Good morning, ladies and gentlemen. Welcome to BCE's Second Quarter 2015 Results Conference Call. I would now like to turn the meeting over to Mr. Thane Fotopoulos. Please go ahead.

Thank you, Wayne and good morning to all on the call this morning. With me here today are George Cope, Bell's President and CEO and Glen LeBlanc who is participating in his inaugural call as CFO BCE, so a very warm welcome to Glen. As a reminder our Q2 earnings release supplementary financial information and slide presentation are available on our corporate BCE Web site a replay and transcript will also be available on our Web site later today or tomorrow. However, before we get started I'd like to draw your attention to our Safe Harbor statement on Slide 2. Information in this presentation and remarks made by both Glen and George will contain statements about expected future events and financial results that are forward-looking and therefore are subject to risks and uncertainties. Results may differ materially. These forward-looking statements represent our expectations as of today, and accordingly are subject to change, we disclaimed any obligation to update forward-looking statement expect as required by law. A discussion of these factors that may affect future results is contained in BCE’s filings of those with the Canadian Securities Commission and the SEC and are also available on our corporate Web site. So with that, over to George.

Great. Good morning everyone. Thanks Thane, good morning everyone thank you for joining us this morning. I'm on Slide 4 to begin the presentation the Company produced a solid quarter across the board with all three divisions driving positive EBITDA growth or a combined EBITDA growth of 2.5% in the quarter. The excellent wireless execution continued with 10% revenue growth year-over-year and 5.3% EBITDA growth. We completed our fourth consecutive quarter of positive wireline adjusted EBITDA growth and expect this will continue going forward. Our broadband market share grew for the sixth straight quarter with 69,000 Internet and IPTV net adds. Bell Media enjoyed excellent execution and what I would describe as a tricky environment producing 2.4% EBITDA growth in the quarter. And I think everyone knows in late June we announced the build out of Bell Gigabit Fibe to 1.1 million locations in Toronto. And today I am pleased to announce that Bell will launch Gigabit Fibe service to 1.3 million homes in Ontario and Quebec this coming Monday. In the Atlantic region by the end of September and will be available to 2.2 million homes by the end of 2015 more on that in the presentation. We turn now to wireless results, we had a strong quarter of gross sales up in the quarter driving 61,000 net adds. We again took market share from the largest wireless carrier in the country, so really pleased with the results given this is the first part or first month we had a double cohort. Also we are able to do that and continue to be the value leader in the industry with an ARPU growth of 5.3% well growing market share in the segment. Cost of acquisition was up year-over-year, really for two reasons; higher mix of postpaid gross adds versus…

Thanks George and good morning to everyone on the call. As Thane mentioned this is my first BCE analyst call since taking over from Siim Vanaselja at the end of June, albeit I have worked with most of you before. It is a real privilege and exciting time to assume the role of CFO of this great company. I definitely have big shoes to fill but I look forward to living up to the high standard step by my predecessor and to continue working with all of you. I will begin with a quick overview of Q2 consolidated financial results on Slide 12. We continue to execute well across the business posting another sound quarter of revenue, adjusted EBITDA growth and earnings profitability in line with our guidance targets for the year. We generated top-line growth of 2% in Q2 driven by a healthy 2% year-over-year increase in service revenues. This performance is led by a strong double-digit increase at Bell wireless and robust wireline residential revenue growth. As expected media revenues were lower year-over-year in line with industry trends. BCE’s adjusted EBITDA was up a solid 2.5% on positive growth across all Bell operating segments all of which was organic. This yielded a higher year-over-year margin of 41.3% reflecting growing broadband scale and our wireline business and continued good spending and price discipline across customer segments and operating efficiencies throughout the organization. Higher EBITDA drove 6.1% growth in adjusted EPS to $0.87 per share from $0.82 last year and a strong 14.2% increase in free cash flow which grew to 931 million this quarter. Statutory EPS of $0.90 in Q2 which was up 15.4% year-over-year included a $94 million cash gain related to the sale of our 50% ownership interest in GLENTEL to Rogers. Cash generated in the quarter…

Thanks Glen. So before we start the Q&A period just to keep the call as efficient as possible I’d ask on behalf of our team here today that you limit yourself to one question and a brief follow-up. And to the extent we have extra time we will circle back and take more questions, so that with that Wayne we're ready to take our first question.

