Good morning, ladies and gentlemen. Welcome to the TELUS 2020 Q2 Earnings Conference Call. I would like to introduce your speaker, Mr. Robert Mitchell. Please go ahead.

Hello, everyone. Thank you for joining us today. Our second quarter 2020 results news release, MD&A and financial statements and detailed supplemental investor information were posted on our website this morning at telus.com/investors. On our call today, we have Darren Entwistle, President and CEO; Doug French, Executive Vice President and CFO; Francois Gratton, Group President and Chair of TELUS Health and TELUS Quebec; and Jeff Puritt, Executive Vice President and President and CEO of TELUS International. And also joining us today for the Q&A portion of the call, we have Zainul Mawji, President, Home Solutions; Jim Senko, President, Mobility Solutions; and Tony Geheran, EVP and Chief Customer Officer. Given we have a virtual call today, Darren will be taking the questions, and he will be allocating them amongst our various participants on the call today. Briefly on Slide 2, this presentation and answers to questions contain forward-looking statements that are subject to risks and uncertainties and may based on certain assumptions. Accordingly, actual performance could differ from statements made today, so we ask that you do not place undue reliance upon them. We disclaim any obligation to update forward-looking statements, except as required by law, and we refer you to the risks and assumptions we’ve outlined in our public disclosures, including our second quarter 2020 MD&A, our 2019 MD&A and filings with securities commissions in Canada and the U.S. With that, over to you, Darren.

Thanks, Robert, and hello, everyone. Our TELUS team continues to respond dynamically to the needs of Canadians and our communities, whilst demonstrating exceptional operational execution and providing innovative solutions for our customers and communities during the COVID-19 pandemic. Notably, at a time when the human connection has never been more important, our TELUS team remains committed to ensuring Canadians have access to the technology and support that enables them to work and learn remotely, apply for critical government resources, receive vital medical care and stay connected to family and friends. In this regard, our TELUS team continues to deliver on our commitment of $150 million to support COVID-19 relief across Canada. Additionally, since the start of the global pandemic, the TELUS Friendly Future Foundation has contributed $5.5 million to 326 charitable health projects. With the launch of our virtual TELUS Days of Giving this quarter alone, TELUS team members have participated in 200,000 acts of giving, including 500,000 volunteer hours served and 131,000 masks sewn for our communities. Clearly, we’re stepping forward. This past quarter, we expanded our TELUS Internet for Good program to help people living with disabilities, access the vital tools and resources they need to live, fulfilling lives from the comfort of their own homes. Since introducing our Internet for Good program on a Canadian leadership basis, we’ve now enabled more than 65,000 Canadians from low-income families with low-cost, high-speed TELUS Internet. I’d like to take this opportunity to thank the entire TELUS team for their tireless efforts in aiding our customers and our communities and in taking care of each other. Despite the challenges we faced with respect to the global health crisis, TELUS achieved resilient second quarter financial and operational results. Our team delivered industry-leading customer growth of 141,000 net additions, all while maintaining the…

Thanks, Darren. Our efforts in the health space have never been more important as the COVID-19 pandemic continues to impact the country. As we navigate this crisis, the pandemic is highlighting the need to enhance our health care system to support a massive influx of patients, protect the health care workers on the front lines and strengthen our mental health support services. The recent rise in cases indicates that the risk of a second wave is real. COVID-19 will be with us for a longer-than-expected period, and the need for digital health care will expand. A recent study by the Canadian Medical Association found that nearly half of Canadians who use virtual care during the pandemic would prefer a virtual-first point of contact going forward. More than ever, TELUS Health’s leading medical expertise, robust networks and broad technology assets will be pivotal in mitigating second wave risks, providing greater efficiency of care and keeping thousands of health care professionals, families and elderly people, healthy and safe. TELUS is extraordinarily well positioned to lead the market in that sense. Despite some impacts from clinic closures and reduced claims, our business remains strong, with exploding demand for our TELUS Health solutions. And as a result, we continue to generate positive simple cash flow in the second quarter, while revenues in the health vertical, including broadband connectivity were stable. And our team is leading efforts across the entire health care ecosystem in many ways. Most of all, we significantly extended the reach of our health care, virtual care solutions. They are enabling a one-on-one video consultations with health care professionals with a three-pronged approach. First, we have the leading direct-to-consumer virtual care platform, Babylon by TELUS Health. It’s addressing the needs of the 5 million Canadians without a family physician today. Babylon by…

