Good morning, ladies and gentlemen. Welcome to the BCE Q1 2018 Results Conference Call. I would now like to turn the meeting over to Mr. Thane Fotopoulos. Please go ahead, Mr. Fotopoulos.

Thank you, Donna. With me here this morning are George Cope, BCE’s President and CEO as well as Glen LeBlanc, our CFO. As a reminder, our first quarter results package and other disclosure documents, including today’s slide presentation, are available on BCE’s Investor Relations webpage. An audio replay and transcript of this call will also be made available on our website. Exceptionally this quarter, because our Annual General Shareholder Meeting is taking place starting at 9:30 this morning, we will be ending the call earlier than usual at 8:45. 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. Results may differ materially. We disclaim any obligation to update forward-looking statements except as required by law. Factors that may affect future results are contained in BCE’s filings with both the Canadian Securities Commission and the SEC and are also available on our corporate website. On that, I will turn it over to George.

Good morning, everyone. Thank you for joining us. We had a good start to the year both financially and from a subscriber perspective in Q1 adding a little over 100,000 broadband subs, up 39% year-over-year. The 4.8% growth in revenue drove 4.1% higher EBITDA on a year-over-year basis and Glen will comment on the CRTC retroactive charge that we were hit with and without that, we would have been around 4.7% in fact. Wireless continued to be an excellent business for us double-digit revenue growth and EBITDA up $8.7 million, excluding the $14 million retroactive regulatory impact that as I said Glen will address. Wireline EBITDA, positive operating trends with EBITDA up 3.1% on the 3.6% revenue growth. At the early in the second quarter, we have begun our mass-marketing of fiber in Toronto. By the end of this year, about 87% of SFUs or single-family units will have fiber coverage to them in Toronto, stable quarter for the media group and really proud that it’s our 50th consecutive quarter of uninterrupted EBITDA growth for the market and in the quarter, we generated strong free cash flow of 9.8% in the quarter. As I mentioned from a wireless perspective, again, very strong subscribers, 68,000 net postpaid additions, up 91% year-over-year, our best Q1 performance since 2011 in 7 years and our fourth consecutive quarter of lower postpaid churn. The Lucky Mobile brand focused on the discount prepaid market is building as expected helped us a little bit in Q1 and that will continue to help turn the tide for us in the prepaid segment of the marketplace. As I indicated before we thought we would see ARPU increases this year in the industry around CPI, you can see in Q1 up 1.4% year-over-year on our postpaid and that’s based on…

Thanks George. Before I begin with my usual quarterly financial overview, I would like to remind everyone that starting Q1 ‘18 we are preparing results in accordance with IFRS 15 accounting standards. For comparability, we have also retrospectively restated 2017 quarterly financial results to reflect IFRS 15 impacts. The revised absolute dollar amounts for revenue and adjusted EBITDA are different from previously reported figures for 2017, mainly for our wireless segment. However, there are no significant differences in our 2018 growth rates when comparing year-over-year results on either on IFRS 15 or previous GAAP basis. Therefore we will not be disclosing 2018 on a prior accounting basis. At a high level IFRS 15 recognizes higher upfront product revenue and amortizes direct and incremental subscriber costs such as wireless device subsidies and sales commissions over the contract term. Generally speaking, the higher the magnitude of wireless postpaid gross additions and handset upgrades in the quarter, the greater the favorable impact on EBITDA. It is also important to note that IFRS 15 has not affected the underlying operating fundamentals of our business. In fact, overall free cash flow does not change which is the key financial measure for dividend growth companies like BCE. With that, let’s move on to the summary and financial highlights for Q1 on Slide 9. Consistent focus on subscriber profitability and disciplined operational execution contributed to strong 4.8% revenue growth and 4.1% higher adjusted EBITDA in Q1. This was driven by another quarter of very healthy wireless financial results, continued steady broadband market share growth, improved year-over-year wireline business performance and a final quarter of the incremental contribution from our acquisition of MTS that lapped on March 17. However, BCE’s consolidated EBITDA margin declined modestly to 40.3% reflecting a one-time $14 million retroactive charge to account for the…

Great. Thanks, Glen. So before we do start Q&A period, I want to remind participants of our time constraints this morning, so please keep your questions brief and as direct as possible, so we can get to as many of you on the call as possible. So Donna please explain how to queue up for call for questions?

Thank you. [Operator Instructions] And the first question is from Simon Flannery from Morgan Stanley. Please go ahead.

