Good day, everyone. And welcome to the TELUS 2025 Q3 Earnings Conference Call. I would like to introduce your speaker, Robert Mitchell. Please go ahead.

Good morning, everyone. Thank you for joining us today. Our third quarter 2025 results news release, MD&A, financial statements and detailed supplemental investor information were posted on our website earlier this morning. On our call today, we'll begin with remarks by Darren and Doug. For the Q&A portion, we will be joined by Zainul, Navin, Jason, Tobias, and Hesham. Briefly prepared remarks, slides and answers to questions contain forward-looking statements. Actual results could vary from these statements. The assumptions on which they are based and the material risks that could cause them to differ are outlined in our public filings with securities commissions in Canada and the U.S., including in our third quarter 2025, and our annual 2024 MD&A. With that, over to you, Darren.

Thank you, Robbie, and hello, everyone. In the third quarter of 2025, TELUS delivered another period of strong customer growth and financial performance, powered by our team's relentless focus on operational excellence. Our results showcase the compelling value of our comprehensive bundled services across mobile and home solutions, and we're doing that in a complementary fashion with the strategic rollout of TELUS PureFibre connectivity to homes and businesses nationwide. We're delivering far more than connectivity. We're empowering Canadians with transformative digital experiences, including AI-powered smart home energy solutions, including cutting-edge tech-enabled health care and well-being services and as well comprehensive security offerings at the disposal of our clients. These offerings are revolutionizing productivity and enhancing quality of life for our customers. Indeed, this quarter, we achieved an industry best 288,000 total mobile and fixed customer additions. Our close to 21 million customer connections reflect an industry-leading 5% growth as compared to the same period a year ago. Furthermore, our sustained focus on delivering exceptional client experiences continues to drive leading customer loyalty metrics. This was demonstrated by our industry best postpaid mobile phone churn of 0.91% this quarter as we progress through our 12th consecutive year below the 1% level, truly a hallmark of this organization and our culture. Looking at our financial results, we achieved solid and resilient TTech EBITDA growth of 3%. In mobile, we drove healthy phone net additions of 82,000 and leading connected device net additions of 169,000. These results were supported by our ongoing focus on profitable margin-accretive customer growth. This is once again evidenced by our consistent industry-leading customer lifetime revenue, underpinned by our industry-best churn result, which remains clearly the hallmark of the TELUS organization and the financial results that we derive from it. Let's turn now and take a look at wireline. TELUS delivered another quarter of industry-leading total fixed customer additions. Indeed, we have consistently delivered positive wireline net additions every year since the third quarter of 2010. This is a remarkable 15-year track record in that regard. This included an industry best 40,000 Internet net additions underpinned by our leading PureFibre offering. Our consistent strategy of leveraging our superior and growing portfolio of bundled products and services on a national basis continues to differentiate us from the competition in a way that is relevant to customers. Turning to TELUS Health. We continue to execute against our global growth strategy, generating revenue and adjusted EBITDA growth of 18% and 24%, respectively. Moreover, we've now extended our reach to over 160 million lives covered on a worldwide basis. This global scale of our TELUS Health footprint stems from a variety of factors, including smart, targeted strategic investments. It comes from continuous product innovation with a digital and AI thesis. It comes from broadening our sales channels with strong cross-selling execution that is paying off for us, and it comes from disciplined cost optimization through technology integration and synergy realization. Importantly, these factors are all solidly anchored in our customers' first promise. Our LifeWorks integration has now delivered $417 million in combined annualized synergies, $329 million from cost efficiencies and $88 million from successful cross-selling strategies. Notably, this is nearly 3x above our initial target of $150 million that we set when we first acquired LifeWorks in September of 2022. Across our B2B portfolio, we have a potent story of differentiation and diversification. We are the market leader in Canada in respect of IoT, private wireless networking, and 5G solutions. Moreover, we have a leading cybersecurity practice that is at the forefront of how AI is changing the cyber threat and cyber protection landscape. Over the years, through a thoughtful and cohesive data-centric strategy, we have significantly and successfully built high-value diversified lines of business. These global business verticals include TELUS Health, TELUS Agriculture & Consumer Goods, and of course, TELUS Digital. This has enabled business resiliency through the diversified portfolio approach while providing global scale and diverse sources of revenue and EBITDA. Notably, at the end of October, we completed the acquisition