Good morning, ladies and gentlemen. Welcome to BCE's Fourth Quarter Results and 2012 Guidance Conference Call. I would now like to turn the meeting over to Mr. Thane Fotopoulos. Mr. Fotopoulos, please go ahead.

Thank you, and good morning, everybody. As Catherine mentioned, this is Thane Fotopoulos, the Head of Investor Relations for Bell Canada. Joining me this morning, as usual, are George Cope, our CEO; and Siim Vanaselja, the company's CFO. Earlier this morning, we issued our news release announcing our fourth quarter and full year 2011 results. The released supplementary financial information package as well as a slide presentation for this call are available on the Investor Relations page of our BCE corporate website. Siim will begin with a quick overview of the Q4 results before he moves to 2012 financial guidance, and George will give you brief comments on our key 2012 priorities before we take your questions as time permits. However, before we begin, I want to remind you that today's remarks will contain certain forward-looking statements with respect to items such as revenue, EBITDA, adjusted EPS, free cash flow and capital intensity. Several assumptions were made by us in preparing these forward-looking statements and there are risks that our actual results could differ materially from those contemplated by our forward-looking statements. For additional information on such risks and assumptions, please consult BCE's Safe Harbour Notice concerning forward-looking statements dated February 9, 2012, filed with both the Canadian Securities Commission and with the SEC and which is also available on our corporate website. These are -- these forward-looking statements represent BCE's expectations as of today and accordingly are subject to change after such time. Except that may be required by Canadian securities laws, we do not undertake any obligation to update any forward-looking statement whether as a result of new information, future events or otherwise. And I'm making this cautionary statement on behalf of both George and Siim, whose remarks today will certainly contain forward-looking statements. So with that over and dealt with, Siim, over to you.

Thanks, Thane, and hello, everyone. So I'll start with a quick review of our fourth quarter and full year 2011 financial highlights. Those are summarized on Slide 7. With the fourth quarter, we've completed what I'd say was a solid year of earnings growth and free cash flow generation. It was supported by increased revenue and EBITDA contribution from our growth services and meaningful Wireline cost reductions. Total revenue growth at Bell was 12.6%, and that reflects the revenue contribution from our acquisition of CTV, which, as you know, is recorded in the Bell Media segment as of the second quarter of 2011. Excluding Media service, revenues were essentially unchanged year-over-year in the quarter. This quarter saw stronger Wireless revenue growth and double-digit residential Internet revenue growth. TV service revenue growth of 1.6% reflects higher upfront promotional discounts and activation credits provided to new Fibe TV customers. As we've seen throughout the year, Bell's overall revenue performance this quarter continued to be impacted by lower year-over-year data product sales and the repricing of connectivity services in our business markets unit. EBITDA was up 10.3% for the quarter. Excluding Bell Media, EBITDA increased 1%, and that was driven by strong Wireless EBITDA growth of 9.6% and Wireline cost reductions. And for the year, EBITDA, excluding Media, was up a healthy 2.9%. Capital expenditures for the quarter and the year reflect continued investment in our IPTV footprint and broadband fiber expansion, spending on our Wireless LTE network buildout and inclusion of CapEx at Bell Media. Our capital intensity ratio was in line with guidance at just under 16% of revenues. BCE statutory EPS in the fourth quarter was $0.62 per share, up from $0.42 per share last year. In addition to higher EBITDA, the increase also reflects lower year-over-year severance acquisition and…

Great. Thanks, Siim. Good morning, everyone. Just turning to Slide 29. And just a few quick comments before we open up to questions. The first point here is that as people all know we embarked on a path of a focus on strategic imperatives, of 5 strategic imperatives. 2012 will be the same strategy, the same focus. We have added a 6th strategic imperative, which is expanding our Media leadership, specifically focused there on moving our Media leadership to all 4 screens from the traditional business that CTV would have operated. And I would also echo that I think in 2011, we made significant progress on all 6 of these imperatives and particularly pleased with Q4 in the Wireless side, where we've been able to absorb the incremental cost of very strong postpaid net adds consistent with our strategy and see EBITDA growth and margin expansion in a tricky quarter in terms of smartphone upgrades in the market with the new product in the market. Turning to Slide 30, this morning, we're pleased to announce the continuation of our LTE network rollout in Canada. We're expanding, as of tomorrow, to 4 -- or to 7 more urban centers, bringing 14 cities up and operating with LTE. More to come this year. And also, rural Canada to come as quickly as we can once we have concluded the 700MHz auction assuming that Bell is successful, and the rules are put in place to allow for that type of great rural coverage in Canada, which we want to do as quickly as we possibly can. Turning to Slide 31, just a comment on a few of our priorities, and in one sense, Siim has covered some of these off. But on the Wireless side, we want to continue, quite frankly, executing on…

