BCE reports 2007 third quarter results



    
    - Strong wireless subscriber and ARPU growth
    - Significant improvement in wireless EBITDA and EBITDA margin
    - Steadily improving financial results overall from revenue improvements
      and cost reductions
    - Solid earnings growth with EPS of $0.50; $0.54 before special items,
      increasing by 38.9% and 12.5% respectively

    This news release contains forward-looking statements. For a description
    of the related risk factors and assumptions please see the section
    entitled "Caution Concerning Forward-Looking Statements" later in this
    release. This release should be read in conjunction with BCE Inc.'s 2007
    Third Quarter MD&A dated November 6, 2007 (available at
    http://www.bce.ca/data/documents/reports/en/2007/q3/2007q3-sr-en.pdf )
    which is incorporated by reference in this release, filed by BCE Inc.
    with the U.S. Securities and Exchange Commission under Form 6-K and with
    Canadian securities commissions.
    

    MONTREAL, Québec, Nov. 7 /CNW Telbec/ - Bell Canada's rebounding wireless
segment and a continued focus on profitability led to steady EBITDA and
earnings growth as BCE Inc. (TSX, NYSE:   BCE), Canada's largest communications
company, today reported results for the third quarter of 2007.
    "Bell continued to make progress on two fronts this quarter, moving
towards the completion of the privatization transaction and delivering
steadily improving results," said Michael Sabia, Chief Executive Officer of
Bell Canada. "With respect to the privatization of the company, our
shareholders have voted overwhelmingly in support of the transaction. We also
received Competition Bureau approval and obtained a schedule from the Superior
Court of Québec that allows for an expeditious resolution of the related legal
proceedings. We continue to expect the closing of this transaction in Q1
2008."
    "In addition, we continued to make operating progress with a record Q3
for wireless gross activations, improving revenue growth and continued steady
growth in EBITDA and earnings," Mr. Sabia said. "We also continued to deliver
on our cost savings targets and to step up our efforts to move away from low
margin equipment sales."
    The Bell Wireless segment(1) had its best ever Q3 with 445,000 gross
activations, or 15.6% more than last year. Net activations this quarter were
137,000, or 7.0% higher than last year. Network revenues increased by 8.0% and
blended ARPU increased to $56. Wireless EBITDA increased by 17.2% with EBITDA
flow-through of 92%. EBITDA margins on network revenues grew to 46.1%, an
increase of 3.6 percentage points.
    "All of our efforts to re-energize our wireless business paid off this
quarter," said George Cope, President and Chief Operating Officer of Bell
Canada. "Wireless clients responded positively to our offers, data-focused
handset introductions and expanded market presence while we continued to
deliver solid EBITDA growth."
    "In our wireline business, as expected, legacy local and long distance
service revenues declined at a slower pace than last year as our business
units continue to focus on profitability and our year-to-date NAS losses are
relatively stable," Mr. Cope said.
    "The rate of Bell's revenue growth has steadily improved this year from
the 0.4% experienced in Q1 to 2.0% this quarter as the rate of our wireline
revenue erosion has improved," Mr. Cope said. "Bell's EBITDA continued to show
steady growth due to higher revenues, cost reductions and lower pension
expenses, which more than offset the continued erosion of higher margin legacy
services."
    With recent regulatory changes, Bell now has the flexibility to bundle
and package local telephone services with other non-regulated services in
Ontario and Québec in areas representing approximately 90% of Bell's
residential access lines and 40% of Bell's business access lines. Taking
advantage of this flexibility, Home Phone service was added to the Bell Bundle
in the Québec market in September.
    Bell invested $575 million of capital this quarter with a continued focus
on improving the customer experience and expanding the range of services
available to customers through expenditures in areas such as Bell's high-speed
Evolution, Data Optimized (EVDO) wireless network and Fibre-to-the-node
(FTTN).

