Canadian Telecommunications Tran Cao Ricco Li Cam Melnyk

Canadian Telecommunications Tran Cao Ricco Li Cam Melnyk Jason Qu

Industry and Companies

Telecommunications �Distance communication by cable, telephone, video, or internet �Involves the sending of information, through a medium, to a receiver

Demographics

Key Target Segments �Fixed Line Telephone �Wireless Telephone �Television �Internet

Fixed Line Telephone �Formerly defined as a telephone line with signals travelling through metal wire or optical fibres �Now includes broadband data and voice ◦ Added due to decreased use of longdistance phone calls and increased use of wireless phones and Vo. IP

Fixed Line Telephone �Increased use of wireless and internet communication means decreased use of fixed line telecommunication �Fixed line market grew by 0. 7% in 2007 to $18. 9 billion with market volume remaining the same

Fixed Line Telephone

Fixed Line Telephone

Fixed Line Telephone

Fixed Line Telephone

Fixed and Mobile Comparison

Fixed and Mobile Comparison

Wireless Telephone �Transfer of communication without the use of cables or lines �Wireless carriers offer coverage to 98% of Canadian population �Wireless communications market grew by 8. 5% in 2008 to $12. 8 billion �Forecasted to reach $17 billion in 2013

Canadian Wireless Market Share

Projected Market Value

Projected Market Volume

Television �Telecommunications firms provide cable or satellite television via subscription or fee �Cable includes transmitting data over fiber optic or coaxial cables �Satellite includes transmitting data via orbiting satellites to customers’ receivers �Cable companies compete by offering video on demand high speed internet access (VOIP)

Television �Telus recently entered the television market �Rogers and Bell already established in the market

Internet �A global system of interconnected computer networks available to several billion users worldwide �Has become increasingly popular in use to the point that most Canadians are users �Cross functionality on cell phones

Internet �Canadian internet access market grew by 8. 1% in 2008 to $4. 5 billion with 10. 2 million subscribers �Growth expected to slow for the next five years

Internet

Internet

Internet

Internet

Technology Upgrades �More companies switching to digital from analog �Analog is a continuous signal with variations that follow the original signal Digital consists of pulses and use binary code and less prone to “noise”

Technology Upgrades �Digital vs. Analog �(HDTV vs. SDTV)

Technology Upgrades �Code Division Multiple Access (CDMA) • Allows multiple users to share bandwidth • over different frequencies More efficient than Time Division Multiple Access and Frequency-Division Multiple Access

Technology Upgrades �Global System for Mobile Communications • • (GSM) Used by 80% of mobile users globally Enables users to use their phones in many parts of the world

Technology Upgrades �International Mobile Telecommunications- • • • 2000 (3 G) Allows simultaneous use of speech and data service Higher data rates Enormous costs of additional spectrum licensing

Technology Upgrades � 4 G LTE - No specific definition yet • High network capacity • A nominal data rate of 1 Gbit/s • High quality of service for next generation • • multimedia support Involves major changes in hardware First commercial release expected in 2010

Government Regulations �New companies now allowed to enter the market �Industry Canada responsible for regional economic development, investment, and R&D. �Specifically, IC is responsible for communications policy and providing certification for communications equipment

Government Regulations �Canadian Radio-television and Telecommunications Commission regulates and oversees the terms and conditions associated with collaboration among telecommunications carriers and service providers

Government Regulations �Competition Bureau Industry Canada maintains fair competition between telecommunication firms �Also responsible for monitoring illegal activities and misleading advertising

BRINGING YOUR WORLD TOGETHER INNOVATION IN COMMUNICATIONS, INFORMATION AND ENTERTAINMENT

Introduction �TSX: RCI. A, TSX: RCI. B, NYSE: RCI �Canada’s one of the largest communication company ROGERS COMMUNICATIOS TSX: RCI. a/ RCI. b NYSE: RCI ROGERS WIRELESS ROGERS CABLE ROGERS MEDIA

Rogers Communication Inc. Structure

Stock Performance (Public, TSE: RCI. B)