Great. [Operator Instructions] So with that, Catherine, we're ready to proceed.

[Operator Instructions] Our first question is from Simon Flannery of Morgan Stanley.

If I could just focus on the Internet adds for a minute. You did talk about the plans to improve the trends there with Fibe. But the ARPU trend was very impressive. I think you said it was up 8.6%. Can you just give us some more color on what's going on there? Is that people buying a fatter pipe, is that overage, and is this something you expect to continue in '12?

First of all, strategically, our Internet adds, of course, include both business and consumer, so consumer was a little stronger than the total number. But quite frankly, it worked there and do, and I think we will see that improvement, as we're seeing it with Fibe TV already early this year. In terms of the ARPU, what's really driving that is actually, in one sense almost the questions you've asked, the migration of customers through our FTTN rates, if you will, a network where the speed is so much improved and therefore, people are using more, and the rates are different, and the expansion in usage. Both those keys have been important to driving increased ARPU. And we continue to see migrations up to FTTN, and we expect that to continue in 2012.

Our next question is from Jeff Fan of Scotiabank.

I just want to follow up on the Internet question with respect to the subscriber trends. George, you did mention that there is a good pull-through coming through the Fibe TV. I guess, maybe digging down a little bit further, given the net adds of only 1,000, I'm just wondering, where are you seeing some migration out of your base, meaning losses? Are you seeing cable competitors sort of going after areas where you don't have fiber? Is that where the losses are coming from?

Yes, good questions. Yes, there's a number of things to be careful because of the competitive part of this answer. But I would say, definitely some softening on the wholesale side. Clearly, as the markets move more and more to FTTN, so that's been one. Secondly, it would be fair to say where we don't have FTTN, we think one of our competitors is seeing more success there than what we're seeing necessarily in the markets where we do. And thirdly, quite frankly, so there was a very, very aggressive 4 or 5 months of Internet by one of our cable competitors in one of core markets that, I think, did have an impact on that. So we have to up our game there. I think the revenue, as everyone has mentioned, is positive, but now its -- the churn levels on the FTTN are actually down. We can see the churn coming down. We see the pull-through with Fibe TV, where we've got to improve that. I'm quite confident with what we're doing on Fibe TV. We going to be where we need to be.

And just a quick follow-up. As you look out to 2012 then, you mentioned that the pull-through is going to be better. So is that going to be the driver to get your overall net numbers to increase while keeping the churn on the non-fiber areas stable?

Yes. That's exactly what we're planning to do. And I do want to mention because it's a consolidated number, I've mentioned the business market is soft, and it's soft in that area as well. And also people migrate up from traditional Internet services to more advanced technologies on the business side that aren't necessarily in our Internet numbers. So we don't break out the consumer numbers versus the business, but it would be fair to say the consumer numbers weren't -- it wasn't just 1,000 on the consumer side.

Our next question is from Maher Yaghi of Desjardins Securities.

I just wanted maybe talk a little bit about the Wireline margin. When you look at EBITDA in that business, it was increasing year-on-year up until this quarter, and it's declining now 2%. And now you're continuing to do cost-cutting there, but can you talk a little bit about what you're hoping to achieve in 2012 in terms of EBITDA? Is there any growth you can get from the business in 2012? And how much cost-cutting you can pull out of that business to keep holding steady the EBITDA in the face of continued debt pressure on the legacy business?