    
    Financial Highlights

    -------------------------------------------------------------------------
    ($ millions except per share amounts)
     (unaudited)                                Q3 2007   Q3 2006  % change
    -------------------------------------------------------------------------
    Bell(i) Operating Revenues                   $3,701    $3,628       2.0%
    -------------------------------------------------------------------------
    BCE(ii) Operating Revenues                   $4,494    $4,407       2.0%
    -------------------------------------------------------------------------
    Bell EBITDA(2)                               $1,386    $1,335       3.8%
    -------------------------------------------------------------------------
    BCE EBITDA                                   $1,789    $1,712       4.5%
    -------------------------------------------------------------------------
    Bell Operating Income                          $679      $616      10.2%
    -------------------------------------------------------------------------
    BCE Operating Income                           $897      $799      12.3%
    -------------------------------------------------------------------------
    BCE Cash From Operating Activities           $1,603    $1,596       0.4%
    -------------------------------------------------------------------------
    BCE Free Cash Flow(3)                          $421      $442      (4.8%)
    -------------------------------------------------------------------------
    BCE EPS                                       $0.50     $0.36      38.9%
    -------------------------------------------------------------------------
    BCE EPS before restructuring and other
     items, net gains on investments and costs
     incurred to form Bell Aliant(4)              $0.54     $0.48      12.5%
    -------------------------------------------------------------------------
      (i)  Bell includes the Bell Wireless and Bell Wireline segments.
      (ii) BCE includes Bell, Bell Aliant and Telesat.

    BCE's net earnings per share (EPS) was $0.50 for the quarter compared to
$0.36 for the same period last year. The increase relates to higher EBITDA,
lower interest expense, and lower restructuring and other charges more than
offsetting higher amortization expense. EPS before restructuring and other
items, net gains on investments and costs incurred to form Bell Aliant(4) was
$0.54 in the quarter, compared to $0.48 in the same period last year.

    Bell Wireless Segment

    The Bell Wireless segment had strong net activations this quarter and its
best-ever Q3 for gross activations while continuing to improve profitability.

    - Total Bell Wireless operating revenues grew 8.0% to $1,072 million.
      Wireless network revenues increased by 8.0% to $974 million.
    - Bell Wireless operating income increased by 23% to $339 million.
    - Bell Wireless EBITDA increased 17.2% to $449 million with EBITDA flow-
      through of 92%. EBITDA margins on network revenues grew to 46.1%, an
      increase of 3.6 percentage points.
    - Blended ARPU increased by $3 to $56 reflecting a $2 increase in
      postpaid ARPU to $68 and a $3 increase in prepaid ARPU to $19.
    - Cost of acquisition decreased by 10.6% to $371 per gross activation,
      reflecting lower handset subsidies and higher gross activations.
    - Blended churn of 1.7% was 0.2 percentage points higher than Q3 of 2006
      reflecting an increase in postpaid churn of 0.3 percentage points to
      1.4% due to the competitive intensity of the marketplace. Prepaid churn
      decreased by 0.1 percentage points to 2.7%.
    - The Bell Wireless client base reached 6,021,000.
    - Total gross activations were 445,000, a 15.6% increase from last year.
    - Total net activations were 137,000 this quarter, or 7.0% higher than Q3
      of 2006 and significantly higher than the net activations experienced
      in Q1 and Q2.

    Bell Wireline Segment

    The Bell Wireline segment made progress in several areas despite the
ongoing erosion of legacy services.

    - Total Bell Wireline operating revenues decreased by 0.2% to
      $2,641 million this quarter as gains in video and data revenues were
      offset by decreases in local and access and long distance revenues.
    - Bell Wireline operating income was unchanged at $340 million this
      quarter as the loss of higher margin voice and data business and higher
      amortization expense was offset by higher video revenues, cost
      reductions, lower pension expenses and lower restructuring and other
      costs.
    - Bell Wireline EBITDA declined by 1.6% to $937 million as the ongoing
      erosion of our residential local access line (NAS) customer base was
      largely offset by pricing initiatives, cost savings and lower pension
      expenses.
    - Local and access revenues declined by 3.7% to $892 million which
      reflected an improvement over the 7.8% decline experienced in Q3 2006.
    - NAS levels declined by 93,000 this quarter compared to the decline of
      59,000 in the same period last year.
    - Residential NAS levels declined by 104,000 this quarter, higher than
      the decline of 90,000 experienced last year with the disconnection of
      non-paying customers and the footprint expansion of a major cable
      competitor more than offsetting the continuing growth in customer
      winbacks. On a year-to-date basis, the decline in residential NAS
      levels remained relatively stable at 394,000 this year compared with
      386,000 for the comparable period in 2006.
    - Business NAS levels increased by 11,000 this quarter.
    - Long distance revenues declined by 8.4% to $306 million this quarter
      which reflected an improvement over the 13.2% decline experienced in
      Q3 2006.
    - Data revenues increased 1.2% to $892 million this quarter due to growth
      in Internet revenues and higher IP Broadband revenues partly offset by
      the further erosion of legacy data services.
    - High-speed Internet subscribers grew by 8.0% compared to last year with
      34,000 net activations in the quarter.
    - Video revenues increased by 14.2% to $330 million this quarter due
      largely to an ARPU increase of $6 to $60.
    - Total video subscribers increased by 1.8% compared to last year to
      reach 1,820,000.
    - Video net activations of 3,000 this quarter were impacted by higher
      churn of 1.3%, an increase of 0.3 percentage points compared to last
      year.

