TELUS Reports First Quarter Results

(Operating revenues increase 7% driven by wireless and data)

VANCOUVER, May 8 /PRNewswire-FirstCall/ -- TELUS Corporation today reported financial results for the first quarter of 2008, including revenue of $2.35 billion, a 6.6 per cent increase from a year ago. That performance was generated by 10 per cent growth in wireless revenue and 19 per cent growth in wireline data revenue, which was aided by two strategic acquisitions in January. Consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) increased 24 per cent to $950 million, largely due to the $173.5 million net-cash settlement feature expense recorded in the first quarter of 2007. Excluding this expense underlying EBITDA increased slightly by $12 million as ongoing growth in wireless was largely offset by a reduced EBITDA in the wireline segment.

Net income in the first quarter was $291 million and earnings per share (EPS) were $0.90, up 49 per cent and 55 per cent respectively. Adjusted to exclude the net cash settlement feature expense, net income decreased 4 per cent and EPS was unchanged, Net income and EPS this quarter also included favourable tax related adjustments of approximately $17 million or five cents per share, compared to $4 million or one cent in the first quarter of 2007. Free cash flow was up 21 per cent to $580 million this quarter, driven primarily by higher EBITDA and lower capital expenditures.

FINANCIAL HIGHLIGHTS

------------------------------------------------------------------------- C$ in millions, except per share amounts 3 months ended March 31 (unaudited) 2008 2007 % Change ------------------------------------------------------------------------- Operating revenues 2,350.6 2,205.6 6.6 EBITDA(1) 949.5 764.3 24.2 EBITDA (as adjusted)(2) 949.7 937.8 1.3 Income before income taxes and non-controlling interest 401.2 275.6 45.6 Net income(3) 291.0 194.8 49.4 Earnings per share (EPS), basic(3) 0.90 0.58 55.2 EPS (as adjusted)(3)(4) 0.90 0.90 - Cash provided by operating activities 633.5 460.6 37.5 Capital expenditures 319.7 381.9 (16.3) Free cash flow(5) 579.8 480.8 20.6

(1) Earnings before interest, taxes, depreciation and amortization (EBITDA) is defined as Operating revenues less Operations expense less Restructuring costs. See Section 11.1 of Management's discussion and analysis.

(2) Excludes a charge of $0.2 million and $173.5 million to Operations expense in 2008 and 2007, respectively, for introducing a net cash settlement feature for share option awards granted prior to 2005.

(3) Net income and EPS for the three month period in 2008 includes favourable tax related adjustments of $17 million or five cents per share, compared to $4 million or 1 cent for the same period in 2007.

(4) Excludes $0.32 after tax charge in 2007 for introducing a net cash settlement feature for share option awards granted prior to 2005.

(5) See Section 11.2 of Management's discussion and analysis.

Darren Entwistle, TELUS president and CEO said, "first quarter results were driven by strong data growth in both the wireless and wireline business segments. This growth and our cash flow enable TELUS to continue returning value to shareholders whilst investing in the long-term success of our company."

"Based on today's results, we are reaffirming TELUS' full year 2008 financial and operating targets announced last December," added Mr. Entwistle.

Robert McFarlane, TELUS executive vice-president and CFO, said, "TELUS successfully accessed the unsettled Canadian capital market in April with the issue of $500 million of 5.95% long-term notes. Placing these seven-year notes reflects our strong investment grade credit ratings and further increased the considerable strength of the TELUS balance sheet in advance of the upcoming AWS wireless spectrum auction."

------------------------------------------------------------------------- This news release contains statements about expected future events and financial and operating results of TELUS that are forward-looking. By their nature, forward-looking statements require the Company to make assumptions and are subject to inherent risks and uncertainties. There is significant risk that the forward-looking statements will not prove to be accurate. Readers are cautioned not to place undue reliance on forward-looking statements as a number of factors could cause assumptions, actual future results and events to differ materially from that expressed in the forward-looking statements. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. In the case of annual guidance, it is the current practice of the Company to evaluate and, where it deems appropriate, provide updates. Subject to legal requirements, this practice may be changed at any time at the Company's sole discretion.

Accordingly this news release is subject to the disclaimer and qualified by the assumptions (including assumptions for 2008 guidance and share purchases), qualifications and risk factors referred to in the TELUS 2007 Management's discussion and analysis, and updates in the first quarter Management's discussion and analysis - May 7, 2008 -------------------------------------------------------------------------

OPERATING HIGHLIGHTS

TELUS wireless

- External revenues increased by $100 million or 10% to $1.1 billion in the first quarter of 2008, when compared with the same period in 2007 - Wireless data revenue increased $51 million or 53% due to the continued adoption of full function smartphones and increased adoption of data services such as text messaging - Net subscriber additions were 88,400, representing a slight 2.3% decrease from the same quarter in 2007. Postpaid net additions were 72,400, an increase of 19%, while net prepaid loading decreased 46% to 16,000 - ARPU (average revenue per subscriber unit per month) was relatively stable at $61.88 compared to the same quarter a year ago. The fast-growing data component of $8.72, represented 14% of ARPU while the voice component continued to decline as a result of intense competition - EBITDA as adjusted of $502 million is an increase of $38 million over the first quarter of 2007, representing 8.3% growth, due to network revenue growth and lower cost of acquisition (COA) expense, partially offset by increased customer retention costs and network and other expenses to support the 10% growth in the wireless subscriber base.

Costs were also incurred for the late March launch of the Koodo brand - Cost of acquisition per gross addition decreased 27% year-over-year to $319 reflecting lower advertising and promotions cost per unit, a higher proportion of new subscribers from lower cost distribution channels and lower equipment subsidies - Blended monthly subscriber churn increased to 1.53% from 1.35% a year ago due to higher prepaid churn and shifting product mix to prepaid, combined with higher deactivations associated with introduction of wireless number portability (WNP) in March 2007. Postpaid churn increased slightly - Cash flow (EBITDA as adjusted less capital expenditures) increased $85 million or 24% to $438 million in the quarter due to an increase in EBITDA and lower capital spending.

TELUS wireline

- External revenues increased by $45 million or 3.7% to $1.25 billion in the first quarter of 2008, when compared with the same period in 2007, as data growth more than offset the declines in local and long distance revenues - Data revenues increased by $81 million or 19% due to revenues from the two January acquisitions, enhanced data and hosting services, and increased high-speed Internet subscribers. When adjusted for the two acquisitions and a regulatory adjustment, underlying data growth was approximately 8%.

- TELUS added 20,300 net high-speed Internet subscribers, a 37% decrease from a year ago reflecting strong competitive activity and market maturity - EBITDA as adjusted of $447.5 million decreased $27 million or 5.6%, due to increased costs from acquisitions, cost of sales including TELUS TV COA, initial costs for new enterprise customers and increased costs to maintain higher service levels.

- Network access lines declined by 39,000 in the quarter and are down 3.6% from a year ago. This reflects continued residential line losses from ongoing competitive activity and wireless substitution, partially mitigated by an increase in business access lines - Cash flow (EBITDA as adjusted less capital expenditures) decreased $11 million or 5.4% to $192 million in the quarter due to lower EBITDA as adjusted partially offset by lower capital expenditures.

Corporate Developments

Government clarifies AWS spectrum rules

At end of February 2008, Industry Canada released clarifications surrounding the upcoming late May/June AWS spectrum auction, including the terms of roaming and tower sharing conditions. TELUS was encouraged by its policy endorsement of a facilities-based regulatory model including the requirement that new entrants build-out networks before being permitted to roam, that resale will not be mandated but rather left to commercial negotiations between relevant parties, and that data service roaming need only be provided at a comparable quality to a new entrant's service.

At end of March, Industry Canada published a list of 27 qualified bidders. TELUS is a qualified bidder and has deposited $230 million in the form of letters of credit. There is no assurance that all qualified bidders will bid and not all can be successful. The number and viability of new entrants in the market also remain uncertain because of build-out costs, capital market conditions and restrictions on foreign investment. Telecom investors continue to watch these auction developments closely given the potential impact on incumbents' market share and wireless service pricing.

TELUS issues $500 million in long-term debt

In April, TELUS successfully issued seven year Canadian dollar notes raising approximately $500 million. The net proceeds of the 5.95% Series CE Notes due April 15, 2015 were used for general corporate purposes and to refinance short-term financing sources. This increased available liquidity and effectively refinanced for the long-term, the short-term bank borrowings and commercial paper used to acquire Emergis in January.

TELUS continues share repurchases

During the first quarter, TELUS continued to purchase shares under its fourth Normal Course Issuer Bid (NCIB). Repurchases were 2.9 million shares for a total outlay of $122.5 million. Over the past 12 months, TELUS has repurchased 13 million shares for an outlay of $672 million, and 55.9 million shares for $2.6 billion since the first NCIB began in December 2004.