Thank you. [Operator Instruction] Our first question is from Richard Choe from JPMorgan. Please go ahead.

Just wanted to get an update on the double cohort what you are seeing in July and start of August. Should we expect kind of the higher level of churn and retention spend it's still kind of trying to focus on market share more than kind of artificially I guess benefiting margin so solid margin but more market share related?

Yes, well I'm not going to comment on the next couple of months that would be I’d give myself some hot water on that. But what I would simply say is the double cohort started certainly our retention spend in the second half of the year will be higher than it was in the first half for the year just because of the map. But as Thane said and Glen said we're comfortable totally with the guidance. Our strategy continues to be to execute on our market share that we're getting higher than our proportion of postpaid and most importantly leading on the revenue growth side giving us the flexibility to compete in the marketplace. But we will definitely see a I think a little lift in the retention spend in the second half of the year and we'll be able to absorb that within in the revenue growth we're seeing on wireless. Thanks for the question I hope that helped to answer it?

Thank you. The following question is from Greg MacDonald from Macquarie. Please go ahead.

Wanted to ask a question on the wireline side, we saw a slight improvement in the year-over-year results for local and access, but a relatively large year-over-year decline in the long distance trend, I wonder -- I am just assuming there is no re-categorization of revenue buckets or anything going on there. I wonder if you might comment on a; what’s driving the long distance component of that, is that related to the data services comment that you made earlier and vis-à-vis the economy. And then just an overall comment on the economic outlook, are you seeing trends worsened, have they stabilized that, we all know it's weak but I think people are looking for some visuals on what’s happening there and if you can comment West Coast versus Ontario, Quebec that would be helpful? Thanks.

So on the long distance there is certainly no change if anything we will have you report; secondly, no real change in that business. If there is anything in the quarter, our wholesale international minutes do tend to flow in and out on a quarterly basis, so that does once in a while Greg bump up and down the LV growth rates. So that’s probably what is replacing the quarter, but nothing other than beyond that. Turning to the economy, I think our consumer results would show, we are continuing to be able to execute on that side and we’re seeing it nationally, so on the wireless and on the wireline side, I think we’ve been so transparent from investors are tired of hearing it from us, but where we see it the most clarity is on the B2B side and certainly year-over-year the quarter was better than the quarter before in terms of that unit with us, but a lot of that is cost management as opposed to top-line growth. So it's very hard for me to make a comment on the economy because it would be quite frankly not correct to say we saw an impact in the quarter.

And George trends east versus west, are you seeing anything change in -- we all know the west is in some difficulty but anything affecting the East Coast customers at all?

No, no we’ve seen -- really have no -- there is nothing in our numbers to tell us it was the economics clearly we will be impacted by what happens in the economy, but we have certainly seen no impact in these results.

The following question is from Jeff Fan from Scotiabank. Please go ahead.

My questions are on the Gigabit Fibe service obviously the return is important on this project. Just wondering if you can help us understand a bit about the return and I guess more specifically on the potential incremental revenue opportunity going from fibre to the node to Gigabit Fibe and maybe the penetration longer-term and maybe help us by -- maybe Glen talking a little bit about the Bell Aliant experience on penetration since those numbers are kind of buried in your overall results now? Thanks.

Yes so look the -- first of all, we’re really excited about the launch of it in the marketplace on Monday in some of our footprints. It's very clear to us as we look out over the next five, 10 years the market is going to demand these type of speeds and so we have to start it now, so that it has broader footprint as we possibly have what we completed as those demands grow. So it's not a matter of market-share, I think it's a matter of table stakes from our perspective that will be the business for broadband. One of the differences certainly we’re seeing in North America is Canadian Telco market-share gains cable is different than other countries and we think that’s because of the hard investment we’re making in our peer competitor in Western Canada to make sure Canada has the leading broadband services in the country. In terms of what we expect and what do we see from Bell Aliant, we see lower churn and better market-share and every single market we have fibre versus where we have fibre to the node, so that makes the investment for us quite frankly, quite easy. I view it as move from, going from HSPA to LTE to me is the next move in the wireline world clearly it is going to take it a long time to execute all this footprint, but there is no doubt in our minds to the place we need to go. And we’ll provide a return to shareholders anybody who has invested with me for the last 25 years knows that’s the focus of the executive team at BCE and so we’ll make sure that happens as we invest.