    Bell Aliant Regional Communications

    Bell Aliant's revenues increased 1.6% to $838 million this quarter due to
growth in Internet and information technology services offsetting declines in
local and access, long distance and data services. Operating income increased
9.9% to $178 million due to higher revenues and cost savings.

    Telesat

    Telesat's revenues were $130 million this quarter, up 15.0% over last
year, due to revenues from its Anik F3 satellite which became operational in
May of this year and growth of its two-way broadband service. Operating income
was $47 million, up 47% due to higher revenues partly offset by higher
amortization expense.
    On October 31, 2007, the company completed the previously announced sale
of Telesat to a new acquisition company formed by Canada's Public Sector
Pension Investment Board and Loral Space and Communications Inc. Net of
assumed debt and transaction expenses, BCE received proceeds of $3.2 billion
from the all-cash transaction and expects to report a gain of approximately
$1.86 billion in the fourth quarter.

    Outlook

    Following the approval of the privatization of BCE by its shareholders on
September 21, 2007, the company is no longer providing or updating guidance.

    Notes

    The information contained in this news release is unaudited.

    (1) Consistent with North American industry practices, total wireless
        gross activations, net activations and subscribers include 100% of
        Virgin Mobile's subscribers. Wireless ARPU, churn, usage per
        subscriber and cost of acquisition continue to be computed by
        including 50% of Virgin Mobile's results, a level corresponding to
        Bell's ownership position.

    (2) The term EBITDA does not have any standardized meaning according to
        Canadian GAAP. It is therefore unlikely to be comparable to similar
        measures presented by other companies. We define EBITDA (earnings
        before interest, taxes, depreciation and amortization) as operating
        revenues less operating expenses, meaning it represents operating
        income before amortization expense and restructuring and other items.

        We use EBITDA, among other measures, to assess the operating
        performance of our ongoing businesses without the effects of
        amortization expense and restructuring and other items. We exclude
        these items because they affect the comparability of our financial
        results and could potentially distort the analysis of trends in
        business performance. We exclude amortization expense because it
        largely depends on the accounting methods and assumptions a company
        uses, as well as non-operating factors such as the historical cost of
        capital assets. Excluding restructuring and other items does not
        imply they are necessarily non-recurring.

        EBITDA allows us to compare our operating performance on a consistent
        basis. We believe that certain investors and analysts use EBITDA to
        measure a company's ability to service debt and to meet other payment
        obligations, or as a common measurement to value companies in the
        telecommunications industry.

        The most comparable Canadian GAAP financial measure is operating
        income. Please refer to the section of the BCE 2007 Q3 MD&A entitled
        "Non-GAAP Financial Measures", which is incorporated by reference in
        this news release, for a reconciliation of EBITDA to operating
        income.

    (3) The term free cash flow does not have any standardized meaning
        according to Canadian GAAP. It is therefore unlikely to be comparable
        to similar measures presented by other companies. We define it as
        cash from operating activities after capital expenditures, total
        dividends and other investing activities. We consider free cash flow
        to be an important indicator of the financial strength and
        performance of our business because it shows how much cash is
        available to repay debt and to reinvest in our company. We present
        free cash flow consistently from period to period, which allows us to
        compare our financial performance on a consistent basis. We believe
        that free cash flow is also used by certain investors and analysts in
        valuing a business and its underlying assets. The most comparable
        Canadian GAAP financial measure is cash from operating activities.
        Please refer to the section of the BCE 2007 Q3 MD&A entitled "Non-
        GAAP Financial Measures", which is incorporated by reference in this
        news release, for a reconciliation of free cash flow to cash from
        operating activities.

