Good morning, ladies and gentlemen. Welcome to the BCE Q4 2019 Results and 2020 Guidance Conference Call. I would now like to turn the meeting over to Mr. Thane Fotopoulos. Please go ahead, Mr. Fotopoulos.

Thank you, Alana, and good morning to everyone on the call. Joining me this morning for the first time officially as President and CEO of BCE is Mirko Bibic, and also here with me as usual is our CFO, Glen LeBlanc. As a reminder, our Q4 results package, 2020 financial guidance targets and other disclosure documents, including today’s slide presentation are available on BCE’s Investor Relations webpage. However, before we get started, I want to draw your attention to our safe harbor statement on Slide 2. Information in this presentation and remarks made by the speakers today will contain statements about expected future events and financial results that are forward-looking and therefore, subject to risks and uncertainties. For additional information on such risks and assumptions, please consult BCE’s safe harbor notice concerning Forward-Looking Statements dated February 6, 2020 filed with both the Canadian Securities Commission and with the SEC and which is also available on our website. These Forward-Looking Statements represent our expectation as of today and therefore are subject to change. We disclaim any obligation to update forward-looking statements except as required by law. So with that, hand it over to Mirko.

Thanks Thane, and good morning everyone. I’m very honored to be on the call with you all today in my new role as President and CEO of this amazing company. And I want to thank my predecessor George Cope for his leadership since 2008 and for putting in place such a foundation for Bell’s future success. We have the right assets to lead the next wave of communications innovation in Canada. And as the world moves to increasingly rapid connections and the unlimited service potential of 5G, IoT, and artificial intelligence, Bell is well positioned to stay out -- out front. As you know, we have updated our six strategic imperatives to frame every action we take to capture future growth opportunities in a converging wireless wireline world. In many ways, these imperatives are consistent with our winning strategy over the past 10-years, overseeing by a seasoned leadership team, but with an even stronger focus on the customer experience and recognizing the importance of all Bell team members in delivering our future success. It all begins with building the best networks. With significant capital investment over the past decade, networks have again become Bell’s critical competitive advantage. In 2020, we will continue to expand our all-fiber connections, we will open up wireless home Internet to even more small communities and will build on our 4G LTE lead by launching the next generation of wireless with mobile 5G. These next-generation networks will be the launch pad to drive market share and revenue growth with new innovative, integrated services including IoT, smart home products as well as business solutions like virtual network services, all delivered over the fastest Internet, the best Wi-Fi, and the highest quality mobile networks. And we will continue to deliver the content consumers want on the platforms of…

Thank you Mirko. And good morning, everyone. I’m going to begin on Slide 9 with a review of our consolidated financial results. The fourth quarter capped off a successful year with revenue up 1.6%, this together with the favorable impact of IFRS-16, which we have now lapped and good overall cost management drove 4.8% higher adjusted EBITDA and 1.2% increase in margin. Net earnings were up 12.6%, benefiting from the flow through of the strong EBITDA growth, as well as the lower year-over-year non-cash impairment charges at Bell Media. Nevertheless, adjusted EPS was down CAD0.01 compared to last year, due to the pickup of less equity income from our minority interest investments and the dilution from the higher number of common shares outstanding. In terms of free cash flow, we generated close to CAD900 million of cash in Q4, bringing the total for 2019 to just over CAD3.8 billion or 7% higher compared to last year. Although Q4 free cash flow was down year-over-year, this result was expected given the step up in CapEx spending, consistent with our plan for the year and higher cash taxes due to the timing of installment payments. Let’s turn over to Slide 10, Bell Wireless. Continued strong financial performance despite the dilutive impact of unlimited data plans and what I would characterize as a relatively more competitive and active market this year. Revenue was up a solid 3.6% and a continued strong postpaid subscriber growth, a higher year-over-year prepaid revenue contribution, and increased sales of higher valued smartphones. Despite the sequential step down in service revenue growth, quite pleased with our overall performance, demonstrating that we are managing decline in data overage at a more measured pace. And as well, Mirko also pointed out, but it definitely bears repeating, adjusted EBITDA grew a strong…

Great. Thanks, Glen. So before we start the Q&A period. Just to keep the call efficient as possible given the time we have left, please limit yourself to one question and a brief follow-up if you must, so we can get to everybody in the queue in the time we have left. Alana, we are ready to take our first question.

Thank you. [Operator Instructions] The first question is from Jeff Fan with Scotiabank. Please go ahead.

