BCE Inc.

All participants, please stand by. Your conference is ready to begin. 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. Zane Fotopoulos. Please go ahead, Mr. Fotopoulos.

Thank you, Alana, and good morning, everyone. Joining me on the call today are Mirko Bibic, BC's President and CEO, and Glenn LeBlanc, our CFO. As a reminder, our first quarter results package and other disclosure documents, including today's slide presentation, are available on BC's Investor Relations webpage. However, before we get started, I want to draw your attention to the safe harbor statement on slide two. 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 risk 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 statements except as recorded 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.

With that, I'll turn it over to Mirko. Thank you, Thayne, 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 of 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 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 have 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 are also keeping connected with a 40% increase in usage of our innovative wireless home internet service. And by the end of April, we made this service available to 137,000 more rural homes than we had initially planned. we understand the importance of this service for rural communities. We've also seen an increase in voice traffic, including a 250% increase in conference call usage as Canadians are keeping connected to their family, their friends and offices while sheltering and working from home. And Canadians are turning to Bell Media for news and entertainment now more than ever, with significant increases in viewership across our platforms, including Crave that is registering 75% higher usage. Now turning our focus to a second key operational priority, which has been to meet the needs of our team members, our customers, and our communities. We're safeguarding our people with stringent sanitation and safety procedures, enhanced support for remote work capability, and we source significant supplies of personal protective equipment. Our assisted self-installation and repair program enables field techs to perform installations and repairs entirely from outside the home by voice and video links. While technicians will enter a customer's premises where necessary, the new program has decreased time spent by technicians in customers' homes by up to 85%. With disruptions to our call center operations, remote customer service has ramped up. We have equipped 4,000 agents with specialized and secure connections to work at home, further reducing the number of people at our work sites. We've also built service capacity by redeploying team members, including retail employees displaced by store closing, to frontline customer service roles. The team has done an amazing job reestablishing service levels in extremely difficult circumstances. We're also enhancing self-serve capabilities. Digital self-serve now represents more than 50% of all customer transactions across all channels since the start of the COVID-19 crisis. These initiatives are protecting our team members and our customers while improving the customer experience in this time of crisis. In that regard, we're also providing significant additional support for customers isolated and working from home in our efforts to champion customer experience. We removed any extra usage fees for customers not already on unlimited residential internet plans and waived wireless roaming fees for customers traveling abroad. We also understand many are facing financial difficulties right now because of the economic impact of COVID-19 and we will work with customers on flexible payment arrangements if they're having trouble. This is also why we have delayed implementation of previously planned price increases for home phone and certain TV services. Bell TV has made CTV News Channel, CP24, and other Canadian youth services available as free previews, in addition to a variety of family, lifestyle, and entertainment channels. Bell Media is also offering 30-day free trials of CRAVE. From a broader community perspective, we are supporting the frontline response to COVID-19 with over 3,500 Bell Mobility phones and airtime for a wide range of organizations across the country, including mental health and other health care facilities, homeless shelters, children's aid societies, and other social service providers. And we donated 1.5 million protective masks for use on the front lines throughout Canada while at the same time procuring the personal protective equipment needed for our own team members. And we increased our Bell Let's Talk commitment by an additional $5 million with particular emphasis on funding agencies delivering remote mental health services. In taking all these steps, we have been guided by our new goal unveiled on January 6th advancing how Canadians connect with each other and the world. And focusing on these key operational priorities has reinforced that our updated strategic imperatives are the right ones to guide us not only through this period, but also over the long term. Building the best networks will always be a core strategic imperative for Bell, in good times and bad. To that end, we are making the necessary investments now to keep up with the demand from all sectors of society. at this now to keep up with the demand from all sectors of society. At the same time, we are maintaining our network deployment plans, whether that be fiber to the home, expanding our leading wireless networks, getting ready for 5G, or accelerating our wireless home internet service footprint with, as I said, 137,000 additional homes passed in April. This is not a time to pull back capital spending on critical network infrastructure. The country is