Stock Chart for One Year

Stock Chart for Five Years

Stock Chart for 15 Years

MANAGEMENT

Edward Samuel “Ted” Rogers Founder, former CEO, and President of RCI Ted Rogers was born in May 27, 1933 � Ted Rogers’ father died when Rogers was five, but he was determined to carry on his father’s legacy. � In 1956, Rogers graduated from University of Toronto with the Bachelor of Arts Degree. � In 1962, he pioneered stereo broadcasting in FM with CHFI and also founded CFTR-AM in Toronto. � In 1967, Ted Rogers established Rogers Communications. � In 1970’s, Rogers Cable TV became Canada’s most innovative cable company. � Ted Rogers positioned Rogers as the segment leader through his business strategies. � From 1970’s to 2000’s, Rogers became Canada’s largest communication company. � Ted Rogers died of heart failure on December 2, 2008. �

Alan D. Hom Chairman of RCI; CEO, and President of Rogers Telecommunications Ltd Designation • Chartered Accountant Education • B. Sc (First Class Honours) in Mathematics from University of Aberdeen, Scotland Career • Chairman of RCI • President, and CEO of Rogers Telecommunications Ltd • VP of Finance and CFO, Rogers Communications Inc. (September 1996 to March 2006) • President and COO, Rogers Telecommunications Limited (1990 -1996)

Nadir Mohamed President and CEO of RCI � 13 consecutive quarters double digit network revenue growth � 14 consecutive quarters of double digit operating profit growth � FCF turnaround from -$800 M in 2001 to +$270 M in 2004 � Led Rogers Wireless through the acquisition of Microcell Telecommunications in November 2004 � Member of the Board of Directors of Cinram International, Inc. � Member of the Board of Directors of Rogers Communications Inc. Designation � Chartered Accountant Education � Undergraduate degree from UBC Career � President and CEO, RCI (March 2009) � President and CEO, Rogers Wireless (July 2001 � President and COO, Rogers Wireless (August 2000) � Senior VP of Marketing and Sales, Telus Communications Inc. (February 1999 and August 2000) � President and COO, BC Tel Mobility (August 1997 and January 1999)

Rogers Wireless �Wireless Business ◦ Largest Canadian wireless communications service provider ◦ Serving about 37% retail voice and data subscribers ◦ Only national carrier operating on the world FSM ◦ Deployed UMTS �Wireless Products and Services ◦ Provides wireless voice, data, and messaging service ◦ Provides high-speed wireless data services

Rogers Wireless �Wireless Distribution ◦ Has 3500 dealers and retail locations across Canada ◦ Has nationwide distribution network �Wireless Networks ◦ Is a facilities-based carrier

Rogers Wireless Equipment Sales �Wireless Revenues ◦ Network Revenues �Postpaid voice and data �Prepaid voice and data �One-way messaging FY 2008 Revenue $6. 3 billion 8% Prepaid Voice 4% Wireless Data 15% ◦ Equipment Sales �Wireless Operating Expenses ◦ Cost of equipment sales ◦ Sales and marketing expenses ◦ Operating, general and administrative Postpaid Voice 73%

Summarized Wireless Quarterly Financial Result

Rogers Wireless �Recent Wireless Projects and News ◦ Launched the next generation Apple i. Phone 3 G S in Canada which offers speeds up to two times faster ◦ Introducing Internet-ready netbooks with HSPA ◦ Launched the Black. Berry Curve 8520 smartphone ◦ Bell Canada and Telus Corp will start carrying Apple’s (AAPL) i. Phone in November

Rogers Cable �Cable Business ◦ One of the largest providers of cable products and services �Cable Products and Services ◦ Provides analog and digital cable, residential interne services, and voice-over-cable telephony services �Cable Distribution ◦ Rogers Retail stores ◦ Extensive network of third party retail locations ◦ Call centers, outbound telemarketing, field agents, direct mail etc ◦ Exclusive and non-exclusive agents

Rogers Wireless �Cable Revenues ◦ Cable ◦ Internet ◦ Rogers Home Phone ◦ Rogers Retail ◦ Rogers Business Solution FY 2008 Revenue $3. 8 billion Retail 11% Home Phone 13% Core Cable 44% Business Solultion 14% High-Speed Internet 18% �Cable Expenses ◦ Sales and marketing expenses ◦ Operating, general and administrative expenses ◦ Cost of Rogers Retail sales

Summarized Cable Quarterly Financial Result

Summarized Cable Quarterly Financial Result

Summarized Cable Quarterly Financial Result

Rogers Cable �Recent Wireless Projects and News ◦ Announced to launch a 50 Mbps DOCSIS 3 high speed Internet service ◦ Announced to launch 18 new HDTV channels

Rogers Media � Media Business FY 2008 Revenue $1. 5 billion ◦ Radio and television broadcasting business Sports Enterainment 14% ◦ Consumer and trade publishing operations ◦ Televised home shopping service ◦ Rogers Sports entertainment Core Media 86% � Media Revenues ◦ Advertising revenues, Circulation revenues, Subscription revenues, Retail products sales, Sales of tickets, Receipts of league revenue sharing, and Concession sales associated with Rogers Sports Entertainment.

