Unless otherwise indicated by us, forward-looking statements in this Annual Information Form describe our expectations as at March 5, 2020 and, accordingly, are subject to change after that date. Except as may be required by applicable securities laws, we do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Forward-looking statements, by their very nature, are subject to inherent risks and uncertainties and are based on several assumptions, both general and specific, which give rise to the possibility that actual results or events could differ materially from our expectations expressed in, or implied by, such forward-looking statements and that our business outlook, objectives, plans and strategic priorities may not be achieved. These statements are not guarantees of future performance or events, and we caution you against relying on any of these forward-looking statements. Forward-looking statements are presented in this Annual Information Form for the purpose of assisting investors and others in understanding our objectives, strategic priorities and business outlook, as well as our anticipated operating environment. Readers are cautioned, however, that such information may not be appropriate for other purposes.

Forward-looking statements made in this Annual Information Form are based on a number of assumptions that we believed were reasonable as at March 5, 2020. Refer in particular to the sections of the BCE 2019 MD&A entitled Business outlook and assumptions on pages 46, 47, 61, 62, 67, 68 and 73 of BCE’s annual report for the year ended December 31, 2019 (BCE 2019 Annual Report) for a discussion of certain key economic, market and operational assumptions we have made in preparing forward-looking statements. If our assumptions turn out to be inaccurate, our actual results could be materially different from what we expect.

Important risk factors that could cause actual results or events to differ materially from those expressed in, or implied by, the previously mentioned forward-looking statements and other forward-looking statements contained in this Annual Information Form include, but are not limited to:

 

•

regulatory initiatives, proceedings and decisions, government consultations and government positions that affect us and influence our business, including, in particular, those relating to mandatory access to networks, spectrum auctions, the imposition of consumer-related codes of conduct, approval of acquisitions, broadcast and spectrum licensing, foreign ownership requirements, and control of copyright piracy

 

•

the intensity of competitive activity, including from new and emerging competitors, coupled with the launch of new products and services, and the resulting impact on the cost of customer acquisition and retention, as well as on our market shares, sales volumes and pricing strategies

 

•

the level of technological substitution and the presence of alternative service providers contributing to the acceleration of disruptions and disintermediation in each of our business segments

 

•

subscriber and viewer growth is challenged by changing viewer habits and the expansion of over-the-top (OTT) television (TV) and other alternative service providers, which may accelerate the disconnection of TV services and the reduction of TV spending, as well as the fragmentation of, and changes in, the advertising market

 

•

rising content costs, as an increasing number of domestic and global competitors seek to acquire the same content, and challenges in our ability to acquire or develop key content to drive revenues and subscriber growth

 

•

the proliferation of content piracy impacting our ability to monetize products and services, as well as creating bandwidth pressure

 

•

higher Canadian smartphone penetration and increased device costs could challenge subscriber growth and cost of acquisition and retention

 

•

adverse economic and financial market conditions, a declining level of retail and commercial activity, and the resulting negative impact on the demand for, and prices of, our products and services and the level of bad debts

 

•

the inability to protect our physical and non-physical assets, including networks, information technology (IT) systems, offices, corporate stores and sensitive information, from events such as information security attacks, unauthorized access or entry, fire and natural disasters

 

•

the failure to transform our operations, enabling a truly customer-centric service experience across a constantly evolving profile of

 

world-class products and services at all points of interaction, while lowering our cost structure

 

•

the failure to continue investment in next-generation capabilities in a disciplined and strategic manner

 

•

the inability to drive a positive customer experience in all aspects of our engagement with customers

 

•

the complexity in our operations resulting from multiple technology platforms, billing systems, sales channels, marketing databases and a myriad of rate plans, promotions and product offerings

 

•

the failure to maintain optimal network operating performance in the context of significant increases in capacity demands on our Internet and wireless networks

 

•

the failure to implement or maintain highly effective IT systems supported by an effective governance and operating framework

 

•

the risk that we may need to incur significant capital expenditures beyond our capital intensity target in order to provide additional capacity and reduce network congestion

 

•

the failure to generate anticipated benefits from our corporate restructurings, system replacements and upgrades, staff reductions, process redesigns and the integration of business acquisitions

 

•

events affecting the functionality of, and our ability to protect, test, maintain, replace and upgrade, our networks, IT systems, equipment and other facilities

 

•

in-orbit and other operational risks to which the satellites used to provide our satellite TV services are subject

 

•

the failure to attract and retain employees with the appropriate skill sets and to drive their performance in a safe environment

 

•

labour disruptions

 

•

our dependence on third-party suppliers, outsourcers and consultants to provide an uninterrupted supply of the products and services we need to operate our business, deploy new network and other technologies and offer new products and services, as well as to comply with various obligations

 

•

changes to our base of suppliers or outsourcers that we may decide on or be required to implement

 

•

the failure of our vendor selection, governance and oversight processes established to seek to ensure full risk transparency associated with existing and new suppliers

 

•

security and data leakage exposure if security control protocols affecting our suppliers are bypassed

 

•

the quality of our products and services and the extent to which they may be subject to manufacturing defects or fail to comply with applicable government regulations and standards

 

•

the inability to access adequate sources of capital and generate sufficient cash flows from operating activities to meet our cash requirements, fund capital expenditures and provide for planned growth

•

uncertainty as to whether dividends will be declared by BCE’s board of directors, whether the dividend on common shares will be increased, or whether BCE’s dividend payout policy will be maintained

 

•

the inability to manage various credit, liquidity and market risks

 

•

pension obligation volatility and increased contributions to post-employment benefit plans

 

•

new or higher taxes due to new tax laws or changes thereto or in the interpretation thereof, and the inability to predict the outcome of government audits

 

•

the failure to reduce costs, as well as unexpected increases in costs

 

•

the failure to evolve practices to effectively monitor and control fraudulent activities

 

•

unfavourable resolution of legal proceedings and, in particular, class actions

 

•

new or unfavourable changes in applicable laws and the failure to proactively address our legal and regulatory obligations

 

•

the failure to recognize and adequately respond to climate change concerns or public and governmental expectations on environmental matters

 

•

health concerns about radiofrequency emissions from wireless communication devices and equipment

 

•

the inability to maintain operational networks and provide products and services to customers in the event of pandemics, epidemics or other health risks, as well as the adverse effect thereof on the economy and financial markets

These and other risk factors that could cause actual results or events to differ materially from our expectations expressed in, or implied by, our forward-looking statements are discussed in this Annual Information Form and the BCE 2019 MD&A and, in particular, in section 9, Business risks of the BCE 2019 MD&A, on pages 93 to 99 of the BCE 2019 Annual Report.

We caution readers that the risks described above are not the only ones that could affect us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also have a material adverse effect on our financial position, financial performance, cash flows, business or reputation.

Except as otherwise indicated by us, forward-looking statements do not reflect the potential impact of any special items or of any dispositions, monetizations, mergers, acquisitions, other business combinations or other transactions that may be announced or that may occur after March 5, 2020. The financial impact of these transactions and special items can be complex and depends on facts particular to each of them. We therefore cannot describe the expected impact in a meaningful way or in the same way we present known risks affecting our business.

 

BCE Inc. was incorporated in 1970 and was continued under the Canada Business Corporations Act in 1979. It is governed by a certificate and articles of amalgamation dated August 1, 2004, as amended by: (a) a certificate and articles of arrangement dated July 10, 2006 to implement a plan of arrangement providing for the distribution by BCE Inc. to its shareholders of units in the Bell Aliant Regional Communications Income Fund and to consolidate outstanding BCE Inc. common shares; (b) a certificate and articles of amendment dated January 25, 2007 to implement a plan of arrangement providing for

the exchange of Bell Canada preferred shares for BCE Inc. preferred shares; (c) a certificate and articles of amendment dated June 29, 2011 to create two additional series of BCE Inc. Cumulative Redeemable First Preferred Shares (first preferred shares); and (d) certificates and articles of amendment dated September 22, 2014 and November 11, 2014 to create six additional series of BCE Inc. first preferred shares. BCE Inc.’s head and registered offices are located at 1, Carrefour Alexander-Graham-Bell, Building A, Verdun, Québec H3E 3B3.

 

The table below shows BCE Inc.’s main subsidiaries at December 31, 2019, which are all incorporated in Canada, and the percentage of voting securities that BCE Inc. directly or indirectly held in such subsidiaries on that date. BCE Inc. has other subsidiaries that have not been included in the table since each represented 10% or less of our total consolidated

assets and 10% or less of our total consolidated operating revenues at December 31, 2019. These other subsidiaries together represented 20% or less of our total consolidated assets and 20% or less of our total consolidated operating revenues at December 31, 2019.

 

BCE is Canada’s largest communications company, providing residential, business and wholesale customers with a wide range of solutions for all their communications needs. Our results are reported in three segments: Bell Wireless, Bell Wireline and Bell Media.

Bell Wireless provides wireless voice and data communications products and services to our residential, small and medium-sized business and large enterprise customers across Canada.

Bell Wireline provides data, including Internet access and Internet protocol television (IPTV), local telephone, long distance, as well as other communications services and products to our residential, small and medium-sized business and large enterprise customers, primarily in Ontario, Québec, the Atlantic provinces and Manitoba, while satellite TV service and connectivity to business customers are available nationally across Canada. In addition, this segment includes our wholesale business, which buys and sells local telephone, long distance, data and other services from or to resellers and other carriers.

Bell Media provides conventional TV, specialty TV, pay TV, streaming services, digital media services, radio broadcasting services and out-of-home (OOH) advertising services to customers nationally across Canada.

Additional information regarding our business operations and the products and services we provide can be found in section 1.2, About BCE of the BCE 2019 MD&A, on pages 31 to 34 of the BCE 2019 Annual Report.

In addition to our operating segments, we also hold investments in a number of other assets, including:

 

•

a 28% indirect equity interest in Maple Leaf Sports & Entertainment Ltd., a sports and entertainment company that owns several sports teams, including the Toronto Maple Leafs, the Toronto Raptors, the Toronto FC and the Toronto Argonauts, as well as real estate and entertainment assets in Toronto

 

•

a 50% indirect equity interest in Glentel Inc. (Glentel), a Canadian-based dual-carrier, multi-brand mobile products distributor

 

•

an 18.4% indirect equity interest in entities that operate the Montreal Canadiens Hockey Club, evenko (a promoter and producer of cultural and sports events) and the Bell Centre in Montréal, Québec, as well as Place Bell in Laval, Québec

A discussion of the key acquisitions, investments and dispositions completed by BCE in the last three financial years can be found in section 4.1, Transactions of this Annual Information Form.

