BCE reports 2009 first quarter results



    
    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.

    - Net earnings per share of $0.48, up 50%
    - Sixth consecutive quarter of fewer YOY local line losses
    - Stable revenue and EBITDA in-line with guidance
    - Postpaid wireless net activations up 25%
    

    MONTREAL, May 7 /CNW Telbec/ - BCE Inc. (TSX, NYSE:   BCE), Canada's
largest communications company, today reported BCE and Bell results for the
first quarter of 2009.
    Bell reported stable revenue and EBITDA; healthy free cash flow and an
increase of $119 million in net earnings applicable to common shares, up from
$258 million in Q1 2008 to $377 million this quarter; its sixth consecutive
quarter of improved year-over-year local line losses; and continued progress
on the execution of its 5 Strategic Imperatives: Improve Customer Service,
Accelerate Wireless, Leverage Wireline Momentum, Invest in Broadband Networks
and Services, and Achieve a Competitive Cost Structure.
    "Bell delivered operating performance and financial results in line with
our guidance, despite economic pressures in the marketplace," said George
Cope, President and Chief Executive Officer of BCE and Bell Canada. "The
softer economy has led to more cautious consumer spending and reduced business
investment. However, increased video, residential Internet and wireless
postpaid activations and improved total revenue per household in the quarter
underscored both the resiliency of much of Bell's business and the progress
we're making in executing on our strategy."
    "With measureable service improvements, network and distribution
investments supporting our wireless and wireline growth, and disciplined cost
management, the Bell team continues to execute on its strategic imperatives as
we work to achieve our goal: To be recognized by customers as Canada's leading
communications company," Mr. Cope said.
    Bell today announced its latest new initiatives in support of its
Strategic Imperatives, including the acquisition of the 50% stake in Virgin
Mobile Canada not already owned by Bell for $142 million. Enabling Bell to
more efficiently leverage Virgin's popular brand and national distribution
network, this initiative complements Bell's acquisition of national consumer
electronics retailer The Source announced in March of this year. The Virgin
Mobile brand is expected to drive further traffic to the more than 750 The
Source stores across Canada when Bell begins offering wireless, digital TV,
Internet and home phone products and services in these locations by January
2010.
    Bell also announced today a new agreement with TELUS Communications
Company under which TELUS will distribute satellite TV service in Alberta and
British Columbia under the TELUS brand. This agreement supports Bell's
imperative to Leverage Wireline Momentum by expanding distribution channels
for Bell's digital TV service in Western Canada.
    Bell continues to work to Improve Customer Service and in the first
quarter had completion rates of greater than 95% on Same Day Next Day
services, experienced a 14% reduction in repair call centre volumes, reduced
wireless dropped call rates in the GTA by 14%, and decreased wireless postpaid
churn.
    "In the context of this difficult economic climate we are pleased with
our overall financial and operating metrics," said Siim Vanaselja, Chief
Financial Officer of BCE and Bell Canada. "With results this quarter, we are
on our way to meeting our financial guidance targets for 2009."
    "We've made good progress in executing against our capital structure
objectives this year. As we announced in February, we have already increased
our common share dividend by 5%. We are announcing today that we have
completed our normal course issuer bid ahead of schedule with the purchase of
40.0 million common shares at an average purchase price of approximately
$24.65 per share. We have concluded a new 3-year $1.4 billion unsecured
committed credit facility with a syndicate of financial institutions. And
finally, we are confirming today that we will be self-funding our debt
maturities for the balance of the year including the early redemption of BCE's
Series C Notes in June," said Mr. Vanaselja.
    Bell's operating revenues this quarter decreased by 0.5% to $3,623
million as growth in wireless, video, and data revenues were offset by
declines in local and access, long distance, and equipment and other revenues.
Excluding the impact of lower margin product sales, Bell's operating revenues
grew by 0.2% this quarter.
    Bell's EBITDA(1) grew by 0.3% to $1,426 million this quarter as the
contribution from Bell's Wireless segment and cost savings related to our
100-day plan initiatives were offset by higher pension costs and the impact of
a lower Canadian dollar. Bell's EBITDA growth would have been 1.2 percentage
points higher this quarter if higher pension costs were excluded. Bell's
operating income was $649 million, or 36.9% higher than the same period last
year due to lower restructuring and other costs.
    The Bell Wireless segment(2) had 35,000 postpaid net activations this
quarter, or 25% more than last year, with postpaid churn improving to 1.2%
from 1.3%. Total net activations were 30,000 reflecting a decrease of 5,000
prepaid clients compared to a net gain of 6,000 prepaid clients in Q1 2008.
Total Bell Wireless operating revenues grew by 3.5% and Bell Wireless EBITDA
grew by 5.9%. EBITDA margin on wireless service revenues increased 1.1
percentage points to 44%. Blended ARPU decreased by $0.80 to $51.52 as
aggressive pricing in the highly competitive discount segment and increased
economic pressures more than offset data revenue growth of 36%.
    The Bell Wireline segment had its sixth consecutive quarter of
improvement in residential local line (NAS) losses, which declined by 78,000
this quarter, or 26.4% fewer than the decline of 106,000 in Q1 2008. Business
NAS declined by 26,000 this quarter compared to a decline of 13,000 last year
reflecting the continued softening of the SMB market in Ontario and Québec.
Bell Wireline operating revenues and EBITDA decreased by 2.4% and 2.0%
respectively, as more cautious business investment adversely affected revenue
performance while revenue and EBITDA growth in video remained robust.
    Bell invested $482 million of capital this quarter, an increase of 5.7%
compared to the same period last year. Capital expenditures supported Bell's
strategic imperatives with focused investment on enhancing the wireless
network, including the deployment of an HSPA 3G network that is expected to be
in place nationally by early 2010, and the continuing expansion of the
Fibre-to-the-node (FTTN) program.
    BCE's cash from operating activities this quarter was $924 million, or
2.4% higher than the same period last year. Free cash flow(3) was well on
track at $272 million this quarter, although 10.5% lower than the same period
last year as higher cash from operating activities was offset by the timing of
capital expenditures.
    BCE's net earnings applicable to common shares this quarter were $377
million, or $0.48 per share, compared to $258 million, $0.32 per share, for
the same period last year. EPS included lower restructuring and other costs of
$0.09 per share this quarter compared to $0.25 per share for Q1 2008. EPS this
quarter also included the impact of fewer outstanding BCE common shares as a
result of share purchases made through the normal course issuer bid (NCIB)
announced last December. BCE's Adjusted EPS(4) was $0.57 this quarter,
unchanged compared to Q1 2008.