Thanks and good morning. First question is just on wireless, there is a lot of moving pieces going on in the industry and wanted to get your comments Mirko, I understand you are managing better when it comes to the transition, but wondering if you can just comment a little bit on what the level of unlimited planned migration has happened within the base, maybe a little bit on overage exposure and as well, as you look out to the rest of the year, how service revenue growth might look compared to what we saw last year? And then I have a quick follow-up on a broader picture question.

Okay, so thanks Jeff. I will pick up where you where you started, which is we have shown another quarter where we have managed the base rather well and it is one of our core competencies, as you know so I mean we are showing that it is possible to deliver more service options to customers in this case, particularly unlimited plans while remaining competitive as you can see from our best ever Q4 gross adds and at the same time delivering financial results that investors have come to expect. And that is because how we are managing the transition over to unlimited, not force migrating every single customer over to unlimited plan. We have various landing spots where they can land. So ultimately what that results in Jeff is a lower - significantly fewer subscribers on unlimited than some of our peers because of how we are managing that base. And in terms of -- in terms of percentage of revenue, which is overage, we are not sharing that specifically for competitive reasons.

Okay. And then a follow-up, just regarding your Media. I know it is a relatively smaller segment, but with you in I guess at the leadership post, just wondering because some of the U.S. peers have been using SVOD services in a way to differentiate their wireless or broadband offerings, given your position in Canada with media and particularly with Crave, what are your thoughts on that progressing as a potential tactic or even a strategy?

Great, so I like our assets and I like our integrated strategy, and right now I will leave it at this. Being vertically integrated does allow us to segment customers and target each segment of the customer base with the right products. So whether that is Crave, which you referred to which caters obviously as you know at over the top viewers and linear viewers as well, whether it is Alt, which gives customers who might otherwise cut the cord, a nice landing spot or whether not its five, which is still the large majority of our TV subscriber base. Having that breadth of product mix allows us to target customers with the right product. So that is, that is why being vertically integrated gives us that flexibility. Now in terms of how we are going to package various services with wireless and broadband that is for the future, but right now we are going to keep on our plan of using the vertically integrated strategies to continue to segment the base.

Okay. Thanks, Mirko.

Thank you. The next question is from Richard Choe with J.P. Morgan. Please go ahead.

Great, thank you. With the pressure from service revenue and wireless competition, should we still expect wireless margin growth and how will you manage the margin versus the ads? And then as a follow-up to that, should we still expect growth in wireline EBITDA or maybe more of a contribution as wireless gets a little bit tougher?

Good morning, Richard, it is Glen. I think our 2020 guidance today is indicative of our performance in 2019 and actually 2018. And you are looking at complete stability. 1% to 3% revenue, 2% to 4% EBITDA, 3% to 7% on cash flow is in line, normalizing for IFRS-16 to what it was experienced this year. Without giving you specific guidance by our BUs, which we don’t do, what I can tell you is as I said in my opening remarks, we expect positive contribution from all three Bell segments on revenue, EBITDA, and cash flow, ultimately feeding that guidance, the consolidated guidance. Margin, I said in my opening remarks, I expect margin to remain stable. So in conclusion, yes, we expect wireline to continue to drive positive EBITDA growth and margins and performance in wireless to be consistent to what you have seen this year.

Great, thank you.

Thank you. The next question is from Aravinda Galappatthige with Canaccord Genuity. Please go ahead.

Good morning, thanks for taking my question. I wanted to ask a question on the enterprise side of the business, you have alluded to strong business market profitability in Q4, Mirko can you just talk a little bit about how you see 2020 playing out and some of the dynamics, both up and down in that sector? And a quick follow-up on the wireless side, we saw -- did see ABPU declines in Q4, considering sort of the competitive environment in the market as well as the overage factor, do you see some sort of price stability as we get to the middle to latter part of the year? Thanks.

I will jump in on the second part of the question and Mirko will handle the BBM part, but wireless ABPU declines as you mentioned in Q4 approximately 0.4%. Really the two factor driving that decline are the absorption of the unlimited plans, which ultimately results in lower data overage. And of course, we expect that will continue through calendar 2020. And remember the success we are having on prepaid, it has been phenomenal and we expect that similar success will continue through 2020. And obviously that mix is going to impact your ABPU. Final part, remind you is that the ABPU calculation doesn’t include the equipment financing piece. So if I normalize for that in the quarter, we are very close to zero.