Share repurchases have resulted in the reduction of total shares outstanding by 3.9% over the last 12 months, and 10% since commencement in December 2004. TELUS believes that such purchases are in the best interest of the Company and constitute an attractive investment opportunity and desirable use of company funds that should enhance the value of the remaining shares.

Integration of acquisitions well underway

At the close of the previously announced first quarter acquisitions of Emergis and Fastvibe, TELUS immediately began implementing the post merger integration plans to ensure a seamless transition for team members and customers, while ensuring a continued focus on achieving the business goals of the transactions. Consistent with TELUS' standard process for all acquisitions, Emergis and Fastvibe team members were welcomed at events in Mississauga, Longueil, Ottawa and Toronto, and for those not present through TELUS' own videoconference service. Customers were contacted and provided with notice of the transactions, together with the strategic rationale, and sales specialist teams from TELUS and the acquired businesses met to learn about one another's products and services with a focus on cross-selling complementary solutions. Almost immediately after closing, Emergis rebranded to "Emergis, a TELUS company" and Fastvibe commenced operating under the TELUS brand.

Successfully launching value brand

In late March, TELUS began the launch of a new wireless value brand and service called Koodo Mobile with an eye-catching mass advertising program targeted to young adults. Koodo Mobile benefits from the use of TELUS' national network, its distinctive brand and innovative marketing and sales approach. The distribution roll out is focusing on mall kiosks, national retailers and self service on the web at Koodomobile.com.

The benefits of this investment include more flexibility in serving various customer segments, augmenting wireless distribution, increasing customer additions and complementing our premium TELUS brand in the marketplace. The estimated financial impact of this launch is already reflected in the 2008 wireless segment targets previously communicated.

Business Solutions

TELUS makes strides in healthcare

In the quarter, Emergis, A TELUS company, completed the migration of the Ontario Ministry of Health and Long-Term Care's Health Network System to its data facilities in Thornhill, Ontario. Under a five-year, multi-million dollar agreement Emergis is responsible for the management and further development of the system, and is now processing drug claims submitted by Ontario pharmacists on behalf of clients under the Ontario Drug Benefit program.

In February, the Medical University of South Carolina (MUSC) selected Emergis' Oacis Health Data Warehouse application for its clinical researchers and administrative staff. Oacis, part of an electronic health record system, will allow MUSC's users to conduct data analyses in areas such as clinical and population research, disease surveillance and case management.

Products and Services

TELUS launches Visual Voice Mail

In March, TELUS introduced Visual Voice Mail, the first service available across Canada that lets users "see what was said" by translating voicemails to emails. The service expands TELUS' suite of unified communications services that simplify communications for business clients. The enhanced voice-to-screen service offers both the popular voicemail-to-text service and a highly convenient voicemail-to-email function, which lets customers get their phone messages anywhere in the world where they can access email with a computer or smartphone.

TELUS first to bring touchscreen phones to Canada

In April, TELUS was the first Canadian carrier to introduce the next generation of cell phone interface with the LG VENUS touchscreen phone. This is the first in a series of LG touchscreen phones TELUS will bring to Canadians this year. Touchscreen user interfaces are typically reserved for high-end entertainment and business tools such as smartphones and personal digital assistants. This marks the first time Canadians can own a touchscreen phone. TELUS also introduced the MOTO Q 9c and the popular BlackBerry Curve 8330.

TELUS Secure Contracts cost-effectively curb paper waste

In April, TELUS, Recombo and Leger Marketing announced the findings of a recent poll on paper waste in Canada. The poll found that while Canadians want their employers to be greener, the average Canadian is wasting more paper now than five years ago. In fact, each day the average working Canadian prints 30 pieces of paper and wastes nearly 40 per cent of the sheets. To help combat the growing wastage of paper, TELUS launched TELUS Secure Contracts, which enables companies to securely exchange and sign contracts with an easy-to-use, web-based digital signatures service.

TELUS connects greater Manicouagan, Quebec

Schools, libraries and municipal buildings in the Manicouagan region are now connected, thanks to TELUS and its partners. The coalition has completed the deployment of high-tech communications infrastructure including a private optical fibre network covering the entire regional county municipality of Manicouagan. The schools, libraries and municipal buildings spread across 350 kilometers are now connected through a state-of-the-art private network. This project, launched in 2005, involves five owners: The Commission scolaire de l'Estuaire, the regional municipalities of Manicouagan, TELUS, the Reseau d'Informations Scientifiques du Quebec (RISQ), and the Eastern Shores School Board. A partnership agreement has been signed to foster regional development and share the approximate $5 million of costs associated with the construction, installation, and maintenance of the private network.

Communities and Community Investment

TELUS creating 75 call centre jobs in Prince George

TELUS announced in April an investment of $1.3 million to double the size of its existing Prince George call centre, expanding it from 75 to 150 team members. The expansion will help TELUS continue to meet growing customer demand for services and products, in particular wireless data services. TELUS expects to begin hiring for the new positions over the summer, once renovations are well underway.

Pink is the new black! Canadians rethink breast cancer with help from TELUS

In February, TELUS launched the new pink BlackBerry Pearl 8130 smartphone. To celebrate the launch of this fashionable device from Research In Motion, TELUS also announced its involvement with Rethink Breast Cancer, and is currently contributing $25 to the organization from the sale of every pink BlackBerry Pearl 8130.

TELUS honoured for work/life balance innovations

TELUS was honoured by WorkLife BC with the 2008 Innovation Award recognizing the creative approach the company takes in providing its employees with tools to better balance their work and personal lives. TELUS was singled out for providing team members with creative and innovative ways to lead healthy balanced lives. Team members benefit from technology allowing many to work at home full or part-time, and take advantage of a long list of programs such as on-site wellness practitioners, employee and family assistance programs, and personal days off each year.

Canadian athletes get boost from TELUS

In April, TELUS awarded a $50,000 performance bonus to Canadian Snowboard Federation (CSF) athletes. The annual award, handed out to the athletes following the TELUS-sponsored Canadian Snowboard Nationals, provides performance bonuses to National Team members and other athletes entered by the CSF into major competitions. TELUS' long-term commitment with the CSF as official telecommunications provider is helping ensure the ongoing development and future success of competitive snowboarders across the country.

TELUS World Skins Game returns to B.C.'s Predator Ridge

The TELUS World Skins Game is a highlight of the Canadian summer sporting schedule, not only for Canadian golf fans but for the local community as well. TELUS partners with a charity during each year's Skins Game, this year supporting the BC Children's Hospital Foundation. The sold out event will feature golfers from five countries: Mike Weir, Fred Couples representing the United States, Greg Norman representing Australia, Colin Montgomerie representing Scotland, and Camilo Villegas representing Colombia.

Theatre TELUS - the new cultural destination in Montreal

In March, TELUS entered into an exclusive 10-year partnership with Groupe Laberge to offer a new venue for artistic expression in Montreal - Theatre TELUS. The new state-of-the-art theatre, located in the Quartier des spectacles, is a 12,000-square-foot venue that can accommodate up to 1,200 people per event. Theatre TELUS opened mid-April is a testament to TELUS' commitment to the local community including our 5,000 team members in Quebec, TELUS' customers and to the visitors who will enjoy the Quartier des spectacles.

TELUS celebrates International Women's Day

In early March, TELUS celebrated International Women's Day by honouring women in the workplace for their contributions to business and the community. TELUS team members across the country highlighted the day by organizing events such as clothing drives and speakers series to raise funds and awareness for a number of local charities. TELUS is committed to empowering women, inspiring their success and celebrating their personal and professional achievements in the workplace and in the community. TELUS also promotes diversity in the workplace through numerous work-life balance initiatives and programs including Connections: the TELUS women's network.

Rimouski gets boost from TELUS to promote region's economy

TELUS joined the Association des marchands de Rimouski and the Caisse Desjardins de Rimouski to develop a new consumer loyalty program emphasizing the importance of buying local goods to promote the community's economic health. Residents will collect Rimouski iPoints (is this correct spelling - if so italicize) coupons when they purchase products in local stores. The coupons allow them to take advantage of promotional offers including rebates on certain tourist attractions. For the occasion, TELUS will offer Rimouskois one more reason to buy locally as participants will have a chance to win a laptop with a one-year subscription to TELUS' High Speed Internet service.

TELUS webcasts Quebec hockey games

TELUS launched high quality webcasts of Quebec Junior Major Hockey League games on telus.com/qmjhl at the start of May, just in time for the President's Cup finals. The webcasts allow customers to transfer streaming video from their home computer to their television set to watch the playoffs. Developed and produced in collaboration with Rimouski-based firm PQM.net, the High Quality broadcast service uses a transmission rate of one Megabit per second, more than three times faster than normal.