Summarized Media Quarterly Financial Result

Rogers Media �Recent Media Projects and News ◦ Received approval for the purcahse of radio stations K -Rock and KIX Country

Question � After Rogers lose the competitive advantages of being the only company, which sold the i. Phone in Canada, can Rogers sustain its significant growth? 50 Mbps DOCSIS 3 High Speed Internet Service Phone 3 G S Internet-ready Netbooks K-Rock Radio Station 18 New HDTV Channels KIX Country Radio Station

ANNUAL FINANCIAL STATEMENT ANALYSIS

5 Years Financial History Summary

2008 2007 2006 2005 2004 2003 2002 Operating Income 2, 024 1, 496 1, 291 655 641 408 166 Interest Expenses (575) (579) (620) (699) (522) (489) (491) Net Income 1, 002 637 622 (45) (13) 129 312 Revenue Growth Rate 12% 15% 21% 33% 16% 12% 9% Net Profit Growth Rate 57% 2. 4% 148% (238%) (110%) (59%) 172% Liability Growth Rate 16% 8% (4%) (5%) 55% (7%) 9%

5 Years Financial History Summary Profit Margin 2008 2007 2006 2005 2004 9% 6% 7% -1% 0%

5 Years Financial History 2008 2007 2006 2005 2004 Total Assets 17, 093 15, 325 14, 105 13, 834 13, 727 Total Debt 12, 366 10, 701 9, 905 10, 306 10, 887 Debt to Asset Ratio 72% 70% 74% 82%

Recommendation �Hold

Five Year (Monthly)

One Year (Daily)

Company Overview � Telus Corporation was created by the merger of Telus (Alberta) and BCTel in 1999. � TELUS Corporation is the largest telecommunications company in Western Canada and the second largest in the country behind BCE. � TELUS provide a wide range of wireline and wireless telecommunications products and services

Corporate Strategy � Building national capabilities across data, IP, voice and wireless � Focusing relentlessly on the growth markets of data, IP and wireless � Providing integrated solutions that differentiate TELUS from its competitors � Partnering, acquiring and divesting to accelerate the implementation of TELUS’ strategy and focus TELUS’ resources on core business � Going to the market as one team under a common brand, executing a single strategy � Investing in internal capabilities to build a highperformance culture and efficient operations

Segments • Wireline, TELUS Communications -Voice, Internet, TELUS TV, Data etc. • Wireless, TELUS Mobility -Digital Voice, Internet and data service

Wireless Development �TELUS’ wireless segment achieved 9% revenue growth (including 55% data revenue growth) and 10% subscriber growth. �The Company’s Mike service has exposure to the transport, construction, automotive and oil and gas sectors, which have been particularly affected by the economic downturn

Wireless Development �A key driver of wireless growth continues to be the increased smartphone adoption and usage of data services such as text messaging and mobile computing. �Its wireless technology evolution strategy toward fourth generation (4 G) LTE

Wireline Development �The Company operates its incumbent wireline business in B. C. , Alberta and Eastern Quebec �TELUS’ wireline segment external revenues increased 4% in 2008.

Wireline Development �TELUS’ approach to the business market is through growth in Central Canada as well as nationally, with a focus on key vertical markets, including the public sector, healthcare, financial services and energy �Growth from wireline data services, including data revenues from two acquisitions (Emergis and Fastvibe), more than offset losses in voice services.

MANAGEMENT

Management Team Brian A. Canfield, Chair 50 years with TELUS -President and CEO of TELUS -Chair and CEO of BC TELECOM Inc Honorary Doctor of Technology by BCIT Member of the Order of British Columbia and the Order of Canada.

