Good morning, ladies and gentlemen. Welcome to the BCE Q1 2020 Results 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. Joining me on the call today are Mirko Bibic, BCE’s President and CEO and Glen LeBlanc, our CFO. As a reminder, our first qua results package 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 the 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. These forward-looking statements represent our expectations as of today and accordingly are subject to change. We disclaim any obligation to update forward-looking statement except as required by law. Factors that may affect future results are contained in BCE’s filings with both the Canadian Securities Commissions and the SEC and are also available on our corporate website. With that, I’ll turn it over to Mirko.

Thank you, Thane, and good morning everyone. We hope that you're all staying safe and following government measures so that we may resume as much as possible given the circumstances our daily lives. I also want to open up by acknowledging government efforts at all levels and extending our deepest gratitude to all health professionals and other frontline workers who are working tirelessly around the clock. And speaking of frontline workers, I am especially proud of the Bell team whose outstanding work to keep Canadians connected to 24/7 is being widely recognized as critical to our country's ability to withstand the COVID-19 crisis. This is the biggest challenge our country has faced in generations. And I'm so proud to be working alongside the more than 50,000 Bell employees as we build on our legacy as the company that's always there when Canadians need us. Our people and our networks have certainly risen to the challenge. Thank you. I'll now turn to highlighting the key operational priorities that have guided us over the last few weeks. One of the key operational priorities is to keep Canadians connected and informed at a time when the country needs it the most. We've taken a number of steps to ensure reform at a time when the country needs it the most. We've taken a number of steps to ensure continuity of critical services, including enhanced capacity and redundancy for our wireless, wireline and broadcast media networks, ongoing special support for health care providers and first responders and a commitment to delivering the latest news to Canadians at the local, regional and national levels. We've been operating our networks at a remarkable 99.99% overall availability despite surging demand, while maintaining internet speeds even with increases in peak daily traffic of up to 60%. Rural customers…

Thank you, Mirko and thank you everyone for joining us and I hope you are all remaining healthy and safe. Firstly, let me echo Mirko's thanks to our employees for ensuring Canadians remain connected and informed and to my finance team specifically, thank you. If I would've told you two months ago that we would close out the quarter and prepare our financial documents released remotely, we would have said that's not possible. But you did just that and you did it flawlessly as usual. So again, thank you. I'm going to begin on Slide 8 with an overview of our Q1 financial results. The financial impact of COVID-19 was limited in Q1 as government lockdown measures and related shutdown of businesses only went into effect towards the end of the quarter. Although difficult to assess with any pinpoint accuracy, we estimate that our normalized - that normalizing for COVID, our overall consolidated results for Q1 were tracking to our now withdrawn guidance targets for 2020. Total service revenue remain positive in Q1 despite the curtailment of commercial activity starting in mid-March, as well as the impact of initiatives to support Bell customers sheltering and working from home. However, product revenue was down decreasing 10% year-over-year. This was a result of a significant reduction in wireless customer transactions attributable to retail channel disruptions, as well as lower business wireline data equipment sales given last year strength in the current economic environment. Despite the year-over-year revenue decline, adjusted EBITDA grew respectable 1.4%, reflecting a 2.6% decrease in total operating costs, which drove a 1 point increase in margin to 43%. As customer activity has waned, so has call volumes and technician visits to the home, this combined with fewer promotional offers reduced mobile handset subsidies, as well as decreased advertising and…

Thanks, Glenn. Before we start the Q&A period, I want to remind participants that due to the time constraints this morning because of our AGM which is taking place right after this call, please limit yourself to one question and a brief follow up, so we can get to as many of you as possible in the queue. So with that Alana, we're ready to take our first question.

Certainly. Thank you [Operator Instructions] The first question is from Richard Choe with JPMorgan. Please go ahead.

Hi. Service revenue and wireless was up on the quarter, but there were some impact at the end due to COVID and ABPU was down. What is going to be the full impact going forward? How much roaming and data overage exposure do you have relative to overall service growth? Thank you.