of TELUS Digital, making a significant upward move on our data and AI competency set, and this marks a significant milestone in the strategic evolution of our organization. We expect this integration to generate approximately $150 million to $200 million in annualized cash synergies and will deliver the $150 million within the 2026 financial year, and that will be driven predominantly through operational efficiencies. Let's make sure we can do here what we did on the LifeWorks synergy realization front. The synergies coming from the privatization of TELUS Digital include accelerated digital and AI transformation. They include smart business simplification strategies, and they include strategic cross-promotion of our industry-leading product portfolio and services. This will further strengthen our financial performance and yield significant shareholder value creation. Our well-established AI-enabling capabilities across TELUS will continue to be an integral part of our business and increasingly critical to our success. These capabilities are driving materially better outcomes within our organization. And in turn, TELUS can be leveraged as an innovation lab, as a product creator, as a testimonial to commercialize these capabilities to support our external customers on their own AI journey to win in their respective markets. Indeed, the opportunity at TELUS is substantial. Combined across TELUS, our AI-enabling capabilities are approaching $800 million in revenue in 2025. This is expected to increase to approximately $2 billion by 2028, representing an annualized growth rate north of 30%. Notably, this is composed of solely external client revenue, and it excludes other parts of our global B2B portfolio such as health and agriculture and consumer goods. Supporting this growth are 4,000 dedicated professionals and AI engineers delivering digital products and solutions that help clients transform their businesses and do that transformation at scale. One component of this growth is our September launch of Canada's first sovereign AI factory. This firmly establishes TELUS' leadership position in this space as we have ready today, the infrastructure and compute ecosystem to help Canadian businesses broadly deploy AI. We are the first North American service provider to become an official NVIDIA cloud partner, utilizing our state-of-the-art data centers to support customers and partners such as OpenText, League, EY, Accenture and Railtown, to name but a few, who immediately benefit from our sovereign AI compute solutions. TELUS is providing the secure sovereign foundation our country needs to create made-in-Canada solutions to accelerate growth and to advance our competitiveness in the global digital economy for generations to come. To wrap up, our Q3 performance reflects the strength of our core operations and the power of our differentiated strategy. The reliability of our results demonstrates our team's dedication to delivering superior customer experiences across our industry-leading wireless and PureFibre broadband infrastructure and technology. Our substantial network investments enable positive social and economic outcomes for Canadian communities nationwide whilst continuously enhancing our operational performance, our financial results, and our customer satisfaction. Moreover, these network investments are powering Canada's digital sovereignty through our pioneering and leading AI infrastructure and technology. And as we look ahead, we are positioned for sustained success, underpinned by ongoing EBITDA expansion and disciplined capital deployment that together generate substantial free cash flow growth for our organization and our investors. Our strong financial foundation supports our industry-leading dividend growth program where today, we increased our quarterly dividend at a moderated rate of 4% to $0.4184. This is reflective of our ongoing commitment to delivering sustainable shareholder returns. Furthermore, we continue to progress considerable deleveraging initiatives. Notably, we remain on track to achieve our leverage target of 3x by 2027, whilst at the same time, stepping down and importantly, eliminating our discount dividend reinvestment plan. In September, we closed our transaction with La Caisse establishing Terrion as Canada's largest dedicated wireless tower operator. This unique partnership will enhance wireless connectivity for Canadians whilst unlocking significant value for TELUS shareholders by strengthening our balance sheet, accelerating our deleveraging program and providing another growth vector for TELUS to leverage. The team is working hard to quickly operationalize Terrion, which already has 3,000 wireless sites across the country. Moreover, it's begun construction of its first multi-carrier tower in Nanaimo, BC, with more planned in the months to come. Finally, in closing, with Remembrance Day approaching, I would like to offer on behalf of the entire TELUS organization, my heartfelt gratitude to our veterans here in Canada and around the globe. These brave individuals, including my own father, Desmond, who served with the Royal Canadian Navy in the Second World War, demonstrate immense courage to preserve the rights and freedoms of all Canadians. I hope you join me in wearing a poppy as we pay tribute to those who serve and who continue to serve so that we and our future generations can enjoy a better life. And on that note, I'll turn the call over to Uncle Doug.