Well, yes, thank you, and let me go back to a comment I make in every call. Sometimes, it's more about Wireless and Wireline, but I'll make it again. We're running the business on a consolidated Wireline view, so cost management in one can be used to benefit another for market share. That's the first point to investors. So you'll notice we had a very strong Wireless EBITDA. So obviously, we were a little less on the lever side. On the Wirelines, we can make investments there in the quarter. As Siim has said, we expect the Wireline margins to be stable year-over-year, but we're not giving either Wireless or Wireline EBITDA guidance. I think it's fair to say, and Siim talked about $100 million cost-benefit flowing through the Wireline this year from the work we did at the end of 2011, and that's really to give us the headroom for the ramp-up we're beginning and have begun to see in the fourth quarter in our Fibe TV investment as well. Hopefully, that's helpful. I may not be as open as you wanted me to be, but that's as much as we're prepared to go into.

Our next question is from Peter Rhamey of BMO.

With regards to your free cash flow guidance and you're talking on dividend, you seem to have disconnected the EPS from your payout ratio. You're now focusing more on free cash flow, so I was hoping you might be able to comment on that.

Yes, well, I did Peter. I didn't mean to -- I hope I didn't -- certainly didn't mean to do that, so thank you for asking the question if I have not clarified it. We talked about our payout ratio being below. If you take our guidance and the midpoint of our guidance with the proposed dividend payout that we now have, that would be just under a 70% payout of EPS. That's what we're talking about. Now -- so both are important, obviously, cash payout and EPS guidance -- or payout. Siim, anything you want to add to that?

No, no. Our dividend payout ratio is based off of an adjusted EPS metric. As George said, we think the free cash flow payout is equally relevant, so we've just shown both metrics given their relevance. But there's certainly no change in our policy or how we think about dividend increase. That's relative to earnings and free cash flow generation.

That being said, EPS is not expected to grow that much this year according to your guidance. Free cash flow is going to be up 7% according to your commentary. So when we're thinking about dividends, should we be looking at the EPS growth or should we be looking at the free cash flow growth?

Well, let me answer the best we can. Our policy is 65% to 75%. Our proposed midpoint of our guidance in our quarterly payout will be 69% of EPS, so there's no change there, Peter. But I think also for people to know what is the cash flow position of the company, and the cash flow growth is just as important, and so that's why both have always been there. There's really no change here. As Siim has mentioned, some of the tax benefits, the one-time tax benefits in Q3, which had our EPS at the year end higher than we had anticipated this year has some flow-through impacts on next year. And you and all the other folks on line will make those adjustments because the underlying cash is what ultimately generates our ability to pay out.

Our next question is from Dvai Ghose of Canaccord Genuity.

George, can I go back to the question of the lack of Fibe flow-through so far, both in terms of DSL, which people really touched upon, but also NAS loss, which was pretty significant in 2011. As you know, you lost 9.2% of your residential lines, which I think is worse in North America. So if I do the inevitable comparison with TELUS, in June 2010, they launched Optik and immediately, they saw the positive impact on ADSL, as well as reduced line loss. You launched Fibe in September 2010, and your numbers deteriorated significantly in 2011 on both those counts. So what is the difference here? Is it your footprint, which is too small, in which case you need to accelerate it? Is it an execution issue? Is it a competitive issue?

Yes, I think the biggest issue year-over-year for us, Dvai, as Siim talked about with the wholesale subscriber additions that came through that migration, that's one. None of the other of your comments do I agree with. The second point, probably more importantly, I think it will be fair to say that Toronto and Montréal, particularly Toronto, I think most people would agree that the new entrants on wireless had been much more aggressive and impactful in Toronto than anywhere else. So there's anything we've seen different that possibly other carriers in Canada haven't seen is the acceleration in wireless substitution on the NAS side, I think, has been more significant than maybe we've seen in other markets. And having said that, I'm actually quite optimistic about -- I've said it, very optimistic about 2012 with the pull-through we're seeing at some of our products. And I do remind because it's the implication the TV never seems to go away. Now we do have a $2 billion revenue-generating TV business. We are right in front of every telco in the world and TV with satellite. And now we're leveraging the maturity of the Fibe TV platform with the strategy in the cities that we're quite frankly, really excited about, and that puts a growth prospect in front of us with our shareholders.