For the years ended December 31, 2019 and 2018, we generated consolidated operating revenues of $23,964 million and $23,468 million, respectively, and consolidated net earnings of $3,253 million and $2,973 million, respectively. For the year ended December 31, 2019, Bell Wireless’ operating revenues totalled $9,142 million ($9,087 million external revenues), Bell Wireline’s operating revenues totalled $12,356 million ($12,066 million external revenues) and Bell Media’s operating revenues totalled $3,217 million ($2,811 million external revenues). For the year ended December 31, 2018, Bell Wireless’ operating revenues totalled $8,818 million ($8,766 million external revenues), Bell Wireline’s operating revenues totalled $12,267 million ($12,025 million external revenues) and Bell Media’s operating revenues totalled $3,121 million ($2,677 million external revenues). A table showing the operating revenues that each segment contributed to total operating revenues for the years ended December 31, 2019 and 2018 can be found in section 4.3, Operating revenues of the BCE 2019 MD&A, on page 52 of the BCE 2019 Annual Report. A table showing the operating revenues of our Bell Wireless and Bell Wireline segments by category of product and service can be found in section 5.1, Bell Wireless and section 5.2, Bell Wireline of the BCE 2019 MD&A, on pages 58 and 64, respectively, of the BCE 2019 Annual Report.

Some of our segments’ revenues vary slightly by season. For more information, refer to section 7.2, Quarterly financial information – Seasonality considerations of the BCE 2019 MD&A, on page 87 of the BCE 2019 Annual Report.

Additional information regarding the business outlook of our Bell Wireless, Bell Wireline and Bell Media segments can be found in the sections entitled Business outlook and assumptions of the BCE 2019 MD&A, on pages 46, 47, 61, 62, 67, 68 and 73 of the BCE 2019 Annual Report.

 

3.2 Strategic imperatives

BCE’s goal is to advance how Canadians connect with each other and the world. Our strategic imperatives frame our longstanding strengths in networks, service innovation and content creation, and position the company for continued growth and innovation leadership in a fast-changing communications marketplace. Our primary business objectives are to grow our subscriber base profitably and to maximize revenues, operating profit, free cash flow and return on invested capital by further enhancing our position as the foremost provider in Canada of comprehensive communications services to residential, business and wholesale customers, and as Canada’s premier content creation company. We seek to take advantage of opportunities to leverage our networks, infrastructure, sales channels, and brand and marketing resources across our various lines of business to create value for both our customers and other stakeholders.

 

To help support every action in pursuit of our goal, we updated our six strategic imperatives on January 6, 2020 to align our efforts company-wide:

1. Build the best networks

2. Drive growth with innovative services

3. Deliver the most compelling content

4. Champion customer experience

5. Operate with agility and cost efficiency

6. Engage and invest in our people

Additional information regarding our strategic imperatives can be found in section 2, Strategic imperatives of the BCE 2019 MD&A, on pages 41 to 45 of the BCE 2019 Annual Report.

 

3.3 Competitive strengths

CANADA’S LARGEST COMMUNICATIONS COMPANY

We are Canada’s largest communications company, offering a wide range of telecommunications products and services, as described below:

 

•

We are the largest local exchange carrier in Canada. BCE operates an extensive local access network in Ontario, Québec, the Atlantic provinces and Manitoba, as well as in Canada’s Northern Territories. We provide a complete suite of wireless communications, wireline voice and data, including Internet access and TV, product and service offerings to residential, business and wholesale customers

 

•

We also offer competitive local exchange carrier (CLEC) services in Alberta and British Columbia

 

•

At December 31, 2019, BCE was one of the largest wireless operators in Canada based on number of subscribers, providing approximately 10 million subscribers with nationwide mobile voice and data services

 

•

BCE is the largest TV provider in Canada based on number of subscribers, nationally broadcasting a wide range of domestic and international programming to approximately 2.8 million retail subscribers (1) at December 31, 2019 through its IPTV services, namely Fibe TV and Alt TV, as well as its satellite TV service

 

•

BCE is the largest Internet service provider in Canada based on number of subscribers, providing approximately 3.6 million retail customers (1) at December 31, 2019 with high-speed Internet access through fibre-optic, wireless-to-the-premise (WTTP) and digital subscriber line (DSL) technology

 

•

BCE operated approximately 2.7 million retail residential network access service (NAS) lines (1) (2) at December 31, 2019

Our scale, due to a large customer base, our wireline and wireless network reach, and our ability to sell through a variety of distribution channels, including a significant number of retail outlets, as discussed in more detail in section 3.4, Marketing and distribution channels in this Annual Information Form, give us a key competitive advantage. With a wireless network service footprint that encompasses more than 99% of the Canadian population, and a wireline national local exchange carrier footprint that extends to approximately three-quarters of Canadian households, BCE is well positioned to take advantage of integrated wireless and wireline solutions in the future.

 

 

TECHNOLOGICALLY ADVANCED WIRELESS NETWORKS AND SERVICES

Our Bell Wireless segment provides wireless services over technologically advanced wireless networks that are available to virtually all of the Canadian population. We offer a broad range of wireless voice and data communications products and services to residential and business customers through our Bell brand, as well as our Virgin Mobile and Lucky Mobile brands which enhance our competitive market position by allowing us to compete more effectively with the Canadian industry’s other discount brands as well as regional facilities-based wireless service providers.

Wireless is a key growth segment for us, and we have established strategic priorities seeking to further enhance our offerings. We are focused on maintaining our market share of national operators’ wireless postpaid customer activations, growing our prepaid market share, increasing adoption of unlimited wireless data plans and installment payment plans, improving sales execution and customer retention, and increasing data service offerings. We also believe our priorities for improved customer experience at all touch points, enhanced network quality and performance driven by effective spectrum deployment and carrier aggregation that support bandwidth and speeds, as well as a broad device offering, should continue to improve our ability to attract and retain wireless customers. With our national high-speed packet access plus (HSPA+) network, our fourth-generation (4G) long-term evolution (LTE) wireless network service (which reached more than 99% of the Canadian population as at December 31, 2019), and our Dual-band, Tri-band and Quad-band LTE Advanced (LTE-A) network service (our Dual-band LTE-A network service reached approximately 94% of the Canadian population at December 31, 2019), we are able to offer one of the broadest ranges of choice in wireless smartphones in Canada, along with extensive North American and international coverage.

In 2018, following successful trials, Bell rolled out its enhanced Gigabit LTE-A network to core locations in Toronto and Kingston, and has since expanded to more areas as smartphones that support these advanced speeds have come to market. To boost LTE-A speeds to the gigabit level, Bell is employing a combination of carrier aggregation and 4X4

 

Multiple Input Multiple Output (MIMO) technology to increase spectrum efficiency and multiply capacity. Gigabit LTE-A is now available in select cities in Ontario and the Atlantic provinces.

In 2016, we successfully demonstrated fifth-generation (5G) mobile technology in collaboration with Nokia Corporation (Nokia). Conducted at Bell’s Wireless Innovation Centre in Mississauga, Ontario, the trial leveraged spectrum in the 73 gigahertz (GHz) range to achieve sustained data speeds more than six times faster than the top 4G mobile speeds now available in Canada. Depending on how global operators roll out the technology, 5G has the potential to provide significantly faster data speeds than current 4G networks and more capacity to meet the demands of mobile customers for broadcast video and Internet of Things (IoT) applications, including Bell Connected Car and city-wide IoT solutions. On February 6, 2020, as part of our mobile 5G strategy, we announced our first 5G network equipment supplier agreement with Nokia. Bell is ready to deliver initial 5G service in urban centres across Canada, leveraging advanced wireless service-3 (AWS-3) spectrum as next-generation smartphones come to market. Early 5G speeds are expected to be similar to those on our LTE-A network. We will continue to enhance 5G access speeds, capacity and coverage as additional 5G wireless spectrum, including in the 3.5 GHz band, becomes available through the federal government’s spectrum auction process.

LEADERSHIP IN INNOVATIVE INTERNET OF THINGS SECTOR

Bell has taken a leadership position in the fast-growing IoT sector, which enables the interconnection of a range of devices and applications that send and receive data. In June 2017, Bell concluded an agreement with Hyundai AutoEver Telematics America, a subsidiary of Hyundai Motor Group, to deliver a range of connected telematics services, including security, safety, diagnostics and infotainment, to select Hyundai and Kia vehicles over Bell’s national mobile network. In August 2017, Bell started to offer global connectivity for our IoT platforms and applications. Bell’s new global IoT connectivity solutions offer customers uninterrupted worldwide network access and the ability to manage all of their international devices remotely from a single web platform. Since 2018, Bell has further extended its extensive lineup of innovative IoT applications, including the following:

 

•

Bell announced its Smart City Accelerator program with the City of Kingston, the City of Orillia and the City of Markham, which employ IoT data monitoring solutions to improve municipal operating efficiencies benefiting residents. On January 13, 2020, the City of Kingston announced the launch of an online snowplow tracker to track the progress of some of the City’s snowplows as part of a Smart City pilot.

 

•

Bell entered into a multi-year agreement with Superior Propane, a subsidiary of Superior Plus Corp., to deliver a comprehensive fuel tank monitoring solution for its business and residential customers on Bell’s national LTE mobile network

 

•

Bell announced that it enabled built-in wireless fidelity (Wi-Fi) hotspots over LTE in supported Ford and Lincoln vehicles with Bell Connected Car – Built In service

 

•

Bell worked with Echologics, an industry leader in leak detection technology, to implement a water management solution for Medicine Hat, Alberta

 

•

Bell announced a managed IoT security service that offers businesses, smart cities and other organizations employing IoT solutions an advanced layer of comprehensive security services to detect and respond to evolving cyber threats

NEXT-GENERATION HIGH-SPEED INTERNET AND TV SERVICES

Our strategic imperative to build the best networks is focused on the expansion of our all-fibre network to more homes and business locations. At December 31, 2019, our fibre-to-the-premise (FTTP) broadband fibre network covered over 5.1 million premises (homes and business locations), and our combined FTTP and fibre-to-the-node (FTTN) broadband fibre network covered approximately 9.7 million premises in Ontario, Québec, the Atlantic provinces and Manitoba. It enables the delivery of Bell’s next-generation fibre-optic high-speed Internet service, marketed as Fibe Internet and Virgin Mobile Home Internet, offering speeds of up to 100 megabits per second (Mbps) with FTTN, or total speeds of up to 1.5 gigabits per second (Gbps) with FTTP through our Gigabit Fibe 1.5 service in Ontario, Québec and the Atlantic provinces. Refer to section 3.6, Networks – Wireline – High-speed fibre deployment in this Annual Information Form for more details concerning the deployment of our fibre-optic high-speed Internet services. In 2019, Bell Canada and our operations in the Atlantic provinces, marketed under the Bell Aliant brand, were ranked the fastest Internet providers in the country in PCMag’s annual Fastest ISPs of 2019: Canadian report. PCMag’s intensive testing found that our operations in the Atlantic provinces, marketed under the Bell Aliant brand, offer the fastest overall Internet in the country. Bell Canada, serving Ontario and Québec customers, topped the list for the second year in a row as the fastest major Internet provider (those with more than 500,000 customers). PCMag’s Internet speed rankings are based on more than 40,000 tests of Canadian Internet providers conducted from June 2018 to June 2019.