Great, thank you very much. I wonder if we could start with 5G, you talked about the wireless-to-the-home initiatives in rural Canada using both 3.5 and 28 gigahertz is a big debate in the U.S. sort of with Verizon leading with microwave, but Sprint and T-Mobile more focused on the lower and mid-band. So, how are you thinking about the various frequency bands and do you think fixed wireless is the most near-term used case or are there other things that you think can generate revenues in the near-term? Thanks.

Yes, thanks for the question. Our perspective on this is on 5G, you got to break it into two components and you really just have there is the mobility transformation from LTE Advanced ultimately to 5G technology. And then there is the opportunity for some fixed wireless footprint and we think in Canada, particularly from Bell’s perspective with the amount of fiber we are doing in the urban markets, 5G fixed is likely to play a bit of a role for us in some of the rural markets and you are seeing that in our announcement that we have noted in the quarterly release. Ultimately, of course, we will have 5G mobility in both urban and rural markets, but that would be our view and in terms of spectrum, we are very rich at 3.5 and we are in the midst of utilizing that at the moment for our fixed 5G services. At this point, it’s not licensed for mobile services in Canada. Hopefully, that’s helpful.

Yes, absolutely. Thank you.

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

Hey, guys. Thanks for taking the question. I guess just one, could you talk about the mass-market rollout of the fiber initiative in Toronto and kind of what the response you have seen to the marketing itself and kind of are we watching the run-rate happened now or is there a kind of rolling wave of initiatives that’s going to take place over the course of the year that will kind of impact the data and video take rate?

Yes, we – first of all, we think for sure it will grow because the positioning of the network now being on in Toronto. If you are here, people would pretty much have noticed we are branding that. And of course we also are as we are branding that also doing it all of our other fiber footprints and hopefully people can see EBITDA in the quarter at 44,000 almost moving to the fiber, where we expect that to continue to grow second half of the year traditionally for Canada for whatever reason on the Internet is the stronger part of that’s got to do with the back-to-school market being so important, the third quarter is a big quarter. So, we are really hoping that, that continues and that would be our strategy with the marketing now to try to capture that important market in the third quarter and obviously the second and towards the third is particularly important. So, yes, I would think we will continue to build plus our footprint of course continuing to expand everywhere as well as in the Toronto marketplace. That’s one of the reasons I call it out that at the end of this year we get to 87% or so of all the single-family units in the 416 footprint that gives us a pretty great ubiquitous coverage footprint.

Great. Thank you so much.

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

Yes, thanks very much. The satellite losses getting better, can you give us any sense of where you are at now in terms of the percentage of subs that would be considered more safe rural subs versus still potentially a risk or is it sort of 80% safe now. I am just trying to gauge how much more downside there could be?

Yes, you are awfully close and things happy with some of the analyst to catch up with that after, that’s a pretty close number to it. So while we are seeing the churn come down, we are also seeing some benefits, we saw with the Bell Alliant acquisition, we are now seeing some of the benefits with the MTS acquisition, where in those markets the more traditional telco that we didn’t have 100% ownership or no ownership of is now marketing in the rural footprint against the other satellite provider. And that’s helping a little bit on the fringe as well. So I think that’s why we are seeing the lower churn and we are actually within some reasonable balance happy to share with the analysts a sense of what’s urban and what’s rural and what we got on the satellite side.

George, can I just follow-up on that like in the area where it is rural, do you have pricing or do these households have good broadband to be able to use OTT services or would you consider this like I have the best video market you have, because they don’t have enough access to competition?

Well, let me qualify, first of all, we have a pretty aggressive satellite competitor in Canada in Shaw. So, there is first of all is that choice on the video side on the broadband side in those markets. One of the reasons we have talked about actually some of the fixed wireless we are going to begin to rollout as we think there is an opportunity there from a broadband perspective. And then of course within that context all of those markets of course have LTE advanced services, but of course that’s more a mobile type pricing than it is fixed wireless pricing. But I would say frankly we are still in the urban markets seeing the net TV growth with their IPTV product as well, but yes, that’s a couple of quarters on a row of satellite churn lower and let’s one hope it continues and secondly from our perspective the split is starting to be helpful versus rural versus urban split.

Thank you.

Thank you.

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

Good morning and thanks for taking my question. George, much of your results continue to show good progress and in line with your prior guidance. So, I am going to take maybe this opportunity to just ask you more a longer term question to step back a bit, could you tell us how you view your asset mix right now and if there are certain assets that you would like to decrease or increase and do you see the company entering other verticals to broaden your presence and find new growth opportunities in the future?