Dividend declaration

The Board of Directors has declared a quarterly dividend of forty-five cents ($0.45) Canadian per share on the issued and outstanding Common shares and forty-five cents ($0.45) Canadian per share on the issued and outstanding Non-Voting shares of the Company payable on July 1, 2008 to holders of record at the close of business on June 10 2008.

This quarterly dividend represents a 20 per cent increase from the $0.375 quarterly dividend paid in 2007.

About TELUS

TELUS (TSX: T, T.A; NYSE: TU) is a leading national telecommunications company in Canada, with $9.2 billion of annual revenue and 11.2 million customer connections including 5.6 million wireless subscribers, 4.4 million wireline network access lines and 1.2 million Internet subscribers. TELUS provides a wide range of communications products and services including data, Internet protocol (IP), voice, entertainment and video. Committed to being Canada's premier corporate citizen, we give where we live. Since 2000, TELUS and our team members have contributed $113 million to charitable and not-for-profit organizations and volunteered more than 2.1 million hours of service to local communities. Eight TELUS Community Boards across Canada lead our local philanthropic initiatives. For more information about TELUS, please visit telus.com.

TELUS Corporation

interim consolidated statements of income and other comprehensive income (unaudited)

Three months Periods ended March 31 (millions except per share amounts) 2008 2007 OPERATING REVENUES $ 2,350.6 $ 2,205.6 ------------------------------------------------------------------------- OPERATING EXPENSES ------------------------------------------------------------------------- Operations 1,394.4 1,436.6 Restructuring costs 6.7 4.7 Depreciation 345.7 317.7 Amortization of intangible assets 76.4 49.6 ------------------------------------------------------------------------- 1,823.2 1,808.6 ------------------------------------------------------------------------- OPERATING INCOME 527.4 397.0 Other expense, net 16.8 3.8 Financing costs 109.4 117.6 ------------------------------------------------------------------------- INCOME BEFORE INCOME TAXES AND NON CONTROLLING INTEREST 401.2 275.6 Income taxes 109.4 79.3 Non-controlling interests 0.8 1.5 ------------------------------------------------------------------------- NET INCOME AND COMMON SHARE AND NON VOTING SHARE INCOME 291.0 194.8 OTHER COMPREHENSIVE INCOME Change in unrealized fair value of derivatives designated as cash flow hedges 3.5 27.9 Foreign currency translation adjustment arising from translating financial statements of self sustaining foreign operations (1.6) 2.4 Change in unrealized fair value of available-for-sale financial assets (1.1) - ------------------------------------------------------------------------- 0.8 30.3 ------------------------------------------------------------------------- COMPREHENSIVE INCOME $ 291.8 $ 225.1 ------------------------------------------------------------------------- ------------------------------------------------------------------------- NET INCOME PER COMMON SHARE AND NON-VOTING SHARE - Basic $ 0.90 $ 0.58 - Diluted $ 0.90 $ 0.57 DIVIDENDS DECLARED PER COMMON SHARE AND NON-VOTING SHARE $ 0.45 $ 0.375 TOTAL WEIGHTED AVERAGE COMMON SHARES AND NON-VOTING SHARES OUTSTANDING - Basic 323.7 337.1 - Diluted 324.6 340.5

TELUS Corporation

interim consolidated balance sheets (unaudited)

March 31, December 31, As at (millions) 2008 2007 ------------------------------------------------------------------------- ASSETS Current Assets Cash and temporary investments, net $ 49.1 $ 19.9 Short-term investments 116.0 42.4 Accounts receivable 687.9 710.9 Income and other taxes receivable 22.3 120.9 Inventories 228.6 243.3 Prepaid expenses and other 268.0 199.5 Derivative assets 4.2 3.8 ------------------------------------------------------------------------- 1,376.1 1,340.7 ------------------------------------------------------------------------- Capital Assets, Net Property, plant, equipment and other 7,094.2 7,177.3 Intangible assets subject to amortization 1,304.1 978.2 Intangible assets with indefinite lives 2,966.5 2,966.5 ------------------------------------------------------------------------- 11,364.8 11,122.0 ------------------------------------------------------------------------- Other Assets Deferred charges 1,374.6 1,318.0 Investments 30.0 38.9 Goodwill 3,541.2 3,168.0 ------------------------------------------------------------------------- 4,945.8 4,524.9 ------------------------------------------------------------------------- $17,686.7 $16,987.6 ------------------------------------------------------------------------- -------------------------------------------------------------------------

LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Accounts payable and accrued liabilities $ 1,412.4 $ 1,476.6 Income and other taxes payable 29.3 7.3 Restructuring accounts payable and accrued liabilities 31.7 34.9 Dividends payable 145.5 - Advance billings and customer deposits 634.6 631.6 Current maturities of long-term debt 7.8 5.4 Current portion of derivative liabilities 43.4 26.6 Current portion of future income taxes 479.8 503.6 ------------------------------------------------------------------------- 2,784.5 2,686.0 ------------------------------------------------------------------------- Long-Term Debt 5,187.4 4,583.5 ------------------------------------------------------------------------- Other Long-Term Liabilities 1,647.5 1,717.9 ------------------------------------------------------------------------- Future Income Taxes 1,090.5 1,048.1 ------------------------------------------------------------------------- Non-Controlling Interests 22.1 25.9 ------------------------------------------------------------------------- Shareholders' Equity 6,954.7 6,926.2 ------------------------------------------------------------------------- $17,686.7 $16,987.6 ------------------------------------------------------------------------- -------------------------------------------------------------------------

TELUS Corporation

interim consolidated statements of cash flows (unaudited)

Three months Periods ended March 31 (millions) 2008 2007 ------------------------------------------------------------------------- OPERATING ACTIVITIES Net income $ 291.0 $ 194.8 Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization 422.1 367.3 Future income taxes (2.3) 78.2 Share-based compensation 6.3 138.6 Net employee defined benefit plans expense (24.9) (24.0) Employer contributions to employee defined benefit plans (27.0) (33.9) Restructuring costs, net of cash payments (3.2) (17.0) Amortization of deferred gains on sale-leaseback of buildings, amortization of deferred charges and other, net 7.2 (9.1) Net change in non-cash working capital (35.7) (234.3) ------------------------------------------------------------------------- Cash provided by operating activities 633.5 460.6 ------------------------------------------------------------------------- INVESTING ACTIVITIES Capital expenditures (319.7) (381.9) Acquisitions (686.9) - Change in non-current materials and supplies, purchase of investments and other (2.1) (10.4) ------------------------------------------------------------------------- Cash used by investing activities (1,008.7) (392.3) ------------------------------------------------------------------------- FINANCING ACTIVITIES Common Shares and Non-Voting Shares issued 0.1 0.4 Dividends to shareholders - (125.9) Purchase of Common Shares and Non-Voting Shares for cancellation (122.5) (200.7) Long-term debt issued 3,712.3 1,097.8 Redemptions and repayment of long-term debt (3,180.9) (293.5) Dividends paid by a subsidiary to non-controlling interests (4.6) - Other - (0.9) ------------------------------------------------------------------------- Cash provided by financing activities 404.4 477.2 ------------------------------------------------------------------------- CASH POSITION Increase in cash and temporary investments, net 29.2 545.5 Cash and temporary investments, net, beginning of period 19.9 (11.5) ------------------------------------------------------------------------- Cash and temporary investments, net, end of period $ 49.1 $ 534.0 ------------------------------------------------------------------------- ------------------------------------------------------------------------- SUPPLEMENTAL DISCLOSURE OF CASH FLOWS Interest (paid) $ (45.0) $ (23.6) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Interest received $ 1.3 $ 1.9 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Income taxes (inclusive of Investment Tax Credits (paid) received, net $ (0.7) $ 6.2 ------------------------------------------------------------------------- -------------------------------------------------------------------------

TELUS Corporation

segmented information (unaudited)