The following question is from Aravinda Galappatthige from Canaccord Genuity. Please go ahead.

George just wondering if you want to comment a little bit on the recent CRTC wire line decision did that in anyway affect your plans or perhaps the pacings around your FTTA sold out, just wanted to get your thoughts on that? Thanks.

Well people have seen we've -- the announcement this morning on our competitive launches in the marketplace. So I would say we clearly are disappointed with the decision but there is much work that still needs to be done before the decision comes into a fact and we understand all the way the CRTC will view it. I will say we'll adjust our business model and investments as we have always done based on the incentives or the barriers put in place by the CRTCs regulatory framework. And so we'll reflect on the decision but we need to understand a lot further as we go forward. But you're seeing the announcements we made this morning to compete in the marketplace.

The following question is from Maher Yaghi from Desjardins. Please go ahead.

I want to follow-up on economics of the launch that you talked about this morning. So in one of your recent CRTC hearings presentation you mentioned that in Quebec City which is covered by fibre to the home 80% of your subscribers are still taking speeds of 50 megabytes or lower i.e. speeds that you currently offer on fibre to the node. I'm wondering are these somewhat below or in line with your expectations in terms of the launch penetration rates and what type of penetrations you need to have in terms of higher speeds for you to be able get your money back and make the necessary return on that investment.

May be the second question so I'll try to make it clear, this investment will generate free cash flow and a return for shareholders it's un-doubtable that Internet is where the company has to go on a market share broadband basis a consumer demand to utilize higher speeds with new technologies coming and with 12-14 devices attached to the home through Wi-Fi. As we look out makes it just so clear and most importantly the compelling metrics from Quebec City from the aligned footprint where the churn is lower the ARPU is better it's clearly where to go now there have been modem restrictions on speed capabilities et cetera. In fact even when we launch the 1 Gigabit service on Monday it will say 940, because we have to wait for the next modem that takes over 100 so over the one. So it's the exact same technology that Google's launched in the United States and so we definitely stick tight to what it is going to do for us in the future from a competitive perspective and that’s why we're making the investment. There is no doubt the one thing I would say depending on the geography in the country and subscriptions to OTT services some markets are much heavier users of OTT services than other and so may have higher demands for speeds than some of the other geographies. So we'll have to see that as we go out but clearly the reason -- everywhere we have fibre we're just going to launch this product.

And just a follow-up in terms of the penetration rates from what we have seen so far and accounted Canada have you reached on average penetration in the 50% to 55% which you said previously is needed to cover your returns [Multiple Speakers]?

I don’t know when I previously said anything so let's first of all on that. But in terms of our goal in a broadband market that has two methods of access into the home is with this type of payment investment I think we should be held accountable to get to that 50% market share and of course what we've seen in the last six quarters with the market share growth on broadband led by IPTV strategy that’s where we're going to continue to make that investment.

And just a quick question on the wireless we have seen an improvement somewhat in gross additions. Can you talk a little bit on what you're seeing in the market place in terms of wireless demand for products and where is it coming from. Is it which province or maybe just more color on what's driving this improved gross addition numbers?

Yes well I think we've seen it for quarter after quarter and our people have seen that our market share has been strong. It is the execution we think on the distribution side the brand and the continued improvement in our service metrics that is driving the market share. We clearly took additional share this quarter against our largest competitor on a year-over-year basis and we’re just going to continue to execute on that basis as long as we can in this highly competitive marketplace, but we’re really pleased with our quarter in terms of gross and our net additions on the postpaid side. And I think particularly because I think people can see we’re doing it through assurance that our customers migrate to the LTE services and that migration is driving the incremental ARPU to underpin the investments we’re making.

The following question is from Drew McReynolds from RBC. Please go ahead.

George just back to the wireline side, obviously a lot of moving parts on the revenue front, I want to focus in on the cost front and can you just provide us an update on just again the customer service initiative efficiency that you're seeing? And just as you roll-out fibre obviously there is a huge potential for cost saving opportunity with fibre just wondering to what extent are you already seeing those types of efficiencies and how should those ramp as you build fibre out?