Thanks for the question and talking about the future. Its interesting conversation, not so much around, we made a number of acquisitions. We think we are in a very good position in that way, but in terms of our asset base, I think we are incredibly excited about it, the investment we are making continue to make in fiber we think as a telco whose national wireless and now 70% of the country with a wireline footprint puts us in one of the best positions of any telco the world in terms of position for 5G, which is going to require fiber to every single cell site and a multiple cell sites going forward you are going to have 3 to 5 years. And so the amortization of this investor we are making in fiber for our wireline business arguably has a huge benefit for the shareholders of BCE on the wireless side as well. So that’s clearly one of the – we think when I look at versus our asset pool 10 years ago completely different. And then second one from us is the aggregation market we are really pursuing aggressively not just linear TV with the OTT market with our all TV product, which really allows us to deliver all the TV services you get in linear TV through our TV license, but without a set-top box and we think that strategically positions us extremely well, because clearly, there is a viewership market that wants to view content in that way and we began that product about the people know 6, 9 months ago and that’s going to continue to build. So, from that perspective, you like the asset mix as well and now it’s really about leveraging the opportunities through a number of technologies in terms of consumer behavior to continue to hold the margins where we have them. Hopefully that’s helpful.

Yes, thank you. And just maybe on enterprise side we don’t get a lot of data on your results and your results on that segment. Can you maybe just give us an update on how was the growth rate in that side of the business looking like and your outlook for that business?

Well, first of all, our enterprise is actually in three places, one is Bell Media, which sells advertising and enterprise too, Bell Mobility, which sells significant enterprise and wireline. Those three groups combined because of wireless what on balance probably overall show growth rate. But as we have talked about in the past, the wireline side of the enterprise tremendous market positioning, but structural challenges relative to real estate footprint growing etcetera – retail footprint growing etcetera. However as I did say it was our best quarter I think in 8 years that we have had on the wireline enterprise marketplace and boy, we’d love that to repeat quarter-over-quarter, but one quarter doesn’t make for a trend, but clearly it helps our wireline business going forward.

Okay, that’s helpful.

Yes, thank you very much.

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

Good morning. Thanks for taking my question. I just wanted to touch on wireless ARPU, obviously, we are starting to see that moderate a little bit, it shouldn’t be surprising given the really strong numbers that we have seen in the past, but I was wondering, George, if you can just add a little bit more color to that, is this more sort of that rollout of premium plus plan starting to lap or are there other factors kind of – that are affecting the ARPU numbers?

Yes. Actually that’s what we used to say and I think as we had expected the buckets have got larger in Canada and in a competitive marketplace, so there is more in bucket usage if you will versus out of data bucket usage and that obviously drives the rate of average revenue per unit not to grow as it had in the last 3 years. The other thing, don’t forget we have done the migration largely from the base onto LTE advance. So although we are continuing to see increasing usage that raise of increase in usage that we talked about the last couple of years was pretty significant as people migrated to the speeds that we are offering in the marketplace. So those will be a few things. And as you know the market as we have seen has moved into more competition than we would have had in the past with the additional players.

Okay. Thank you.

Thank you. The next question is from Richard Choe from JPMorgan. Please go ahead.

Great. Just wanted to hit on wireless given some strong results from competitors and the results were strong too, but I think people might have been expecting a little bit more, can you talk about your positioning and the competitive landscape?

Yes. I don’t think there is an analyst on the street who expected more wireless net adds. And when we normalize Q1 results of our largest competitor, we think we are right on top in terms of net adds and what a great couple of quarters and let’s hope the other peers in the industry show the same numbers and makes it really health industry for our investor, but we are absolutely thrilled. I can’t remember first quarter like this in net adds in wireless. So great positioning, clearly one of peers had a good first quarter and we will obviously wish the other ones well, because it means it’s a healthy market for investors.

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

Thank you. Just want to follow-up on the ARPU question quickly, if we will take a look at the difference in APU and the ARPU and just take a look at the service ARPU growth, it was flat year-on-year, I am wondering what that trend kind of looks like, because it says that there has been a big help in terms of the or ARPU growth from the subsidy model and I guess the question really is could that service ARPU go negative given the competitive landscape and then what if the subsidy model becomes less of a factor in terms of supporting ARPU growth?