Thank you, Darren, and hello, everyone. The mobile network decreased slightly, in line with the second quarter at 0.6%. This performance reflects growth in mobile phone and connected device subscribers and a 9% increase in IoT revenue, balanced by a decline in mobile home revenue. ARPU continues to improve, with a decline of 2.8% this quarter, which is a 50 basis point improvement sequentially. We see improvements quarter-over-quarter across new activations, rate plan changes, and customer renewals, showing our efforts to manage network revenue pressures. Fixed data revenue grew by 1% year-over-year, making us the only provider to report positive growth for 19 consecutive quarters. Within the Consumer segment, data revenue increased by 4%, driven by a 6% rise in residential Internet revenue, reflecting ongoing customer growth and higher ARPU alongside increased security and automation revenues. In the business segment, fixed data revenue declined due to year-over-year variability and changes in customer contracts. However, this was somewhat offset by continued small growth in small and medium businesses, supported by our diverse portfolio of solutions. TTech adjusted EBITDA, excluding Health, rose by 2%, with a margin expansion of 210 basis points to 43.4%. These results stem from our focus on profitable growth while also concentrating on cost reduction and increasing the adoption of TELUS Digital solutions, leading to substantial competitive advantages. In Telus Health, operating revenues and adjusted EBITDA grew by 18% and 24%, respectively. This growth resulted from global business acquisitions, including Workplace Options, as well as organic growth in payer and provider solutions, showing strong performance in collaborative health records and recurring revenue from electronic medical records and virtual pharmacy solutions. TELUS Health adjusted EBITDA margin expanded by 60 basis points to 17.1%, slightly lower than Q2 as we begin post-acquisition integration work related to Workplace Options. In the TELUS Digital segment, operating revenue grew by 5%, with solid performance across various industry verticals. We continue to see strong performance in our AI and digital solutions across service lines. However, TELUS Digital's profitability continues to face pressures, with an adjusted EBITDA margin of 11.1% for the third quarter. We remain committed to mitigating operating margin pressures while making targeted investments in customer quality and strategic initiatives to enhance our operations through technology and greater global efficiencies. The near-term synergies from the TELUS Digital privatization include reducing public company costs, lowering borrowing costs by leveraging TELUS' strong credit position, and achieving operational efficiencies. TELUS Digital will continue to appear as a segment in our financial statements until the end of 2025, with a review to happen when we release our Q2 results in February 2026. On a consolidated basis, net income for the quarter was $431 million, and EPS was $0.32, which is an increase of 68%, mainly due to gains from the purchase of long-term debt associated with our tender process that concluded in July 2025. Adjusted net income of $370 million decreased by 10%, while EPS of $0.24 was down 14%. Capital expenditures, excluding real estate, fell by $16 million or 2%, primarily due to the cancellation of certain wireless and fiber network projects in addition to ongoing AI investments. Overall, capital intensity stood at 12%, an improvement from 13% in the previous year, continuing to lead the industry. Free cash flow increased by 8% to $611 million compared to the same period last year, supported by TTech EBITDA growth, lower capital expenditures, and decreased contracted wireless volumes. For 2025, we expect TTech operating revenue, including our Health segment, to be at the lower end of our target range of 2% to 4%, with variability in mobile handset equipment revenue as we enter a high-volume fourth quarter. Importantly, all other targets remain unchanged, demonstrating the resilience of our business and effectiveness of our operations. After the privatization of TELUS Digital, we will implement our integration plan. The previously issued guidance for TELUS Digital will no longer be relevant and will not be updated for the rest of the year. Regarding our balance sheet, the average term to maturity of our long-term debt is just over 13 years, with a weighted average cost of capital of 4.61%. Our leverage ratio improved to 3.5x, a decrease of 20 basis points sequentially from Q2 2025. This improvement was aided by cash received from our partner, Terrion, and the repayment of the TELUS Digital credit facility in Q3. We anticipate leverage may slightly increase in Q4 as we pay for the TELUS Digital privatization. We remain on track to reach a leverage ratio of approximately 3x by the end of 2027, while gradually decreasing our dividend reinvestment program discount starting in 2026, with a total removal by the end of 2027. Our financial position will continue to strengthen, and we will focus on generating shareholder value throughout 2025 and beyond. Our attention will be on EBITDA growth, reducing capital intensity as we move towards our target of 10% robust free cash flow generation, and our active asset monetization program, including forming partnerships where appropriate for TELUS Health and TELUS Agriculture. With that, Robert, back to you.