Thanks very much, Francois, and hello, everyone. Despite these significant challenges brought about by COVID-19, TELUS International delivered excellent results in Q2. I am so very proud of the continued resilience and the dedicated focus of our global team in rapidly enabling over 90% of our frontline team members to safely work from home. And importantly, to continue providing exceptional service to our global clients during the pandemic. TI has continued to generate very healthy financial results, surpassing $1 billion in revenue on a year-to-date basis, including double-digit organic growth. We were also able to maintain strong EBITDA margins at the high end of our previously communicated 20% to 25% expectation, whilst also delivering robust simple cash flow underpinned by TI’s CapEx intensity profile. These results have been driven by growth in business volumes, derived from both expanded services for existing clients as well as new client growth. This performance is even more impressive when considered in the context of how quickly government-mandated lockdowns disrupted our traditional service delivery model due to COVID. Beyond the rapid work-from-home deployment, our team also managed our costs prudently while driving meaningful productivity improvements that helps to bolster our strong results. Our team and our client partners quickly embrace the new operating environment, and in so doing, have unlocked exciting new capabilities and success stories for our business. For example, in Q2, for the first time in our history, we launched support for new clients in a 100% virtualized fashion, starting with the sales pursuits and success, to contracting, recruiting, onboarding and training and on to delivering exceptional performance. This was accomplished by leveraging our leading digital solutions in concert with our highly engaged team. Our success to the pandemic has also been fueled by our diversified client base that has provided us with…

Thank you, Jeff. Our resilient second quarter results reflect the thought leadership of our highly engaged team, who collectively embraced the new operating environment, while focusing on the well-being of our team members, our customers and our communities. Despite the widespread challenges of COVID, we delivered a strong set of subscriber results while actively managing our financial outcomes and delivering strong free cash flow. Our results were supported by our continued focus on driving cost efficiency and margin-enhancing initiatives. Of the $250 million goal that we had set for ourselves, we have achieved roughly half by the end of the second quarter. We’ll achieve the rest over the next two quarters and certain of these opportunities will be permanent. I’m proud of the team’s operational execution to realize these benefits, which helped us partially offset the negative COVID impacts that were outlined on Slide 9 of our investor presentation. In wireless, external revenue was lower, 7.7%, driven by decreases in both network and equipment revenue. Network revenue declined 3.3%, largely the result of the pandemic-related impacts, primarily from a roaming decline of approximately $65 million as travel remained restricted and borders were closed. Depending on the future timing of resumption of travel and cross-border reopenings, the roaming recovery is expected to be slow and will continue into 2021. Data overage was also down as customers remained home and used their Wi-Fi networks. While we did experience some offsetting upside in voice usage, the overall overage impact was negative. Network revenue was also impacted by various customer-friendly initiatives, such as waving late payment fees and other charges. Normalized for the total impact of COVID-19, network revenue would have grown by approximately 1.4%. Mobile phone ARPU declined by 5.8%. However, this decline would have been 1.2% – just 1.2%, excluding the COVID…

Thanks, Doug. Mike, can you please proceed with questions for the team?

Of course. The first question comes from Simon Flannery from Morgan Stanley. Please go ahead.