Three-month periods ended March 31 Wireline Wireless (millions) 2008 2007 2008 2007 ------------------------------------------------------------------------- Operating revenues External revenue $1,250.6 $1,205.6 $1,100.0 $1,000.0 Intersegment revenue 30.8 25.1 7.0 6.3 ------------------------------------------------------------------------- 1,281.4 1,230.7 1,107.0 1,006.3 ------------------------------------------------------------------------- Operating expenses Operations expense 828.0 905.4 604.2 562.6 Restructuring costs 6.5 4.4 0.2 0.3 ------------------------------------------------------------------------- 834.5 909.8 604.4 562.9 ------------------------------------------------------------------------- EBITDA(1) $ 446.9 $ 320.9 $ 502.6 $ 443.4 ------------------------------------------------------------------------- ------------------------------------------------------------------------- CAPEX(2) $ 255.2 $ 270.7 $ 64.5 $ 111.2 ------------------------------------------------------------------------- ------------------------------------------------------------------------- EBITDA less CAPEX $ 191.7 $ 50.2 $ 438.1 $ 332.2 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Operating expenses (as adjusted)(3) Operations expense (as adjusted)(3) 827.4 752.3 604.6 542.2 Restructuring costs 6.5 4.4 0.2 0.3 ------------------------------------------------------------------------- 833.9 756.7 604.8 542.5 ------------------------------------------------------------------------- EBITDA (as adjusted)(3) $ 447.5 $ 474.0 $ 502.2 $ 463.8 ------------------------------------------------------------------------- ------------------------------------------------------------------------- CAPEX(2) $ 255.2 $ 270.7 $ 64.5 $ 111.2 ------------------------------------------------------------------------- ------------------------------------------------------------------------- EBITDA (as adjusted) less CAPEX $ 192.3 $ 203.3 $ 437.7 $ 352.6 ------------------------------------------------------------------------- -------------------------------------------------------------------------

Three-month periods ended March 31 Eliminations Consolidated (millions) 2008 2007 2008 2007 ------------------------------------------------------------------------- Operating revenues External revenue $ - $ - $2,350.6 $2,205.6 Intersegment revenue (37.8) (31.4) - - ------------------------------------------------------------------------- (37.8) (31.4) 2,350.6 2,205.6 ------------------------------------------------------------------------- Operating expenses Operations expense (37.8) (31.4) 1,394.4 1,436.6 Restructuring costs - - 6.7 4.7 ------------------------------------------------------------------------- (37.8) (31.4) 1,401.1 1,441.3 ------------------------------------------------------------------------- EBITDA(1) $ - $ - $ 949.5 $ 764.3 ------------------------------------------------------------------------- ------------------------------------------------------------------------- CAPEX(2) $ - $ - $ 319.7 $ 381.9 ------------------------------------------------------------------------- ------------------------------------------------------------------------- EBITDA less CAPEX $ - $ - $ 629.8 $ 382.4 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Operating expenses (as adjusted)(3) Operations expense (as adjusted)(3) (37.8) (31.4) 1,394.2 1,263.1 Restructuring costs - - 6.7 4.7 ------------------------------------------------------------------------- (37.8) (31.4) 1,400.9 1,267.8 ------------------------------------------------------------------------- EBITDA (as adjusted)(3) $ - $ - $ 949.7 $ 937.8 ------------------------------------------------------------------------- ------------------------------------------------------------------------- CAPEX(2) $ - $ - $ 319.7 $ 381.9 ------------------------------------------------------------------------- ------------------------------------------------------------------------- EBITDA (as adjusted) less CAPEX $ - $ - $ 630.0 $ 555.9 ------------------------------------------------------------------------- -------------------------------------------------------------------------

EBITDA (as adjusted) (from above) $ 949.7 $ 937.8 Incremental charge(3) 0.2 173.5 --------------------------------------------- EBITDA (from above) 949.5 764.3 Depreciation 345.7 317.7 Amortization 76.4 49.6 --------------------------------------------- Operating income 527.4 397.0 Other expense, net 16.8 3.8 Financing costs 109.4 117.6 --------------------------------------------- Income before income taxes and non- controlling interests 401.2 275.6 Income taxes 109.4 79.3 Non-controlling interests 0.8 1.5 --------------------------------------------- Net income $ 291.0 $ 194.8 --------------------------------------------- ---------------------------------------------

(1) Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") is a measure that does not have any standardized meaning prescribed by GAAP and is therefore unlikely to be comparable to similar measures presented by other issuers; EBITDA is defined by the Company as operating revenues less operations expense and restructuring costs. The Company has issued guidance on, and reports, EBITDA because it is a key measure used by management to evaluate performance of its business segments and is utilized in measuring compliance with certain debt covenants.

(2) Total capital expenditures ("CAPEX").

(3) Substantially all of the Company's share option awards that were granted prior to January 1, 2005, and which were outstanding on January 1, 2007, were amended by adding a net-cash settlement feature; such amendment resulted in an incremental charge to operations of $0.2 (2007 - $173.5) and did not result in an immediate cash outflow. In respect of 2008 and 2007 results provided to the Company's chief operating decision maker, operations expense and EBITDA are being presented both with, and without, the impact of such amendment.

Caution regarding forward-looking statements

------------------------------------------------------------------------- This document and Management's discussion and analysis contain statements about expected future events and financial and operating results of TELUS Corporation (TELUS or the Company, and where the context of the narrative permits, or requires, its subsidiaries) that are forward-looking. By their nature, forward-looking statements require the Company to make assumptions and are subject to inherent risks and uncertainties. There is significant risk that assumptions (see below), predictions and other forward-looking statements will not prove to be accurate. Readers are cautioned not to place undue reliance on forward-looking statements as a number of factors could cause actual future results, conditions, actions or events to differ materially from the targets, expectations, estimates or intentions expressed in the forward-looking statements. The Company disclaims any intention or obligation to update or revise any forward- looking statements, whether as a result of new information, future events or otherwise, except as required by law. In the case of annual guidance, it is the current practice of the Company to evaluate and, where it deems appropriate, provide updates (see Section 9). Subject to legal requirements, this practice may be changed at any time at the Company's sole discretion.

Assumptions for 2008 guidance include: economic growth consistent with recent provincial and national estimates by the Conference Board of Canada, including revised Canadian gross domestic product (GDP) growth of 2.2% and above average growth in the provinces of Alberta and British Columbia; forecast exchange rate between the Canadian dollar and U.S.

dollar at or near parity; increased wireline competition in both business and consumer markets, particularly from cable-TV and VoIP (voice over Internet protocol) companies; impact from the acquisition of Emergis in mid-January; Canadian wireless industry market penetration gain of 4.5 to 5%; potential participation in advanced wireless services (AWS) spectrum auction is not reflected in capital expenditures; no new wireless competitive entrant assumed for 2008; approximately $50 million restructuring expenses (up from $20.4 million in 2007); a blended statutory tax rate of approximately 30.5 to 31.5%; a discount rate of 5.5% (50 basis points higher than 2007) and expected long-term return of 7.25% for pension accounting (unchanged from 2007); and average shares outstanding of approximately 320 million (down from 331.7 million in 2007). Earnings per share (EPS), cash balances, net debt and common equity may be affected by purchases of up to 20 million TELUS shares over a 12-month period under the normal course issuer bid that commenced December 20, 2007.

Factors that could cause actual results to differ materially include, but are not limited to: competition (including more active price competition and the possibility of new wireless competition after the 2008 spectrum auction); economic growth and fluctuations (including pension performance, funding and expenses); capital expenditure levels (including possible wireless spectrum asset purchases); financing and debt requirements (including funding share repurchases and debt financings); tax matters (including acceleration or deferral of required payments of significant amounts of cash taxes); human resource developments; business integrations and internal reorganizations (including post-acquisition integration of Emergis); technology (including reliance on systems and information technology, evolving wireline broadband and wireless next generation technology options and the possible need for prospective wireless sharing arrangements to achieve cost efficiencies and reduce deployment risks); regulatory approvals and developments (including the spectrum auction, tower sharing and roaming rules, the new media proceeding and possible changes to foreign ownership restrictions); process risks (including conversion of legacy systems and billing system integrations); health, safety and environmental developments; litigation and legal matters; business continuity events (including manmade and natural threats); any prospective acquisitions or divestitures; and other risk factors discussed herein and listed from time to time in TELUS' reports and public disclosure documents, including its annual report, annual information form, and other filings with securities commissions in Canada (on http://www.sedar.com/) and in its filings in the United States, including Form 40-F (on EDGAR at http://www.sec.gov/).

For further information, see Section 10: Risks and risk management of TELUS' 2007 Management's discussion and analysis and updates in Section 10 of this document.

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Management's discussion and analysis

May 7, 2008

The following is a discussion of the consolidated financial condition and results of operations of TELUS Corporation for the three-month periods ended March 31, 2008 and 2007, and should be read together with TELUS' interim Consolidated financial statements. This discussion contains forward-looking information that is qualified by reference to, and should be read together with, the Caution regarding forward-looking statements above.