    
    Financial Highlights
    -------------------------------------------------------------------------
    ($ millions except per share amounts)   Q1 2009     Q1 2008    % change
    (unaudited)
    -------------------------------------------------------------------------
    Bell(i) Operating Revenues              $ 3,623     $ 3,640        (0.5%)
    -------------------------------------------------------------------------
    Bell EBITDA                             $ 1,426     $ 1,422         0.3%
    -------------------------------------------------------------------------
    Bell Operating Income                   $   649     $   474        36.9%
    -------------------------------------------------------------------------
    BCE Operating Revenues                  $ 4,342     $ 4,360        (0.4%)
    -------------------------------------------------------------------------
    BCE EBITDA                              $ 1,757     $ 1,751         0.3%
    -------------------------------------------------------------------------
    BCE Operating Income                    $   829     $   650        27.5%
    -------------------------------------------------------------------------
    BCE Cash From Operating Activities      $   924     $   902         2.4%
    -------------------------------------------------------------------------
    Free Cash Flow                          $   272     $   304       (10.5%)
    -------------------------------------------------------------------------
    BCE Net Earnings Applicable
     to Common Shares                       $   377     $   258        46.1%
    -------------------------------------------------------------------------
    BCE EPS                                 $  0.48     $  0.32        50.0%
    -------------------------------------------------------------------------
    BCE Adjusted EPS                        $  0.57     $  0.57         0.0%
    -------------------------------------------------------------------------
    (i)  Bell includes the Bell Wireless and Bell Wireline segments.


    BCE's operating revenues declined by 0.4% to $4,342 million this quarter
due to lower revenues at Bell and Bell Aliant.
    BCE's operating income increased to $829 million this quarter, or by
27.5%, due to higher operating income at Bell and Bell Aliant. BCE's EBITDA
increased 0.3% to $1,757 million this quarter due to EBITDA growth at Bell and
Bell Aliant.