Right. Thank you very much. Thanks for all the detail and the color on the balance of the year. I wonder if you could just talk a little bit about how you’re thinking – you exited Q2 into Q3, where are you on store activity, payment terms? What are you seeing from the enterprise customers? Is Q3 going to be a little bit more of a normal quarter based on what you’re seeing so far? And what are the puts and takes, presumably things like bad debts and so forth? You’re hopefully well positioned for that. So any color around that would be great. And any commentary on the – some of the recent moves by show on wireless plans? Thanks.

Thanks, Simon. Why don’t I kick it off quickly on the shop front, and then I’ll hand it over to Jim and Zainul to top-up in that regard. They can also talk about store activity, and I can close with a little bit of an update on the enterprise market. In terms of Shaw Mobile and the launch this week, I’m going to say something that I’ve said repetitiously over the years, TELUS has a second-to-none superb track record on the competitive front. And I think we’ve demonstrated operationally and financially. And in terms of the economic returns that we’ve generated for shareholders in terms of the success of our strategies. And we have a decided preference, any day of the week, for vigorous competition over onerous regulation. And when you look at the tail of the tape in terms of our capability set, whether it’s our world-leading network superiority from PureFibre to 5G, whether it’s our leading product portfolio, whether that’s the functionality of our products, the breadth of our product portfolio and how that differentiates us, what we can do in that regard on the bundling front. Or the inherent attributes from best-in-class symmetry, latency, content delivery, functionality, and our ability to deliver all of that within a customer service excellence package because of the great culture of our organization, the great people and the way that we lead in respect of service excellence. And then lastly, at the end of the day, products are only going to deliver great results if you’ve got great distribution channels to support them from marketing and sales through to fulfillment, care and billing. And our distribution strength is second to none in terms of the topology. And clearly, as amply demonstrated by our second quarter results, our digital capabilities are just excellent. And that is both in its own right in terms of our digital capabilities, but the way they are all so synergistic with our physical channels. And that supports our ability to do digital go-to-market, digital fulfillment and digital customer serve and support. And so I’ll just stop it there and just hand it over to Jim and Zainul for a little bit of additional color in that regard. And I’ll make a quick concluding comment as it relates to enterprise. Jim, Zainul over to you.

Yes. Thanks, Darren. I’ll start and Zainul, please top-up. First thing is, obviously, we’re not surprised. We’ve been expecting the Shaw Mobile launch for four years now. We’ve been actively bundling our base, simplifying our offers and ensuring we are simple and transparent for our customers. We possess four leading networks across both wireless and PureFibre, which is especially important now. Our wireless network, as an example, has significantly faster speeds and better availability and video quality. We deliver industry best customer service, driven by our team, which is incredibly engaged. We have product superiority across both mobile and home. There’s no comparison on the breadth of services from home security to virtual health to over-the-top content. And we stack up really well on bundled pricing. Overall, TELUS has significantly more points of distribution and a more effective digital experience. And on the distribution front, we have over 300 stores in Alberta and BC to less than 20 from Shaw. We continue to bundle our stand-alone wireless base, and feel that the remaining unbundled base is manageable. And going forward, we’ll continue to focus on mobile and home and our network and our customer experience leadership. Just a quick couple of words on the channel, and then I’ll hand it over to Zainul. 99% of our channels are operational now. Capacity does continue to be restricted due to safety precautions. We’re seeing retail traffic is returning slowly, but still down about 30%. And a return to normal will take a bit of time, especially in the malls. With that said, digital is performing really well. And we’ll continue to enhance that digital experience. Zainul, do you want to top-up?