Thanks, Doug. Karl, we are ready for questions, please.

The first question is from Maher Yaghi from Scotia.

Great. I have a question regarding wireless and another one about Terrion. Doug, you mentioned in your remarks that ARPU has seen a slight improvement sequentially. Can you provide an overview of what you believe needs to occur to achieve growth in ARPU again? Additionally, what are your thoughts on the churn outlook? While it is currently low, we've noticed a small increase this quarter. What factors are contributing to that change in behavior regarding wireless? For the second question on Terrion, what should we expect regarding the capital requirements for the business moving forward? Are you looking to acquire existing towers, or will you be focusing on constructing new colocation towers in various regions of Canada? Also, how will we see the cash flows from that business reflected in your free cash flow calculations?

All right, Doug. Go ahead. Second on the last one, you're the Chair of Terrion. So we'll do Terrion on and then maybe pass to Zainul for ARPU. No, I think you should do it all. Go ahead.

All right. So on Terrion, I think the best way to describe it is, yes, we are looking at acquiring towers where appropriate to do so, and that could be either outright purchases and/or partnerships on bringing more partners into our overall partnership. We will continue to build, and we have a densification of our network and building our capacity, as even Darren highlighted, some of the new ones that we've already started. Cash flow out of the gate, any of the build costs are coming out of Terrion. And so any distributions that would be coming out of Terrion would be net of that CapEx. And so as we consolidate Terrion into our books, you will see 100% of the CapEx and then you'll see a lower distribution. And as we define our free cash flow definition into the future, we will make sure that that is very clear on the ins and outs as you see that in both pieces. So I think that will be very clear and it will be transparent when you see anything of materiality. Terrion has only been in play for 2 months, so there has been a minimal impact this quarter. On ARPU growth, I think it's going to be the continued hard work that we see from the team on step-ups and the prices that we're seeing on new acquisitions as well. We've seen a little bit better on device subsidy as well. But as we get into the fourth quarter, and you see Black Friday and Christmas specials that will come in, and any aggressive specials could obviously slow that down. But I think it's momentum. Once it's through your base, it's going to be slow and steady back on the way out. And so far, good momentum, but I think it's to be determined if that holds or not as we move into the fourth quarter. And so I think that would be my best assessment.