    Bell Wireless Segment

    The Bell Wireless segment had reasonable operating results with continuing
strong growth in wireless data revenues.

    - Total Bell Wireless operating revenues grew by 3.5% to $1,079 million
      this quarter due to higher wireless service and product revenues.
      Wireless service revenues increased by 3.1% to $986 million due to a
      larger subscriber base partly offset by lower ARPU. Wireless product
      revenues increased by 12.2% to $83 million due to higher gross
      activations and an improving mix of higher end handsets.
    - Postpaid and prepaid ARPU decreased by $1.93 and $1.12 to $62.34 and
      $15.38, respectively, due to aggressive pricing in the discount segment
      and lower usage as customers reacted to a weakening economy, partly
      offset by growth in wireless data revenues of 36%. Blended ARPU
      decreased by $0.80 to $51.52.
    - Bell Wireless operating income grew by 2.4% to $300 million this
      quarter as a result of higher EBITDA. Bell Wireless EBITDA grew by
      5.9% to $434 million this quarter due to higher revenues and lower
      subscriber retention costs, partly offset by higher pension costs.
      EBITDA flow-through was 80% this quarter.
    - EBITDA margins on wireless service revenues increased to 44% this
      quarter, or by 1.1 percentage points, when compared to the same period
      last year.
    - Total gross activations were 366,000 this quarter, an increase of
      4.3% from Q1 of last year.
    - Postpaid net activations grew by 7,000 to 35,000 this quarter due to
      an increase in postpaid gross activations and lower churn while our
      prepaid client base decreased by 5,000 compared to an increase of
      6,000 last year due to higher churn. Total net activations were 30,000
      this quarter, 11.8% fewer than last year.
    - The Bell Wireless client base reached 6,527,000 at the end of the
      quarter.
    - Postpaid churn improved to 1.2% from 1.3% last year while prepaid churn
      increased to 2.9% from 2.8%. Blended churn was stable at 1.6%.
    - Cost of acquisition this quarter was essentially unchanged at $397 per
      gross activation compared to $396 per gross activation last year.

    Bell Wireline Segment

    The Bell Wireline segment continued to reduce the number of residential
NAS losses and showed continued improvement in video net additions this
quarter.

    - Bell Wireline operating revenues decreased by 2.4% to $2,592 million
      this quarter as gains in video and data revenues were more than offset
      by decreases in local and access, long distance and equipment and other
      revenues. Although a large part of our residential business is
      exhibiting resiliency during this weaker economy, more cautious
      business customer investment has adversely affected the revenue
      performance of our SMB and Enterprise units.
    - Bell Wireline operating income increased by 92.8% to $349 million this
      quarter as lower restructuring and other charges more than offset lower
      EBITDA. Bell Wireline EBITDA decreased by 2.0% to $992 million this
      quarter due to the margin loss related to the ongoing erosion of our
      NAS customer base and higher pension costs partly offset by savings
      from Bell's 100-day plan initiatives.
    - Local and access revenues declined by 6.1% to $805 million this quarter
      due to ongoing residential and business NAS erosion.
    - Residential NAS declined by 78,000 this quarter, a significant
      improvement over the decline of 106,000 experienced in 2008 reflecting
      the strength of customer winbacks and demand for Home Phone packages.
      Business NAS declined by 26,000 this quarter compared to a decline of
      13,000 in the same quarter last year reflecting the continued softening
      of the SMB market in Ontario and Québec. Total NAS declined by 5.3% on
      a year-over-year basis.
    - Long distance revenues declined by 6.7% to $278 million this quarter
      due mainly to ongoing residential and business NAS erosion and pricing
      pressures in our business and wholesale markets.
    - Data revenues increased by 0.2% to $905 million this quarter as growth
      in high-speed Internet customer connections and residential Internet
      ARPU and higher IP Broadband and ICT revenues were largely offset by
      the further erosion of legacy data services, including decreased data
      equipment sales to business customers. Excluding product sales, data
      revenues grew by 3.6% this quarter.
    - High-speed Internet customer connections increased by 6,000 this
      quarter, compared to 10,000 last year, with residential net additions
      doubling year over year. At the end of the quarter, Bell had 2,060,000
      high-speed Internet customer connections, an increase of 2.3%
      year-over-year.
    - Video revenues were $387 million this quarter, or 8.7% higher than last
      year due largely to an ARPU increase of $4.19 to $68.84. ARPU increased
      as a result of customer upgrades to higher-priced programming packages,
      higher rental fees and pricing initiatives.
    - Video EBITDA was $92 million this quarter, or 19.5% higher than last
      year, due to higher ARPU and a larger customer base.
    - Total video subscribers increased by 12,000 this quarter to reach a
      total of 1,864,000. In Q1 2008, video subscribers increased by 1,000.
    - Video subscriber churn of 1.1% was unchanged from last year.
    - Equipment and other revenues decreased by 9.1% to $140 million due to
      lower legacy voice customer premise equipment sales to SMB customers.


