BCE Inc.

Good morning, ladies and gentlemen. Welcome to the BCE Q2 2021 results conference call. I would now like to turn the meeting over to Mr. Payne Fotopoulos. Please go ahead, Mr. Fotopoulos.

Thank you, Justyna, and good morning to everyone. Joining me today, as usual, are Mirko Bibic, BC's president and CEO, and our CFO, Glenn LeBlanc. You can find all of our Q2 disclosure documents on the investor relations page of the bce.ca website, which we posted this morning. However, before we begin, I'll draw your attention to our safe harbor statement, reminding you that today's slide presentation and remarks made during the call will include forward-looking information and therefore are subject to risks and uncertainties. Results could differ materially. We disclaim any obligation to update forward-looking statements except as required by law. Please refer to the company's publicly filed documents for more details on our assumptions and risks. On that, I'll hand it over to Mirko.

Thank you, Thayne. Thank you, Justina. And good morning, everyone. Q2 marked another quarter of great operational execution by the Bell team as we continue to deliver with sequential improvement in our consolidated operating results with strong mobile phone subscriber loadings and further acceleration in capital spending to forge ahead even more aggressively on our successful broadband strategy that drove 80% higher fibre internet net customer ads this quarter. A year after COVID's significant initial impacts in early 2020, Total BCE revenue and adjusted EBITDA growth accelerated this quarter, increasing by more than 6% over last year, as we led all national wireless carriers in reported service revenue, adjusted EBITDA, and ABPU growth. Of note, we've recovered 99% of our pre-pandemic wireless service revenues, and our wireless adjusted EBITDA has fully recovered, despite the lack of a recovery in high-margin roaming revenues. It's an impressive result by the Bell Mobility team. Our results for Q2 included a $44 million regulatory charge related to the CRTC's recent decision to lower wholesale internet rates even further to the benefit of resellers. Were it not for this one-time retroactive impact, total revenue and adjusted EBITDA would have increased 7.2% and 8.1% respectively. We leveraged our broadband networks and improved customer service tools to deliver 115,916 total mobile phone, mobile connected device, retail internet and IPTV net subscriber additions in Q2, an increase of 75% over last year. Against the backdrop of continued government support for investment to drive the country's COVID recovery and propel Canada's global leadership and next generation digital infrastructure, we stepped up capital spending in Q2, investing over $1.2 billion on new fiber and wireless home internet connections, further expanding mobile 5G coverage, and augmenting network capacity to manage core IP traffic volume, which grew another 20% compared to last year when demand surged during the early stages of COVID. In our strong financial position with $5.3 billion in available liquidity at the end of Q2, bolstered by more than $1.2 billion of free cash flow generation this quarter, puts us in the leading position to execute on our upsized capital acceleration plan, wireless spectrum purchases, and BCE's higher common share dividend for 2021. I also want to highlight the recent launch of Bell for Better, an initiative that encapsulates our ESG strategy and provides a framework for all actions we are taking to create better outcomes for all stakeholders. including Canadian communities, employees, customers, as well as BC shareholders and bondholders. With our broadband connectivity commitments from the smallest rural communities to the largest cities, investments in mental health initiatives, environmental sustainability, and an engaged and diverse workplace, we're looking to create a thriving, prosperous, and more connected world for Canadians across the country. In terms of notable ESG developments this past quarter, We are adopting science-based targets to reduce greenhouse gas emissions by 2030, in line with the Paris Climate Agreement, and we successfully completed an inaugural $500 million sustainability bond offering, the first ever for a North American telecom company. We will be using the proceeds to finance green and social investments with a focus on energy efficiency and affordable infrastructure projects. The offering was very popular with investors, receiving total orders for more than six times the amount issued, which enabled us to price the issue at a lower cost of debt than for regular bonds. Let's turn to slide four of our presentation for an update on our strategic priorities for 2021. We secured 30% of the 3.5 gigahertz spectrum available to national wireless carriers at the recently concluded auction for a price of $2.07 billion. This included an additional 30 MHz in each of the top three markets and an incremental 22 MHz in our rural wireless to the home markets. Together with existing holdings, Bell now possesses 37% or a weighted average of approximately 50 MHz of the total spectrum that was available to the incumbent national wireless carriers, acquired at an industry-low average blended cost of $1.25 per MHz pop. That said, Given how the government designed the auction, it was the most expensive auction in Canadian history, a key factor that requires careful consideration in future assessments on auction frameworks and on future assessments of wireless pricing by the government. With significant high-capacity 3.5 GHz spectrum at our disposal, we have the mid-band spectrum necessary to drive the rollout of 5G across Canada and extend our leadership positions. Since the beginning of the year, we've launched service in more than 80 new markets nationally, including the first 5G service in Newfoundland and Labrador, introduced Canada's first 5G roaming for the U.S., and entered into new 5G strategic partnerships. Our 5G footprint coverage is now above 40% and remains on track to reach 70% of the Canadian population by year-end. Success in 5G and IoT depends on a number of factors beyond just coverage. It's about delivering the fastest speeds and lowest latency, leveraging network points of presence such as central offices for multi-access edge computing that support product development, and establishing deep relationships with the biggest Canadian companies. And whichever element you look at, Bell is the industry leader. We lead in speed, offering the fastest data speeds of up to 1.7 gigabits per second and consistently win third-party speed test awards, including most recently from Uclep. who rank Bell 5G as Canada's fastest. We lead in latency, owing to our deep fiber deployment, now at 94% of all Bell Mobility cell sites fiberized, as well as our ability to bring computing power, processing, and storage to the edge of the network, closer to the customer. We lead in network points of presence, with over 2,700 locations across our wireline footprint. Our MEC partnership with Amazon Web Services and our strategic technology partnership with Google Cloud will