Just 2 top-ups on that. Given that we don't entirely control our own destiny on the ARPU front, I think it's important that we continue to improve our profile on unit cost to serve. So you've seen us make some good progress there getting into the double digits on the cost reduction front. I think we need to keep going down that particular path and lower our unit cost to serve. And that's one of the attractive aspects of having TELUS Digital now fully in the fold so that we can leverage AI technology to really drive down unit cost to serve within our consumer and our B2B wireless operations. And then the other thing that is a great antidote to ARPU pressure as we hope for better days ahead is product bundling. We've got the best product portfolio in the industry to the extent to which we can increase our product intensity in our customer relationships through progressive bundling, that's going to give us a holistic outcome with the client in terms of overall economics that's extremely appealing.

And just to be clear, Doug, on free cash flow, any distribution that Terrion is going to be making to its equity shareholders will be deducted from your free cash flow calculation?

We're going through that as we speak, but it will be transparent of where it is. But it will be how we assess the capital item because when you think through the capital item as well, we're not paying for 100% of the capital. We have to consolidate it. So I need to make sure that that is very clear on both the capital that we're accountable for and then the distribution, but we'll make sure you see the net on both.

The next question is from Jerome Dubreuil from Desjardins.

The first one is on the partner build model. If you can please discuss the implications from a financial standpoint. Maybe I'm just throwing ideas out there, but maybe the margin profile is going more toward a wholesale model, but lower CapEx. Is this the right way to think about it? And if you can discuss the different return profile of owners' economics versus the partner build, please.

So just on the fiber side, I assume that's the partnership you're referring to. The economics are that we would end up either signing a lease for, call it, a dark fiber lease and/or we take a community as it's built, and it's our initiative to ramp up and scale it. And so the economics are based on, I would say, similar to what you would see on any third-party fiber lease or fiber wholesale arrangement. And the third party is making their money just as we would if we were wholesaling our fiber to someone else. So it's a very similar structure. And we just have a couple of different scenarios out there of how we lease, but it would be a fair market value for what a lease arrangement would be on any kind of fiber transaction.

And overall, our goal is to ensure that when we're leasing or when we're renting fiber on a wholesale basis, the return, the total economic return is equal to or better than the economic return that we derived historically from our own fiber build in Western Canada. And the reason why we've set that Axiom and think that it's doable is clearly we have much greater scale today on the fiber front. So we should be better positioned to seize those economies of scale. We have better technology deployed than what we had historically during the fiber build time in the West from 2014 to 2020 that improves both operational efficiency and operational execution. And we have far more products. When we started to build fiber in the West, the revenue returns were very much around Internet and TV. Now our business still has the Internet and TV components, but we have the security component. We have smart home automation. We have smart home energy services, so on and so forth. So again, leveraging the limitless bandwidth of fiber. We're also looking to secure economies of scope by creating new services over that rented fiber and getting a better return than what we did originally on our own build activities.

Second one for me is, can you please provide clarity on the, I think you call it AI-enabled revenue going from $800 million to $2 billion? If you can discuss maybe what are those lines of business? Is this replacing other existing revenue? Or is there kind of a direct line of revenue here that's going to be going from $800 million to $2 billion?