    Bell Aliant Regional Communications

    Bell Aliant's revenues decreased by 3.5% this quarter to $828 million due
primarily to the wind-down of the operations of Atlantic Mobility Products
(AMP) in Q3 2008. Operating income increased 2.3% to $180 million due to lower
labour costs, cost containment initiatives and lower pension costs.

    Normal Course Issuer Bid

    On December 12, 2008, BCE announced it would return capital to
shareholders in the form of a NCIB. The NCIB was completed on May 5, 2009,
with BCE having repurchased 40.0 million common shares, including the 10.3
million common shares that BCE announced on March 30, 2009 it would purchase
pursuant to private agreements with arm's-length third-party sellers.

    Common Share Dividend

    BCE's Board of Directors has declared a quarterly dividend of $0.385 per
Common Share, payable on July 15, 2009 to shareholders of record at the close
of business on June 15, 2009.

    Renewal of Credit Facilities

    Bell Canada has entered into a new $1.4 billion unsecured credit facility
with a syndicate of financial institutions effective May 7, 2009. This new
three-year committed facility will replace BCE's and Bell Canada's existing
credit facilities which mature in August 2009.

    Early Debt Redemption

    BCE will redeem on June 8, 2009, prior to maturity, all of its outstanding
$650 million principal amount of 7.35% Series C Notes (Series C Notes) due
October 30, 2009. The Series C Notes will be redeemed at a price equal to
$1,025.116 per $1,000 of principal amount of Notes plus $7.853 for accrued and
unpaid interest up to but excluding the date of redemption. Registered holders
of Series C Notes will receive a notice providing the details of this
redemption, including where to present their Notes for payment.

    Outlook

    BCE confirmed its financial guidance for 2009 as follows:

    -------------------------------------------------------------------------
                                                              Guidance 2009
    -------------------------------------------------------------------------
    Bell (i)
    -------------------------------------------------------------------------
    Revenues                                                         Stable
    -------------------------------------------------------------------------
    EBITDA(ii)                                                       Stable
    -------------------------------------------------------------------------
    Capital intensity                                              15% - 16%
    -------------------------------------------------------------------------
    BCE
    -------------------------------------------------------------------------
    Adjusted EPS growth                                      greater than 5%
    -------------------------------------------------------------------------
    Free Cash Flow(iii)                                 $1,750 M - $1,900 M
    -------------------------------------------------------------------------

    (i)   Bell's 2009 financial guidance for revenue, EBITDA and capital
          intensity is exclusive of Bell Aliant.
    (ii)  EBITDA includes pension expense
    (iii) The most comparable Canadian GAAP financial measure is cash from
          operating activities. For 2009, BCE expects to generate
          approximately $1,750 million to $1,900 million in free cash flow.
          This amount reflects expected BCE cash from operating activities
          of approximately $4.9 billion to $5.1 billion.


    Call with Financial Analysts

    BCE will hold a conference call for financial analysts to discuss its
first quarter results on Thursday, May 7 at 8:00 a.m. (Eastern). Media are
welcome to participate on a listen-only basis. To participate, please dial
(416) 695-6310 or toll-free 1-800-952-4972 shortly before the start of the
call. A replay will be available for one week by dialing (416) 695-5800 or
1-800-408-3053 and entering passcode 3403310#. This conference call will also
be webcast live and archived for 90 days on BCE's website at:
http://www.bce.ca/en/investors/investorevents/quarterlyresults/. The mp3 file
will also be available for download on this page shortly after the call.

    Notes

    The information contained in this news release is unaudited.