Management Team Darren Entwistle, President and CEO Joined TELUS as President and CEO in 2000 A 30 -year veteran of the communications industry President of Cable & Wireless (United Kingdom and Ireland) in 1999 Bachelor of Economics (Honours) from Concordia University, an MBA in finance from Mc. Gill University and a diploma in Network Engineering from the University of Toronto. Annual compensation 1, 676, 410

Management Team Robert Mc. Farlane, Executive Vice. President and CFO Formerly EVP, CFO and secretary-treasurer of Clearnet Communications Inc. acquired by TELUS in 2000 Named Canada’s Top CFO by Canadian Business magazine Obtained a Bachelor of Commerce (Honours) degree from Queen's University and an MBA from the University of Western Ontario in 1985 Annual compensation: 671, 250

Recommendation �Buy

Bell Canada Enterprises

Common Shares outstanding: 767. 2 M

Five Year Chart

BCE vs S&P/TSX Tel Service

Dividend Payments

History

History

History

Company Overview

Products & Services

MANAGEMENT

George Cope � � � President and CEO Work Experience ◦ Serving the Canadian telecommunications industry for more than 20 years ◦ President and CEO of national wireless carrier Clearnet for 13 years ◦ President and CEO of Telus Mobility in 2000 ◦ Joined Bell in 2005 as President and Chief Operating Officer of Bell Canada, and was appointed President and CEO of BCE and Bell in July 2008 Education ◦ B. Comm. (Honours) degree from the University of Western Ontario Salary: C$959, 327 Stock Options: C$2, 077, 700

Trevor Anderson � Executive Vice President - Network � Work Experience ◦ Former Senior Vice-President Technology for Bell Canada ◦ Vice President level in Bell’s Broadband division, Technology Development in Bell ◦ Program Management in Stentor ◦ President of Bell Advanced Communications for 2 years ◦ Board of ATIS (Alliance for Telecommunications Industry Solutions) ◦ Board of Inukshuk (joint venture between Bell & Rogers). � Education ◦ Graduate of Carleton University with highest distinction – Bachelor of Engineering

Stéphane Boisvert � President - Bell Business Markets � Work Experience ◦ Spent 20 years at IBM and Sun Microsystems ◦ Senior Vice-President, Global Client Solutions Sales & Chairman of Sun Microsystems Canada ◦ Director of the Board of Wellspring, a cancer support organization � Education: ◦ Graduate of Mc. Gill University � Salary: C$673, 494 � Stock Options: C$2, 388, 583

Siim A. Vanaselja � � � Executive Vice-President & Chief Financial Officer Work Experience ◦ Executive Vice-President and Chief Financial Officer of Bell Canada International from August 1996 to January 2001 ◦ A member of the Institute of Chartered Accountants of Ontario ◦ Board director of CGI Group inc. , Jones Intercable, Cable and Wireless Communications and the National Ballet of Canada ◦ Ambassador of the Heart and Stroke Foundation of Quebec ◦ Active fundraiser for the Royal Victoria Hospital and the annual Bell Walk for Kids Education ◦ Honours Bachelor of Business degree from the Schulich School of Business Salary: C$535, 000 Stock Options: C$3, 560, 547

Competitive strengths � Canada's largest Communications Company offering a broad scope of products and services � Operate over 7. 4 million network access lines principally in Ontario and Québec and hold a 67% and 79% share of lines in the residential and business wireline voice market segments � Second largest wireless operator in Canada � Largest digital television provider in Canada � Largest Internet service provider in Canada Can these strengths translate into competitive advantage?

Current Performance

Current Performance

Q 3 Revenue

Q 3 Income

Q 3 Cash Flow

Recent News � Oct. 6 2009 - Bell and Apple have reached an agreement to bring i. Phone 3 G and i. Phone 3 GS to Canada this November � Oct. 5 2009 - Bell clients to access the fastest, largest national wireless network deployment ever starting next month (HSPA & HSPA+) � July 2 2009 - completes acquisition of The Source and its 750 retail locations across Canada � June 23 2009 - Bell Canada announced the public offering of Cdn $1 billion of medium term 4. 85% debentures and redeem all of its outstanding $600 million principal amount of 5. 5% Debentures � May 4, 2009 - Bell obtains ISO 14001 certification for environmental management � Mar 30, 2009 - BCE announces the purchase through private agreements of 10. 3 million common shares under its normal course issuer bid

Recommendation �Buy