As Bell quickly extends its direct fibre links in urban centres, we are also delivering broadband speeds to smaller towns and rural locations with our innovative Wireless Home Internet fixed wireless service. With the expansion of wireless cell site coverage, deep fibre backhaul and advancements in technology, the cost to provide a fixed wireless solution has become viable in rural areas where it is uneconomical to deploy FTTP. Based on 5G-capable WTTP technology in the 3.5 GHz spectrum band, the service is now available in 226 communities covering approximately 250,000 homes. Bell’s WTTP solution delivers broadband speeds of up to 25 Mbps, or 5 to 10 times faster than average speeds currently available in these areas.

Our FTTP and FTTN broadband fibre network also enables the delivery of Bell’s next-generation IPTV services, namely Fibe TV and Alt TV. Bell’s IPTV services target areas in Ontario, Québec, the Atlantic provinces and Manitoba where cable providers had long been dominant, providing us with the opportunity to gain significant market share through offering a comprehensive multi-product bundle of communications services to customers.

Bell’s Fibe TV service, built on a next-generation IPTV platform, offers a wide range of flexible programming options and innovative features such as: the Fibe TV wireless receiver, which enables customers to enjoy the Fibe experience on up to five additional TVs anywhere in the home without the hassle of running cable through the house; the Restart and Look Back features, enabling customers to rewind and watch TV shows already in progress from the beginning and up to 30 hours after they started; and the Trending feature, which lists the five most-watched shows in both English and French among Fibe TV customers at any given time and allows customers to switch to watch live or Restart from the beginning. Fibe TV further allows access to Crave, Netflix and Youtube directly from customer TV receivers, providing a seamless experience.

 

We also offer the Bell Fibe TV app, which brings the rich Fibe TV viewing experience to laptops, smartphones, tablets, Apple TV, Amazon Fire TV Stick, Google Chromecast and a variety of Android TV devices, with access to more than 500 live and on-demand channels at home or on the go, which allows customers to seamlessly transfer a channel being viewed from a mobile device to a TV, or resume what is being watched on TV on a mobile device, and allows customers to control their TVs with their mobile devices. In 2018, we introduced the Download & Go feature, whereby Fibe customers in Ontario, Québec and Atlantic Canada can download their personal video recordings with the Fibe TV app to watch on iOS and Android mobile devices without Wi-Fi network access. In 2019, we introduced a feature whereby customers can pause and rewind live TV on any device with the Fibe TV app.

We also offer the Alt TV service, a completely new way to watch live and on-demand TV. With no traditional TV set-top box required, Alt TV is accessed through the Fibe TV app and offers up to 500 live and on-demand channels on laptops, smartphones, tablets, Apple TV, Amazon Fire TV Stick, Google Chromecast and a variety of Android TV devices. Alt TV offers access to two TV streams at a time and customers can add individual channels to build their own Alt TV packages. Like Bell’s Fibe TV service, Alt TV operates as a licensed broadcast service on the privately managed Bell Fibe broadband network for in-home viewing, and on mobile or Wi-Fi networks outside the home.

NATIONAL WIRELINE SERVICE PROVIDER WITH MARKET LEADERSHIP POSITION

Our leadership position in broadband Internet and TV and our broad suite of product offerings serve as a foundation for the other products and services we offer. This provides us with a significant number of established customer connections to drive uptake of new products and services, either through bundled offerings or on a stand-alone basis, and allows us to improve customer retention.

Our business markets team maintains a leadership position, having established relationships with a majority of Canada’s largest 100 corporations. Our team continues to deliver network-centric business service solutions to large business and public sector clients, including data hosting and cloud computing services, which are key to business communications today and increase the value of connectivity services. In April 2019, Bell and Google introduced new hybrid cloud connectivity for business customers to connect to the Google Cloud Platform globally via direct fibre connections on Bell’s private network. In addition, in May 2019, Bell added managed database, application monitoring and security scanning to its extensive portfolio of Bell Cloud Managed Services for Microsoft Azure. Bell first launched its suite of managed services for Microsoft Azure in 2018, including managed cloud server, firewall, backup and disaster recovery. The Bell Cloud Connect service also offers Canadian businesses secure and reliable access to cloud solutions from Amazon and IBM over our broadband networks.

OUR SIGNIFICANT MEDIA ASSETS

Bell Media’s range of video content enhances the execution of our strategic imperatives by leveraging our significant network investments, delivering compelling content across all screens and platforms, and enabling us to maximize strategic and operating synergies, including the efficiency of our content and advertising spend.

Bell Media’s assets in video, radio, digital media and OOH advertising are a key competitive advantage, as described below:

 

•

We own and operate 30 conventional TV stations, including CTV, Canada’s highest-rated TV network based on viewership

 

•

We own and operate 29 specialty channels and four pay TV services, as well as three direct-to-consumer streaming services, including Crave, the exclusive home of HBO in Canada

 

•

In 2019, our 109 licensed radio stations in 58 markets across Canada reached on average 16.8 million listeners per week across the country

 

•

We own and operate the most visited Canadian-owned online media business in the Canadian digital landscape

 

•

We own Astral, one of Canada’s leading OOH advertising businesses with a network of more than 50,000 advertising faces strategically located in key urban cities across the country. It offers a portfolio of six innovative product lines: outdoor advertising, street furniture, airport, digital large format, transit and lifestyle.

 

•

We own Crave, a subscription on-demand video streaming service providing premium content and a robust lineup of video programming. Crave features a broad catalogue of sought-after content and Emmy Award-winning programming. With Crave, current HBO programming as well as box-office hits are available directly to all Canadians with access to the Internet.

 

•

On October 30, 2019, Bell Media announced a long-term exclusive deal with Warner Bros. International Television Distribution (Warner Bros.) to bring original programming from Warner Bros.’ HBO Max to Canada beginning in 2020. The agreement extends Bell Media’s programming relationship with Warner Bros., making original series from the new HBO Max service available to Canadians via Crave and Bell Media’s suite of CTV-branded platforms. The deal also extends Bell Media’s existing relationship with Warner Bros. on conventional and specialty TV rights as well as on pay TV rights for Warner Bros.’ first-run feature films.

 

•

On January 28, 2020, Crave evolved into a bilingual service, offering exclusive new French-language content through participating TV providers and streaming platforms. As part of the change, Bell Media’s Super Écran became available OTT for the first time as an add-on to Crave.

 

•

In March 2019, we launched STARZ in Canada, delivering a slate of bold, diverse and genre-bending programming that has established the channel as one of the leading pay TV services in the United States. STARZ is now the Canadian home of all new STARZ original programming, select library titles and classic films from all eras. Our pay TV channel Encore was rebranded as STARZ as of March 1, 2019.

 

•

We provide live and on-demand access to content from our conventional and specialty networks, CTV and CTV2, BNN Bloomberg, TSN, RDS, and other brands in news, sports and entertainment. Bell Media’s TV Everywhere services feature a series of apps including CTV, Discovery, CTV Drama, TSN and RDS, providing live and on-demand content delivered to smartphones, tablets and computers.

 

•

In March 2019, TSN and RDS launched Day Pass subscriptions to their TSN Direct and RDS Direct streaming services, the first of its kind in Canada, providing full access to TSN and RDS channels for 24 hours with no contract.

 

•

Leveraging our powerful CTV brand, we launched four newly-branded specialty TV channels in September 2019. The Comedy Network, Space, Bravo and Gusto became CTV Comedy Channel, CTV Sci-Fi Channel, CTV Drama Channel and CTV Life Channel, respectively.

 

Our competitive strengths also include our broad reach across Canada, our ability to acquire top programming for conventional, specialty and pay TV and streaming services, our constant drive to provide the most engaging and interactive experience for viewers, and our ability to serve the needs of advertisers across multiple platforms.

 

Refer to section 2.3, Deliver the most compelling content of the BCE 2019 MD&A, on page 43 of the BCE 2019 Annual Report, for a description of certain other agreements entered into and initiatives launched in 2019 by Bell Media.

 

BELL WIRELESS AND BELL WIRELINE

The guiding principle driving our marketing strategy is to offer our clients the ultimate in reliable, simple and accessible telecommunications services. In doing so, our objective is to increase customer acquisition, retention and loyalty through multiple service offerings.

Through the bundling of services, which combines wireline local voice and long distance, high-speed Internet and TV, as well as wireless services, our goal is to use a multi-product offering to achieve competitive differentiation by offering a premium, integrated set of services that provides customers with more freedom, flexibility and choice. We also make use of limited-time promotional offers featuring discounted rate plans, special rates on wireless handsets and TV receivers, as well as other incentives, to stimulate new customer acquisition and retain existing customers or to respond to competitive actions in our markets.

We focus our marketing efforts on a coordinated program of TV, print, radio, Internet, outdoor signage, direct mail and point-of-sale media promotions. We engage in mass-market advertising in order to maintain our brand and support direct and indirect distribution channels. Coordinated marketing efforts throughout our service area ensure that our marketing message is presented consistently across all our markets. Promoting the Bell brand is complemented by our other brand marketing efforts, reinforcing awareness of all our services and capitalizing on the size and breadth of our customer base across all product lines.

The Bell brands play a key role in product positioning. Our branding is straightforward and directly supports our strategy of delivering a better customer experience at every level.

Specifically for Bell Wireless, acquiring and retaining postpaid and prepaid subscribers is a key marketing objective that we seek to achieve through our networks and suite of leading-edge devices and services to drive higher usage and increased adoption of data services. Since June 2019, we offer unlimited plans featuring unlimited data access with no overage charges. In July 2019, we also introduced SmartPay device financing plans that let customers buy their new smartphones with 24 interest-free installments separate from their service plan. In addition, we launched new Connect Everything plans that provide a way to link all of a customer’s Bell devices with a pool of data to share across smartphones, tablets, smartwatches and other devices, such as wireless trackers, security cameras and vehicles with Bell Connected Car. We also continue to offer discounts on the price of wireless handsets in exchange for a contractual commitment from a subscriber, a practice also used by other Canadian wireless operators. Research has shown that a key driver of customer acquisition is handset selection and style. Our current wireless device portfolio includes many leading-edge devices, some launched as exclusive to Bell in the Canadian market. As the Canadian wireless market further matures and competition intensifies, customer retention is increasingly important. Accordingly, we employ customer retention initiatives aimed at increasing our customers’ level of satisfaction and loyalty.