Yes it's a good question we are in the quarter we clearly are on track for the $100 million of CapEx and operating synergies for Bell Aliant this year. So that’s tracking as we have talked about. We are seeing because of the tools we’re putting in the marketplace on our smartphones and the demographics of the marketplace, our customers calling in much less to call centers and utilizing the tools we put in the market so every quarter, even as our customer base grows we’re seeing a drop in call volume into the call centers which of course ultimately is a cost reduction for the company. And we think that will continue we think it's core to our strategy and it is fair to say where we have fibre, our truck rolls dropped in terms of the number of what we call assurance load customer service, experiences improve and overtime that will also we believe lower our cost of operating the business with the roll. And we have all those stats internally on our fibre investment of course that’s part of our rationale for the investment, but clearly on our call with our competitors we’re not going to disclose those. But the amount of truck rolls just drops significantly because of fibre rate when it is in the home.

So just a follow-up George, then in terms of the wireline business when you look at kind of those two or three big chunky moving parts to the cost structure as opposed to just eliminating people, it sounds if the overall business is moving to a more kind of cost efficient structure is that a fair comment and thus is your confidence on maintaining wireline margins are growing, wireline EBITDA is that arguably getting greater with time or is it still a battle day-to-day?

Well, it's both, but we would absolutely concur with your comment. We believe that the cost to delivering these services through the technology evolution to fibre and through the great work that John Watson’s team is doing on the service metrics will overtime take cost out of our business in the competitive market that we’re in and we clearly think that’s where we have to go and that is, I don’t want to give forecast on margins, but our results over the last eight years probably is an example of our focus on margin. So we have the free cash flow to invest. We are unique in a wireline center on North American basis that we can take the CapEx we have got and have still generate the free cash flow on the wireline business to make the investment in broadband and we think gives us a very unique opportunity to be one of the broadband leaders in our markets and that’s why other players across the world are Telco versus Cable. It doesn’t mean we’re going to be head-to-head with the cable guys, but at least we know when we’re playing head-to-head against them.

The following question is from Phillip Huang from Barclays. Please go ahead.

A longer-term question for George, so as mobile data usage continues to grow, how do you see DC network infrastructure evolving do you see greater reliance on Wi-Fi and just given the scale of your wireline network and your investment in fibre is there more that you can do to leverage your wireline footprint to gain a competitive edge for your wireless business beyond what you're already doing?

Well I think first of all there is no doubt and it's a competitive issue I’d be a little careful, but you see our competitor and us in the marketplace, modems in the home they are very, very important competitive element now because it is by Wi-Fi in the home and the amount of devices on the Wi-Fi services in the house. So that’s why we just find it so clear and obvious to us that we’re going to need a larger broadband pipe to service that and then in terms of wireless we think being vertically integrated wireline wireless business certainly helps us on our execution particular now with the ownership of Bell Aliant. Best example is we've have built and I think at the end of this year or early next year 95% of our cell sites will have fiber rate to the cell sites and we need that so that the bottom neck doesn’t become the backhaul for the speed on enhanced LTE. So whether or not investors love to view that as whether or not that’s an advantage over those who don’t have that vertical integration but clearly it's making a difference on our ability to make sure our network continues to lead. And we've been doing that for a number of years make sure we have fibre to literally every cell site.

I guess do you see any mirrors in like what MTS is doing with their total Internet offering and that so what do you think about something like that also you’ve given your footprint on the fixed line side to potentially provide you a competitive edge on the wireless side?

I won't comment on products like that we are obviously seeing what Jay's done there and we'll fall the developments in the marketplace. But at the moment I don’t have anything on the product launch for sure.

The following question is from Batya Levi from UBS Securities. Please go ahead.

This is Chris for Batya could you talk a little bit about the sustainability of your ARPU growth it has been over 5% for the past year. How should we think about this trajectory in the back half and what are the key puts and takes you are looking at? Thanks.