depending on us. These are healthy investments for the long-term benefit of our company, our customers, and our economy. We are also making the investments we need to champion the customer experience, especially as it relates to online fulfillment, self-serving automation tools, or improved app functionality. The importance of such investments has been made all the more pressing in the current environment where retail stores were temporarily closed and only now ramping back up slowly. where call center operations are disrupted, and where Canadians are sheltering at home and teleworking is the order of the day. In short, now is not the time to curtail strategically critical investments in customer experience. They are necessary to keep us competitive in the short term and will benefit us in so many ways over the medium and long term. The current crisis also highlights in a very clear way the benefits of Canada's global network leadership. which has been made possible because of our massive investments supported by long-standing facilities-based regulatory policies. It has never been more important for governments and regulators to stay the course with policies that incent continued deployment of high-speed fiber networks, wireless home internet in Canada's underserved rural communities, and next-generation mobile 5G technology. The bottom line is Canada cannot risk losing its global leadership on networks. Now I'll turn to slide five of our presentation and our financial outlook for 2020. Like every other company, we are being affected by COVID-19. The situation is evolving continuously and its ultimate length, severity and outcome is unknown. As a result, we are withdrawing our 2020 financial guidance previously announced on February 6th. Against the backdrop of this uncertainty, I am confident BCE will exit the crisis in strong shape. we remain highly focused on managing our cost structure and ensuring continued financial flexibility Bell's underlying business fundamentals have not changed our liquidity position is strong underpinned by healthy balance sheet and substantial free cash flow generation that provides significant financial flexibility to execute on our capital investment priorities and to sustain BCE's common share dividend payments for the foreseeable future in fact we just declared this morning, as scheduled, our common share dividend for Q2 that will be paid to shareholders on July 15. As mentioned, we plan to make the investments Canada needs now and for the future, and we will do so without putting the dividend in jeopardy. This will provide a strong foundation for growth going forward that will benefit all stakeholders, our customers, our employees, and our more than 1.4 million shareholders. Maintaining our planned level of capital spending will result in a dividend payout ratio that exceeds the upper end of our historical target policy range. Turning now to slide six and a quick overview of some key operating metrics by segment. I'll start with wireless. Subscriber and promotional activity was down significantly in the last few weeks of the quarter with a temporary closure of retail stores and call center disruptions due to COVID. which resulted in a 12% year-over-year decline in post-paid gross activations in Q1. As fewer wireless consumers are shopping, we also saw a corresponding decline in customer churn. In fact, we reported our lowest ever post-paid churn rate of 0.97% this quarter. As a result of fewer customer disconnections, combined with some temporary new COVID-19-related government activations, post-paid net ads in Q1 totaled 24,000. With respect to prepaid, gross ads were up 38% on the continued strength of Lucky Mobile and our Dollarama distribution agreement, which drove a 66% year-over-year improvement in net subscriber losses to 4,000. Blended ABPU was down 2.7% compared to last year. Not an entirely unexpected result, given the restrictions on travel and waiving of roaming fees due to COVID, as well as the continued decline in data over revenue due to more subscribers on unlimited plans, including a growing mix of installment customers in the base. Now I'll move to Bell Wireline. Our subscriber results reflect the resiliency of our household products in the current environment and should fare relatively well during the COVID crisis as consumers are now spending more time at home using broadband internet and video services. Therefore, although fewer customers are installing new residential services, Fewer are also disconnecting. This drove 23,000 retail internet net additions in Q1, unchanged versus last year. We also added another 48,000 fiber to the home subscribers this quarter, bringing the total number of direct fiber customers to around 1.5 million, up 19% over last year. On the TV side of things, we added 3,000 net new IPTV subscribers, a modest yet reasonable result given the impact of sales channel disruptions on gross additions, as well as overall TV market maturity and the maturity of our footprint. We also continue to see nice year-over-year improvement in retail satellite TV and residential home phone customer losses, which were down 5% and 8% respectively. For Bell Media, while overall TV viewership is up 25% since the start of COVID-19, TSN and RDS subscriber deactivations have been minimal even without live sports. This speaks to the quality and depth of our programming, which is unparalleled in the Canadian market. Lastly, at the beginning of April, the CRTC approved our acquisition of television network V, supporting our growing media presence in Quebec and offering more competition in consumer choice and French language conventional TV. With all the regulatory approvals in place, the transaction is scheduled to close in the second quarter. Thank you, and I'll turn it over to Glenn.