Okay. Let me tackle that. And then if you want to have a follow-up for additional detail, we can go there. Looking at the base right now at the $800 million level. That base in terms of the question that you're asking is comprised of a variety of revenue sources. They include SaaS solutions that we're providing. They include our cloud solutions. They include the myriad of Gen AI applications that we have developed both within TELUS proper as well as within TELUS Digital. They include our data annotation business, and they will include, it's very minor right now, but it will grow to be major prospectively, our sovereign AI GPU compute solutions. We like the position that we're in here because we are extremely unique in that TELUS controls the entirety of the AI compute ecosystem. And that is significantly differentiated from our North American peer group. So it's all in-house at TELUS, whether you're talking about AI inferences, whether you're talking about AI models, or whether you're talking about AI training. And we would believe in terms of what supports our revenue going forward that our holistic in-house solution aided and embedded by our partnership with NVIDIA creates a series of superior attributes that's going to drive the revenue model progressively in terms of getting from that $800 million to $2 billion. And so when you look at these components, number one, I think we are fairly unique in that we explicitly qualify in terms of a desired Made in Canada sovereign AI solution consistent with the white paper that the federal government has just published. And I got to believe that that is deeply relevant. I also believe it's important in terms of revenue generation as to where the government is going to place their business be it at a federal, provincial, or municipal level because that's going to be the qualifier on the RFP. The other thing that I think is distinct about us and our relationship with NVIDIA and our strategy of going from $800 million to $1 billion is that we're taking a modular build approach. You can look in the papers this morning and then look back historically. There's an Oklahoma land race to build infrastructure. And then 2 weeks later, people are worrying, 'oh, this is going to be a bubble, and we're going to have overinvestment and too much infrastructure, and we're not going to be able to move the inventory.' And it's oscillated back and forth in that regard. We think whilst the supply and demand component is still getting figured out. Our modular build approach is the right way to address the market opportunity, but do it from a responsible CapEx investment point of view. The other advantage of the modular build rather than big bang is that we can continuously take advantage of improvements in chip technology, leveraging again our NVIDIA relationship. And as the chips continue to get better, we're not locked in on a bulk basis with last-gen technology. We can leverage next-gen technology. And that makes a difference on compute power, but it also gives us advantages in areas like power consumption and cooling which are, of course, nontrivial as it relates to their importance. And because we control the entirety of this ecosystem, I would imagine your next question is, well, if you're going to go from $800 million to $2 billion, what's the margin? Well, I'll tell you the margins are, a, attractive and they're more attractive to the organizations that control the totality of the compute ecosystem from inferences, models all the way through to the training capability component. And so that's an exceedingly attractive aspect for us. And we don't have to share our economics with a myriad of partners that have to buttress our solution because of our capabilities to do it in-house, aided and embedded by TELUS Digital. From a specificity point of view and going from $800 million to $2 billion across those product lines that I've just articulated from SaaS all the way through to the sovereign AI component. As it relates to the sovereign AI component, we're forecasting that by 2028, we will be circa 25,000 GPUs supported by 50 megawatts of power. And our model will be a cluster-as-a-service model. It's a rental model on a per-GPU basis within the cluster construct with a dollar charge on a per-hour basis. I'm not going to get into pricing on this call, but you can work through the economics as to how big that will be on a revenue basis and how attractive it can be on a margin basis given the control of our ecosystem. And then the other big area that we see contributing to the $2 billion that I think, again, is entirely unique to TELUS, almost fortuitously so, if you will, but we will lead the world in the combination of customer experience and AI. We will lead the world in the fusion of AI with CX on the client experience front. And we will be developing AI capabilities from bots to specific copilots for lines of business to both help TELUS and our external clients leveraging the developments on the back of TELUS in terms of humans in the loop, aided and embedded by copilot capabilities across specific lines of business that drive better selling outcomes, better service outcomes along with lower churn and better agent training outcomes that really support a superior client experience in terms of growth, service as well as the economics because of the AI contribution to the human performance factor and will drive this contribution right through to the agentic level as well. And we expect that to be a big source of growth on a go-forward basis because we already have a huge client base, a legacy CX client base within the TELUS Digital organization where we have well over 650 clients, some of the world's largest organizations that are crying out for a CX AI transformation strategy and for us to help them along that particular journey. And so that's the color on the $2 billion in terms of specificity and where it's coming from.

The next question is from Vince Valentini from TD Cowen.

Darren, great answer. And you're right, you would have predicted that the next question may have been margins, but close after that would be CapEx to achieve the $2 billion, especially when it comes to the sovereign AI factories. Can you talk a little bit about how much you have to invest and clarify to us that this definitely still fits within the 10% CI target that you have?

So yes, it would still fit into our bucket. Based on the module approach that we talked about, we see this as a very digestible but strategic and well laid out plan over the next few years. And I think because we already have the land, we already have the data center infrastructure set up in both the East and the West, it will allow us for that easier transition.