We deliver our products and services to residential wireless and wireline customers through:

 

•

a network of approximately 800 corporate and dealer-owned Bell, Virgin Mobile and Lucky Mobile retail locations

 

•

The Source’s approximately 500 retail locations

 

•

national retailers such as Best Buy, Walmart, Loblaws and Glentel’s WIRELESSWAVE, Tbooth wireless and WIRELESS etc., as well as a network of regional and independent retailers in all regions

 

•

value retailer Dollarama’s locations across Canada as it relates to Lucky Mobile and Virgin Mobile’s prepaid wireless services

 

•

call centre representatives

 

•

our websites, including bell.ca, virginmobile.ca and luckymobile.ca

 

•

door-to-door sales representatives

We also offer customers the convenience of One Bill for Internet, TV, home phone and wireless services.

For small business customers, our residential and small business team offers a wide range of wireline services, including Business Fibe Internet, Bell Total Connect, Business Phone and TV, along with many other communications solutions, all designed for companies that typically have fewer than 20 employees. Small business solutions are sold through dedicated call centre representatives and our bell.ca website, as well as our retail network and door-to-door sales representatives.

Communications solutions, other than wireless, for mid-sized business and large enterprise customers are delivered by our business markets team. Our products and services are sold through dedicated sales representatives, call centres, certified resellers and competitive bids. By combining products and services, including professional services, into fully managed, end-to-end information and technology solutions, we have been successful in procuring both mid-sized business and large enterprise customers with complex communications products and services. We continue to differentiate ourselves in the marketplace by enhancing our customer service levels and offering solutions designed to provide superior service, performance, availability and security. We deliver expertise in key solution areas, including Internet, private networks and broadcasts, voice and unified communications, data centres, customer contact and security solutions.

Our wireless products and services are delivered to business customers, including small business customers, through the same channels as those previously described for services to residential customers. In addition, Bell’s business customers are served by our nationwide sales team responsible for the sale of wireless products and services to business customers, as well as the execution of sales contracts.

Our wholesale business communications products and services are delivered by our wholesale team. They are sold through our dedicated sales representatives, web portals and call centres.

 

BELL MEDIA

Bell Media’s video and OOH customer base is comprised primarily of large advertising agencies, which place advertisements with Bell Media on behalf of their customers. Bell Media also has contracts with a variety of broadcasting distribution undertakings (BDUs), under which monthly subscription fees for specialty TV, pay TV and streaming services are earned. Bell Media’s radio broadcast customer base is comprised of both advertising agencies and businesses in local markets.

Bell Media’s conventional TV networks are delivered to Canadians through over-the-air broadcast transmission and through distribution by BDUs. Bell Media’s specialty TV and pay TV channels and streaming services are delivered through distribution arrangements with BDUs, and its radio programming is distributed through over-the-air transmission. In addition to these primary distribution channels,

Bell Media also distributes its video and radio programming through a variety of non-traditional means, such as mobile and Internet streaming (iHeartRadio). Crave is available through participating TV providers across Canada, which provide the added opportunity to access the Crave linear channels on traditional set-top boxes, as well as via On Demand channels, through the Crave app, and online at Crave.ca. Crave is also available directly via the Internet at Crave.ca, and via the Crave app. Crave can be streamed on the web and partner platforms such as iPhone, Apple TV, Android mobile, Android TV, Xbox One, Samsung Smart TVs, Amazon Fire TV, Chromecast and Facebook Portal, with additional platforms in development. Finally, Bell Media’s OOH business delivers its services through an inventory of OOH faces and street furniture equipment in key urban cities across the country.

 

In 2015, we launched a project seeking to transform our networks, systems and processes with three main objectives: (a) to become more agile in our service delivery and operations, including self-serve and instant-on capabilities for our customers; (b) to ensure best quality and best customer experience; and (c) to develop a new network infrastructure that enables a competitive cost structure with rapidly growing capacity needs, and enabling new revenue opportunities. We are leveraging new technologies, including network functions virtualization, software-defined networks and cloud technologies. These

 

technologies offer unprecedented levels of flexibility, automation and elastic capacity: 5G, IoT, enhanced Internet, communication and video services, as well as the next generation of enterprise cloud applications, all depend heavily on these capabilities. We work closely with our partners and are leveraging these connections by contributing to industry associations that are accelerating this evolution, such as the open source software and hardware initiatives. We are also focusing on transforming our organization and some key development and operational processes to meet our objectives.

 

The telecommunications industry is evolving rapidly as it continues to move from multiple service-specific networks to Internet protocol (IP)-based integrated communications networks that can carry voice, data and video traffic. We continue to work with key vendor partners to expand our national multi-service IP-enabled networks.

Our communications networks provide wireless and wireline voice, data and video services to customers across Canada. Our infrastructure includes:

 

•

national transport networks for voice, data and video traffic, including Internet traffic

 

•

urban and rural access networks and infrastructure for delivering services to customers

 

•

national wireless networks that provide voice, data and video services

WIRELESS

To provide wireless connectivity, we have deployed and operate a number of nationwide wireless broadband networks compatible with global standards that deliver high-quality and reliable voice and high-speed data services. With our high-speed data network, we are able to offer Canadian consumers a broad range of choice in wireless smartphones, as well as touch screen tablets, IoT devices and other devices designed for data services such as video and audio streaming, IoT communications, e-mail, messaging, Internet access and social networking.

HSPA+ NETWORK

Our wireless HSPA+ network offered high-speed mobile access to 99% of the Canadian population at December 31, 2019, covering thousands of cities and towns in both urban and rural locations. The HSPA+ network supports global roaming, as well as a wide range of smartphones, data cards, universal serial bus (USB) sticks, tablets and other leading-edge mobile devices. Bell supports international roaming to 230 outbound destinations (196 of them also supporting 4G LTE). The vast majority of the site connectivity for the HSPA+ network was built with high-speed fibre and an all-IP architecture for enhanced reliability.

4G LTE NETWORK

With Bell’s 4G LTE wireless network coverage, customers have data access speeds similar to those of broadband connections and significantly faster than our HSPA+ network, making it easier for users to download applications, stream high-definition videos and music, play online games or videoconference and chat with virtually no delays or buffering.

Our LTE wireless network reached more than 99% of the Canadian population coast to coast at December 31, 2019 with theoretical peak download speeds of up to 150 Mbps, with expected average download speeds from 18 to 40 Mbps. LTE currently accounts for 95% of our total wireless data traffic.

In September 2019, we announced the availability of LTE wireless broadband service to all 25 communities in Nunavut, Canada’s northernmost territory, delivering mobile data speeds of up to 100 Mbps to residents and businesses across the territory.

 

The HSPA+ and LTE networks work together in that all Bell LTE devices support both networks. At first, voice calls initiated when an LTE device was attached to an LTE network were transferred to the HSPA+ network for processing. In April 2016, we introduced Voice over LTE (VoLTE) so that the phone stays on the LTE network for both voice and data calls. By implementing VoLTE, we can reduce voice call set-up time and operate the network more efficiently.

LTE-A NETWORK

With Dual-band LTE-A technology, Bell generally delivers theoretical peak download speeds of up to 260 Mbps (expected average download speeds of 18 to 74 Mbps). By assigning three radio channels or carriers to one user, we generally deliver, with Tri-band LTE-A technology, theoretical mobile data peak download speeds of up to 335 Mbps (expected average download speeds of 25 to 100 Mbps). With the addition of MIMO technologies and quadrature amplitude modulation (QAM), we can deliver in certain areas theoretical peak download speeds of up to 800 Mbps with Dual-band LTE-A technology and 1.2 Gbps with Tri-band LTE-A technology.

Since 2017, Bell’s LTE network is capable of delivering Quad-band LTE-A service. Quad-band technology leverages multiple bands of wireless spectrum to boost LTE-A speeds to the gigabit level. In addition to employing a combination of carrier aggregation, Bell also uses 256 QAM and 4X4 MIMO technologies to increase spectrum efficiency and multiply capacity. Quad-band LTE-A now offers theoretical mobile data peak download speeds of up to 1.5 Gbps in select markets like Kingston (expected average download speeds of 25 to 245 Mbps).

At December 31, 2019, Bell’s LTE-A network provided service to approximately 94% of the population in Canada. In addition, our Tri-band LTE-A footprint covered more than 82% of Canadians and our Quad-band service had expanded to more than 57% of Canadians at December 31, 2019. As the handset ecosystem matures, Bell’s AWS-3 and 2500 megahertz (MHz) spectrum licences will enable upgrades of carrier aggregation that will support four and five simultaneous carriers.

LTE-M NETWORK

In 2018, Bell launched a new LTE-M network, which is a subset of our LTE network supporting low-power IoT applications with enhanced coverage, longer battery life and lower costs for IoT devices connecting to Bell’s national network. In September 2019, Bell announced an expanded reciprocal roaming partnership with AT&T Inc. (AT&T) to provide Canadian business customers with access to AT&T’s LTE-M network across the United States. The reciprocal agreement also enables AT&T’s customers to roam on Bell’s national LTE-M network in Canada. Our LTE-M network is available in most Canadian provinces.

3G/CDMA NETWORK

On April 30, 2019, Bell completed the previously announced shutdown of its legacy 3G code division multiple access (CDMA) network, and customers in CDMA coverage areas were transitioned to Bell’s 4G LTE network. Bell began winding down its CDMA network in 2017 as its LTE coverage accelerated. As most of its development and network enhancement focus has been on the HSPA+/LTE networks, traffic had been migrating off our CDMA network and onto the independently operating HSPA+/ LTE networks. The shutdown of Bell’s CDMA network enables Bell to “re-farm” additional low band spectrum for 5G services and to repurpose existing structures, fibre connections and power systems to further enhance its next-generation LTE networks.

WIRELINE

VOICE AND DATA NETWORK

Our national voice and data network consists of an optical fibre network with the latest technologies to provide redundancy and fault protection. It reaches all major Canadian metropolitan centres, as well as New York, Chicago, Boston, Buffalo, Detroit, Minneapolis, Ashburn (Virginia) and Seattle in the United States.

Our network in major Canadian cities provides state-of-the-art high-speed access at gigabit speeds based on IP technology. We operate a national IP multi-protocol label switching network with international gateways to the rest of the world. This network delivers next-generation, business-grade IP virtual private network (IP VPN) services that connect our customers’ offices and data centres throughout Canada and around the world. The IP VPN service is the foundation platform required for the delivery of business service solutions that add value and efficiencies to customers’ businesses. These technology solutions include voice over IP/IP telephony, IP videoconferencing, IP call centre applications and other future IP-based applications. In addition, we maintain extensive copper and voice-switching networks that provide traditional local and interexchange voice and data services to all business and residential customers in Ontario, Québec, the Atlantic provinces and Manitoba.