That make sense. Can I ask you of a quick follow-up? Just in terms of your guidance, you're talking 2% to 5% Bell Canada revenue and 2% to 4% EBITDA growth. If I pro forma for CTV for all of last year, I am calculating about 0% to 2% revenue and 0% to 2.5%. Could you just confirm that?

Yes, I saw those comments. I'd have to -- were you talking about 2011? Sorry.

So I'm just saying if I add CTV back to Q1, and I think you've given us Q pro forma numbers for '11, it looks like 2012 guidance implies pro forma growth of 0% to 2% growth.

I'm not going to comment on 2012 because those numbers -- because CTV is now fully integrated into Bell Media and Bell, but I would comment on 2011 because our revenue growth and EBITDA growth, excluding Bell Media, in fact, was not flat to Fibe. We generated 1% revenue growth and 2.9% EBITDA growth for 2011, excluding all of Media, including the portal, which was transferred from Bell.

Okay. Maybe we can take that offline.

Our next question is from Phillip Huang of UBS.

My question is on the LTE. As adoption of LTE increases given more coverage and handsets, do you think the industry can price LTE plans out of premium for 3G services? And also what's your assumption in terms of LTE's help to Wireless ARPU in your guidance for 2012?

Yes, the competitive marketplace, I guess, will ultimately determine the LTE pricing in the marketplace. I think LTE will drive the acceleration of services and ultimately, therefore, that will be a positive for industry growth on revenue. We -- LTE takes Mobile TV to a new level, takes accessing the Internet to a new level from a wireless perspective, and those should generate revenue growth for investors because the products are just, quite frankly, out of this world on that network in terms of what we would have seen even as we launched HSPA and HSPA+. So I think the migration to smartphones will continue at a rapid pace, and the revenue trajectory from LTE should be positive. How it's priced in the market will be subject to how all competitors approach LTE, not just how Bell does.

Now given your ownership of all sports content, and you obviously have strong media assets that you can leverage, I was wondering if -- you mentioned Mobile TV. Is there any way that you can price Mobile TV as an incremental service as opposed to just another app on your existing data plan?

Yes, we're doing that. Actually, it's a very unique model in Canada. We've seen subscribers subscribing every month to it. I mean, we --what we've done is that for television, the Mobile TV, it's outside your data bucket. It's $5 for 10 hours or X number of hours of viewing. And our view is that those type of -- or $10, those type of access fee pricing outside the data bucket gives the user comfort that there's not a surprise video data bill coming. So we actually have a third focus with the customer base and revenue stream, so people know exactly what they're going to pay for Mobile TV, and they're not worried about a data bill that they can't control. And that's how we've launched that in Canada. That's how we're continuing to see traction on that. And we think it blends itself to a significant growth opportunity not just for Bell, but for the wireless industry. And then we also think, from our content perspective, it gives us the opportunity to sell our content to the other wireless carriers in Canada as they grow that business, particularly through the technology benefits of LTE.

Our next question is from Glen Campbell of Merrill Lynch.

George, the Wireless margins were better than we thought, and you alluded to the smartphone pressure that you seem to have done very well in spite of. Can you give us a little bit of granularity on what happened there? I mean, I know you're pushing the super phones, but some should -- would have been high subsidies there. iPhone sales, globally, more than doubled quarter-to-quarter. Can you give us a bit of sense of what happened to Bell and why you did as well as you did?

Yes, I think a couple of things. I think the -- Glen, you all know your own numbers. I think the ARPU is maybe -- our service revenue might have been a little better than expectations of the Street, so the ARPU was a little better and that, of course, everyone would know would flow through. And secondly, our cost management on the distribution channel side and on our operations has really started, and we think it paid out well in the fourth quarter. We got to continue that. The ownership of things like the source really, really paid off in the fourth quarter whereas everyone knows that's the quarter that retail matters, and our costs of running a source don't go up. So some of those things, I think, really helped. And also when we did our cost restructuring in the fourth quarter, it wasn't just the Wireline business that had to do a little bit of work around it's costs. It's how do we get our Wireless business in this environment with the new entrants at such low prices in our cost structure line, and I think some of that benefited us in Q4 as well.