So thanks, Richard. So on - as I mentioned at the outset in terms of our ABPU, right we have, obviously, there’s a data – our ABPU right, we have, obviously, there’s a data overage impact there. And like I said in past quarters our overage decline actually in Q1 of this year was relatively [indiscernible] relatively muted like in Q4 2019 and it's just another quarter where we have demonstrated that base management it really is one of our core competencies and that will continue. As far as roaming, clearly that's going to have an impact in Q2 given the restrictions on - basically the right restrictions on travel as to whether or not that's inbound or outbound roaming, that's going to be significantly impacted in Q2 and for as long as the crisis last and travel restrictions remain in place. And Glen do you have any – do you want to add to that?

Not much, Mirko. I think that's pretty good. Richard, I'm not going to try to forecast the duration and severity of COVID and try to predict its implications on service revenues go forward. Certainly I'm not equipped to do that. I think as Mirko said, naturally roaming revenue is going to be significantly impacted for the foreseeable future. We're managing the data overage, transactions are significantly down in wireless. But all in all, I think the underlying health of our business remains and as Mirko said in his opening remarks, the fundamentals remain strong.

No it seems like you're managing the service revenue part well. To follow up on the equipment side. What is the kind of decline in the second half of March versus then 9%, 10% that you saw in the overall quarter?

I'm not going to provide any specifics on that Richard. Suffice to say that, as retail channels closed, we see - we saw a significant reduction in transactions and that has continued well through the month of April. The good news is, we're starting to see signs across the country that retail channels are opening, store fronts are coming back online and let's hope that, that this is relatively short-lived and we start to see a Canadian shopping again and transactions picking up.

Great. Thank you.

Thank you, Richard.

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

Good morning. Thanks for taking my questions. You referred to some of the impact that you'd expect on the SME side or seeing on the SME side. Can you expand a little bit on what you believe would be the impact on enterprise. Obviously, there could be some pricing pressure as the contracts will roll over. But at the same time, I think as you alluded to in your prepared remarks, there could be some upside because of the increased spend on connectivity, including conference and video conferencing, et cetera. Can you maybe just talk to some of the dynamics there?

Sure. Thank you. Thank you. Please to. So the pandemic certainly has highlighted the importance of our wireline services generally to Canadian homes and businesses. And we're seeing usage up and churn down. As it relates to the enterprise segment, we are seeing an increase or saw early increases in demand for connectivity, which was a positive. That said, there has been lower demand for data equipment and some lower demand for service solutions. But ultimately Canadian businesses do rely on Bell to keep them connected. So it's no surprise that we're seeing that stability, you know, for stability to an increase in demand for connectivity now on the - you know that's in the enterprise segment and the small business segment. That's clearly more exposed given the economic circumstances that small businesses are facing. But that also is a smaller portion of our business segment revenue.

Thank you. And just as my follow up, you talked to some of the cost reductions in wireless, can you speak to your expectations in terms industries that are potentially moving towards lower handset subsidies in general. I know that the current period is not necessarily the best representation, but I know there was some progress even prior to COVID-19 hitting, just wanted to get your thoughts on that. Thank you.

Right. Okay. So we're seeing - we are seeing some subsidy savings from two sources, one is clearly the decrease in transactions due to the retail store closures, Glen touched on that, so no need repeating that. But we also saw a reduction in subsidy due to scaling of installment plans and they have been scaling quite nicely, we're quite pleased with it. And as we said in previous calls where you know, quite favorably to it and as we said in previous calls where you know, quite favorably disposed to the installment plan model and we like the early results, whether or not that was the latter part of Q4 of last year and into Q1 of this year. Nice scaling and we see the financial benefits that will come. And a couple of points to highlight, at the end of April the Bell brand has fully switched over to the smart pay model. And I believe I mentioned on our last call together that we were doing the IP work necessary to transition the Virgin brand over to installment plans. I'm happy to report that we’ll – you know, installment plans will be available on the Virgin brand this month actually. So it's looking good. We like the early results and I think that that answers the question.

Thank you.