    (1) 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 of intangible
        assets) as operating revenues less cost of revenue and selling,
        general and administrative expenses, meaning it represents operating
        income before depreciation and amortization of intangible assets and
        restructuring and other. We use EBITDA, among other measures, to
        assess the operating performance of our ongoing businesses without
        the effects of depreciation and amortization of intangible assets and
        restructuring and other. 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
        depreciation and amortization of intangible assets 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 does not imply they are
        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. The following
        table is a reconciliation of operating income to EBITDA.


    ($ millions)

    BCE                                                 Q1 2009     Q1 2008
    -------------------------------------------------------------------------
    Operating income                                        829         650
    Depreciation and amortization of
     intangible assets                                      819         818
    Restructuring and other                                 109         283
    -------------------------------------------------------------------------
    EBITDA                                                1,757       1,751
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    BELL                                                Q1 2009     Q1 2008
    -------------------------------------------------------------------------
    Operating income                                        649         474
    Depreciation and amortization of
     intangible assets                                      678         665
    Restructuring and other                                  99         283
    -------------------------------------------------------------------------
    EBITDA                                                1,426       1,422
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    BELL WIRELINE                                       Q1 2009     Q1 2008
    Operating income                                        349         181
    Depreciation and amortization of
     intangible assets                                      545         551
    Restructuring and other                                  98         280
    -------------------------------------------------------------------------
    EBITDA                                                  992       1,012
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    BELL WIRELESS                                       Q1 2009     Q1 2008
    Operating income                                        300         293
    Depreciation and amortization of
     intangible assets                                      133         114
    Restructuring and other                                   1           3
    -------------------------------------------------------------------------
    EBITDA                                                  434         410
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    (2) 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
        our ownership position.

    (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 free cash flow as cash from operating activities and
        distributions received from Bell Aliant less capital expenditures,
        preferred share dividends, dividends/distributions paid by
        subsidiaries to non-controlling interest, other investing activities
        and Bell Aliant free cash flow. 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,
        pay dividends to common shareholders 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.
        The most comparable Canadian GAAP financial measure is cash from
        operating activities. The following table is a reconciliation of
        cash from operating activities to free cash flow on a consolidated
        basis.


    ($ millions)
    -------------------------------------------------------------------------
                                                        Q1 2009     Q1 2008
    -------------------------------------------------------------------------
    Cash from operating activities                          924         902
    Bell Aliant distributions to BCE                         73          71
    Capital expenditures                                   (590)       (551)
    Other investing activities                              (13)          3
    Cash dividends paid on preferred shares                 (28)        (35)
    Cash dividends/distributions paid by
     subsidiaries to non-controlling interest               (92)        (90)
    Bell Aliant free cash flow                               (2)          4
    -------------------------------------------------------------------------
    Free cash flow                                          272         304
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    (4) The term Adjusted net earnings 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
        Adjusted net earnings or Adjusted EPS, among other measures, to
        assess the operating performance of our ongoing businesses without
        the effects of after-tax restructuring and other and net losses
        (gains) on investments. 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. The following table is a reconciliation
        of net earnings applicable to common shares to adjusted net earnings
        on a consolidated basis and per BCE common share.


    ($ millions except per share amounts)
    -------------------------------------------------------------------------
                                       Q1 2009                 Q1 2008
    -------------------------------------------------------------------------
                                  TOTAL   PER SHARE       TOTAL   PER SHARE
    -------------------------------------------------------------------------
    Net earnings applicable
     to common shares               377        0.48         258        0.32
    Restructuring and other          70        0.09         197        0.25
    Net (gains) losses on
     investments                     (1)       0.00          (2)       0.00
    -------------------------------------------------------------------------
    Adjusted net earnings           446        0.57         457        0.57
    -------------------------------------------------------------------------
    

    Management's Discussion and Analysis

    This release should be read in conjunction with BCE's 2009 First Quarter
MD&A dated May 6, 2009 which is incorporated by reference in this release, and
is filed by BCE with the U.S. Securities and Exchange Commission under Form
6-K (available at www.sec.gov) and with Canadian securities commissions
(available at www.sedar.com). This document is also available on BCE's website
at www.bce.ca.