TELUS' interim Consolidated financial statements have been prepared in accordance with Canadian generally accepted accounting principles (GAAP), which differ in certain respects from U.S. GAAP. See Note 20 of the interim Consolidated financial statements for a summary of the principal differences between Canadian and U.S. GAAP as they relate to TELUS. The interim Consolidated financial statements and Management's discussion and analysis were reviewed by TELUS' Audit Committee and approved by TELUS' Board of Directors. All amounts are in Canadian dollars unless otherwise specified.

TELUS has issued guidance on and reports on certain non-GAAP measures that are used by management to evaluate performance of business units, segments and the Company. In addition, non-GAAP measures are used in measuring compliance with debt covenants and are used to manage the capital structure. Because non-GAAP measures do not have a standardized meaning, securities regulations require that non-GAAP measures be clearly defined and qualified, and reconciled with their nearest GAAP measure. For the reader's reference, the definition, calculation and reconciliation of consolidated non-GAAP measures are provided in Section 11: Reconciliation of non-GAAP measures and definitions.

Management's discussion and analysis contents

------------------------------------------------------------------------- Section Contents ------------------------------------------------------------------------- 1. Introduction Introduction and summary of TELUS' consolidated results for the first quarter of 2008 ------------------------------------------------------------------------- 2. Core business, vision A discussion of activities in support and strategy of TELUS' six strategic imperatives ------------------------------------------------------------------------- 3. Key performance drivers A listing of corporate priorities for 2008 ------------------------------------------------------------------------- 4. Capability to deliver A description of the factors that results affect the capability to execute strategies, manage key performance drivers and deliver results ------------------------------------------------------------------------- 5. Results from operations A detailed discussion of operating results for the first quarter of 2008 ------------------------------------------------------------------------- 6. Financial condition A discussion of significant changes in TELUS' balance sheets for the three- month period ended March 31, 2008 ------------------------------------------------------------------------- 7. Liquidity and capital A discussion of cash flow, liquidity, resources credit facilities and other disclosures ------------------------------------------------------------------------- 8. Critical accounting A description of accounting estimates estimates and accounting that are critical to determining policy developments financial results, and changes to accounting policies ------------------------------------------------------------------------- 9. Annual guidance for 2008 TELUS' confirmed annual guidance ------------------------------------------------------------------------- 10. Risks and risk management An update on certain risks and uncertainties facing TELUS and how the Company manages these risks ------------------------------------------------------------------------- 11. Reconciliation of non-GAAP A description, calculation and measures and definitions reconciliation of certain measures used by management -------------------------------------------------------------------------

1. Introduction

1.1 Materiality for disclosures

Management determines whether or not information is material based on whether it believes a reasonable investor's decision to buy, sell or hold securities in the Company would likely be influenced or changed if the information were omitted or misstated.

1.2 Canadian telecommunications industry

Key industry development

On June 30, 2007, Canada's largest telecommunications service provider BCE Inc. announced that it had entered into a definitive agreement to be acquired by a consortium led by Teachers Private Capital, the private investment arm of the Ontario Teachers' Pension Plan, and the U.S.-based Providence Equity Partners and Madison Dearborn Partners, LLC. The BCE Board recommended that their common shareholders accept the consortium's offer at an all-cash price of $42.75 per common share or approximately $34 billion. On September 21, 2007, BCE shareholders overwhelmingly approved the acquisition. The CRTC (Canadian Radio-television and Telecommunications Commission) approved the change in control of BCE's broadcasting licences, subject to certain conditions. Industry Canada also approved the acquisition subject to certain conditions. The closing of the transaction remains subject to the outcome of Bell bondholder appeals before the Quebec Court of Appeal. BCE has indicated that it expects the transaction to close before the end of the second quarter of 2008.

Wireless developments - advanced wireless service (AWS) and other spectrum auction in the 2 GHz range

On February 16, 2007, Industry Canada released a discussion paper for the upcoming auction for advanced wireless services (AWS) spectrum in various spectrum bands. On November 28, 2007, the Minister released a policy framework on how the auction will be conducted. The major elements include a set aside for new entrants of 40 MHz of the available 90 MHz of AWS spectrum, mandated roaming, and mandated tower and site sharing requirements at commercial rates subject to binding arbitration.

On February 27, 2008, Industry Canada clarified its decision on roaming. TELUS was encouraged by Industry Canada's policy endorsement of a facilities-based regulatory model including the requirement that new entrants build-out their networks before being permitted to roam, that resale will not be mandated but rather left to commercial negotiations between relevant parties, and that data service roaming need only be provided at a comparable quality to a new entrant's service. Terms of roaming and tower and site sharing are to be based on commercial terms and subject to binding arbitration where commercial negotiations are not successful. Final conditions of licence, consistent with the above factors, were subsequently released on February 29, 2008. The auction is scheduled for May 27, 2008.

On March 31, 2008, Industry Canada published a list of 27 qualified bidders who have posted deposits varying in size from $80,000 to $534.2 million. TELUS' wholly owned partnership, TELUS Communications Company, is a qualified bidder and TELUS has deposited $230.4 million in the form of letters of credit with Industry Canada. There can be no assurance that all qualified bidders will participate in the auction, and not all auction participants can be successful in their bids. See Section 10.1 Regulatory for additional information.

1.3 Consolidated highlights

The chief executive officer, who is the chief operating decision-maker, regularly receives TELUS' reports on two bases: including and excluding an incremental pre-tax charge for introducing a net-cash settlement feature for share option awards granted prior to 2005. The highlights table below presents both views.

------------------------------------------------------------------------- Consolidated highlights ($ millions, except shares, per-share Quarters ended March 31 amounts, subscribers and ratios) 2008 2007 Change ------------------------------------------------------------------------- Consolidated statements of income ------------------------------------------------------------------------- Operating revenues 2,350.6 2,205.6 6.6 %

Operating income 527.4 397.0 32.8 % Net-cash settlement feature expense 0.2 173.5 (99.9)% ---------- ---------- ---------- Operating income (as adjusted) 527.6 570.5 (7.5)%

Income before income taxes 401.2 275.6 45.6 % Net-cash settlement feature expense 0.2 173.5 (99.9)% ---------- ---------- ---------- Income before income taxes (as adjusted) 401.4 449.1 (10.6)%

Net income 291.0 194.8 49.4 % Net-cash settlement feature expense, after tax 0.1 107.7 (99.9)% ---------- ---------- ---------- Net income (as adjusted) 291.1 302.5 (3.8)%

Earnings per share, basic ($) 0.90 0.58 55.2 % Net-cash settlement feature per share - 0.32 (100.0)% ---------- ---------- ---------- Earnings per share, basic (as adjusted) ($) 0.90 0.90 - %

Earnings per share, diluted ($) 0.90 0.57 57.9 %

Cash dividends declared per share ($) 0.45 0.375 20.0 % ------------------------------------------------------------------------- Consolidated statements of cash flows ------------------------------------------------------------------------- Cash provided by operating activities 633.5 460.6 37.5 % Cash used by investing activities 1,008.7 392.3 157.1 % Capital expenditures 319.7 381.9 (16.3)% Cash provided by financing activities 404.4 477.2 (15.3)% ------------------------------------------------------------------------- Subscribers and other measures ------------------------------------------------------------------------- Subscriber connections(1) (thousands) 11,208 10,800 3.8 %

EBITDA(2) 949.5 764.3 24.2 % Net-cash settlement feature expense 0.2 173.5 (99.9)% ---------- ---------- ---------- EBITDA (as adjusted) 949.7 937.8 1.3 %

Free cash flow(3) 579.8 480.8 20.6 % ------------------------------------------------------------------------- Debt and payout ratios(4) ------------------------------------------------------------------------- Net debt to EBITDA - excluding restructuring costs 1.8 1.7 0.1 Dividend payout ratio (%) 44 45 (1)pt ------------------------------------------------------------------------- pt; pts - percentage point(s) (1) The sum of wireless subscribers, network access lines and Internet access subscribers measured at the end of the respective periods based on information in billing and other systems.

(2) EBITDA is a non-GAAP measure. See Section 11.1 Earnings before interest, taxes, depreciation and amortization (EBITDA).

(3) Free cash flow is a non-GAAP measure. See Section 11.2 Free cash flow.

(4) See Section 11.4 Definitions of liquidity and capital resource measures.

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Highlights for the first quarter of 2008, as discussed in Section 5: Results from operations, include the following:

- Subscriber connections increased by 408,000 in the twelve-month period ended March 31, 2008. The number of wireless subscribers grew by 10% to 5.66 million, the number of Internet subscribers grew by 5.0% to 1.19 million and the number of network access lines decreased by 3.6% to 4.36 million.

- Wireless gross subscriber additions increased by 17% in the first quarter of 2008, when compared to the same period in 2007, with consistent growth for both postpaid and prepaid. In addition, average revenue per subscriber unit per month (ARPU) was stable when compared to the first quarter of 2007.