Again you heard I can back and I apologize all the time in saying the guidance kind of incorporates all that so I don’t mean to I know you want more than that I think the one thing we will continue to say we are seeing customers as they migrate to LTE. And every month more of our customer base migrates to LTE customers use the product more and as a result we've seen improvement and increase in ARPU. So that is clearly one of the pieces as it is driving the increase in ARPU. The second increase is simply because we move to a two year contract market versus three and the subsidy has to be recovered in 24 months not 36 months. Air time prices have generally moved up in concert with that a couple of years ago. So there are customers now who are migrating across the industry and when they migrate from the three to two years they may see a different rate than they had before. So it's really those two things and I think both those are still working through this system. So we would anticipate strengthen our revenue continued through the year but I don’t want to give a specific forecast on ARPU because no matter what I tell you I'll be wrong.

And in terms of roaming the wireless carriers in the U.S. have increasingly talked about creating a seamless network experience across North America breaking news or data allotments from the home markets while travelling rather than purchasing add on packages. Can you provide your opinion on this trend and what implications these programs might have for Bell?

Yes look it is a competitive market in our roaming we've lowered our U.S. roaming rates by 50% over the last year in all and many, many other markets we've lowered roaming rates. And put them in packages given notification to customers so it's a competitive area and we've got to make sure we're competitive in the marketplace and we believe we are. We've not re-priced to the significant levels some of our competitors have and that’s probably evidenced in our financial results and given our market share results clearly our customers think what we're doing now for roaming in U.S. is meeting their requirements.

The following question is from David McFadgen from Cormark Securities. Please go ahead.

Just a question on your free cash flow if you look at Slide 17 and you give an updated or you have given a free cash flow for Q2, you continue to benefit from working capital inflows in 2014 you benefited from a fairly large working capital inflow well over 300 million. I know that you're looking for another kind of large working capital inflow to make your free cash flow guidance. I was just wondering how sustainable is this how much working capital can you keep pulling out of the business?

I think what I would say I am turning over to Glen. Our cash flow is with the guidance is very transparent around that. Management of receivables and inventory continue to be a core piece of what we've done the last 7-8 years we continue to see benefits at some point obviously that runs its course and we've got to do through the execution in EBITDA and cash flow growth and you'll see that when we get everyone our '16 guidance coming up in four or five to six months from now. But clearly we're running out of some of that space because we have just done so well on those management items.

Yes as George said you can't do it forever but we're very confident that free cash flow targets we have out for 2015. The results and what we've done on AR in particular are consistently seeing our days sales outstanding come in has provided great opportunity on cash flow and we’re very confident with the targets that are out there, your observations are good one you certainly can’t do that forever, but we’re confident with the rest of ’15 that’s for sure.

Okay, can I squeeze in another or?

Sure, go ahead.

Just on wireless, I don’t know if you can provide some color, but just curious as to what percentage of your wireless postpaid base are free agents now?

Yes, we won’t disclose that by competitor, we love the no. So we won’t disclose our base, but we’ll continue to manage the base and hopefully the track rate in the wireless business the last some of years people feel comfortable, we’ll make the appropriate retention in investment as required to deal with the issue in the market.

So just on wireless what percentage of your postpaid base beyond, would have a tablet on a postpaid plan, is anything material?

No it's not material for us, it's very low. It's certainly quite different than the scale we’ve seen in United States.

The following question is from Rob Peters from Credit Suisse. Please go ahead.

Sorry if I missed this, but I just want to go back to when you guys look at LTE subscribers, I think last quarter they were roughly 52% of your subscriber base, I was just wondering if there was an update on that number. And then kind of how do you think about that penetration rate going forward given that it seems to be -- you’ve seem to be seeing a lot of increased data growth when people switch over from the HSPA to the LTE and such?

Yes, so we went from 52 last quarter to 57 this quarter. So if that were a trend that will continue that is definitely as people migrate we see an improvement in ARPU because they are using the product more and the speeds are just incredible on this service center and as we widen the channel with aggregating our spectrum the speeds improve and that adds to the usage as well. So 5% this quarter we don’t have a forecast but seems through to that’s probably the pace we’ve been on, where do I ultimately think we end up, I would assume, I can’t think of why we went up with 100% of our base migrated ultimately to that and the prepaid base should be the slower start really in the numbers that we’re talking about today anyway.

There are no following questions registered at this time.

So once again thanks to all for participating on the call this morning as usual. I’ll be available throughout the day for any follow-ups and clarifications. So thanks and have a good rest of the day.

Thank you. That concludes today’s conference call. Please disconnect your lines at this time. And we thank you for your participation.