    Caution Concerning Forward-Looking Statements

    Certain statements made in this news release, including, but not limited
to, statements relating to our financial guidance for 2009, and other
statements that are not historical facts, are forward-looking statements and
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, we cannot
guarantee that any forward-looking statement will materialize and you are
cautioned not to place undue reliance on these forward-looking statements.
These forward-looking statements assume, in particular, that many of our lines
of business will be resilient to the current economic downturn. However, we
caution that the current adverse economic conditions make our forward-looking
statements and underlying assumptions subject to greater uncertainty and that,
consequently, they may not materialize. It is impossible to predict with
certainty the impact that the current economic downturn and credit crisis will
have on our business or residential customers' future purchasing patterns. 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.
Except as may be required by Canadian securities laws, we do not undertake any
obligation to update or revise any forward-looking statements contained in
this news release, whether as a result of new information, future events or
otherwise. Except as otherwise indicated by BCE, these statements do not
reflect the potential impact of any non-recurring or other special items or of
any dispositions, monetizations, mergers, acquisitions, other business
combinations or other transactions that may be announced or that may occur
after the date hereof. Forward-looking statements are provided for the purpose
of providing information about management's current expectations and plans
relating to 2009 and allowing investors and others to get a better
understanding of our operating environment. Readers are cautioned that such
information may not be appropriate for other purposes.

    Material Assumptions

    A number of Canadian economic and market assumptions were made by BCE in
preparing forward-looking statements for 2009 contained in this release,
including, but not limited to: (i) Canadian GDP to decrease by approximately
1%, compared to 2008, consistent with estimates by the six major banks in
Canada, (ii) the Bank of Canada's target overnight rate to remain fairly
stable at approximately 1%, (iii) the Consumer Price Index as estimated by
Statistics Canada to decline to the range of 1.0% to 1.5%, (iv) revenues
generated by the residential voice telecommunications market to continue to
decrease due to wireless substitution and other factors including e-mail and
instant messaging substitution, (v) current levels of competition to continue
for residential and business local voice telephony, as cable operators and
other telecom service providers maintain the intensity of their marketing
efforts and continue to leverage their network footprints to pursue market
share in our regions, (vi) slower Internet and video market growth than in the
previous few years as a result of the relatively high penetration rates for
these services and a reduced focus by our indirect retailers on actively
selling these services and supporting the product category,(vii) wireless
industry penetration growth in 2009 to be similar to 2008, subject to the
economic environment potentially causing a slowing of growth.
    In addition, BCE's and Bell Canada's 2009 guidance is also based on
various internal financial and operational assumptions. Our guidance related
to Bell (excluding Bell Aliant) is based on certain assumptions concerning
Bell, including, but not limited to: (i) many of our lines of business to
provide good resiliency and protection from an economic downturn so that
spending on our core wireline telephone services should not be severely
impacted given the importance of these services to both residential and
business customers, (ii) reduced housing starts and residential moves to
contribute to reduced customer turnover, (iii) Enterprise market demand to be
adversely affected as business clients revisit their investment plans due to
tighter credit availability, economic uncertainty, continued competition from
offshore manufacturing and reduced public sector spending, (iv) the softening
of the Ontario and Québec SMB market to continue with the potential to drive
business NAS erosion higher, (v) more conservative investments by Enterprise
customers to result in lower capital spending requirements to support business
customers, (vi) the economic recessionary environment, increased price
competition and the introduction of new wireless entrants, potentially as soon
as the second half of 2009, to put pressure on ARPU and result in customer
satisfaction and retention becoming even more critical over time, (vii)
residential NAS losses to decline in 2009 compared to 2008, (viii) Bell's
revenue outlook was derived in the context of a worsening economy, (ix) Bell's
total net benefit plans cost, which is based on a discount rate of 7.0% and a
2008 return on pension plan assets of approximately (19.5%), is expected to be
approximately $260 million in 2009, (*) Bell's 2009 retirement benefit plans
funding is estimated to be approximately $500 million, based on a 10-year
amortization of the pension solvency deficits that arose during 2008, (xi)
Bell's capital intensity in 2009 is estimated to be in the 15% to 16% range,
(xii) Bell to continue to invest in extending its fibre network, and (xiii)
Bell's 100-day plan annualized cost savings and other cost reduction
opportunities to be approximately $400 million.
    Our guidance related to BCE is based on certain assumptions for 2009,
including, but not limited to: (i) restructuring and other charges in the
range of $250 million to $300 million, (ii) depreciation and amortization
expense essentially unchanged when compared to 2008, (iii) an effective tax
rate of approximately 20%, while the statutory tax rate is approximately 32%,
(iv) relatively stable cash taxes for 2009 given the accelerated utilization
of Bell's investment tax credit carry-forwards, (v) EPS to be positively
impacted in 2009 by the repurchase of 40 million common shares under BCE's
normal course issuer bid that completed on May 5, 2009, and (vi) the permanent
repayment of long-term debt maturing in 2009.
    The foregoing assumptions, although considered reasonable by BCE at the
time of preparation of its financial guidance and business outlook and other
forward-looking statements, may prove to be inaccurate. Accordingly, our
actual results could differ materially from our expectations as set forth in
this news release.