Sure. Thanks, Jim. As Jim highlighted, we certainly have expected this mobile launch from Shaw. And when you look at the TELUS bundle, it’s truly unmatched in the industry. Each of our product capabilities from our award-winning PureFibre Internet, to world-class mobility, to our superior SmartHome service, are best-in-class within their domain, and they’re based on customer-centric value propositions. So the sum of the parts is absolutely greater than the whole. And then when you layer in our differentiated suite of value-added products, we’ve demonstrated strength in enhancing customers’ digital lives, whether it’s seeing a doctor at your convenience and the comfort of your home via Babylon by TELUS Health, staying safe, protected and insured online with TELUS online security or the most diverse entertainment service with OTT packaging on Optik TV. And what’s more in the current environment, we’ve seen customers come to experience the superiority of our network and product as well as our amazing service and place more value in these capabilities. We also continue to innovate and provide customers with simple and flexible services. Another example of our many first in the industry, yesterday, we announced a partnership with Amazon that offers Prime as a benefit integrated right into the Optik packaging and seamlessly accessible on our TV platform. So we’ve seen our product intensification strategy continue to pay dividends on both ABPU and churn, and we’ve demonstrated our channel execution in market, particularly during very difficult times. The passion, grit and customer-first culture of our team has served our customers and our business well in the past, and we believe it will continue to do so in the future.

On the enterprise front, Simon, that sector for us has been largely resilient. Our revenue is down about circa 1%. Clearly, there’s some obvious areas that have been pressurized at the EBITDA level, including the wireless component of our enterprise sector as a result of the absence of roaming. And whilst there have been some sectors, sadly, that have been hard hit on the enterprise front because of COVID-19, we have seen offsetting factors from growth in areas, including the public sector at the federal, the provincial, and in certain cases, the enterprise level. As these businesses or public sectors look to virtualize or digitize their operations, their business models, their customer support strategies and the like, which is clearly the comment that Jeff was alluding to in terms of the TI support that they’re affording their corporate client base. And it’s clear to me that COVID-19 is going to accelerate digital transformation activities. And I think both TELUS Corporation and TI are very well positioned to address this significant opportunity. And so we’ve been focused for years on building intimacy within key verticals within the enterprise space and driving third-wave data solutions on a data networking, data capability front that include working-from-home capabilities, and includes cloud platforms and Agile IT, complemented by very modern concepts, such as cybersecurity, collaborative cloud services and unified communications. And what we can do for clients on the data analytics front and turn that information to predictive models, leveraging the advent of AI. And I see that getting accelerated by the commercialization of 5G, which I think is going to accelerate this digital transformation and the opportunity to do smart things with our 5G networks in terms of the creation of private networks for our enterprise clients by doing things like network slicing, which…

Thanks a lot.

Next question, please, Mike.

Sure. Next question comes from Jeff Fan from Scotiabank. Please go ahead.

Thanks, good afternoon. Just wanted to follow-up on Jim’s response on the Shaw Mobile question regarding bundling. If we’re trying to kind of unpack how much bundling you’ve done over the years, can you help us a little bit on that? Maybe the perspective to look at it is the CRTC says that TELUS has about 40%, roughly, wireless share in BC and Alberta. I’m just wondering, within your Internet base, is that materially higher, i.e., that would insulate you from any competition from Shaw? And then I guess a quick question on the digital capabilities that you mentioned and Darren has alluded to as well. Any learnings from your customer behavior on what they’re doing on the digital front, particularly related to loading and upgrades? And do you see this digital advantage continuing even as stores start to reopen as we go through the back half of this year and maybe even into 2021? Thanks.

So Jeff, I’ll let both Jim and Zainul top-up on that. I’ll caution them to be a bit careful on the competitive disclosure front. But they’ll both handle that very adeptly. And Tony, why don’t you respond to Jeff’s question in terms of digital excellence continuity and what it’s meant to our organization and what it looks like going forward and how it differentiates us.

Okay. Why don’t I go first and then hand it over. So Jeff, we’ve been actively cross-selling our base now for several years and have had a lot of success on it. Obviously, I’m not – it’s competitively sensitive, how much of the base is bundled. What I would say is that it’s a very manageable unbundled base right now. So we’re very comfortable with where we are. Our customers have really responded well to our bundling. And I think that’s been one of our areas of great success. So we’re feeling really good about where we are, and we are seeing very good customer reaction from our bundles. And especially when you tie that back to our superior wireless network and our superior PureFibre network, the customers – that’s really resonating with their customers. So I’ll leave it there and let you know that we’re confident. So Zainul, did you want to top-up or should we hand it over to Tony for digital?