- In the first quarter of 2008, TELUS recorded its highest quarterly consolidated Operating revenues.

- Operating revenues increased by $145.0 million in the first quarter of 2008, when compared to the same period in 2007, due primarily to growth in wireless network revenues and wireline data revenues, which more than offset revenue declines in wireline voice local and long distance.

- Operating income increased by $130.4 million in the first quarter of 2008 when compared to the same period in 2007, largely due to the $173.5 million net-cash settlement feature expense recorded in the first quarter of 2007. Excluding net-cash settlement feature expenses, operating income (as adjusted) decreased by $42.9 million primarily due to increased depreciation and amortization expenses, partly offset by improved EBITDA (as adjusted).

- Income before income taxes increased by $125.6 million in the first quarter of 2008 when compared to the same period in 2007. Excluding the effect of the net-cash settlement feature, Income before income taxes decreased by $47.7 million due mainly to decreased operating income (as adjusted).

- Net income and basic EPS increased by $96.2 million and 32 cents, respectively, in the first quarter of 2008 when compared to the same period in 2007.

------------------------------------------------------------------------- Net income continuity Quarters ended ($ millions) March 31 ------------------------------------------------------------------------- 2007 Net income 194.8 Changes in: Net-cash settlement feature 108 EBITDA as adjusted 8 Depreciation and amortization, excluding investment tax credits in 2007 (34) Interest expenses 6 Tax-related adjustments 13 Other (4.8) ------------------------------------------------------------------------- 2008 Net income 291.0 ------------------------------------------------------------------------- -------------------------------------------------------------------------

- The average number of shares outstanding during the first quarter of 2008 was 4% lower than the first quarter of 2007 due to repurchases under normal course issuer bid (NCIB) programs. The Company purchased 950,000 Common Shares and more than 1.9 million Non-Voting Shares for an outlay of $122.5 million during the first quarter of 2008.

Highlights for the first quarter of 2008, as discussed in Section 7: Liquidity and capital resources, include the following:

- Cash provided by operating activities increased by $172.9 million in the first quarter of 2008 when compared to the same period in 2007.

The balance of proceeds from securitized accounts receivable was unchanged in 2008, while a $350 million reduction in proceeds occurred during the first quarter of 2007, for a comparative increase in cash flow of $350 million. This increase was partly offset by short-term investments in the first quarter of 2008 and higher paid interest.

- Cash used by investing activities increased by $616.4 million in the first quarter of 2008 when compared to the same period in 2007, primarily due to the January 2008 acquisition of Emergis, partly offset by lower capital expenditures.

- Cash provided by financing activities decreased by $72.8 million in the first quarter of 2008 when compared to the same period in 2007, due primarily to March 2007 debt issues of $1 billion being partly offset by increased amounts drawn from the 2012 credit facility and issued commercial paper, lower NCIB purchases and payment of the first quarter 2008 dividend subsequent to the end of the quarter, on April 1.

On March 3, 2008, TELUS Corporation closed a new $700 million, 364-day credit facility with a select group of Canadian banks. This new facility provides incremental liquidity to TELUS and allows the Company to continue to meet one of its financial objectives, which is to maintain $1 billion in available liquidity. The Company has not utilized this facility.

On April 9, TELUS successfully closed an offering of 5.95%, Series CE, Notes due April 15, 2015, for aggregate gross proceeds of approximately $500 million. The net proceeds of the offering are expected to be used for general corporate purposes including repayment of amounts under the 2012 credit facility, and to refinance short-term financing sources.

- Free cash flow of $579.8 million in the first quarter of 2008 increased by $99.0 million from the same period in 2007, mainly due to lower capital expenditures, improved EBITDA (as adjusted), lower paid interest and lower payments under restructuring plans. Free cash flow was supplemented in the first quarter of 2008 by financing activities to complete acquisitions totalling $686.9 million, net of acquired cash.

- Following the addition of debt in January 2008 to finance the acquisition of Emergis, Net debt to EBITDA at March 31, 2008 was 1.8, up by only 0.1 from the measure at December 31, 2007, and continued to be in the long-term target policy range of 1.5 to 2.0 times.

- The dividend payout ratio, based on the annualized first quarter dividend and actual earnings for the 12-month trailing period ended March 31, 2008, was 44%. The dividend payout ratio calculated to exclude the impacts of favourable tax-related adjustments from earnings for the 12-month trailing period ended March 31, 2008, was 54%.

2. Core business, vision and strategy

The following discussion is qualified in its entirety by the Caution regarding forward-looking statements at the beginning of Management's discussion and analysis. It is also qualified by Section 10: Risks and risk management of TELUS' 2007 Management's discussion and analysis, as well as updates reported in Section 10 of this document.

TELUS' core business, vision and strategy were detailed in its 2007 Management's discussion and analysis. Activities that supported the Company's six strategic imperatives during the first quarter of 2008 include the following:

Building national capabilities across data, IP, voice and wireless

In January, two strategic acquisitions were completed, as outlined below in the Partnering, acquiring and divesting imperative.

Focusing relentlessly on the growth markets of data, IP and wireless

In February, the Ville de Montreal selected TELUS to provide and manage Internet Protocol (IP) based voice and data services for the city's more than 300 administrative offices. TELUS' advanced telecommunications framework supports the city's goals of accessing a cost-effective infrastructure, while providing a secure IP backbone for new services and solutions. The total value of the 10-year contract is approximately $87 million.

Also in February, TELUS completed the rollout of wireless high-speed capability in B.C. and Alberta, using EVDO Rev A technology. TELUS' wireless high-speed service reaches about 95% of the population of B.C. and Alberta, providing typical download speeds of 450 to 800 Kbps and typical upload speeds of 300 to 400 Kbps.

In March, TELUS launched the KOODO MOBILE(TM) wireless discount brand and service to address the challenge of marketing against competitors with two or more brands. The potential benefits include more flexibility in serving various market segments, increasing customer additions, protecting revenue on the premium TELUS brand, and improving client retention programs.

Building integrated solutions that differentiate TELUS from its competitors

In March, the Company launched the TELUS Visual Voice Mail service that provides a voicemail-to-text function and, for the first time in Canada, a voicemail-to-email function. With this service, TELUS' wireless customers can access their phone messages wherever they can access email using smartphones, such as personal digital assistants (PDAs) and BlackBerry devices, or computers. The customer can respond easily to the messages or emails, either by voice or by text, at the touch of a button and optionally include an audio recording of the message as an attachment.

Partnering, acquiring and divesting to accelerate the implementation of TELUS' strategy and focus TELUS' resources on core business

Fastvibe Corporation

In January, TELUS acquired privately held Fastvibe, a provider of Web-streaming solutions for business. This acquisition is expected to strengthen the Company's technology solutions portfolio, providing businesses with an environment-friendly and cost effective way to deliver information such as training, employee communications and investor information to staff and stakeholders who are dispersed geographically.

Emergis Inc.

In January, TELUS completed the acquisition of Emergis, having financed and paid $743.4 million for all of the then issued and outstanding Emergis common shares by drawing down TELUS' syndicated credit facility and utilizing available cash resources, primarily proceeds of commercial paper issuance. Emergis was de-listed from the Toronto Stock Exchange on January 21.

Emergis is a business process outsourcer that specializes in the healthcare and financial services sectors and is a leader in the automation of electronic health records. TELUS has targeted and invested in serving the healthcare and financial business sectors. Emergis' complementary expertise, applications and customer base are expected to strengthen TELUS' existing industry solutions and allow it to better compete in the growing and transforming healthcare industry. This acquisition is consistent with three of TELUS' strategic imperatives: building national capabilities; focusing relentlessly on the growth markets of data, IP and wireless; and partnering, acquiring and divesting.

Going to the market as one team under a common brand, executing a single strategy

On completion of the acquisitions of Emergis and Fastvibe, TELUS immediately began implementing the post merger integration plans to ensure a seamless transition for team members and customers, while ensuring a continued focus on achieving the business goals of the transactions. Consistent with TELUS' standard process for all acquisitions, Emergis and Fastvibe team members were welcomed at events in Mississauga, Longueil, Ottawa and Toronto, and for those not present, through TELUS' own videoconference service. Customers were contacted and provided with notice of the transactions, together with the strategic rationale, and sales specialist teams from TELUS and the acquired businesses met to learn about one another's products and services with a focus on cross-selling complimentary solutions. Almost immediately after closing, Emergis re-branded to "Emergis, a TELUS company" and Fastvibe commenced operating under the TELUS brand.

Investing in internal capabilities to build a high-performance culture and efficient operations

The Company continued to achieve higher retail service levels, as measured by CRTC quality of service measures. In particular, record high measures were reached for consumer service metrics, such as installation appointments met, repair appointments met and out-of-service trouble reports cleared within 24 hours.

