Telus 2015 Annual Report Download - page 4

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to build out adequate broadband capacity; network reliability and change management
(including migration risks related to technology and customer retention, to new, more efficient
Internet data centres (IDCs) and realizing the expected benefits); timing of decommissioning
of certain legacy wireline networks, systems and services to reduce operating costs; timing of
decommissioning of CDMA and iDEN wireless networks to redeploy spectrum and reduce
operating costs, and the associated subscriber migration costs and customer retention risks;
and success of upgrades and evolution of TELUS TV technology, which depend on third-
party suppliers.
 Regulatory decisions and developments including: potential of government intervention to
further increase wireless competition; the Canadian Radio-television and
Telecommunications Commission (CRTC) wireless wholesale services review, in which it
was determined that the CRTC will regulate wholesale GSM-based domestic roaming rates
and the setting of such rates; future spectrum auctions (including limitations on established
wireless providers, spectrum set-aside favouring certain carriers and other advantages
provided to new and foreign participants, and the amount and cost of spectrum acquired);
restrictions on the purchase, sale and transfer of spectrum licences; the undetermined long-
term impact of the CRTC’s wireline wholesale services review, which concluded that
wholesale competitors shall receive regulated access to FTTP facilities owned by incumbent
Internet service providers; increased subsidy requirements for telecommunications facilities in
Yukon, Nunavut and the Northwest Territories, and possible changes to the scope and nature
of basic service obligations, including higher minimum Internet access speeds; the CRTC’s
new code of conduct for TV services; vertical integration by competitors moving into
broadcast content ownership and timely and effective enforcement of related regulatory
safeguards; ongoing monitoring and compliance with restrictions on non-Canadian ownership
of TELUS Common Shares; modification, interpretation and application of tower sharing and
roaming rules; and the non-harmonization of provincial consumer protection legislation,
particularly in light of the CRTC’s mandatory national Wireless Code (the Code) in effect
since December 2, 2013, and pressures on retention costs and other operational challenges
resulting from the retroactive application of the Code, which led to two-year and three-year
customer contracts ending coterminously starting in June 2015.
 Economic growth and fluctuations including: the state of the economy in Canada, which may
be influenced by economic developments outside of Canada; future interest rates; inflation;
unemployment levels; effects of low oil prices; effects of low business spend (reducing
investments and cost structure); pension investment returns, funding and discount rates; and
Canada: U.S. dollar exchange rates.
 Capital expenditure levels and potential outlays for spectrum licences in spectrum auctions or
from third parties, due to: our ongoing deployment of wireless LTE and future technologies;
utilizing newly acquired spectrum; our wireline broadband initiatives, including connecting
more homes and businesses directly to fibre; investments in network resiliency and reliability;
subscriber demand for data; evolving systems and business processes; implementing
efficiency initiatives; supporting large complex deals; and future wireless spectrum auctions
held by the Department of Innovation, Science and Economic Development. Our capital
expenditure levels could be impacted by the achievement of our targeted operational and
financial results.
 Ability to successfully implement cost reduction initiatives and realize planned savings, net of
restructuring and other costs, without losing customer service focus or negatively affecting
business operations. Initiatives include: our earnings enhancement program to drive
improvements in earnings before interest, income taxes, depreciation and amortization
(EBITDA), including the initiative announced in November 2015; business integrations;
business process outsourcing; offshoring and reorganizations, including any full-time
equivalent (FTE) employee reduction programs; procurement initiatives; and real estate
rationalization. Additional cost reduction initiatives may be needed if we do not achieve our
targeted operational and financial results.
 Financing and debt requirements including: our ability to carry out financing activities and our
ability to maintain investment grade credit ratings in the range of BBB+ or the equivalent.