Yes. Maybe I’ll just make a couple of top-up points. Thanks, Jim. So I spoke about the strength of the individual products in our bundle. And I think what drives our capabilities is that we’re able to leverage those unique and individual differentiated product strengths across elements of the bundle. And I think we also provide our customers with significant flexibility to dial up and dial down within the bundle. So those are areas that have really resonated with our customers. And coupled with our excellent channel execution, we’ve seen really significant progress in our ability to bundle. And we’ve seen growth in our capabilities quarter-over-quarter. So I’ll leave it there, and ask Tony to top-up on the digital.

Thanks. Thanks, Zainul and Jeff. A couple of things about the digital world. We’ve been investing in our platform now for a number of years. And I think you could see when we executed on our Peace of Mind and device financing plans last year, we didn’t rush to be first to market just for the sake of it. We waited until we had an end-to-end capability that we were satisfied with, work for us and for our customers and give them a great experience. And we’ve used that mindset as we develop capability. As we watch the emerging pandemic issues growing at the beginning of the year, we rated our platform. We made sure it was robust and could step up to the volumes we would expect that would be coming. And you can see from our Q2 results that, that worked well for us relative to our peers. I think the real important part of what’s going to happen next is not that things will return to normal, it’s how does this augmentation of our channel capacity enhance the customer experience. And how do we fine-tune that to make sure more and more customers want the exact business digitally, we’re there for them. And we think we’re in a good position right now. We’re not resting on our laurels, and we have a very tight plan of how we expand our capability and where we focus. And what you can expect from TELUS is a consistent execution in that regard.

Jeff, I would note as well that as we amplify digital throughout COVID, we also achieved the highest customer satisfaction survey response in the history of our organization, which proves that you can achieve the duality of leveraging digital and enhancing the customer experience simultaneously. Over to you, Robert.

Thanks, Darren. Mike, next question, please.

Of course. Next question comes from Vince Valentini from TD Securities. Please go ahead.

Yes, thanks very much. Doug, you mentioned 32,000 subscriber number in wireless and a 23,000 subscriber number in wireline. I’m not sure if I heard you incorrectly, but I think you said that the 23,000 subs in wireline were not treated as disconnects because they hadn’t been paying. But I think that’s wrong. Can you just clarify, you did take out 23,000 subs, and you still were able to put up these strong numbers in wireline?

I’ll leave it to Doug. It’s really important that you get the explanation clear because I’m going to have an embolism if you don’t. If this gets misinterpreted, I’m going to be a very grumpy bear.

So yes, we did take them out of our base, and it did increase churn. So our nets were reduced for that amount.

Perfect. And sorry, I forgot the rules here. So Darren, I’ll put this to you, but you can put it to Doug after. Those 23,000 and 32,000 figures, I mean, that just makes sure your numbers look so impressive. I mean postpaid churn at 0.45% is something I don’t think any of us thought was ever possible. Can you give us some context here, though? These numbers elevated because of COVID, but they wouldn’t have been zeros in the past. There’s always some level like that 32,000 on the wireless side. Can you give us any context of what it might have been in Q2 last year?

So Doug, why don’t you just walk everyone through the numbers one more time. And then I’ll make a couple of comments as to what the ingredients are behind those results. And given that you’re our Chief Customer Officer, Tony, I’ll afford you the opportunity to top-up.

So Vince, you’re right. It was 32,000 as a reduction in the wireless space and 23,000 in wireline split between the Internet, TV and the voice product. And in the past, the numbers were – we haven’t – I don’t have the exact numbers at my fingertips, but they are very close in the same proximity in previous quarters of nonpayment disconnects. So it would be plus or minus a small amount, but not materially different.