    (4) The term net earnings (or EPS) before restructuring and other items,
        net gains on investments, and costs incurred to form Bell Aliant does
        not have any standardized meaning according to Canadian GAAP. It is
        therefore unlikely to be comparable to similar measures presented by
        other companies.

        We use net earnings (or EPS) before restructuring and other items,
        net gains on investments, and costs incurred to form Bell Aliant,
        among other measures, to assess the operating performance of our
        ongoing businesses without the effects of after-tax restructuring and
        other items, net gains on investments, and costs incurred to form
        Bell Aliant. We exclude these items because they affect the
        comparability of our financial results and could potentially distort
        the analysis of trends in business performance. Excluding these items
        does not imply they are necessarily non-recurring.

        The most comparable Canadian GAAP financial measure is net earnings
        applicable to common shares. Please refer to the section of the BCE
        2007 Q3 MD&A entitled "Non-GAAP Financial Measures", which is
        incorporated by reference in this news release, for a reconciliation
        of net earnings before restructuring and other items, net gains on
        investments, and costs incurred to form Bell Aliant to net earnings
        applicable to common shares on a total and per share basis.
    

    About BCE Inc.

    BCE is Canada's largest communications company, providing the most
comprehensive and innovative suite of communication services to residential
and business customers in Canada. Under the Bell brand, the Company's services
include local, long distance and wireless phone services, high-speed and
wireless Internet access, IP-broadband services, information and
communications technology services (or value-added services) and
direct-to-home satellite and VDSL television services. BCE also holds an
interest in CTVglobemedia, Canada's premier media company. BCE shares are
listed in Canada and the United States.

    Caution Concerning Forward-Looking Statements

    This news release contains forward-looking statements relating to the
proposed privatization of BCE, legal proceedings related thereto and other
statements that are not historical facts. Such forward-looking statements are
subject to important risks, uncertainties and assumptions. The results or
events predicted in these forward-looking statements may differ materially
from actual results or events. As a result, you are cautioned not to place
undue reliance on these forward-looking statements.
    The completion of the proposed privatization transaction is subject to a
number of terms and conditions, including, without limitation: (i) approval of
the CRTC, Industry Canada and other applicable governmental authorities,
(ii) necessary court approval, and (iii) certain termination rights available
to the parties under the definitive agreement dated June 29, 2007 governing
the terms of the transaction. These approvals may not be obtained, the other
conditions to the transaction may not be satisfied in accordance with their
terms, and/or the parties to the definitive agreement may exercise their
termination rights, in which case the proposed privatization transaction could
be modified, restructured or terminated, as applicable. Failure to complete
the proposed privatization transaction could have a material adverse impact on
the market price of BCE's shares. In addition, depending on the circumstances
in which the proposed transaction is not completed, BCE could have to pay
significant fees and costs as directed by the purchaser, in addition to its
own costs incurred in connection with such activities completed to date.
    The forward-looking statements contained in this news release are made as
of the date of this release and, accordingly, are subject to change after such
date. However, we disclaim any intention and assume no obligation to update or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise. Additionally, we undertake no obligation to
comment on expectations of, or statements made by, third parties in respect of
the proposed privatization transaction. For additional information with
respect to certain of these and other assumptions and risks, please refer to
the definitive agreement dated June 29, 2007, as well as BCE's 2007 Second
Quarter MD&A dated July 31, 2007, BCE's 2007 Third Quarter MD&A dated
November 6, 2007 and BCE's management proxy circular dated August 7, 2007, all
filed by BCE with the Canadian securities commissions (available at
www.sedar.com) and with the U.S. Securities and Exchange Commission (available
at www.sec.gov). These documents are also available on BCE's website at
www.bce.ca.




For further information:

For further information: Pierre Leclerc, Bell Canada, Media Relations,
(514) 391-2007, 1-877-391-2007, pierre.leclerc@bell.ca; Thane Fotopoulos, BCE,
Investor Relations, (514) 870-4619, thane.fotopoulos@bell.ca

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