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

Hey, guys. Thanks. I guess, could you talk a little bit about what behavioral changes we saw emerge in the wireless business, kind of in the last month, month and a half. Specifically with respect to whether you saw customers ratcheting down spend to lower end metered plans or from postpaid to prepaid or whether as a function of kind of the greater need for connectivity we saw a greater up of - the demand?

I didn't hear the last part of it, but I'll start with the answer. I think – okay. We saw - let me answer the question by contrasting wireline to wireless for a second, we saw the huge surges in usage on the wireline side, whether or not it's broadband or voice. On the wireless side, it was pretty stable, usage was pretty stable. We didn't see much of a spike up or down. We did see greater usage in rural areas than in urban areas, but pretty stable. And also pretty stable in terms of the behavior on the acquisition of the various data packages. So - and didn't see downgrades from customers in the packages they were acquiring. We can't hear you. Your connection is not clear.

Can you hear me better now?

That's better.

Sorry. Just as a quick follow up. And thank you for that answer. As a quick follow up, on your comments with respect to SMB, we did see for instance AT&T and Verizon take bad debt reserves for potential payment misses from that category. I apologize if I missed it, but did you take any of those reserves yet if you or do you plan to in coming quarters? Thanks.

Good morning, David. It's Glen. Look, absolutely a great question. We are monitoring our daily cash collections like never before. They remain strong. We're not seeing what I would call disturbing trends. That said, your observation is a good one. We are ensuring that we increase our provisions across our business, whether that be an SMB – SME, whether that be in our media operations, whether that be in our consumer segment of our business. Naturally the longer this goes on, Canadians are going to run into their own liquidity challenges. They're going to be looking for reasonable and payment terms and payment arrangements. And we're going to have to be - to be cognizant of how that impacts reserves. But I can assure you, I'm monitoring that daily. We have taken additional reserves, a modest albeit in Q1, but that will accelerate for additional reserves in Q2. Thank you, David.

I’ll just add a little bit to that, but saying, that we're seeing those small businesses that are the most affected and with that ABPU [ph] we are working with where we're seeing suspensions rather than just everyone necessarily disconnecting, which is favorable in relative terms. And we're also working with those affected small businesses on alternative payment arrangements. And Glen as he mentioned is taking the appropriate provisions.

Okay, great. Thank you, guys.

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

Great. Thank you very much. Good morning. You talked about maintaining your capital spending program, could you talk a little bit about your 5G plans and where does that stand at this point with potential 5G iPhone coming later this year? And maybe layer into that, when are we going to get some clarity from the government on the Huawei's potential role or not in the networks? Thanks.\

Thanks for the question. So we are ready with our initial 5G network, but frankly we've made - frankly we don't think that it's the right time right now to officially launch it for marketing purposes. I just don't think that customers are paying attention to this right now and that's not what is top of mind for our customer base. They have other priorities understandably. But we are we are ready. As you know, I think we are carrying the first 5G phones that have been brought to market, Samsung GS20 would be one example. And you know, as the economy opens up, we'll have more news on that, on when we will launch our initial 5G services. And as for Huawei and the government, I really don't know and can’t provide more insight than I provide in the last couple of times we spoke, we will - we're waiting for the government's decision and we will follow all government rules with respect to usage of equipment in our 5G network and as you know, we work with multiple suppliers in our supply chain.

Great. And do you think the auction timing could be impacted by the crisis?

Well, I – on the auction timing, like here's what - back to my opening comments about, you know, my general comments and my opening about, we cannot risk as a country falling behind in communications and networks and now makes it as clear as ever how important the world's leading communications are. So you know, with that as context, I don't think we can and shouldn't want to fall behind on 5G and 3500 megahertz is we all know is the backbone of 5G. So my point of view is we need to have that auction as planned or very soon after, if it's not December 15, then like very soon after December 15. And that would be our position. Let's have the auction, let's move forward. Let's make that spectrum available, let's lead in 5G. Now with that having been said, I would also say that given how our industry has stepped up with accelerated investments this year in particular, if the government would be open to delaying payments until calendar year 2022 that would be helpful to everyone concerned. But ultimately the short answer to your question is let's have the auction.

Great. Thank you.