And I think the other attractive aspect of the modular build approach as it relates to your question on cash flow, we'll be able to recycle the attractive margins that we make on GPU utilization and recycle that back into the funding of the next module and bringing new GPUs online. And so it's a philosophy or a mentality that we will eat what we kill, leveraging off the progress that we're making and the inventories that we're building.

Okay. Sorry, did you say earlier that there's potentially partners involved with the build as well too, though, so it may not be all on your balance sheet? Maybe I misheard you in your opening remarks.

We're looking at partnerships as well as our own data centers. So looking at opportunities that would allow for even further expansion as required. And so I would say, yes, we are looking at partnerships where applicable, and it would go well beyond just our Kamloops and our Rimouski data centers.

Okay. I have one more follow-up question for clarification. Your lease costs or lease principal payments decreased by 20% compared to last year, which is encouraging to see. Can you explain how that occurred, Doug? Is there any connection to Terrion and the shift of tower leases to a different subsidiary?

No, we can provide more details later, but we've restructured some of the leases, which has positively impacted our free cash flow. Our goal is to manage our cash flow more effectively, and that was the main reason for the change.

The next question is from Drew McReynolds from RBC.

Maybe one question on sovereign AI from my perspective. Are we going to see this ramp-up in revenue here through the fixed data services line? Does it kind of spread out through other lines just in your financials, just so we can kind of understand the moving parts there? And then secondly and separately, can you just speak to some of your success you're getting on Internet and the broader kind of product portfolio in Eastern Canada. Do you see any differences in terms of what you're able to do in the West versus what you can in the East? And just maybe an update on where you're getting more success on the product intensity portfolio and where there's more wood to chop in terms of commercialization?

Maybe I'll kick it off and hand over to you, Doug. Where you can look for the manifestation of the revenue created on our sovereign AI factories is twofold. You'll see it within our TELUS Business Solutions organization, and you'll also see it within TELUS Digital. And we would intend in February to give additional guidance on how we'll report TELUS Digital as a business segment. On top of that, we will provide additional ad hoc disclosure, so you'll be able to assess the process that we are following and the yield that we're getting off the sovereign AI factory and the GPU investment. So we'll give you clarity into that specifically.

And within some of the product reporting between fixed data and others, you will get even more insights as well of where that's showing up. On East-West loading. We've seen good loading across the board, and it's both East, both West and then business within the small business area is contributing to those Internet loads. And on a bundled basis, we are seeing obviously a little bit more bundling still in the West, but gaining momentum in the East.

The next question is from Stephanie Price from CIBC World Markets.

I was hoping you could talk a little bit about your strategy on device financing and how that's flowing through to the TTech service revenue? And maybe more broadly, how you think about TELUS' positioning in the wireless market at this point?

I couldn't hear the first part, what was it.

Device financing.

Device financing is really the flow-through on the balance sheet. So you'll see it build up over that 2-year period. Where how it hits your P&L will be depending on how much of a handset subsidy you give. And the handset subsidy then is prorated between upfront hit and an impact on your ARPU based on an allocation from the accounting rules. So it takes the fair market value of the handset, the fair market value of the monthly recurring revenue and allocates it to both. And so you'll see from a cash flow perspective, lower handset financing, obviously, is impacting positively on cash flow. And then what goes through your P&L is really only impacted by whether you give a subsidy or whether you make a margin. And that's what you would see in our financials on any quarterly basis.

Okay. And then just as a follow-up, TELUS has announced they're an MVNO partner for Cogeco's wireless launch and BC recently announced a fiber expansion into Alberta and BC. I understand financial details aren't disclosed, but hoping you can give some color on the financial profile versus the TTech segment? And what kind of impact we can expect to see from this over time.

Take it away.