And just a final point on ABPU to what Glen has said as well is taking everything into consideration, I think it is really important for investors to focus on total wireless revenue growth and just look at our performance in that regard. As it relates to the enterprise segment, overall, we are quite pleased we had a strong 18-month run now and we are lapping strong results from the back end of 2018 and we are continuing to see improvement in the rate of EBITDA declines, all very positive and the fiber investment really benefiting this segment as well. So that bodes well and look the transparency, the reprice continues to be a challenge, but we are managing it quite well.

Thank you.

Thank you. The next question is from Vince Valentini with TD Securities. Please go ahead.

Yeah, thanks very much. And welcome aboard Mirko and congratulations on the new role. Two questions for you if I could. Sorry, Thane you can beat me up later, but one just on this ARPU and ABPU thing and I know your regulatory history and I know there is a big -- a big hearing coming up soon, do you not agree with what was written in the [indiscernible] recently that some of the inflation that, the policymakers seem to be worried about for consumers is driven by smartphone prices as opposed to actually what you and other carriers charge for service. And if that is the case, should we not focus on ARPU versus ABPU and I’m still not sure why you guys don’t disclose that because it makes it difficult for the regulators and politicians to see the figure if you are not even giving it to us every quarter. So I would like your thoughts around that. And the second one, just your big picture thoughts on M&A, it is been a big portion of Bell’s growth story during George Cope’s tenure and curious if you still think that is possible or likely in the future. I’m not talking about small tuck-ins, but is there any sort of transformative stuff that you think could happen over the next two years or three years or is it more just an organic story? Thank you.

Thanks Vince. So I will address your question in a general sense and then turn it over to Glen for some more precise comments, but at the highest level, I 100% agree with you that you cannot ignore the increases in the cost of handsets and the impact that have on the consumer’s pocket book. I mean you just can’t because that is a big, big component of what the customer ultimately pays for wireless service. By the same token, I’m shifting gears a little bit, but you also can’t ignore when you are looking at what consumers are paying, you can’t ignore the fact that when you walk into a store, whether or not it is a back-to-school or Black Friday or Boxing Week or other times during the year, you are being offered CAD400 gift cards, or free Sonos players, or free tablets, those add tremendous value to the customer, but they’re not calculated in all the analysis that you read about when it comes to pricing. So you got to factor in a complete and total value that the customer gets, both in terms of promotions, in terms of when the handset pricing that gets absorbed and also speed, access, coverage, latency, it is all part of the mix. Glenn, if you want to comment on ARPU versus ABPU.

Sure. Vince, I know you would appreciate my focus is always on cash generation and I think one thing you have to focus on looking at ARPU is ARPU is your closest metric for cash and we can’t lose sight of that. All that said, I can assure you that government officials and regulatory bodies are well aware of our ARPU and we disclose that and have discussions completely in line with what you laid out here today. Over time as EIP becomes the majority of our loadings, we will start to see a convergence of our ARPU and ABPU. So I think it fixes itself with time, but never lose sight of the flow of cash, I like to say Vince.

And on the M&A, Mirko?

Vince on M&A, I’m not going to comment on M&A, until there is something to comment on.

Thank you.

Thank you. The next question is from Maher Yaghi with Desjardins. Please go ahead.

Thanks for taking my question. I wanted to ask like in terms of strategically positioning yourself in terms of CapEx for 5G, you are starting the rollout, your starting investment, and you have invested a lot in the backbone, but now you are getting ready to get onto your last less connections and the regulatory environment is still fluid and I wanted to ask you, how do you manage such large investment when the regulatory environment is influx like that? And when you talk about the reduction in CapEx, that could be a solution to overcome potential negative outcome and a possible regulatory decision, what are we talking about? Can you quantify how much you can pull on your CapEx to offset possible negative outcome and regulation?

Thanks for the question. So how we manage the investment given the uncertainty. So we take a step back and I have faith that the CRTC will base its decisions on the evidence on the record and the evidence that is on the public record is rather compelling that deciding in favor - mandating MVNOs would be the wrong thing to do, that is the first thing. Two is the way you manage the risk is you make judgment calls. So first build outs will be in urban areas, so what that means is you wait and see what the decision is going to be before you make any concrete plans to build out in the less dense areas and that has an impact on rural areas and that has an impact on suburban areas as well. I mean these are all the consequences of regulatory overhang, that is how you manage it. And I’m not going to quantify the potential impacts on cuts and investments from regulatory decisions because I need to see what the regulatory decision is going to be, but I can tell you that negative regulatory decisions will result in cuts and investment, we already saw it last summer and I hope we don’t have to see it again, well that is just the way it works.