integrate their technology with Bell 5G to move data processing to the network's edge, thereby minimizing latency and powering 5G use cases such as immersive gaming, Ultra HD video streaming, smart manufacturing, AI, and distance learning. By combining all those ingredients, we can deliver the superior functionality that will allow developers to design apps and next generation solutions and IoT services that leverage the best 5G network in Canada. And that's how we intend to take a leading share in 5G services and capture the sizable revenue growth opportunities beyond mere network connectivity. And we're already beginning to do that, as you saw with innovative applications such as TSN and RDS 5G view. Now over to wireline. In the first six months of the year, we have equipped 347,000 homes and businesses with either direct fiber or fixed wireless internet technology and also launched wireless home internet service in Manitoba this past June. This progress, together with another 257,000 locations that are currently under construction, keep us on track to deliver between 850,000 and 900,000 new premises by year end. And at a time when network connectivity is more important than ever, as we all know, Bell once again was recognized by PCMAG in their annual study as the fastest ISP in four provinces. It's a testament to the significant investments and the hard work, significant investment we're making and the hard work we have in the field in our world of networks. Moving to slide five for an overview of some key operating metrics for Q2. Let's start again with wireless. The clear highlight of the quarter was Bell's 5.8% service revenue growth, which led all national peers, delivering an industry-best 3.3% increase in NAPCU. Again, an excellent result representing our first quarter of growth since Q3 of 2019, when unlimited data plans were first introduced in Canada. This strong rebound reflects our focus on higher-value smartphone loadings, including a growing base of customers on device financing plans and the lapping of COVID-related pressures from roaming, data overage, and the waiving of certain fees to support customers during the crisis. Although retail traffic and store capacities were impacted by the third wave of COVID, overall customer activity ramped up. We added more than 44,000 new net mobile post-paying phone subs this quarter, up 45,000 compared to last year. This result was driven by a 35% increase in gross activations, reflecting higher direct and digital channel sales volumes that balanced ongoing retail store restrictions, as well as pent-up customer demand. And our mobile phone churn remained well below 1% at 0.83% for postpaid, a strong performance that reflects our improving digital capabilities and leading networks. For connected devices, we realized 47,000 net ads, a year-over-year increase of 22%, driven by continuing strong demand for Bell's IoT solutions. In fact, we added 74,000 new IoT subscriptions, up 2.5 times over last year. And similar to the previous few quarters, prepaid net ads of 2,000 were impacted by lower market activity attributable to reduced retail store traffic and a slowdown in immigration and international travel, of course, because of COVID. Let's move to Wireline. We're showing again that our fiber strategy is working. We added more than 27,000 new net retail fiber customers, which is an increase of 80% versus last year. At approximately 1.9 million, residential fiber customers now represent over 50% of our total retail internet customer base. Taking into account the competitive loss of legacy DSL subscribers and Bell's non-fiber footprint, we delivered 18,000 total retail internet net ads this quarter. This compares well to last year when we experienced a surge in demand as COVID restrictions were put in place. Our growing base of five customers combined with higher revenue per user driven by speed upgrades and an improving tier mix given fiber superior experience drove a majority of the 12% year over year increase in residential internet revenue this quarter. This consistently strong revenue growth quarter after quarter Together with the benefits we see in terms of market share gains, customer lifetime value, and lower operating costs are the reasons why we're pushing hard on the accelerated expansion of our broadband footprint. In TV, we continue to leverage our multiple brand strategy to drive 5,000 IPTV net additions this quarter, and that's up 8,000 from Q2 of last year. Satellite net customer losses improved 21% to 9,000. And that represents the seventh consecutive quarter of year-over-year improvement. And home phone customer net losses remained essentially stable at just around 50,000. So all in all, a very solid quarter of wireline subscriber results in what is typically a seasonally slow quarter. I'll now turn to Bell Media. The first notable highlight for Bell Media is advertiser demand, which rebounded across all our media platforms this quarter. However, a more robust recovery, particularly for radio and out of home, was muted by the pandemic's third wave. TV advertising was up 70%, reflecting stronger bookings due to the return of live sports and TV productions. This helped TSN and RDS maintain their number one sports channel rankings for the current broadcast year to date, and for CTV to achieve a milestone 20th year as Canada's most watched network. In Quebec, Nouveau also made further gains in viewership versus its French language competitors with year-to-date audiences up 10% that drove a two-point increase in market share. More notably, at our virtual upfront presentation in June, we unveiled our fall programming lineup with the most programming inventory in five years for CTV and more than 70 original productions planned. This was our most successful upfront season ever with bookings 19% ahead of our previous forward sales record in 2019 and more than double last year, a very encouraging result that bodes well for the upcoming broadcast year. The second highlight of the quarter for Bell Media was the strong growth in our digital platforms, demonstrating that our strategic pivot to a digital-first media company is bearing fruit. Digital revenues increased an impressive 57% and now represent 19% of total Bell Media revenue, and that's up from 16% last year. Underpinning the standout performance was growth in Crave and TSN Direct streaming subscribers. Crave's subs increased 6% over last year and is now approaching the 3 million mark, while TSN Direct more than doubled its subscriber base thanks in part to the Euro Cup, where the final game was one of the most watched broadcasts of the year. and TSN's biggest live streaming audience ever. We also continue to scale CTV.ca, our all-in-one digital video streaming app, which has now become the top AVOD platform in the country. And Bell Media's innovative SamTV sales tool that connects advertisers and other marketers with the right audiences on the right media platforms has more than tripled its 2020 sales revenue in the first six months of 2021. And on that, I'll hand the call over to Glenn for a more detailed review of our financials.