3. Key performance drivers

The following is qualified in its entirety by the Caution regarding forward-looking statements at the beginning of Management's discussion and analysis. It is also qualified by Section 10: Risks and risk management of TELUS' 2007 Management's discussion and analysis, as well as updates reported in Section 10 of this document.

Management sets new corporate priorities each year to advance TELUS' strategy, focus on the near-term opportunities and challenges, and create value for shareholders.

------------------------------------------------------------------------- 2008 corporate priorities ------------------------------------------------------------------------- Drive profit from strategic services with a focus on data ------------------------------------------------------------------------- Build scale in vertical markets and leverage the Emergis acquisition ------------------------------------------------------------------------- Exact productivity gains from efficiency improvement initiatives ------------------------------------------------------------------------- Elevate the client experience and build enhanced loyalty ------------------------------------------------------------------------- Execute technology initiatives, including broadband and IT platforms -------------------------------------------------------------------------

4. Capability to deliver results

4.1 Principal markets addressed and competitors

The principal markets addressed and competitors have not changed significantly from those described in TELUS' 2007 Management's discussion and analysis. As described in Section 10.1 Regulatory, the number of wireless competitors is expected to increase in the future, as potential new entrants bid for spectrum regionally, nationally, or both in the May 2008 AWS spectrum auction.

4.2 Operational capabilities

Development of a new billing and client care system in the wireline segment

A pilot implementation for approximately 150,000 residential customers in B.C. is expected to begin in the second quarter of 2008. Additional related development and conversions are planned, including a full system conversion for more than one million B.C. residential customers later in 2008. See Section 10.2 Process risks.

Increasing ability to offer high-speed wireless data service to customers

Building on the Company's investments to expand its wireless high-speed EVDO network, such service is now available in geographic areas covering approximately 80% of the Canadian population. Wireless data revenues are increasing strongly due to increased usage and continued migration of existing subscribers to more widely available full function smartphones and EVDO-capable handsets.

4.3 Liquidity and capital resources

The following discussion is qualified in its entirety by the Caution regarding forward-looking statements at the beginning of Management's discussion and analysis. It is also qualified by Section 10: Risks and risk management of TELUS' 2007 Management's discussion and analysis, as well as updates reported in Section 10 of this document.

Capital structure financial policies (Note 3 of the Consolidated financial statements)

The Company's objectives when managing capital are: (i) to maintain a flexible capital structure which optimizes the cost of capital at acceptable risk; and (ii) to manage capital in a manner which balances the interests of equity and debt holders.

In the management of capital, the Company includes shareholders' equity (excluding accumulated Other comprehensive income), long-term debt (including any associated hedging assets or liabilities, net of amounts recognized in accumulated Other comprehensive income), cash and temporary investments and securitized accounts receivable in the definition of capital.

The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, purchase shares for cancellation pursuant to normal course issuer bids, issue new shares, issue new debt, issue new debt to replace existing debt with different characteristics and/or increase or decrease the amount of sales of trade receivables to an arm's-length securitization trust.

The Company monitors capital utilizing a number of measures, including: net debt to EBITDA - excluding restructuring costs; and dividend payout ratio of sustainable net earnings. For further discussion, see Section 7.4 Liquidity and capital resource measures.

Liquidity and financing

-------------------------------------------------------------------- TELUS' 2008 financing plan and results to-date -------------------------------------------------------------------- Repurchase TELUS Common Shares and TELUS Non-Voting Shares under the normal course issuer bid (NCIB)

In the first quarter of 2008, the Company repurchased for cancellation, 950,000 Common Shares and 1.97 million Non-Voting Shares for a total outlay of $122.5 million. See Section 7.3 Cash used by financing activities.

Pay dividends

The dividend declared for the first quarter of 2008 was 45 cents per share, up by 20% from 37.5 cents per share in the same period in 2007.

Use proceeds from securitized receivables and bank facilities, as needed, to supplement free cash flow and meet other cash requirements

At March 31, 2008, the balance of proceeds from securitized accounts receivable was $500 million, unchanged from December 31, 2007. In January 2008, the Company increased utilization of its existing $2 billion credit facility. The proceeds were used for general corporate purposes, including the purchase of Emergis. At March 31, 2008, $320.9 million was drawn on the 2012 revolving credit facility.

Maintain compliance with financial objectives, policies and guidelines

Maintain a minimum $1 billion in unutilized liquidity - On March 3, 2008, the Company closed a new $700 million, 364-day credit facility with a select group of Canadian banks. This new facility provides incremental liquidity to TELUS and allows the Company to continue to meet one of its financial objectives, which is to maintain $1 billion in available liquidity. The Company had unutilized credit facilities exceeding $1.3 billion at March 31, 2008, including the 364-day facility. See Section 7.5 Credit facilities.

Net debt to EBITDA excluding restructuring costs ratio of 1.5 to 2.0 times - actual result of 1.8 times at March 31, 2008.

Dividend payout ratio of 45 to 55% of sustainable net earnings - the ratio was 44%, based on the annualized first quarter dividend rate and actual earnings for the 12-month trailing period ended March 31, 2008. The ratio was 54% when calculated to exclude the impacts of favourable tax-related adjustments from earnings for the 12-month trailing period ended March 31, 2008.

Maintain position of fully hedging foreign exchange exposure for indebtedness

Maintained for the 8.00% U.S. dollar Notes due 2011, the one remaining foreign currency-denominated debt issue.

Give consideration to accessing the public debt markets in 2008 to refinance short-term financing sources with long-term financing

Following the end of its fiscal first quarter, on April 9 TELUS successfully closed its offering of 5.95%, Series CE, Notes due April 15, 2015, for aggregate gross proceeds of approximately $500 million. The net proceeds of the offering are expected to be used for general corporate purposes including repayment of amounts under the 2012 credit facility, and to refinance short-term financing sources.

Preserve access to the capital markets at a reasonable cost by maintaining investment grade credit ratings and targeting improved credit ratings in the range of BBB+ to A-, or the equivalent, in the future

At May 7, 2008, investment grade credit ratings from the four rating agencies that cover TELUS were in the desired range. TELUS' April 2008 debt issue was assigned credit ratings of: A (low) by DBRS Ltd., Baa1 by Moody's Investors Service, BBB+ by FitchRatings, and BBB+ by Standard and Poor's, all with a stable trend or outlook and all consistent with the agencies' existing ratings for TELUS debt securities. See Section 7.7 Credit ratings.

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4.4 Disclosure controls and procedures and internal control over financial reporting

Changes in internal control over financial reporting

There were no changes in internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

5. Results from operations

5.1 General

The Company has two reportable segments: wireline and wireless. Segmentation is based on similarities in technology, the technical expertise required to deliver the products and services, the distribution channels used and regulatory treatment. Intersegment sales are recorded at the exchange value. Segmented information is regularly reported to the Company's Chief Executive Officer, who is the chief operating decision-maker. See Note 5 of the interim Consolidated financial statements.

5.2 Quarterly results summary

------------------------------------------------------------------------- ($ in millions, except per share amounts) 2008 Q1 2007 Q4 2007 Q3 2007 Q2 ------------------------------------------------------------------------- Operating revenues 2,350.6 2,330.8 2,309.9 2,228.1 Operations expense 1,394.4 1,371.3 1,316.5 1,340.3 Restructuring and workforce reduction costs 6.7 6.1 6.4 3.2 ------------------------------------------------------------------------- EBITDA(1) 949.5 953.4 987.0 884.6 Depreciation 345.7 386.2 332.5 318.3 Amortization of intangible assets 76.4 68.1 70.1 72.5 ------------------------------------------------------------------------- Operating income 527.4 499.1 584.4 493.8 Other expense (income) 16.8 5.8 8.0 18.5 Financing costs 109.4 109.1 86.2 127.2 ------------------------------------------------------------------------- Income before income taxes and non-controlling interest 401.2 384.2 490.2 348.1 Income taxes 109.4 (18.0) 78.6 93.7 Non-controlling interests 0.8 2.1 1.7 1.3 ------------------------------------------------------------------------- Net income 291.0 400.1 409.9 253.1 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Income per Common Share and Non-Voting Share - basic 0.90 1.23 1.24 0.76 - diluted 0.90 1.22 1.23 0.75 Dividends declared per Common Share and Non-Voting Share 0.45 0.45 0.375 0.375 -------------------------------------------------------------------------