Okay. And just my follow-up question, when you look at, I mean you are in charge now and you are looking at the company, have your new sets of priorities, when you look at the 5% dividend growth model that George had and positioned the company to deliver on what’s your view on that 5% dividend growth model and how sustainable it is going forward?

I’m supportive and yes.

Okay, thank you.

Thank you. The next question is from Simon Flannery with Morgan Stanley. Please go ahead.

Thank you, good morning. Just staying on 5G, perhaps you could just talk a little bit about the Nokia deal today, and are you planning to use multiple suppliers and tie that in perhaps to the Huawei review and I think a lot of investors are just trying to understand what the timing of any decision from the government might be? And we saw a decision in the UK, perhaps you could just reflect on that and see if there is a similar decision in Canada, what the implications would be? Thank you.

Okay. So, my announcement today is that Nokia will be the first provider of 5G ran equipment in our network. And I stress the word, first. What I’m trying to signal here is that we need to be able to work with many equipment suppliers today and in the future. And today that includes Nokia, it includes Huawei, it includes Ericsson, it includes Cisco, and it is always prudent to have multiple supply sources and we are always looking for that flexibility. We are still waiting for the government’s decision on the security review as you know, but as we have shown this morning we are ready to deploy initial 5G service because we will always be competitive and we are going to be doing this within our normal overall CapEx envelope and normal capital intensity ratio. I don’t know when the government is going to decide a couple of things, we do want clarity on that and we also are eagerly awaiting 3.5 spectrum auction. So that Canada frankly can get going on launching real 5G in 2021.

Okay. Any comments on the UK decision?

No, I mean it is -- no comment on the UK decision. We are focused on is what Canada decision is going to be.

Okay, thank you.

Thank you. The next question is from Drew McReynolds with RBC. Please go ahead.

Yeah, thanks very much. Good morning. On the EBITDA growth guidance of 2% to 4%, Glen you are alluding to obviously that is been pretty consistent with prior years, Mirko you point to next level of cost efficiencies and certainly investors are used to a decade of some pretty impressive cost efficiency and cost reductions at BCE. So could you just flush out a little bit of what changes or what kind of incremental cost reductions and efficiencies are expected to flow through? And then a follow-up, completely different here. Could you just comment on the wireless competitive environment here through Q1 through the early part of February here? Thank you.

Good morning Drew, it is Glen. As you alluded to our EBITDA growth guidance is consistent to that of before and of course underpinning the EBITDA growth guidance is our success and our track record around cost efficiencies. I believe you will see that continue, certainly under Mirko’s leadership much as it has in the past. When we look at the investments we are making and the opportunities to reduce the way we serve the customer, the cost and the manner in which we serve the customer. As you have heard me say before, good customer service is cheaper, as we roll out fiber we see cost efficiencies. And as we look at serving our customer better, eliminating challenges we have in our bill, eliminating troubles we have in our network, reduce calls to the contact center, all of that delivers efficiencies. And as we look at the investments we are making and we are ramping up to essentially rebuilding 140-year-old copper network and we are more than 50% done, as we look at more self-serve, more opportunities, I think the future is bright and cost efficiency and actually over time as we fix platforms and we fix billing stacks, you get to a point where I think we can see an acceleration in cost efficiency.

Yes, I agree with Glenn. It is -- cost efficiency remains one of our core strategic imperatives. So that is a very, very important signal and it comes down to, repeating a little bit what Glen said, but I’m going to reiterate it because it is important, more fiber means fewer truck rolls, it means fewer calls. Things like unlimited plans means fewer calls, we are going to be leveraging technology like artificial intelligence, we are going to be leveraging self serve platforms, we are modernizing the core of our network, we are making services more on-demand, more one-touch, all those things result in cost of goodness. So that is just to punctuate the point that Glen was making. On the competitiveness in wireless, I think one of the things worth mentioning in early days of 2020 and particularly early days of February, I think we like the early results of installment plans that we have seen on the Bell brand with our smart pay program, that is ensuring upfront affordability for our customer, and it helps us manage what were ever increasing subsidy costs. So that is a win-win all around actually for the customer and for ourselves. We followed quite closely what of our peers has recently done with it is flanker brand and installments. And I got two comments on that, one is, you have heard us say this before, we will always remain competitive and you will see some something soon on that. And two, much like I said in Q3 of last year I think, when we had to do some IT work to enable Bell, the Bell brand to be competitive on installments, we are going to be doing the same thing to enable the Virgin brand to be competitive on installment soon.

Okay. Thanks, Mirko.

Thank you. The next question is from David Barden with Bank of America. Please go ahead.

