Bell Aliant completes conversion to a corporation

    <<
    - Unitholders' proportionate interests in Bell Aliant effectively
      unchanged by the conversion transaction
    - Expected dividend continues Bell Aliant's high-payout of free cash flow
      and represents a yield of 7.3 per cent on December 31, 2010 closing
      price
    - Income fund units automatically exchanged on a one-for-one basis for
      common shares of Bell Aliant Inc.
    - For holders resident in Canada and the United States, the exchange
      occurred on a tax deferred basis
    >>

HALIFAX, Jan. 01 /CNW/ - Bell Aliant Inc. and Bell Aliant Regional Communications Income Fund (the "Fund") today announced the completion of the conversion of the Fund from an income trust to a corporate structure under a plan of arrangement (the "Arrangement") described in the Fund's management information circular dated May 7, 2010. The transaction has received all unitholder, board, court and regulatory approvals.

"I am pleased that the conversion to a corporate structure is now completed," said Karen Sheriff, President and Chief Executive Officer of Bell Aliant. "The new structure will reduce our administrative costs and complexity from that of the trust structure and will make us more comparable to our peers. We expect this will make the assessment of our performance easier for our investors as we continue to accelerate the execution of our key strategies."

As a result of the Arrangement, each Fund unit has been automatically exchanged for one common share of the new corporation, Bell Aliant Inc. Consequently, unitholders' proportionate interests in Bell Aliant Inc., including the 44.1 per cent ownership interest held by BCE Inc., is effectively unchanged by the conversion.

For holders resident in Canada and the United States, this exchange occurred on a tax deferred basis. A letter of transmittal will be sent to former registered Fund unitholders shortly requesting the return of Fund unit certificates in exchange for a certificate representing the applicable number of Bell Aliant Inc. common shares.

Bell Aliant Inc. common shares will begin trading on the Toronto Stock Exchange at the commencement of trading on January 4, 2011 with the trading symbol "BA."

Bell Aliant Inc. expects to continue the long-standing record of its predecessor companies of paying out a high portion of its free cash flow to investors, Bell Aliant is expected to pay an initial dividend of $0.475 per share quarterly, ($1.90 per share annually), for a yield of approximately 7.3 per cent based on the December 31, 2010 closing price. The first quarterly dividend is expected to be declared and paid in March 2011.

    <<
    Acquisition Disclosures under Securities Laws

    As part of the Arrangement:

    - the Fund was dissolved and all of the outstanding Fund units and
      special voting units were cancelled;
    - Bell Aliant Regional Communications Holdings, Limited Partnership
      ("Bell Aliant Holdings LP") was dissolved and all of its outstanding
      partnership units were cancelled;
    - Bell Aliant Regional Communications Holdings Inc., the former Bell
      Aliant Regional Communications Inc. and 7538332 Canada Inc. amalgamated
      under the Canada Business Corporations Act to continue as Bell Aliant
      Regional Communications Inc. ("Bell Aliant GP"); and
    - the following entities acquired the following securities:


    Issuer        Security           Quantity    Percentage    Acquirer
    ------        --------           --------    ----------    --------
                                     Acquired     Acquired
                                     --------     --------

    Fund          Units(1)         127,394,909      100%     Bell Aliant Inc.

    Fund          Special Voting   100,373,827      100%     Bell Aliant Inc.
                  Units(1)

    Bell Aliant   Class 1 exchan-   28,168,803      100%     Bell Aliant
    Holdings LP   geable limited                             Regional
                  partnership                                Communications
                  units(1)                                   Holdings Inc.

    Bell Aliant   Class 2 limited  132,367,606      100%     Bell Aliant Inc.
    Holdings LP   partnership
                  units(1)

    Bell Aliant   Class B exchan-   72,205,024      100%     Bell Aliant
    LP            geable limited                             Regional
                  partnership                                Communications
                  units                                      Holdings Inc.

    Bell Aliant   Voting Common    101,373,832   100% - 1    Bell Aliant Inc.
    GP            Shares

    Bell Aliant   Voting Common              1   less than   BCE Inc.
    GP            Shares                         1%          (through Bell
                                                             Canada)

    Bell Aliant   General               67,500      100%     Bell Aliant GP
     LP           Partnership
                  Units

    Bell Aliant   Class A limited  118,526,408(2)   100%     Bell Aliant GP
    LP            partnership
                  units

    Bell Aliant   Class B limited   72,205,024      100%     Bell Aliant GP
     LP           partnership
                  units

    1. As part of the Arrangement, these units were canceled upon dissolution
       of the issuer
    2. Includes 10 Class A limited partnership units held indirectly through
       6583458 Canada Inc.
    >>

The closing price of the Fund units on December 31, 2010 was $25.99 per unit. The head office address of Bell Aliant Inc. and Bell Aliant GP is 7 South Maritime Centre, 1505 Barrington Street, Halifax, Nova Scotia B3J 2W3. To obtain a copy of the reports of acquisition filed by Bell Aliant Inc. and Bell Aliant GP under securities laws, contact Frederick P. Crooks, Corporate Secretary at (877) 248-3113.

Forward-looking Statements

This news release contains forward-looking statements concerning the expected dividend policy of Bell Aliant Inc. These statements are based on management's expectations at January 1, 2011. The statements are subject to important risks and uncertainties, including the declaration of dividends in the discretion of the Bell Aliant Inc. board of directors as currently contemplated. Therefore, actual results and events may differ materially from these forward-looking statements, and there can be no assurance that the results or events predicted will be realized. Except as may be required by Canadian securities laws, Bell Aliant disclaims any intention and assumes no obligation to update or revise any forward-looking statement even if new information becomes available, as a result of future events or for any other reason.

About Bell Aliant

Bell Aliant (TSX: BA) is one of North America's largest regional communications providers and the first company in Canada to cover an entire city with fibre-to-the-home (FTTH) technology with its FibreOP(TM) services. Through its operating entities it serves customers in six Canadian provinces with innovative information, communication and technology services including voice, data, Internet, video and value-added business solutions. Bell Aliant's employees deliver the highest quality of customer service, choice and convenience.

SOURCE BELL ALIANT REGIONAL COMMUNICATIONS INCOME FUND

For further information: Media Relations: Alyson Queen, (866) 696-6700, alyson.queen@bellaliant.ca; Investor Relations: Zeda Redden, (877) 487-5726, zeda.redden@bellaliant.ca

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BELL ALIANT REGIONAL COMMUNICATIONS INCOME FUND

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