------------------------------------------------------------------------- ($ in millions, except per share amounts) 2007 Q1 2006 Q4 2006 Q3 2006 Q2 ------------------------------------------------------------------------- Operating revenues 2,205.6 2,254.6 2,210.7 2,135.2 Operations expense 1,436.6 1,362.4 1,239.7 1,201.2 Restructuring and workforce reduction costs 4.7 7.9 12.5 30.7 ------------------------------------------------------------------------- EBITDA(1) 764.3 884.3 958.5 903.3 Depreciation 317.7 353.2 325.8 335.2 Amortization of intangible assets 49.6 53.9 57.5 46.9 ------------------------------------------------------------------------- Operating income 397.0 477.2 575.2 521.2 Other expense (income) 3.8 10.1 4.0 9.6 Financing costs 117.6 133.6 116.6 127.5 ------------------------------------------------------------------------- Income before income taxes and non-controlling interest 275.6 333.5 454.6 384.1 Income taxes 79.3 91.6 128.3 15.1 Non-controlling interests 1.5 1.4 2.4 2.6 ------------------------------------------------------------------------- Net income 194.8 240.5 323.9 366.4 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Income per Common Share and Non-Voting Share - basic 0.58 0.71 0.95 1.06 - diluted 0.57 0.70 0.94 1.05 Dividends declared per Common Share and Non-Voting Share 0.375 0.375 0.275 0.275 ------------------------------------------------------------------------- (1) EBITDA is a non-GAAP measure. See Section 11.1 Earnings before interest, taxes, depreciation and amortization (EBITDA).

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Trends

The consolidated revenue trend continues to reflect strong growth in wireless network revenues generated from an increasing subscriber base. Wireless ARPU (average revenue per subscriber unit per month) for the most recent quarter was relatively stable on a year-over-year basis. ARPU declined slightly in the previous two quarters following 18 successive quarters of year-over-year increases. The stability in ARPU resulted from strong data growth offsetting declining voice ARPU, which reflects a shifting product mix, pricing competition, and increased in-bucket, or included-minute, usage.

The trend in wireline revenues reflects growth in data revenue including new revenues from the two January 2008 acquisitions. For the 2007 and 2006 periods shown above, this growth in data revenue was fully offset by declining wireline voice local and long distance revenues due to substitution for wireless and Internet services, as well as competition from VoIP service providers, resellers and facilities-based competitors. Quarterly losses of residential network access lines continued to increase over the same periods in the previous year. Partially offsetting the losses on the residential side were gains in business network access lines, which continued to match or exceed those in the same periods in the previous year.

Historically, there is significant fourth quarter seasonality with higher wireless subscriber additions and related acquisition costs and equipment sales, resulting in lower wireless EBITDA. There is a less pronounced fourth quarter seasonal effect for wireline high-speed Internet subscriber additions and related costs.

As described in Section 1.3, quarterly Operations expenses include expenses for introducing a net-cash settlement feature for share option awards granted prior to 2005. The net-cash settlement feature expense (recovery) for the first, second, third and fourth quarters of 2007 was $173.5 million, $1.8 million, $(7.2) million and $0.6 million, respectively, and for the first quarter of 2008 was $0.2 million. The credit in the third quarter 2007 was an adjustment to the initial estimate recorded. Restructuring costs varied by quarter, depending on the progress of a number of smaller initiatives under the Company's ongoing competitive efficiency program.

The downward trend in depreciation expense ended in the second half of 2007 with a reduction in estimated useful service lives for certain circuit switching and network management assets, resulting in write-downs of approximately $20 million and $47 million, respectively, in the third and fourth quarters of 2007. The previous downward trend was interrupted by a provision of approximately $17 million in the fourth quarter of 2006 to align estimated useful lives for TELUS Quebec assets, resulting from integration of financial systems. Depreciation is expected to increase slightly for the full year of 2008 as compared to 2007, due to a planned increase in capital assets. See Caution regarding forward-looking statements.

The sequential increase in amortization of intangible assets in the first quarter of 2008 was due mainly to acquisitions. With a major new wireline billing and client care system put into service in March 2007, $18 million of additional amortization was recorded in each of the second, third and fourth quarters of 2007 and first quarter of 2008, reversing the previous downward trend in Amortization of intangible assets. In addition, amortization expenses in the second and fourth quarters of 2006 and the first quarter of 2007 were reduced by approximately $12 million, $5 million and $5 million, respectively, for investment tax credits relating to assets capitalized in prior years that are now fully amortized, following a determination of eligibility by a government tax authority.

Within Financing costs shown in the table above, interest expenses trended lower. The sequential decline in financing costs in the third quarter of 2007 was due to lower effective interest rates and debt balances plus increased interest income from tax refunds. Financing costs in the eight periods shown are net of varying amounts of interest income.

The generally upward trends in Net income and earnings per share (EPS) reflect the items noted above, as well as adjustments arising from legislated income tax changes, settlements and tax reassessments for prior years, including any related interest on reassessments. EPS has been positively impacted by decreased shares outstanding from ongoing NCIB purchases.

------------------------------------------------------------------------- Tax-related adjustments ($ in millions, except EPS amounts) 2008 Q1 2007 Q4 2007 Q3 2007 Q2 ------------------------------------------------------------------------- Approximate Net income impact 17 143 93 10 Approximate EPS impact 0.05 0.44 0.28 0.03 Approximate basic EPS excluding tax-related impacts 0.85 0.79 0.96 0.73 -------------------------------------------------------------------------

------------------------------------------------------------------------- Tax-related adjustments ($ in millions, except EPS amounts) 2007 Q1 2006 Q4 2006 Q3 2006 Q2 ------------------------------------------------------------------------- Approximate Net income impact 4 20 30 124 Approximate EPS impact 0.01 0.06 0.09 0.36 Approximate basic EPS excluding tax-related impacts 0.57 0.65 0.86 0.70 -------------------------------------------------------------------------

5.3 Consolidated results from operations

------------------------------------------------------------------------- ($ in millions except EBITDA Quarters ended March 31 margin in % and employees) 2008 2007 Change ------------------------------------------------------------------------- Operating revenues 2,350.6 2,205.6 6.6 % Operations expense 1,394.4 1,436.6 (2.9)% Restructuring costs 6.7 4.7 42.6 % ------------------------------------------------------------------------- EBITDA(1) 949.5 764.3 24.2 % Depreciation 345.7 317.7 8.8 % Amortization of intangible assets 76.4 49.6 54.0 % ------------------------------------------------------------------------- Operating income 527.4 397.0 32.8 % ------------------------------------------------------------------------- ------------------------------------------------------------------------- Operations expense (as adjusted)(2) 1,394.2 1,263.1 10.4 % EBITDA (as adjusted)(2) 949.7 937.8 1.3 % Operating income (as adjusted)(2) 527.6 570.5 (7.5)%

EBITDA margin(3) 40.4 34.7 5.7 pts EBITDA margin (as adjusted)(3) 40.4 42.5 (2.1)pts ------------------------------------------------------------------------- (1) EBITDA is a non-GAAP measure. See Section 11.1 Earnings before interest, taxes, depreciation and amortization (EBITDA).

(2) Excluding net-cash settlement feature expenses of $0.2 million and $173.5 million, respectively, in the first quarter of 2008 and 2007.

(3) EBITDA or EBITDA (as adjusted) divided by Operating revenues.

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The following discussion is for the consolidated results of TELUS. Segmented discussion is provided in Section 5.4 Wireline segment results, Section 5.5 Wireless segment results and Section 7.2 Cash used by investing activities - capital expenditures.

Operating revenues

Consolidated Operating revenues increased by $145.0 million in the first quarter of 2008 when compared to the same period in 2007. Revenue and subscriber growth continued to occur in wireless operations and wireline data services. Wireline data revenue was positively impacted by two acquisitions completed in January 2008. Voice long distance revenues continued to erode, while voice local revenue showed a year-over-year decrease due to the effects of local competition.

Operations expense

Consolidated Operations expense decreased by $42.2 million in the first quarter of 2008 when compared to the same period in 2007. Operations expense adjusted to exclude the net-cash settlement feature expense increased by $131.1 million, including $75.1 million in the Wireline segment due to acquisitions, increased cost of sales, initial implementation costs for new wireline enterprise customers and increased expenditures to maintain higher wireline service levels. The increase also supported the 10% year-over-year growth in the wireless subscriber base and network revenue. TELUS' defined benefit pension plan net expense did not change significantly.

Restructuring costs

Restructuring costs increased by $2.0 million in the first quarter of 2008 when compared to the same period in 2007. An aggregate annual expense of approximately $50 million is expected for several smaller efficiency initiatives in 2008.

DATASOURCE: TELUS Corporation

CONTACT: Media relations: Shawn Hall, (604) 697-8176,

; Investor relations: Robert Mitchell, (416) 279-3219,