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

Thanks very much. Can I start with one clarification. Glen, we talked about the equipment revenues in wireless and the volume declining in March. Are you able to give us what the figures are on how much both the OpEx for equipment costs, as well as the cash costs for equipment subsidies went down in Q1?

Vince, I don't have that at my fingertips, but obviously it's not overly material due to the fact that we basically had 10 or so weeks of what I would deem normality prior to the COVID. Naturally what I've experienced in the past month has been substantial in April and you'll see that in our Q2 results.

Okay. And a bigger picture question. Mirko, do you - give any thoughts about when we come out of this crisis and obviously as lot of people talking about a new way for society to interact and more work from home and more embracing of a digital economy. When you think about your business telecom operations is this a net positive or negative in your view, if there is less office lines and less people in offices, but more connectivity required and services, so people can work from home. Is it a net neutral or positive or negative in your mind?

I view it as a medium to long term net positive for all the reasons you mentioned in the question. And also you know, as we - we've all we've all had to adjust the way we serve customers and that's why I mentioned in the opening remarks that we are making the investments necessary now in digital adoption, self- serve and self-install in apps and online fulfillment because - on January 6, when we updated our strategic imperatives and we added one that talked about operating with agility and cost efficiency and we talked about with agility and cost efficiency and we talked about the need for digital adoption, we identified it then, said that, you know, we're all going to be on this journey now of course this crisis highlighted how important it is to serve customers in that matter and in that manner and customers, we're seeing our prepared and very comfortable and being served in this manner. So what that does is a lot of goodness on the cost structure, because if we can accelerate those investments in the long term it's going to reduce our cost of operations, much like building fiber has an obvious win in terms of market share, but a win in terms of cost structure. So to answer your question, I do see it on the business side as a net positive and the whole way we're shifting in how we're serving the customer is also going to have some medium and long term benefits on the cost side.

Thank you.

Thank you. The next question is from Jeff Fan with Scotiabank. Please go ahead.

Thanks. Good morning. Hope you guys are doing well. First question is just the clarification, probably for Glen, regarding your CapEx comment, normal you give CapEx intensity guidance, but it looks like what you guys are saying is you're going to keep the same CapEx dollar, are you – are we calculating that based on the previous, I guess revenue guidance and getting to roughly a $4 billion number, just wanted to check the math, make sure that's the number that you're referring to on CapEx. And then the second question, probably looking beyond COVID-19 in wireless store. So it's reopened as we start to get back to some kind of a normalcy. Wondering how Mirko you think about the COVID shutdown competitive environment, given a lot of contracts that COVID [ph] lapse. You know, a lot of pent-up perhaps demand on upgrades, wondering how you see that competitive environment sort of play out post the shutdown. Thanks.

Why don’t you go ahead, Glen on the first one.

Sure. Good morning, Jeff. On CapEx, you're absolutely right in your assessment of what we were attempting to say if I wasn't clear. Obviously, our ability to forecast CI or capital intensity in this environment is extraordinarily difficult because we really don't know the length of the duration and the severity of COVID and how that's going to impact our top line. So what I said on CapEx or what I intended to say is, that we intend to spend roughly on an absolute dollar basis consistent to what our target was. I said in our February 6th guidance that we would spend approximately 16.5% intensity and if you took that against our revenue guidance of 1% to 3% growth, you'd get a number of $4 billion, $4.1 billion I believe. So I - our intended remarks were that we intend to spend to that level. And as Mirko said, this is not a time to be shy. This is a time to lean forward. We're going to make the investments we need to keep this business healthy, to keep this business vibrant and to keep Canadians connected. And with the strength of our balance sheet, the health of our liquidity – the healthy liquidity position, the health of our balance sheet, we're going to lean in and we're going to make the investments we need.

Okay. Thanks, Glen. And Jeff on the second question. In terms of wireless demand as things opened up, I feel I feel pretty good about our position as the economy slowly opens up and as our stores open up and we'll see how long it takes for customers to, consumers to get comfortable to go out and start shopping. But so put aside predictions when that will be, when that does happen, we're in a very good position. We have strong inventory. As the stores open up we lead in distribution which is great news and we have the best networks and we will have our 5G network led up. And so that puts us in a very strong position competitively and kind of leave it at that and I think when people do start going out we'll see - I think my sense is those who go out to shop, we're going out to shop with a purpose and that's to buy, rather than to just browse.