To improve reliability and increase network capacity to support the rapidly growing volumes of wireless and Internet usage carried on our networks, for several years we have been upgrading all of our fibre-based national backbone network with the deployment of 100 gigabit technologies. To satisfy continued traffic growth, in 2018 Bell started the next phase of the national backbone network upgrade with the deployment of 200 gigabit dense wavelength division multiplexing (DWDM) technologies, which will be able to support up to 1 terabit in the future. Key traffic routes span more than 25,000 kilometres across Canada and into the United States.

HIGH-SPEED FIBRE DEPLOYMENT

Our strategic imperative to build the best networks is focused on the expansion of our all-fibre network to more homes and business locations. Over the past few years, we have upgraded our access infrastructure by deploying fibre closer to our customers using FTTN with pair bonding technology, and overlaying legacy copper and FTTN with FTTP. In addition, Bell continues to deploy FTTP to all new urban and suburban housing developments in Ontario, Québec, the Atlantic provinces and Manitoba, in addition to Bell’s ongoing deployment of FTTP to multi-dwelling units and business locations. In our view, FTTP, in which optical fibre cables are used to connect each and every location, is the best available network architecture to support future bandwidth-demanding IP services and applications. Our residential fibre-optic Internet service, marketed as Fibe Internet and Virgin Mobile Home Internet, is enabled by our FTTP and FTTN networks.

In March 2017, Bell announced an $854 million investment to bring FTTP to 1.1 million residences and business locations throughout Montréal, representing the largest-ever communications infrastructure project in Québec. Bell’s broadband FTTP network enables our Gigabit Fibe Internet service, which was available in 32% of locations in Montréal at December 31, 2019. Montréal will join a growing number of centres across Québec that are fully wired with Bell fibre, including Québec City.

In April 2018, Bell launched its all-fibre optic broadband network in Toronto, enabling gigabit Internet speeds, advanced TV and business connectivity to a majority of homes and business locations in that city. In February 2018, Bell announced the expansion of FTTP direct fibre connections throughout the populous and fast-growing Greater Toronto

 

Area/905 region surrounding Toronto. Bell’s fibre plan will deliver gigabit Internet speeds and other broadband Fibe service innovations to approximately 1.3 million homes and businesses in the region.

In August 2018, Bell announced the increase of Fibe Internet access speeds to up to 1.5 Gbps. Unlimited Gigabit Fibe 1.5 service is now available in Ontario, Québec and the Atlantic provinces. Delivered over Bell’s FTTP network and leveraging the powerful Home Hub 3000 modem/router already used by most Bell FTTP customers, the enhanced Internet service offers total download speeds of up to 1.5 Gbps and uploads of up to 940 Mbps.

Over the past few years, several direct fibre deployment projects were also announced in a number of communities. In 2019 and early 2020, new investments were announced in the Bas-Saint-Laurent region and in Louiseville in the province of Québec; in Flin Flon and the Town of Carman in the province of Manitoba; and in the Municipality of Shelburne in the province of Nova Scotia. In addition, on January 23, 2020, we announced an investment of $400 million to expand broadband Internet access in urban and rural areas of Hamilton, including a plan to bring direct fibre network connections to more than 200,000 homes and business locations throughout the city. On March 2, 2020, we announced an investment of approximately $400 million to bring FTTP technology to Winnipeg, with direct fibre connections to approximately 275,000 homes and businesses throughout the city.

As at December 31, 2019, more than 5.1 million homes and businesses across Ontario, Québec, the Atlantic provinces and Manitoba had the capability of receiving up to 1.5 Gigabit Fibe service.

In addition to our Fibe Internet service, in 2016 we introduced Home Internet under the Virgin Mobile brand for customers in Ontario and Québec. This high-speed Internet service offers existing Virgin Mobile customers fast download speeds of up to 100 Mbps and upload speeds of up to 10 Mbps together with large monthly data bandwidth limits.

Additionally, we continue to deploy our next-generation IPTV services in areas in Ontario, Québec, the Atlantic provinces and Manitoba where cable providers had long been dominant. As of December 31, 2019, our IPTV services had the capacity to service approximately 8.4 million homes in major cities and municipalities across Ontario, Québec, the Atlantic provinces and Manitoba.

WTTP

Following successful WTTP trials in the 3.5 GHz band using 8T8R and MIMO radio technologies, Bell began the buildout of WTTP to rural locations in the second quarter of 2018. At the end of 2018, Bell’s WTTP footprint, enabling its Wireless Home Internet broadband service, encompassed 28 communities covering approximately 22,400 homes, complementing Bell’s FTTP network. Bell announced the continued

expansion of its Wireless Home Internet broadband service to more communities in 2019 and early 2020, including, in the province of Ontario, rural Hamilton, the Regional Municipality of Niagara, Muskoka and Haliburton County, Quinte West and Hastings, Lennox and Addington, the Kawartha Lakes region, Northumberland, Prince Edward and Peterborough Counties, Lanark County, the United Counties of Leeds and Grenville; in several communities in Québec’s Eastern Townships region and its southwestern Montérégie region; and in 21 Nunavut communities. At the end of 2019, Bell’s WTTP footprint encompassed 226 communities covering approximately 250,000 homes. The August 15, 2019 decision of the Canadian Radio-television and Telecommunications Commission (CRTC) to reduce the wholesale rates that Internet resellers pay to access network infrastructure built by facilities-based providers like Bell Canada will however, if not overturned or otherwise modified, reduce the scope of our broadband wireless Internet build-out plan for smaller towns and rural communities by approximately 200,000 households, to a total revised plan of 1 million households. For more information, refer to section 8.2, Telecommunications Act – Review of wholesale FTTN high-speed access service rates of the BCE 2019 MD&A, on page 89 of the BCE 2019 Annual Report.

WTTP is fixed wireless technology that will take full advantage of 5G to deliver high-speed Internet service to residents in smaller and underserved communities. Bell’s WTTP solution currently delivers broadband speeds of up to 25 Mbps, or 5 to 10 times faster than average speeds currently available in these areas, and is expected to increase to higher speeds with the evolution of WTTP technology and implementation of 5G. Innovation in WTTP complements Bell’s extensive broadband fibre build in urban markets, and our deployment of WTTP in rural locations underscores our focus on the full utilization of Bell’s assigned wireless spectrum resources.

DSL

We also offer DSL-based Internet service in areas where Fibe Internet and Wireless Home Internet are not available, with download speeds of up to 5 Mbps.

SATELLITE TV SERVICE

We provide satellite TV service nationwide under the Bell TV brand using satellites operated by Telesat Canada (Telesat). Pursuant to a set of commercial arrangements between Bell ExpressVu Limited Partnership (Bell ExpressVu) and Telesat, Bell ExpressVu currently has two satellites under contract with Telesat. Telesat operates or directs the operation of these satellites, which are used by Bell ExpressVu to provide its satellite TV service.

 

The table below shows the number of BCE employees at December 31, 2019 and 2018.

 

NUMBER OF EMPLOYEES AT DECEMBER 31		2019								2018
Bell Wireless			10,547								10,703
Bell Wireline			35,345								35,777
Bell Media			6,208								6,310
Total (1)			52,100								52,790

 

(1)	The total number of BCE employees at the end of 2019 was 52,100, down from 52,790 at December 31, 2018 due to natural attrition, retirements and workforce reductions, partly offset by call centre hiring.

Approximately 41% of BCE employees were represented by unions and were covered by collective agreements at December 31, 2019.

The following collective agreements covering 250 or more employees were ratified in 2019 or early 2020:

 

•

the collective agreement between Unifor and Bell Canada covering approximately 280 sales employees expired on December 31, 2018. A new collective agreement was ratified on February 21, 2019.

 

•

the collective agreement between Unifor and Bell Media (CTV Toronto Specialties) covering approximately 710 employees expired on May 31, 2018. A new collective agreement was ratified on March 6, 2019.

 

•

the collective agreement between Telecommunications Employees Association of Manitoba – International Federation of Professional and Technical Engineers (TEAM-IFPTE Local 161) and Bell Canada (Bell MTS) covering approximately 660 supervisory and non-supervisory management employees expired on February 19, 2019. A new collective agreement was ratified on September 20, 2019.

The following collective agreements covering 250 or more employees will expire in 2020:

 

•

the collective agreement between Unifor and Bell Canada (Bell Craft) covering approximately 3,500 craft employees will expire on November 30, 2020

 

•

the collective agreement between Unifor and Bell Media (CTV Agincourt) covering approximately 500 employees will expire on December 31, 2020

•

the collective agreement between the International Brotherhood of Electrical Workers (IBEW) and Northwestel Inc. covering approximately 325 craft and clerical employees will expire on December 31, 2020

The following describes the status of collective agreements covering 250 or more employees that have already expired:

 

•

the collective agreement between Unifor and Expertech Network Installation Inc. (Expertech) covering approximately 810 craft employees expired on November 30, 2019. Negotiations are ongoing.

 

•

the collective agreement between Unifor and Bell Canada (Bell MTS) covering approximately 650 clerical employees expired on December 19, 2019. Bargaining began on February 11, 2020.

 

3.8   Corporate responsibility

GENERAL

Environmental, social and governance (ESG) practices form an integral part of BCE’s corporate responsibility. Since its founding in 1880, Bell has been the Canadian leader in telecommunications, with the goal of enhancing how Canadians connect with each other and the world. We take very seriously our responsibility to manage the company in ways that enable us to sustain our record of serving the personal and business communications needs of millions of customers, seek to create value for shareholders, provide meaningful careers for tens of thousands of people, and make a significant contribution to the broader Canadian community and economy. Our approach to corporate responsibility and ESG begins with the objective of balancing economic growth, social responsibility and environmental performance as we pursue our ongoing success as a company and work to ensure our continued ability to contribute to the Canadian economy. We engage with stakeholders to identify opportunities to create benefits for both society and us while minimizing, where we can, any negative impact our activities may have. Accordingly, in 2006 we adopted a resolution to support the United Nations Global Compact (UNGC), a set of universal principles addressing human rights, labour, environment and anti-corruption. These principles serve as the foundation of our approach to corporate responsibility.