Vince, key ingredients, and I’ll quickly hand over to you, Tony, but the performance culture of the organization clearly is coming to the forefront here. Secondly, we’ve never let up on our progression path of continuous improvement on customer service excellence. And the traction that we’re getting in that regard is just terrific. And the specificity of our actions, the quality of the service from the transactional through the fulfillment component, the fantastic job that Jim and Zainul have done on smart simplification, which is such a customer-friendly thing to do along the way. The intimacy of our one-to-one marketing. Our retention activities have really been borne out along the way. We have gone from rudimentary on bundling to proficient on bundling to sophisticated unbundling. And the mathematical correlation from one product to dual product to triple play, quad play, quintuple play and the like, has really driven churn through the floor. And it’s been extremely potent, to say the least for our organization in that regard. We have driven hard as it relates to network excellence. And the fact of the matter is, the COVID-19 has taught Canadians that fiber matters. And in TELUS’ case, PureFibre, which means fiber to the home, is the medium of choice in terms of connectivity, given that people want to use that Internet connection for everything from teleworking to network gaming. And so they want the – not just the downlink speed, but they want the uplink speed if they’re doing business. And they want low latency if they’re gamers along the way. And fiber has just been a massive differentiating factor. And people don’t want to give it up. They want to get it, and they don’t want to give it up. And I’ve bored the hell it of all of you…

I’ll try and find something else to add there, Darren. Thank you. I think, Vince, what we’ve demonstrated over the last six years is consistently outloading our peers on a qualitative basis with our RGUs and particularly building off the investments we made in PureFibre and our top – world-class wireless infrastructure. And if you consider this year, not only was our digital channel ready to go, and we think it’s wholly irresponsible to drive traffic into malls and stores when there’s a COVID pandemic. So we were able to make sure we kept our customers safe and make a transact. In our field operations, very quickly in March, we drew from crossing the customer threshold. And developed, within 48 hours of restriction, an ability to deliver what we call a virtual technician model of supporting the customer in their self in-store through a video uplink and through some AR technology that we deployed to help customers completely inside the homework. And we had expectations that this would be sort of 50%, 60% successful. And I have to say we went from a high yield – we’re normally in the high 80s, of our yield on truck rows, dropped to 60% on the first few days of deploying this. But the TELUS patent is really to consider, understand what’s happening, refine, improve and move on. And within a month, we were back into the high 80s. And in fact, we ended in June with the highest yield on our vitality virtual assistance model with our techs, without even crossing the threshold. And now we can do that. But what we do now is we monitor communities and if there are outbreaks, we fall straight back to the no crossing the threshold. We want to keep our team members and our…

Thank you.

Mike, we have time for two more questions, please.

Of course. Next question comes from Maher Yaghi from Desjardins. Please go ahead.

Thank you for squeezing me in. So I wanted to ask you, since the beginning of the pandemic, we have seen the value of health technology companies increase significantly, and many companies have been able to get external financing. In the past, you always stated that TI was more the immediate focus for you when it comes to tapping the capital markets. Has the significant increase from the different provincial government usage of your health solutions make you change your mind or accelerate maybe the plans for TELUS Health to tap the capital markets to get into this new growth opportunity? And my second question is regarding your cost structure. We’ve seen – as you mentioned, you lost $58 million – close to $58 million of EBITDA because of lower roaming revenues. You have also overage revenues that probably affected your profitability. What actions can you take maybe to realign your cost structure because it might take time for you to get back those revenues given that the pandemic doesn’t seem to be letting go? Thank you.

So Francois, why don’t you speak to the first question? Doug, you can take the second question and I’ll top-up on anything thereafter.