    Material Risks

    Factors that could cause actual results or events to differ materially
from those expressed in or implied by our forward-looking statements include:
general economic and credit market conditions, the level of consumer
confidence and spending, and the demand for, and prices of, our products and
services; our ability to implement our strategies and plan in order to produce
the expected benefits; our ability to continue to implement our cost reduction
initiatives and contain capital intensity while seeking to improve customer
service; the intensity of competitive activity, including the increase in
wireless competitive activity that could result from Industry Canada's
licensing of advanced wireless services spectrum, and the resulting impact on
our ability to retain existing and attract new customers, and on our pricing
strategies and financial results; increased contributions to retirement
benefit plans; our ability to respond to technological changes and rapidly
offer new products and services; events affecting the functionality of, and
our ability to protect, maintain and replace, our networks, information
technology (IT) systems and software; events affecting the ability of
third-party suppliers to provide to us essential products and services; labour
disruptions; the potential adverse effects on our Internet and wireless
businesses of network congestion due to a significant increase in broadband
demand; events affecting the operations of our service providers operating
outside Canada; our ability to raise the capital we need to implement our
business plan, including for BCE's share buy-back programs and dividend
payments and to fund capital and other expenditures; our ability to
discontinue certain traditional services as necessary to improve capital and
operating efficiencies; regulatory initiatives or proceedings, litigation and
changes in laws or regulations; launch and in-orbit risks of satellites used
by Bell TV; competition from unregulated U.S. direct-to-home (DTH) satellite
television services sold illegally in Canada and the theft of our satellite
television services; BCE's dependence on its subsidiaries' ability to pay
dividends; stock market volatility; depending, in particular, on the economic,
competitive and technological environment at any given time, and subject to
dividends being declared by the board of directors, there can be no certainty
that BCE's dividend policy will be maintained; Bell Aliant's ability to make
distributions to BCE and Bell Canada; health concerns about radio frequency
emissions from wireless devices; delays in completion of the high speed packet
access (HSPA) overlay of our wireless network and the successful
implementation of the network build and sharing arrangement with TELUS to
achieve cost efficiencies and reduce deployment risks; the timing and
completion of the proposed acquisitions of national electronics retailer "The
Source by Circuit City" and of the equity of Virgin Mobile Canada not already
owned are subject to closing conditions and other risks and uncertainties; and
loss of key executives.
    For additional information with respect to certain of these and other
assumptions and risks, please refer to BCE's 2008 annual MD&A dated March 11,
2009 included in the BCE 2008 Annual Report and BCE's 2009 First Quarter MD&A
dated May 6, 2009, both 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.

    About BCE

    BCE is Canada's largest communications company, providing the most
comprehensive and innovative suite of communication services to residential
and business customers in Canada. Operating under the Bell and Bell Aliant
brands, the Company's services include Bell Home Phone local and long distance
services, Bell Mobility and Solo Mobile wireless, high-speed Bell Internet,
Bell TV direct-to-home satellite and VDSL television, IP-broadband services
and information and communications technology (ICT) services. BCE shares are
listed in Canada and the United States. For corporate information on BCE,
please visit www.bce.ca. For Bell product and service information, please
visit www.bell.ca.




For further information:

For further information: Media inquiries: Jacques Bouchard, Bell Media
Relations, (514) 391-2007, 1-877-391-2007, jacques.bouchard1@bell.ca; Investor
inquiries: Thane Fotopoulos, BCE Investor Relations, (514) 870-4619,
thane.fotopoulos@bell.ca

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BCE INC.

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