The BCE board of directors has established clear lines of authority and oversight over our corporate responsibility programs and our approach to ESG practices, with primary accountability at the committee level. The Audit Committee oversees issues including environmental risks, security and business continuity. The Management Resources and Compensation Committee (Compensation Committee) has oversight for human resources issues, including respectful workplace practices, health and safety. The Corporate Governance Committee is responsible for governance practices and policies, as well as for policies concerning business conduct and ethics. In addition, in 2020, the Compensation Committee has introduced a metric to track corporate performance against our ESG targets.

An officer-level committee mandated by the BCE board of directors further oversees issues related to environmental matters. The responsibilities of this committee have expanded over time and now BCE’s corporate responsibility strategy, including health and safety, security, environmental and compliance risks and opportunities, is overseen by the Health & Safety, Security, Environment and Compliance Oversight Committee (HSSEC Committee). This cross-functional committee is co-chaired by the Chief Human Resources Officer and

Executive Vice-President, Corporate Services and the Chief Legal Officer and Corporate Secretary, and seeks to ensure that relevant risks are adequately recognized and mitigation activities are well integrated and aligned across the organization, as well as supported with sufficient resources. The HSSEC Committee also mandates our Energy Board, a working group composed of business unit employees at the vice-president and director levels, to ensure oversight of our overall energy consumption and costs with the objective of minimizing financial and reputational risks while maximizing business opportunities.

BCE has implemented a range of social and environmental policies that are supported by various programs and initiatives. These policies address issues of importance to our many stakeholders, including: preventing conflicts of interest; protecting company assets; safeguarding privacy and confidentiality; treating clients, business partners, team members and competitors with respect and honesty; fostering a diverse and safe workplace; and protecting the environment.

These BCE policies include, among others, the following:

• Code of Business Conduct

• Privacy Policy

• Environmental Policy

• Supplier Code of Conduct

• Procurement Policy

• Political Contributions Policy

• Mandatory Reporting of Internet Child Pornography

• Health & Safety Policy

• Mental Health Policy Statement

Since 2004, we report annually on our corporate responsibility performance and our ESG practices in our corporate responsibility report, available at BCE.ca. The report, together with the information and documents available in the Responsibility section of BCE’s website, presents Bell’s corporate responsibility performance. We report on the topics that are of greatest importance to our stakeholders and could have an important impact on our business. These include diversity and inclusion, mental health in the workplace and the community through our Bell Let’s Talk mental health initiative, the environment, climate change and waste management. In our corporate responsibility report, we describe how we manage these topics and we also report on our performance against targets we have set for ourselves. It has been prepared in accordance with the Global Reporting Initiative (GRI) Standards-Core option and adheres to the principles of the UNGC. It

 

describes actions we have taken to implement these guidelines and principles, and serves as our Communication on Progress (COP), as required for all companies that endorse the UNGC. In addition, we report on select Sustainability Accounting Standards Board (SASB) indicators and Sustainable Development Goals (SDGs). Furthermore, BCE supports the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD), which aims to develop voluntary and consistent climate-related risk disclosures.

BCE is recognized around the world for the effectiveness of its corporate responsibility programs, which is reflected in its inclusion in various sustainable indices and its receipt of sustainability awards. In 2019, BCE continued to be listed on socially responsible investment indices such as the FTSE4Good Index, the Jantzi Social Index, the United Nations Global Compact 100 (GC 100) and the Euronext Vigeo World 120 index. The latter index includes the 120 most advanced companies in the European, North American and Asia-Pacific regions, and distinguishes companies achieving the best ESG performances. BCE was also identified as a Prime Responsible Social and Environmental investment by oekom research, was selected for inclusion in the Ethibel EXCELLENCE Investment Register and is a component of the STOXX Global ESG Leaders indices, an innovative series of ESG equity indices. In 2019, Bell was named one of Canada’s Greenest Employers by Canada’s Top 100 Employers program for the third consecutive year. The award recognizes Bell’s focus on minimizing our environmental impact, our leadership in implementing an ISO 14001-certified environmental management system and the success of our ongoing initiatives to reduce waste and save energy.

We recognize that risks and opportunities exist related to climate change. Our membership in the Global Enabling Sustainability Initiative (GeSI) (gesi.org), an international organization that aims to achieve integrated social and environmental sustainability through digital technologies, helps us gain a deeper understanding of these risks and opportunities. GeSI is comprised of diverse and international members and partnerships, representing around 40 of the world’s leading information and communications technology (ICT) companies, 12 global businesses and multiple international organizations. Members and partners of GeSI use their collective knowledge and experience to identify opportunities and develop solutions for improving energy and resource efficiency, reducing carbon emissions and footprints, ensuring sustainable good practices in the supply chain, encouraging access to sustainable technologies and supporting worldwide digital-enabled transformation across all industries. Part of our involvement includes promoting ICT as a way to mitigate and adapt to climate change – for example, by enabling travel substitution, virtualization, dematerialization and cloud computing. Monitoring and reducing energy consumption and greenhouse gas emissions are also key priorities at BCE because of their impacts on the environment, society and the economy. We also recognize that being a responsible service provider means having best practices in business continuity and being prepared to face extreme weather events that could be exacerbated by climate change. We report on our climate change mitigation and adaptation efforts through the CDP (formerly known as the Carbon Disclosure Project). The CDP represents more than 525 financial planners, advisors, wealth managers and institutional investors managing a total of US $96 trillion in assets. The CDP gathers information on climate-related risks and opportunities from organizations worldwide to help reveal the risks and maximize financial rewards in the investment portfolios of these investors. In 2019, BCE attained CDP Leadership status,recognizing our work on climate action, our alignment with current best practices and the transparency of our climate disclosures.

In addition, we consider the exploitation and trade of minerals that fuel armed conflicts and lead to human rights abuses as unacceptable. We monitor industry best practices and integrate them into our procurement programs on a continuing basis.

ENVIRONMENT

We have been implementing and maintaining programs to reduce the environmental impact of our operations for more than 25 years. Environmental protection is core to our corporate responsibility approach and it aligns with our strategic imperatives. Our Environmental Policy, first issued in 1993, reflects our team members’ values, as well as the expectations of customers, investors and society, that we regard environmental protection as an integral part of doing business that needs to be managed systematically under a continuous improvement process.

The policy is reviewed annually and contains principles that support our goals, ranging from exercising due diligence to meet or exceed the environmental legislation that applies to us, to preventing pollution and promoting cost-effective initiatives that minimize use of resources and waste. For example, Bell Canada’s in-house stewardship program ensures our customers have access to a responsible way to dispose of electronic waste. We complement this by supporting provincial industry-led stewardship programs across the country.

We have instructed subsidiaries subject to this policy to support these principles, and have established an executive-level committee to oversee the implementation of the policy.

Bell Canada monitors its operations to seek to ensure that it complies with environmental requirements and standards, and takes action seeking to prevent and correct problems when needed. It has an environmental management and review system in place that:

 

•

seeks to provide early warning of potential problems

 

•

identifies management accountability

 

•

enables systematic environmental risks and opportunities management, including cost savings

 

•

establishes a course of action

 

•

seeks to ensure ongoing improvement through regular monitoring and reporting

In 2009, Bell Canada obtained certification that its environmental management system (registration number: 0068926-01) was ISO 14001-compliant. This certification covers Bell Canada’s landline, wireless, TV and Internet services, broadband and connectivity services, data hosting, cloud computing, radio broadcasting and digital media services, in addition to related administrative functions. Bell Canada has continuously maintained this certification since 2009, and was recertified in April 2018 for another three years.

As part of our effort to minimize the negative impacts of our operations, we seek to obtain sustainable certifications for our buildings. Forty-seven buildings leased or owned by Bell Canada across the country are certified BOMA BEST. In addition, BCE occupies nine buildings with LEED certifications: one LEED-NC Certified (Montréal), one LEED-NC Silver (Mississauga), four LEED-EB Gold (Toronto, Vancouver and Calgary), one LEED-NC Gold for our data centre in the Gatineau area and two LEED-EB Silver (Winnipeg).

BCE’s strong showing in sustainable indices, such as Ethibel and FTSE4Good, reflects the effectiveness of our ISO 14001 certified environmental management system, energy-saving measures and waste reduction initiatives, including the Bell Blue Box mobile recycling program.

 

One of our key tools is our Corporate Environmental Action Plan, which outlines the environmental activities of our various business units. The plan identifies funding requirements, accountabilities and deliverables, and monitors our progress in meeting our objectives.

For the year ended December 31, 2019, we spent $33.5 million on environmental activities, 70% of which was expensed and 30% of which was for capital expenditures. For 2020, we have budgeted $35.5 million (62% for expenses and 38% for capital expenditures) to seek to ensure that our Environmental Policy is applied properly and that our environmental risks are minimized.

COMMUNITY

We are committed to advancing the cause of mental health across Canada through Bell Let’s Talk. Mental illness affects all Canadians, yet this major health issue remains significantly underfunded, misunderstood and stigmatized. Recent data shows that 64% of Canadians report that they or someone they know has experienced a mental health problem or illness. The impact on the Canadian economy is staggering, with the total cost from mental health problems to the Canadian economy exceeding $50 billion annually – or nearly $1,400 for every person living in Canada. In any given week, at least 500,000 employed Canadians are unable to work due to mental health problems.

In 2010, Bell announced Bell Let’s Talk, a five-year, $50 million initiative supporting an extensive range of programs to enhance mental health in every aspect of Canadian life. Bell Let’s Talk has four action pillars: anti-stigma, enhanced care and access, new research and workplace leadership. It is the largest-ever corporate effort to promote mental health in Canada. In 2015, Bell announced the extension of Bell Let’s Talk for another five years and an increase in its total funding commitment for Canadian mental health to at least $100 million by 2020.

January 29, 2020 marked the 10th anniversary of Bell Let’s Talk Day. The 2020 Bell Let’s Talk Day theme was Mental Health: Every Action Counts, and it encouraged Canadians to think of the ways that they can contribute to positive change. On Bell Let’s Talk Day, Bell donated 5 cents more to mental health programs for every Bell text message, mobile and long-distance call and eligible social media interaction. Between midnight in Newfoundland and Labrador and midnight Pacific time, there were 154,387,425 eligible Bell Let’s Talk communications, an increase of more than 6% over the previous year, meaning that Bell will donate an additional $7,719,371.25 to Canadian mental health.

Adding this amount to the original Bell Let’s Talk commitment of $50 million in 2010, along with the results of the first nine Bell Let’s Talk Days, Bell has now committed $108,415,135 to improving Canadian mental health.