Thanks, Darren. Thanks for the question, Maher. You’re right. I think we’re seeing very strong valuations in the marketplace. But I would say a couple of things. The first one is, we’re entirely focused on serving our customers; responding to exploding demand and leveraging the multiplatform and three-pronged approach that we’ve developed; maximizing our growth potential in the marketplace and serving customers and Canadians, the way they need to be served or the way they want to be served either directly through their employers or through the physicians they’re used to seeing. We’re seeing also a lot of companies in the marketplace focusing on customer growth at the expense of a business model that makes sense. So you look at players in the U.S. that are trading on a revenue multiple without any kind of profitable business model. That’s not the way we’re going at it at TELUS. It is a – very much a sound business model that we’re putting together here. And again, leveraging the strength of our distribution capabilities. When you look at what Zainul is doing on the wireline front or what Jim is doing on the wireless front, or Navin Arora and David Sharma are doing on the B2B front. It’s really integrating our virtual care capabilities and solutions to reach the biggest number or the largest number of Canadians. And that becomes part of our bundled approach. And really enhances our relationship with our customers. When it comes to monetizing or benefiting from doing an IPO, I think that’s for further down the line. I think we’re not focused right now on the kind of valuations you’re seeing in the marketplace. That’s not what’s driving our strategic priorities. But Doug, Darren, you may want to top-up.

Why don’t you go ahead, Doug? And pick up on the cost front or anything you want to say on health, and then I’ll close quickly.

Excellent. So on the cost side, over the past three months, as we’ve been going through COVID, we’ve been definitely looking at our operating mode and which of the learnings are we – can we take from the situation and make them permanent? Which of the initiatives that we had, and it started on customer experience, on digital that you heard from Tony, are we going to even accelerate faster with the underlying theme of customers and team members need to be looked after and protected along the way? So there’s definitely cost opportunities that we’ve been working through in our future mode of operation. Digitization and then looking at our – easier to do business with is obviously one. The benefits of fiber, we haven’t fully utilized yet either with the reduction in truck rolls, with the synergies and efficiencies that come with fiber, and there’s still a significant opportunity as we move forward on more customers on our fiber network. And then it’s going to be the direct impact of real estate costs and other, call it, overhead costs that if we change the dynamic of our flexibility with our team members that we’ll be balancing out all of that, call it, more traditional overhead to the more fluid workforce. So those ones will be that top of mind right out of the gate. But there is a list of many more that we’re currently working through that we’ve started to identify and plan for from the learnings of COVID overall.

Just on the health front, I would ask you to take your comment as it relates to those players in the marketplace and reengineer it as to what it means for TELUS. So if you’re seeing those valuations out in the marketplace with other players, take the math of those valuations and apply it to just a component of our overall TELUS Health business. Within the virtual care area to be more specific, I think you’ll get some interesting math as to what the valuation implications are for TELUS, given our position in that market. Secondly, I would say that, that valuation of TELUS should deserve a premium for two reasons: number one, we’ve got an integrated portfolio. Unlike our competitors in this space who are single product players, we’ve got a continuum of solutions from a product perspective across the totality of the primary health care ecosystem. And secondly, we’re profitable. So you don’t have to weigh in on negative EBITDA, it would tell us we’re EBITDA accretive. And so I think that bestow a premium on us as it relates to taking those implied valuations and doing an application of that to our TELUS Health business in terms of just one particular segment on the virtual care front. Secondly, look at our market coverage. Again, I could talk about TELUS Health more broadly, but given that your question is related to virtual care, let’s burn in on virtual care. We have a direct-to-consumer offering on Babylon, where we’ve not even hit our growth stride yet. We’re just opening new markets as we speak on a provincial basis. We have a business to business to employee – business to employer to employee solution with Akira. And then we have a virtual visit solution for docs with whom we’ve got…

Thank you very much.

Thanks, Maher. Mike, we have time for one more question, please.

Sure. Next question comes from David Barden from Bank of America. Please go ahead.