Our next question is from Drew McReynolds of RBC Capital Markets.

For you, George, just on Wireless again. Just can you comment just on the new Wireless meandering competition, whether you're seeing any change thus far in Q1 with some upward revision of price. I know a lot of that is at the lower end. And also just in terms of COA pressure just relative to Q4, are you seeing that continue?

Yes, I think the COA issue is clearly the upgrade and the strength we're seeing on smartphones, and particular brands are really strong. And it's hard to say -- there was a note put up by one of the analysts, and I might agree with them on 12, but it's hard to say if we're going to see a reduction in COA. The actual cost of units are coming with the volume of smartphones as a percent of our sales continues to go up, and so that will be the challenge. In terms of pricing in the marketplace, it's a competitive marketplace. The new entrants are one side. We obviously also pay a lot of attention to what's happening on the incumbent side. And I would probably have to say it's been as usual. It's aggressive. I certainly haven't seen a reduction in the competitive intensity in the market in the first quarter that I've noticed or that we've noted at Bell.

Our next question is from Greg MacDonald of Macquarie Capital.

Quick follow-on actually relative to the last 2 questions on COA. George, I wonder if you might comment on a mix of Android versus iPhone. This is a very big iPhone quarter, and I'm assuming that it was a higher load quarter relative to previous. Could you give us a little sense of Android versus iPhone mix and maybe an understanding of the impact of Android ASP coming down relative to stable iPhone subsidy?

Yes, I have to be careful because these are supplier arrangements. I'd simply would say that those companies report publicly, so people can see the strong quarters they had that have been reported. So proportionally, our sales of those -- of Android and iPhone were clearly up in Q4 other -- over other smartphone suppliers, and we continue to see that. I would say we're obviously -- as a distributor of hardware, we're really quite pleased to see the head-to-head battle between Android and Apple because that helps us on choice of handsets. And we continue to see amazing handsets on the Android side to compete with the Apple side, and that gives our customers great choice and hopefully, over time, drives some cost for us.

Can I just as a quick follow-on. If you assume stable mix between iPhone and Android phone, are you looking at stable margin this year on the COI -- the COA side? Or are you assuming that there's a potential for uptick because on the margin with ASPs coming down for most phones, there should be a bit of an opportunity there, should it not?

Yes, I don't want to go specifically, but it's so driven by a competitive intensity in mix and who has a great phone one quarter and the timing of the next product. It's a really tricky one. I can simply say, and I don't mean to be so high level, but clearly, the COA that we're investing and the ARPU growth we're seeing is absolutely the right investment for our investors. And seeing our ability to improve that margin in a very strong fourth quarter, we're doing some really tough things on the cost side to try to keep in this competitive intensity and try to maintain this as best we can.

Given that we're running out of time, this will be our last question.

Our last question is from Rob Goff of NCP.

My question, George, would turn over to the business side of things. Can you address the pricing pressures and your leverage their versus your leverage to job growth as demand's been up?

Yes, it's a good question. Pricing, it's a very competitive segment for sure. So pricing power there, I think, as implied in your question, is really best taken to the customer when you're adding new services. So our business challenges to expand the share of wallet we have of the customer base and as people would know on the call, we have a very, very strong business there and the challenges that those companies are not growing significantly. And as I used the number 2% because most economists will say employment growth really accelerates significantly once you get over 2%. And we've not had that. And therefore, we think that's one of the structural challenge we have in that business. And where we're optimistic is at some point, as GDP growth accelerates, we think that business will see those benefits. Secondly, we do need to make and improve our focus on the SMB, where it's been -- it's a very strong and profitable business for us, and we need to step our game up there a little bit on the product portfolio side, and we'll be doing some things this year there that our new management team there been focused on since they stepped in place 3 or 4 months ago.

Great. So before we sign off, I want to thank everybody for their participation. And I'm available throughout the day for follow-ups and for questions. George, are there any other comments?

Yes, one last thing, I hope you all saved your text messages yesterday for Bell Let's Talk Day. I know it's money out, but it's money well spent. Thank you.

Thank you.

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