Since its launch, Bell Let’s Talk has supported more than 1,000 mental health partners across Canada, from large healthcare institutions and universities to small community organizations in every region. Annual community funds support grassroots mental health initiatives across Canada and military families, in addition to dedicated funds for Canada’s northern territories and Indigenous mental health in Manitoba. Bell Let’s Talk has also funded the world’s first university chair in anti-stigma studies at Queen’s University; the world’s first voluntary standard on workplace mental health; Canada’s first biobank of biological, social and psychological data at l’Institut universitaire en santé mentale de Montréal; the Bell Gateway Building at the Centre for Addiction and Mental Health (CAMH), the first mental health facility named for a corporation; a first-of-its-kind project at the Université du Québec à Montréal (UQAM) aimed at preventing suicide by establishing best

practices in making optimal use of today’s digital communications tools; and the first university-certified workplace mental health training program.

More than 12,000 Bell managers across Canada have received training in mental health support and more than 1,200 internal workplace events have taken place since 2010 in support of ending the stigma around mental illness, building resiliency and creating positive mental wellness.

In 2019 and early 2020, Bell Let’s Talk announced funding to several mental health projects, including: a $240,000 donation to the Behavioural Health Foundation to support Indigenous programming as a core component of holistic residential treatment for adults and families affected by addictions and co-occurring mental health issues; $500,000, in partnership with the Government of the Northwest Territories and Northwestel Inc., to support the Strongest Families Institute to provide mental health services for children, youth, adults and families throughout the territory; a $110,000 donation to the Peguis Foundation and SunLodge Village to support a four-season land-based traditional wellness program for at-risk youth in Peguis First Nation; a joint $300,000 donation to Fondation de ma vie for the refurbishment of psychiatric departments at three hospitals in the Saguenay-Lac-St-Jean region; and a $420,000 donation to William Osler Health Foundation to support a new repetitive Transcranial Magnetic Stimulation (rTMS) Clinic at Osler’s Brampton Civic Hospital.

On Bell Let’s Talk Day 2020, the True Patriot Love Foundation shared the list of the 10 most recent Bell True Patriot Love Fund recipients from across Canada, including Québec Veterans Foundation, which will provide recreation and creative arts therapy programs at Ste. Anne’s Hospital in Montréal and in Longueuil, and Roots of Empathy, which will offer a program to prevent bullying and aggression while nurturing positive mental health for children of military families in five provinces.

Bell Let’s Talk partners have also included Bear Clan Patrol, Brain Canada, Canadian Red Cross, Children’s Hospital of Eastern Ontario (CHEO), CISSS de Lanaudière, the Douglas Mental Health University Institute, Embrace Life Council, l’Institut universitaire en santé mentale de Montréal Foundation, Fondation de l’Institut universitaire en santé mentale de Québec, Kids Help Phone, Ma Mawi Wi Chi Itata Centre, McGill University’s Montréal Neurological Institute and Hospital, Montréal General Hospital Foundation, Ogijiita Pimatiswin Kinamatwin, Queen’s University, Rise Asset Development, St. John Ambulance, University of British Columbia, VGH & UBC Hospital Foundation, Ottawa’s Youth Services Bureau and many others.

The 2019 Bell Let’s Talk Fund distributed 123 grants to community organizations that deliver support and services in every region of Canada. Since its launch in 2011, the Community Fund has awarded 657 grants to grassroots groups in every province and territory, delivering programs ranging from support group workshops led by a social worker, mental health support for refugees, and a mobile health/ mental health clinic serving youth. The $2 million Bell Let’s Talk Community Fund will again distribute grants to community organizations in 2020.

In 2019, Bell Let’s Talk was awarded the first Social Impact Award presented by Québec newsmagazine L’actualité and Crédo in the Philanthropy category in recognition of Bell’s commitment to mental health and the effectiveness of our annual Bell Let’s Talk Day campaign in changing perceptions, reducing stigma and influencing public policy. The Social Impact Awards recognize organizations that have made a positive difference in Canadian society.

To learn more, please visit Bell.ca/LetsTalk.

 

Between mental health and its other initiatives, Bell contributed more than $29.5 million in community investment in 2019. Our employees

and pensioners also donated more than $2.5 million in charitable gifts and logged more than 109,000 hours in volunteer time.

 

A discussion of our competitive environment can be found in section 3.3, Principal business risks and the various subsections entitled Competitive landscape and industry trends and Principal business risks of the BCE 2019 MD&A, on pages 47 to 49, 60 to 62, 66 and 67, 69, 71 and 72, and 74 of the BCE 2019 Annual Report.

See also section 3.3, Competitive strengths in this Annual Information Form for more information concerning our competitive position.

 

A discussion of certain legislation that governs our businesses, as well as government consultations and recent regulatory initiatives and proceedings affecting us, can be found in section 8, Regulatory environment of the BCE 2019 MD&A, on pages 88 to 92 of the BCE 2019 Annual Report.

More information about the Canadian ownership restrictions on BCE’s common shares can be found in section 5.1, BCE securities in this Annual Information Form.

 

We use various works protected by intellectual property rights (IP Assets), which we own or for which we have been granted rights of use. These IP Assets include, without limitation: brand names; trademarks such as names, designs and logos; copyrights of content, programs and musical works; broadcast signals, software and applications; domain names; patents or patent applications for inventions owned or produced by us and our employees; and various other copyright materials, trademarks, patents and other intellectual property owned or licensed by us. We derive value through the use of these IP Assets in various business activities, and they are important to our operations and our success. To protect these IP Assets, we rely on a combination of legal protections afforded under copyright, trademark, patent and other intellectual property laws, as well as contractual provisions under licensing arrangements.

In particular, the Bell brand plays a key role in product positioning. Our branding is straightforward and directly supports our strategy of delivering a better customer experience at every level. Our trademark rights are perpetual, provided that their registrations are renewed on a timely basis when applicable and that the trademarks are used in commerce by us or our licensees. Other types of intangible proprietary information are also important to our operations, such as customer lists.

We believe that we take reasonable and appropriate measures to protect, renew and defend our IP Assets, including prosecuting infringers, and we take great care not to infringe on the intellectual property rights of others. However, we cannot provide any assurance that the laws protecting intellectual property in various jurisdictions are, or will continue to be, adequate to protect our IP Assets or that we will be successful in preventing or defending claims by others asserting rights in or to our IP Assets.

 

COMPLETION OF NORMAL COURSE ISSUER BID

On February 8, 2018, BCE announced a normal course issuer bid (NCIB) program under which BCE could purchase for cancellation up to 3.5 million common shares, subject to a maximum aggregate purchase price of $175 million, during the twelve-month period starting February 13, 2018 and ending no later than February 12, 2019. On March 13, 2018, BCE completed its NCIB program, having repurchased

and cancelled 3,085,697 common shares, at an average price of $56.71 per share, for a total cost of $175 million. The repurchase of common shares was conducted for the purpose of offsetting share dilution resulting from the exercise of stock options.

 

Refer to the sections of the BCE 2017 MD&A and BCE 2018 MD&A, contained in the BCE 2017 Annual Report and BCE 2018 Annual Report, respectively, indicated in the table below for a discussion of various business strategies and corporate initiatives implemented, and other actions taken, in the financial years ended December 31, 2017 and December 31, 2018 that have influenced the general development of our business in 2017 and 2018. Refer to the sections of the BCE 2019

MD&A, contained in the BCE 2019 Annual Report, indicated in the table below for a discussion of various business strategies and corporate initiatives implemented, and other actions taken, in the financial year ended December 31, 2019 that have influenced the general development of our business in 2019, and the priorities we intend to focus on in 2020.

 

MD&A		SECTION REFERENCES
BCE 2017 MD&A		Section 1.3,		Key corporate developments
		Section 1.4,		Capital markets strategy
		Section 2,		Strategic imperatives – 2017 progress for each strategic imperative
BCE 2018 MD&A		Section 1.3,		Key corporate developments
		Section 1.4,		Capital markets strategy
		Section 2,		Strategic imperatives – 2018 progress for each strategic imperative
BCE 2019 MD&A		Section 1.3,		Key corporate developments
		Section 1.4,		Capital markets strategy
		Section 2,		Strategic imperatives – 2019 progress for each strategic imperative
		Section 2,		Strategic imperatives – 2020 focus for each strategic imperative

 

During the past three financial years, the general development of our business has been affected, and will continue to be affected, by decisions made by the Government of Canada and its relevant departments and agencies, including the CRTC, Innovation, Science and Economic Development Canada (ISED), Canadian Heritage and the Competition Bureau. Although most of our retail services are not price-regulated, government agencies and departments such as those mentioned above continue to play a significant role in regulatory matters such as mandatory access to networks, spectrum auctions, the imposition of consumer-related codes of conduct, approval of

acquisitions, broadcast and spectrum licensing, foreign ownership requirements and control of copyright piracy. Refer to section 8, Regulatory environment of the BCE 2019 MD&A, the BCE 2018 MD&A and the BCE 2017 MD&A contained in the BCE 2019 Annual Report, the BCE 2018 Annual Report and the BCE 2017 Annual Report, respectively, for a discussion of the regulatory initiatives and proceedings that influenced the general development of our business in the financial years ended December 31, 2019, 2018 and 2017.

 

BCE’s articles of amalgamation, as amended, provide for an unlimited number of common shares, an unlimited number of first preferred shares issuable in series, an unlimited number of second preferred shares also issuable in series and an unlimited number of Class B shares. As at March 5, 2020, BCE had no Class B shares or second preferred shares outstanding.

Each common share entitles its holder to one vote at any meeting of shareholders. Additional information about the terms and conditions of the BCE preferred shares, common shares and Class B shares can be found in Note 27, Share capital of the BCE 2019 consolidated financial statements, on pages 150 and 151 of the BCE 2019 Annual Report.

Since 1993, the Telecommunications Act and associated regulations (Telecom Regulations) have governed Canadian ownership and control of Canadian telecommunications carriers. Bell Canada and other affiliates of BCE that are Canadian carriers are subject to this Act. In 2012, amendments to the Telecommunications Act largely eliminated the foreign ownership restrictions for any carrier that, with its affiliates, has annual revenues from the provision of telecommunications services in Canada that represent less than 10% of the total annual revenues from the provision of these services in Canada, as determined by the CRTC. However, given that Bell Canada and its affiliates exceed this 10% threshold, they remain subject to the pre-existing Canadian ownership and control restrictions, which are detailed below.