Hey, guys. Thanks very much for squeezing me in. Appreciate it. I guess I just have two questions. First, Darren, in the press release, there was some verbiage that said you were hopeful that you’d be able to get to your targeted dividend increase if the Board allowed it. I was wondering if you could kind of elaborate a little bit on what you think the KPIs the Board will be looking at to kind of evaluate whether they will or won’t kind of support that? And whether that’s just about kind of third quarter performance or maybe how the uncertainty of the forward 12 months might factor into that decision making? And then the second question, if I could, would be just – you guys, obviously, launched your 5G product this past quarter, you announced – in fact, last month, announced Samsung as a strategic partner. I was just wondering kind if you could elaborate a little bit on what actually happened? Which spectrum bands? How much spectrum? One vendor, all the vendors? I was just kind of interested in kind of understanding where we are because we’re going to be extrapolating into 26 new cities over the rest of the year. Thanks.

Okay, Dave, let me hit it. The reason why we’re specific on the quote in that regard is because as we’ve communicated for 20 years, the dividend decision is the providence of the Board. And that decision is made by the Board based on recommendations from management on a quarterly basis. And I never want to surface it, which is why we’re always very formal in the way that we present our pros, our nomenclature in that regard as it relates to the dividend, both current and perspective. What measures does the Board look at? And these measures are not meant to be static, but dynamic. So both at time T and where they’re going at T plus X. The Board looks at the EBITDA robustness in terms of what’s been generated in quarter and what’s expected prospectively. They look at free cash flow generation, again, in quarter as well as prospectively. They look at where we are within our dividend payout ratio guidelines and what that portends on a prospective basis. They’re also stewards of the balance sheet and take into consideration net debt-to-EBITDA and the like. And then they don’t want to make just a static decision in terms of what’s good for a quarter or what reflects what happened within the 90 days of the quarter. They want to be more dynamic than that and look at the sustainability of what we’re proposing because that’s the way that we manage the business. So in making the adjudication, they look at the here and now of those financial parameters that I’ve just articulated, and how we would expect them to evolve 12 months hence. And then lastly, they take into account our representations to the street. And so it matters to the Board. And we’ve had a fantastic…

Thanks for the color, Darren. No, the question was really around the 5G launch announcement. What actually happened in terms of which spectrums got launched? How much spectrum is DSS involved, et cetera?

Okay. So as it relates to the launch, the launch is at the 1.7 gig level with 600 megahertz getting operationalized within key rural areas in the second half of 2020. Our current launch speeds are 1.7 gigabits per second across the topology of Toronto, Montreal, Vancouver, Calgary and Edmonton. Our coverage is around 16% of the Canadian population. As I said in my remarks, we’re going to augment that by 26 municipalities over the course of the year, which will take our coverage up to about 30% of the Canadian population. Through network developments and improvements, we’ll be able to buttress that 1.7 gigabits per second to be about 1.9, 2 gigabits per second as we look to exit 2020 in that regard. Look for us to participate in the mid-band spectrum, which the government has slated for mid-2021. That’s clearly an important global ecosystem in terms of those frequencies and our ability to secure large swaps of those frequencies to continue the 5G marathon because it’s a marathon, not a sprint. As it relates to improving the commercialization and getting more bang for our buck on the 5G speed front along the way, all the way through to what will come thereafter on millimeter wave spectrum auctions on the 28 to 30 gig, 40 gig, 68 to 70 gig and the like. I think for TELUS, this is a huge advantage in our regard because, again, when it comes to new technology deployment, we have a track record second to none. Number two, we do it from urban to rural, hence, my comments about operationalizing our 600-megahertz spectrum within Alberta and BC and to back over the latter half of 2020 in terms of bringing 5G into the rural dominion of Canada, which is critical for both business…

Thanks, Darren.

Thank you, everyone, for taking the time to join us today. Please feel free to reach out to the IR team if there are any follow-up questions. And in the meantime, take care. And for those of you in Canada, we wish you a very enjoyable long weekend. Mike, over to you.

Ladies and gentlemen, this concludes the TELUS 2020 Q2 earnings conference call. Thank you for your participation, and have a nice day.