Telus 2005 Annual Report Download - page 7

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By combining its wireline and wireless businesses into a single operation in the wireline-wireless
merger, which included the 2006 legal restructure, TELUS expects to be better able to leverage
the ongoing convergence between wireline and wireless communications technology, more
effectively compete with telecom and cable TV operators, differentiate its business from those of
its competitors by having TCC provide wireline and wireless services to customers, and provide
new services to customers regardless of the physical medium used to deliver the service. The
combining of the wireline and wireless businesses in TCC should also improve operating
effectiveness and efficiency. TELUS will continue to report financial results separately for the
wireless and wireline segments.
During the three years ended December 31, 2005, the corporate structure of the Company
underwent other changes. On July 1, 2004, through an internal reorganization, TCI acquired
substantially all of the assets and the wireline operations of TELUS Communications (Québec)
Inc. (“TELUS Communications (Québec)”). TCI assumed substantially all the liabilities of
TELUS Communications (Québec) including $30 million principal amount of First Mortgage
Bonds and $70 million principal amount of Medium Term Notes, which were the publicly held
debt of TELUS Communications (Québec). By combining in a single entity ownership of the
network assets in Québec with those outside of Québec, TELUS expects to be able, over the
long-run, to build common systems and processes that otherwise would have been more difficult
to build due to regulatory requirements. These changes should allow TELUS to better serve
customers whose service requirements span Canada.
On November 30, 2004, Verizon Communications Inc. (“Verizon”) and the Company entered into an
agreement pursuant to which the independent members of the Board of Directors of TELUS agreed
to accommodate Verizon’s desire to divest all of its 20.5 per cent equity investment in the Company.
Such divestiture was effected by a public secondary offering of Verizon’s entire equity interest in the
Company. Post divestiture, Verizon and the Company are no longer related parties (the “Verizon
Sale”). Concurrently with the divestiture, Verizon and the Company further adjusted their business
relationships to reflect changes in their business requirements since the alliance was first established.
See section “Alliances” on page 17 of this annual information form for further information.
On December 30, 2004, through an internal reorganization, a subsidiary of TELUS, TELUS
Solutions Holdings Inc., was wound up into TCI. Upon this wind up, TELUS Services
Partnership ceased to exist and its business was transferred by operation of law to TCI.
Amendments to Charter Documents
TELUS’ charter documents, the Notice of Articles and the Articles of the Company, were
amended in 2005 with the requisite approval of its shareholders. In particular, these
amendments:
• decreased the minimum number of directors from 12 to 10;
• replaced the then existing Articles with a new form of Articles which conformed with the
New BC Act;
• reduced the threshold for a special resolution and a special separate resolution from 3/4 to
2/3;