Yes. So on the Cogeco one, it's all going to be based on roaming. So we will get that through roaming revenue, and it will build as their volume grows, and it'd be at a wholesale rate, a commercially driven wholesale rate. I think on the Bell side of reselling in the West, I think we are obviously supportive of competition. And the wholesale revenue that you get comes at a higher margin, and you don't have the success-based capital, but you don't get the product intensity. So you would have a fast payback, you'd be earning margin and really good margin right upfront. And then you would not have that success-based capital, so it would take pressure off the capital number concurrently. And there's a good chance these are customers that we would not have gotten, so it is a net benefit to us. So over time, you could build up a base just like wholesale and wireless, and it is high margin, and it's contributing, obviously, to our P&L. But from a customer experience perspective, we still want to obviously win in retail and our bundling and our product superiority will continue to compete well there.

Thanks, Stephanie. Karl, we have time for 1 more question, please.

The final question is from Matthew Griffiths from Bank of America.

Could you share your perspective on the health outlook? The growth has been robust this past quarter, partly due to the acquisition, but I would appreciate your comments on the underlying performance we might anticipate moving forward, as this would assist with our modeling. Additionally, regarding the information you provided on AI, I don't want to revisit it extensively, but you mentioned the positioning of the government as potential buyers based on their position paper. Is your initial assumption for the $2 billion revenue target primarily leaning towards government adoption of these services, possibly with a delay in enterprise adoption, or do you envision equal adoption among these main customer segments?

Yes. So the answer is the latter, a wider distribution, not anchored on the government front. It would include government, but equally or even more broadly, enterprises would include start-up organizations that would want to be able to leverage the compute access that we can provide. You could think about research opportunities. It really is a broadly distributed portfolio of customers that we would be going after. And there's aspects of exploration as well. We've got the capability. Let's see how it develops related to market need along the way. And because we've done it on a modular basis, we can be agile and responsive. But the answer is no, it's not anchored on government. Navin, do you want to maybe speak a little bit about the view on health prospectively from a growth point of view?

Yes, I'd be happy to. Thanks, Darren, and thanks for the question, Matthew. I would say we're seeing good acceleration in the health business in terms of operating revenue. So we saw that improve to 18% in Q3, and that obviously was helped by a full quarter of Workplace Options this quarter. And when I look ahead, I see some strong organic growth in the business, both in the employer and Payvider business, and we're seeing that because of strong churn performance and as well as really strong sales bookings. So as an example, the employer business, sales bookings are up 72%. Clinics are also up 44%, and the Payvider business is up 18% all year-over-year. And so that bodes well for that revenue coming online in the future. And when we think about the WPO integration, not only are we seeing good organic revenue growth from that part of the business, but what we're also seeing is their really strong operating model is driving EBITDA margin expansion as we migrate more and more of our former TELUS Health operations onto the WPO case management system. And so we're expecting even further improved churn, improved stickiness through customer experience, the opportunity to really drive improved product intensity tied to that improved experience. And then, as I said, improved margin contribution from that business. And then also prospectively, we really like the global footprint that we've developed and the markets that we're playing in have very strong growth opportunity. And as products like EAP, employer well-being services, employer well-being platform, capabilities, and the gamification of well-being, mental health capabilities, as those capabilities continue to improve in terms of importance in those markets, we're going to ride that market growth wave tied to that. So feeling very good about that. And then maybe the last thing I'll close with is on the Payvider side, we've seen some very good organic growth coming from deals tied to Platform as a Service, our data capabilities, and our ability to monetize the analytics coming from the data, and we're starting to see strong growth there. We also sold our largest pharmacy management system deal recently. So feeling very good about the prospects of continued growth in the health space. So with that, I'll pass it back to you, Darren.

Okay, Robert.

Okay. Thank you, Matt, and thank you, everyone, for joining us today. Please feel free to reach out to the IR team with any follow-ups. And with that, back to you, Karl.

This concludes the TELUS 2025 Q3 Earnings Conference Call. Thank you for your participation. Have a nice day.