So let’s just talk about traditional ARPU, that is really what are we billing at end user. As we have said we reported our quarter there we think is one fundamental that people have to know. And I think the Canadian wireless industry hopefully will continue to report that so investors can see truly what we are billing per unit at the unit. The other metric quite frankly is about amortization and grossing up hardware and it’s hard for me to say it tells you much at all, sorry related to what we are really billing from a custom perspective, because you get this phenomenon of booking the hardware upfront. And so if you have higher growth at sales you can actually inflate that number, but not have anything to do really with you run rate on a customer perspective. So one of the biggest challenges as everyone, all the analysts know on the call is it’s going to be so important to focus on our cash flow, because a multitude of upgrades in anyone quarter can drive short-term EBITDA which frankly isn’t really driving additional cash flow in that quarter. So just one of the challenges, but I think it’s simple for everybody to see as long as we are reporting the free cash flow which of course we are going to continue to do. And I think you are going to see the industry certainly we will – more traditional ARPU will also be a number that we will try to share with the street. Am I right on that Glen?

Yes. The ARPU, it will follows the cash and I think that’s why it’s so important for us to have reported that and we have seen our peers are reporting that and I thought we will continue.

Do you expect that to reaccelerate at 1.4% that you reported on that number?

Well, I think I am not going to give forecast on ARPU other than I think it’s fair to say, a couple of quarters ago we started to – this has been an important question from the street we have been saying. We think modeling for the analyst something around CPI, it seems to be would be a prudent thing to do. If it ever does better than that, that’s great for investors. Obviously, we are obviously without giving guidance, certainly trying to give some direction how to look at the market going forward.

Okay. Thanks George.

Thank you. [Operator Instructions] And your next question is from Drew McReynolds from RBC. Please go ahead.

Thanks very much. George, can you provide an update on just from a regulatory standpoint obviously we saw some decisions over the last couple of months with the government wanting to address affordability and we have seen some affordable options in the market. Maybe just provide an update on whether the industry has done enough and just the overall relationship there? And secondly just for you Glen, can you just give us the kind of technicalities of how you go from kind of 99% to 105% on the pension? And does that kind of automatically trigger kind of a lower pension contribution requirement just how the mechanics there work? Thank you.

Yes. So, I am going to answer the first part of the question. I think we have had decisions come out of the CRTC that I think reflect the government’s acknowledgment that the country is leading from an investment perspective from a network perspective on the global basis and at the same time the minister has said he wants a competitive marketplace and wants choices for consumers across all different price points in the market. One of the reasons one strategically – one of the reasons we rolled out Lucky Mobile is an opportunity for us in the prepaid segment that we have not played in successfully and secondly I also think it’s consistent with what the ministers agenda has been which is to try to make sure there is affordability pricing across all segments of some products will have different speed available based on the price points and so Lucky really was trying to address some of those issues as well. But I think it would be just in general say, it was just strategically done for that. It also was a market that we were not as successful and that we need to be going forward, because as we see people migrate from prepaid to postpaid and we want to be in that space as well, but generally, the decisions have been consistent, what we would have expected, I would say, consistent what the minister has been saying publicly. It’s probably a little disappointing seeing lowering of roaming costs to our competitors when they have been in the business 8 or 9 years and have had 8 or 9 years now the builder networks, I would question why we would reduce the cost of multibillion dollar companies, but that’s maybe – that’s as you can see given how small it was in our numbers although our retroactive was somewhat immaterial for Bell.

I will jump in on the second part, Andrew. Thanks for the question. The path to fully funded has been an elusive one as you know all too well, but with the fluctuation in the rising of interest rates we find yourselves at 99.6 now and frankly we even had a day, I think during the quarter where I think it was 99.9, so we are almost at a crack to champagne when we got to a fully funded state. How do we get from fully funded to the ultimate state of 105 which would allow the contribution holidays which you have heard me speak of before would be as much a 200 in a given year, probably 50 basis points and the simple math gets you there recognizing that we are 70% fixed income you need about 50 basis points, because in a rising interest rate environment, what’s going to happen is you are going to see a lower return experience, you can remember the years where we were knocking on some pretty healthy returns, but obviously in a rising rate environment, I would expect that returns to be muted. So, simple answer in the lower return environment, 50 basis points gets us to that ultimate state.

Thank you.

Thanks Drew.

Thank you. There are no further questions at this time. I would like to turn the meeting back over to Mr. Fotopoulos.

Thank you, Donna. So, once again I want to thank everybody who participated this morning on the call. The IR team, Richard [indiscernible] and myself will be available for follow-up questions, clarifications, following our AGM later this morning. So, have a good rest of the day. Thank you.

Thanks everyone.

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