Thank you, both.

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

Thank you for taking my question. So I wanted to just go back to your comment about your wireline business and you know now that you were looking at April, can you maybe just look the effect of the shutdown on - the effect of the shutdown on small and medium size businesses. How was that being reflected on your P&L, are these businesses asking for credit for the months that they're closed or they're deciding to reduce actual spending on their bill. And so I'm trying to just figure out how you're using the situation on cash flow versus P&L type on that business. And my other question on one hand is, we're seeing an alarming increase in number of criminal acts on towers, starting more and more in Canada, which we have not seen in the past. It used to be more in Europe, it seems like the pandemic has increased alarm for some people against wireless tower, in Quebec we’ve seen a few criminal acts. How are you expected or what are you looking at in terms of protecting your assets in the situation that this could continue to increase in the future?

Okay, thank you. I'll take the second one Glen, can - I'll take the second one first Glen, and then I'll turn it over to you. So on the - on the vandalism, those are really unfortunate criminal acts against our wireless towers across the industry. These are facilities that communities need for critical communications and that our first responders need there in the field. And so you know, it's rather unfortunate. Now what we're doing is as you'd expect, we'd be doing - we are hardening our security, we're being very vigilant. We're working with law enforcement and I noted that the Prime Minister did issue communication, a tweet not that long ago actually, decrying these acts of vandalism. And so that, thank you to the prime minister for that because it's important for us to educate consumers and the public that there is no link between our wireless facilities and the cornavirus. And I think there have been a couple of arrests actually related to some of these recent acts of vandalism. So that's positive news. So over to you Glen.

Sure. Good morning, Maher. On the SME activity what are we seeing? We're literally seeing everything that you alluded to. When you think about restaurants and bars, many of them have suspended service and therefore they've taken a pause there. So that impacts are cash flow naturally, but it impacts the P&L as well, as they're not in operations. Other small businesses that are continuing to operate, but operate in a more limited capacity have retained their services. We've seen minimal requests for payment arrangement or changes in the manner in which they pay. But in some instances we've provided that and we're trying to do everything we can to make it easy and possible for our small and medium sized businesses to remain healthy and to ensure that they return. But we've seen it across the board, as you can appreciate, some have suspended service, some have continued operations with no disruption in the manner in which they're paying and others have requested a modest amount of request with additional terms for paying. But I would say at this point, I'm going to go back to my earlier comments. We've changed the way we track cash collections. We literally track it daily compared to the - day to day comparisons, we do comparisons to previous week, previous month and same period last year. We are monitoring everything on cash collections to ensure that we are proactive in the way we reach customers and introduce terms to them that make it - make the flexibility available to them, so that ultimately we don't result in an unforeseen bad debt. But as I say, it's across the board and thanks for the question Maher.

Thank you.

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

Great. Thank you. Just to follow up on wireline, I am sorry if I missed this, but can you remind us what percent of your wireline mix is from the business segments and in specific from the SME segment. And maybe if you could provide more color on where you expect cost efficiencies to come from in light of the current environment that could potentially keep the wireline profitability more flattish, as results have been so far resilient except for this SME more flattish, as results have been so far resilient, except for this SME pressure that you're highlighting? Thank you.

Okay. So business segment revenues writ [ph] large are about a third of our wireline revenues. And then in terms of - terms of the puts and takes on OpEx, like we'll see subsidy savings with lowering of transactions as I mentioned earlier and with the scaling of installment plan, so savings there. We will see. Of course, we have to watch collections as Glen has mentioned a couple of times already. We have savings on travel as you'd expect and other discretionary spending, on the other hand if we're going to talk about puts and takes, PPE and cleaning is going up, we're installing plexiglass in stores. Obviously for the safety of our customers and our team members who are ultimately at the end of - the end of this as I mentioned in an earlier - in response to an earlier question, we're going to see in the medium term some cost savings goodness just from accelerated footprint deployment, which we're continuing to engage on or embark on throughout 2020. And as we had initially planned and as we continue to evolve our service delivery model with more self-serve, one touch digital there will be savings. And I would say - significant savings on the delivery side in that respect. Look ultimately, we generate substantial cash inflows that will continue our cost discipline second to none, and that will continue. And it really puts us in good stead to be able to make these long term investments for the long term health of BCE, as well as to continue to sustain that dividend.

