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Normally when Robert McFarlane gives the Telus Corp. board of directors a year-end update on corporate strategy, he uses a single PowerPoint slide. This month, he needed 45 slides to bring directors up to speed on changes that had occurred since their strategy session held in September.

"There is an unprecedented amount of change, and it's not just economic," says the chief financial officer and executive vice-president of the Vancouver-based company. "It's regulatory, it's political, it's competitive."

For Telus, the nation's second-largest phone carrier, change in 2008 came at a furious pace in an industry widely regarded as conservative and predictable. Events included new industry pricing plans, new smart phones, a decision to invest hundreds of millions of dollars in an alternative wireless standard, the last-minute collapse of its rival BCE Inc.'s buyout, and Ottawa's wireless-spectrum auction. The auction raised $4.25-billion for the government, cost Telus $880-million and opened the door for numerous new competitors across the country.

The only way for an organization to remain on its feet with so much in flux is to have established core pillars of strength, and at Telus, that has meant keeping a strong balance sheet and a culture that encourages adaptability, Mr. McFarlane says.

Similar to the rest of the telecom industry, the company faces an additional financial challenge on top of navigating the economic crisis. Telus's traditional core business of long-distance and local phone service is eroding. To replace the fat and steady profit margins of these streams, the carrier needs to expand smartly in the growth areas of wireless communications, data transmission and video services, while at the same time shrewdly managing its costs.

"We're a very complex business. Automotive is [simpler]. It's in decline. We're a business with [dramatic] growth in some areas and decline in other areas," Mr. McFarlane says.

His game plan for 2009 is to increase revenue by between 4 per cent and 6 per cent, to slightly more than $10-billion; boost capital expenditures by 12 per cent, to $2.1-billion; and spend between $50-million and $75-million to eliminate more positions and continue restructuring.

How are you adjusting your strategy to contend with what looks like very challenging economic conditions in 2009?

The economy may be pressured, you may have less growth, but you are going to have systemic growth in the areas of wireless and data. So the issue is, how do you position yourself best to take advantage of that?

We're pursuing long-term growth investments. For example, the [next generation] HSPA [high-speed packet access] wireless technology overlay on our network is a significant undertaking and investment. We're investing significantly in expanding our wire-line broadband network in Western Canada so that we can offer higher Internet speeds and Telus TV.

We've also had considerable success in winning some large enterprise deals on the wire-line side. Examples are the government of Ontario, City of Montreal, Department of National Defence. When you win these deals, you proceed to invest a fair amount of capital well in advance of revenue. This means they are dilutive in the short term. But they represent long-term investment and we are pursing them.

In order to do this, we also have to recognize that we are in other businesses that are eroding. So we have to become more efficient and address the cost structure in these declining areas in order to fund investment in the growth areas.

How did you react when you first sensed the economy was in trouble?

I don't think there are any dramatic changes. It really goes to the effect that we are well prepared.

By way of example, one of my primary responsibilities is the balance sheet of the organization. And we've had a well-defined, well-communicated and transparent financial policy in terms of how much leverage we will have, about what percentage of earnings we will pay out as dividends. Therefore, we have a high degree of credibility and support in the capital markets.

We have a lot of liquidity, we don't have any near-term debt maturities. We just had all four of our credit agencies reconfirm their credit ratings in our target range. All of which is to say we are in a very strong position to weather any storm. We just renewed a $700-million bank credit facility for another year at a time when a lot of companies can't raise any capital.

What do you see as the best and worst moves by policy makers trying to deal with the economic crisis?

This summer we had $4.3-billion extracted from the Canadian wireless industry to purchase spectrum due to a unique set of rules that, in my view, were counterproductive. In any event, the government's own budget was to raise up to $1.5-billion.

So I sort of find myself in the twilight zone, where I can't open the paper or turn on the TV to a news broadcast without hearing about which industries should get subsidies, which ones are being bailed out. And the issue is "how much," as opposed to whether to do it.

And I'm working in an industry that just had $4.3-billion extracted from it. There are consequences to that. It's important, regardless of one's political party, to understand we are a growth engine in the economy.

It's not just about Telus and Bell and Rogers, it's the technology that we purchase, it's the productivity we help improve in the economy. There are few industries as important.

We would never ask for a subsidy, for God's sake, but to have $4.3-billion taken out of your industry is hard to swallow.

What is the biggest opportunity and the biggest fear for Telus in 2009?

The greatest opportunity for us is wireless data and smart phones.

Currently, it's hard for me to get past the [BlackBerry] Storm. Because our biggest issue is supply rather than demand, which is ironic, given the recession.

And fear?

Regulation. A regulator can do more in one day than competitors can do in 10 years.