Hey, guys. Thanks so much for taking the questions. And welcome and congrats Mirko. I guess my question is I guess would be related to the handset side of things, could you kind of talk about the subsidy expense profile that you absorbed in 2019 versus 2018 and Glen, how you see that evolving in 2020 from a competitive versus kind of an EIP standpoint? And then a related question if I could, which would be just - there is a debate in [indiscernible] about the potential for a handset super cycle and phones are getting older and customers are ready to make this big upgrade to the 5G iPhone, if that is what it turns out to be. What have you kind of assumed in your 2020 outlook for the handset upgrade rate and the velocity that comes with this next upgrade cycle? Thanks.

Hi David. I will start off and then I will leave the handset super cycle comments for Mirko, but look on the handset side of things, it is not news to anyone that as we watched more and more costly handsets enter the marketplace that we have seen continued cost pressure in the ever-increasing subsidy expense of our business. And I think that 2019 was no different and that in the first half of 2019 we watched frothy promotions, which ultimately at certain periods throughout the year you see zero priced handsets. Once again, despite the landed cost for them, they still find their way to zero. I think what gives me some confidence looking into 2020 and managing of that ever increasing subsidy cycle is EIP, and installment plans. And I think managed correctly, and what we are seeing is early days, but managed correctly, I think we have an opportunity here to provide customers choice to separate the airtime packages from the equipment packages and give customers the opportunity to choose the handsets that meets their needs and with zero dollars upfront, finance it, over 24-month period. And the win-win in that is while giving customers what they want, I think we have an opportunity to mitigate that ever increasing subsidy cost of our business and see a significant earnings and cash flow opportunity. Albeit it will slow transactions, which Mirko said earlier, we have to focus on total revenue, because I think you will see the potential in EIP of transaction slowing, but that could lead to a significant opportunity in earnings and cash flow generation.

And on the handset cycle, look I think the initial 5G handsets are likely to cater more to early adopters and we have managed this before, we manage the cycle from 2G to 3G, from 3G to 4G, from 4G to LTE-Advanced, and I expect much the same here, certainly in the early days.

Okay, great guys. Thanks for the comments.

Thank you. The next question is from Batya Levi with UBS. Please go ahead.

Thank you. Two questions quickly. As you think about the competitive environment, do you think we can expect to see churn going back to year-over-year improvement this year? And a clarification on the wireless capital intensity, do you expect to reach 9% to 10% after the 3.5 auctions or is there enough spending right now as you prepare for the 5G network that we will see that level early on in the year. Thank you.

Well the 9% to 10% on wireless [CDIs] (Ph) throughout - for the entirety of the 5G build cycle.

And then on your question on churn improvement, it goes to the comments I just made about EIP and I believe in a world where we see the installment plans starting to become a big portion, significant portion of our loadings, I believe you will start to see a decline in churn. I mentioned that you will see a slowing of transactions, which ultimately can slow service revenues and it slows transactions, but managed properly can improve EBITDA, improved cash flow. Final point I will make on churn improvement is don’t lose sight of the fact that it did -- for BCE churn did improve in 2019, 3 basis points.

Alright, thank you.

Thank you.

Okay. Last question in the time we have left.

Thank you. The last question will be from Tim Casey with BMO. Please go ahead.

Thanks. Glen, could you tie your comments on subsidies and your measured roll out of unlimited plans or balanced rolled out, I guess is better way into the assumptions you have made for guidance. In other words, have you assumed that you will ramp up the intensity of uptake of unlimited plans in your guidance? And do you expect some material relief in expenses on the subsidy side from EIPs in your guidance? Can you help us sort of square up some of the assumptions you are making for us?

I would say the short answer to your question Tim, in the short term, calendar year 2020 is no. We are not expecting a substantive shift in the subsidy reductions. Do I think that in the longer run this creates a great opportunity for the industry? Yes. Highly dependent upon that to deliver on the guidance in 2020? No. Do I think unlimited will ramp, Mirko has made numerous comments here today that our job and what we have proven for a number of quarters here is that we will take a balanced and managed approach to the data overage decline or the shift to unlimited, while giving customers what they want. So I think a lot more of the same in 2020 of what you -- you saw from us in second half of 2019.

Thank you.

Thank you, Tim.

Okay, so on that I want to thank everybody for their participation today on the call and I will be available throughout the day as usually and for any follow-ups and clarification. So with that, have a good rest of the day.

Thank you, everyone.

Thank you.

Thank you. The conference has now ended. Please disconnect your lines at this time and we thank you for your participation.