Okay. Thank you.

Thank you. And the next question is from Tim Casey with BMO. Please go ahead.

Thanks. Just following up on that, what other things are you considering Mirko in terms of permanent changes to work and processes within the company. Are you looking at having people work permanently from home or maybe you know, on a team basis, so you can reduce you know, your real estate footprint and things like that. And I just wondering what you're contemplating to do on the permanent side. And second, can you comment on how you're going to manage media. Obviously it's going to be a rough summer and you know the fall schedules are in disarray. So you know there's going to be challenges there. How will you manage the cost side on media going forward? Thanks.

Thanks for the questions. So you know, first ones a really good question in terms of you know, future long range planning. So as we undertake our planning exercises which and we have a regular cadence as you would expect that we would have one of the items that we're going to be taking away is what have we learned from this crisis in terms of operations that we can adopt permanently that will enhance our competitive position, improve our cost structure or improve the customer experience. So we're going to be looking at everything through that lens and that will include what we do in terms of real estate footprint. But it's still early days on that, but definitely something we'll be looking at and we'll be looking at those things across the entire scope of our operations. And look on media, I'd say this I mean, the Q1 impacts as you saw were relatively small. Obviously there'll be impacts on media in Q2 and beyond, depending on how long this last. But customers and viewers are rediscovering the value and attractiveness of linear TV and you could see it in the ratings. You can see it in terms of the engagement with Crave, which is an absolutely phenomenal product and more customers are discovering it. And we've also seen in the last few - last few days, last couple of weeks some stabilization in the number of cancellations of ad buys, which is also a positive sign. And you know, we have puts and takes, we see a decline across some advertising sectors, but a pickup in things like financial services, technology, consumer packaged goods. So you know, I'd say we're going to be managing our cost structure very carefully at media, managing our cost structure very carefully at media, our subscriber revenues are remaining strong and we're seeing that some live sports are going to start coming back on fairly soon. You think of UFC and NASCAR and the PGA tour and I think is going to have pent up demand for sports viewership. So that bodes well as well.

Thank you.

Thank you. The next question is from David McFadgen with Cormark Securities. Please go ahead.

Hi. Thanks for taking my question. Just following along with that last question, I mean now that we were into May, I was wondering if you could give us an idea of what the ad trend you saw in the month of April was, how much it might be down?

Yeah, I'm not going to give a forward looking numbers. David, as you can appreciate. But suffice to say, that were as substantive decrease in advertising in the month of April. Well managed, as Mirko alluded to. On the cost side, as we took the necessary actions, we could. I need to remind everybody, that our media operations represents about 8% of our consolidated EBITDA. So not overly impacting to our consolidated cash flow, but we took actions on costs, advertising was certainly down. But that was a relatively short window, when we think here we are in early May, and as Mirko alluded to, where NASCAR and PGA tour and we’re starting to hear about UFC and many sports coming back online, that I am optimistic that we will start to see some return of advertising. Although, let’s be honest, Q2 is going to be a difficult quarter compared to historic advertising levels.

And could you give us any color on the declines for your sports properties versus non-sports properties, any help there would be great.

No I think – look, our sports - decline advertising and there is subscription revenue. And our sport subscriptions cancellations have been frankly minimal. So customers are not disconnecting, customers are the ones who make the ultimate call, and so far those cancellations have been frankly minimal and with live sports coming back soon, I think you’re going to see a pick up there, certainly in viewership and stability that we’ve seen continue in subscriptions.

All right. So with that said, we’ve timed out. So thank you again for your participation this morning. I will be available throughout the day for follow ups and clarifications. So take care everybody and stay safe. Thank you, everyone.

Thank you.

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