Under the Telecommunications Act, in order for a corporation to operate as a Canadian common carrier, the following conditions have to be met:

 

•

Canadians own at least 80% of its voting shares

 

•

at least 80% of the members of the carrier company’s board of directors are Canadian

 

•

the carrier company is not controlled by non-Canadians

In addition, where a parent company (Carrier holding company) owns at least 66²⁄₃% of the voting shares of the carrier company, the Carrier holding company must have at least 66²⁄₃% of its voting shares owned by Canadians and must not be controlled by non-Canadians. BCE is a Carrier holding company. The Telecom Regulations give certain powers to the CRTC and to Canadian carriers and Carrier holding companies to monitor and control the level of non-Canadian ownership of voting shares to ensure compliance with the Telecommunications Act. Accordingly, BCE, which controls Bell Canada and other Canadian carriers, must satisfy the following conditions:

 

•

Canadians own at least 662⁄3% of its voting shares, and

 

•

it is not controlled by non-Canadians

The powers under the Telecom Regulations include the right to:

 

•

suspend the voting rights attached to shares considered to be owned or controlled by non-Canadians

 

•

refuse to register a transfer of voting shares to a non-Canadian, and

 

•

force a non-Canadian to sell his or her voting shares

However, in our case, there is an additional control restriction under the Bell Canada Act. Prior approval by the CRTC is necessary for any sale or other disposal of Bell Canada’s voting shares unless BCE retains at least 80% of all Bell Canada voting shares.

Similarly, the Canadian ownership rules under the Broadcasting Act for broadcasting licensees, such as Bell Media and Bell Canada, generally mirror the rules for Canadian-owned and -controlled common carriers under the Telecommunications Act by restricting allowable foreign investments in voting shares at the licensee operating company level to a maximum of 20% and at the holding company level to a maximum of 33¹⁄₃%. An additional requirement under these Canadian broadcasting ownership rules is that the chief executive officer of a company that is a licensed broadcasting undertaking must be a Canadian citizen or permanent resident of Canada. The CRTC is precluded under a direction issued under the Broadcasting Act from issuing, amending or renewing a broadcasting licence of an applicant that does not satisfy these Canadian ownership and control criteria.

Cultural concerns over increased foreign control of broadcasting activities also require broadcasting licensees to establish programming committees when foreign investment in their holding company, while within permissible limits, exceeds 20%. In line with CRTC practice, programming committees have been established within the relevant subsidiary licensees, thereby allowing foreign investment in voting shares of BCE to reach the maximum of 33¹⁄₃%.

We monitor the level of non-Canadian ownership of BCE’s common shares by obtaining data on: (i) registered shareholders from our transfer agent and registrar, AST Trust Company (Canada), and (ii) beneficial shareholders from the Canadian Depository for Securities (CDS) and the Depository Trust Company (DTC) in the United States. We also provide periodic reports to the CRTC.

As of March 5, 2020, BCE had no debt securities outstanding.

 

Under its shelf prospectus dated March 20, 2018 (2018 Shelf Prospectus), Bell Canada could issue, over a 25-month period, up to $4 billion of unsecured debt securities. In addition, under its prospectus supplement dated June 19, 2018 (2018 Prospectus Supplement), Bell Canada could issue, over the same period, up to $3 billion of unsecured Medium Term Notes (MTN) Debentures.

 

•

On March 29, 2018, Bell Canada issued, under the 2018 Shelf Prospectus and a prospectus supplement dated March 26, 2018, US$750 million (C$967 million) of 4.464% Series US-1 Notes (US-1 Notes) at a price of US$100 per US$100 principal amount, to mature on April 1, 2048

 

•

On August 21, 2018, Bell Canada issued, under the 2018 Shelf Prospectus and the 2018 Prospectus Supplement, $1 billion of 3.80% MTN Debentures, Series M-48, at a price of $99.885 per $100 principal amount, to mature on August 21, 2028

 

•

On September 14, 2018, Bell Canada issued, under the 2018 Shelf Prospectus and a prospectus supplement dated September 11, 2018, US$400 million (C$526 million) of 4.464% Series US-1 Notes at a price of US$98.768 per US$100 principal amount plus accrued interest, to mature on April 1, 2048. The US-1 Notes represent a re-opening of, and form a single series with, Bell Canada’s outstanding 4.464% Series US-1 Notes, due 2048, that were issued on March 29, 2018.

 

•

On May 13, 2019, Bell Canada issued, under the 2018 Shelf Prospectus and a prospectus supplement dated May 8, 2019, US$600 million (C$808 million) of 4.30% Series US-2 Notes at a price of US$99.802 per US$100 principal amount, to mature on July 29, 2049. On the same day, Bell Canada issued, under the 2018 Shelf Prospectus and the 2018 Prospectus Supplement, $600 million of 2.75% MTN Debentures, Series M-49, at a price of $99.795 per $100 principal amount, to mature on January 29, 2025. The net proceeds of these offerings were used to fund the early redemption of Bell Canada’s $1 billion principal amount of 3.25% Debentures, Series M-27, due June 17, 2020, and the early redemption of Bell Canada’s $400 million principal amount of 3.54% Debentures, Series M-37, due June 12, 2020.

In order to continue to provide Bell Canada with financial flexibility and efficient access to the Canadian and U.S. capital markets, on May 29, 2019,

Bell Canada filed with the Canadian provincial securities regulatory authorities and with the SEC a new shelf prospectus (2019 Shelf Prospectus) under which Bell Canada may issue, over a 25-month period, up to $5 billion of unsecured debt securities. The 2019 Shelf Prospectus effectively replaced the 2018 Shelf Prospectus and effectively cancelled the 2018 Prospectus Supplement. On June 6, 2019, Bell Canada filed a new prospectus supplement (2019 Prospectus Supplement) for the issue of up to $5 billion of unsecured MTN Debentures under the 2019 Shelf Prospectus.

On September 10, 2019, Bell Canada issued, under the 2019 Shelf Prospectus and 2019 Prospectus Supplement, $550 million of 2.90% MTN Debentures, Series M-50, at a price of $99.871 per $100 principal amount, to mature on September 10, 2029. The net proceeds of the offering were used to repay short-term debt.

On February 13, 2020, Bell Canada issued, under the 2019 Shelf Prospectus and 2019 Prospectus Supplement, $750 million of 3.50% MTN Debentures, Series M-51, at a price of $99.902 per $100 principal amount, to mature on September 30, 2050. The net proceeds of the offering are intended to be used to fund, on March 16, 2020, the redemption, prior to maturity, of Bell Canada’s 4.95% Series M-24 MTN debentures, having an outstanding principal amount of $500 million, which were due on May 19, 2021, and for the repayment of short-term debt.

As at March 5, 2020, Bell Canada had issued $1.3 billion principal amount of debt securities under its 2019 Shelf Prospectus.

Certain of Bell Canada’s trust indentures and MTS’ 2011 trust indenture assumed by Bell Canada impose covenants that place limitations on the issuance of additional debt with a maturity date exceeding one year based on certain tests related to interest and asset coverage. In addition, Bell Canada is required, under certain conditions, to make an offer to repurchase all or, at the option of the holder thereof, any part of certain series of its debt securities upon the occurrence of both a “Change of Control” of BCE or Bell Canada and a “Rating Event” relating to the relevant series of debt securities. “Change of Control” and “Rating Event” are defined in the terms and conditions of the relevant series

 

of debt securities. Bell Canada is in compliance with all conditions and restrictions of its debt securities.

Bell Canada may issue short-term notes (CP Notes) under its Canadian and U.S. commercial paper programs up to the maximum aggregate principal amount of $3.0 billion in Canadian or U.S. currency provided that at no time shall such aggregate principal amount of CP Notes exceed $4.0 billion in Canadian currency, which equals the amount available under Bell Canada’s supporting committed lines of credit as of March 5, 2020. The sale of CP Notes pursuant to Bell Canada’s

separate Canadian or U.S. program decreases the Canadian or U.S. $3.0 billion maximum principal amount of CP Notes authorized to be outstanding at any time under both programs, with one Canadian dollar being treated as equal to one U.S. dollar for purposes of this limitation. At March 5, 2020, Bell Canada had CP Notes outstanding under its U.S. program in the principal amount of US$2,340 million (C$3,067 million when taking into account hedges with forward currency contracts against foreign currency fluctuations). As at the same date, no CP Notes were outstanding under Bell Canada’s Canadian program.

 

Ratings generally address the ability of a company to repay principal and pay interest or dividends on issued and outstanding securities.

Our ability to raise financing depends on our ability to access the public equity and debt capital markets as well as the bank credit market. Our ability to access such markets and the cost and amount of funding available depend partly on our assigned credit ratings at the time capital is raised. Investment grade ratings usually mean that when we borrow money, we qualify for lower interest rates than companies that have ratings below investment grade. Credit ratings are subject to change, based on a number of factors including, but not limited to, our financial strength, competitive position, liquidity and other factors that are not completely within our control. A ratings downgrade could result in adverse consequences for our funding capacity or our ability to access the capital markets.

As of March 5, 2020, BCE’s preferred shares are rated by DBRS Limited (DBRS) and S&P Global Ratings Canada, a business unit of S&P Global Canada Corp. (S&P), and Bell Canada’s debt securities are rated by DBRS, Moody’s Investors Service, Inc. (Moody’s) and S&P.

This section describes the credit ratings, as of March 5, 2020, for certain of the issued and outstanding securities of BCE and Bell Canada. These ratings provide investors with an independent measure of the credit quality of an issue of securities. However, they are not recommendations to buy, sell or hold any of the securities referred to below, and they may be revised or withdrawn at any time by the assigning rating agency. Ratings are determined by the rating agencies based on criteria established from time to time by them, and they do not comment on market price or suitability for a particular investor. Each credit rating should be evaluated independently of any other credit rating.

In the past two years, we have paid rating agencies to assign ratings to BCE’s preferred shares, as well as to Bell Canada’s short-term and long-term debt securities. The fees paid to DBRS and S&P include access to their websites. In addition, we paid DBRS and Moody’s for services provided relating to ratings assigned in connection with Bell Canada’s accounts receivable programs.

 

GENERAL EXPLANATION

SHORT-TERM DEBT SECURITIES

The table below shows the range of credit ratings that each rating agency assigns to short-term debt instruments and is based upon public statements from the respective rating agencies as of March 5, 2020.

 

		HIGHEST QUALITY OF SECURITIES RATED				LOWEST QUALITY       OF SECURITIES  RATED
DBRS			R-1 (high)				D
Moody’s			P-1				NP
S&P (Canadian scale)			A-1 (High)				D
S&P (Global scale)			A-1+				D

The DBRS short-term debt rating scale provides an opinion on the risk that a borrower will not meet its short-term financial obligations in a timely manner. Ratings are based on quantitative and qualitative considerations relevant to the issuer and the relative ranking of claims.

Moody’s short-term ratings are assigned to obligations with an original maturity of 13 months or less and reflect both on the likelihood of a default or impairment on contractual financial obligations and the expected financial loss suffered in the event of default or impairment.

An S&P Canadian commercial paper rating is a forward-looking opinion about the capacity of an obligor to meet financial commitments associated with a specific commercial paper program or other short-term financial instrument, relative to the debt servicing and repayment capacity of other obligors active in the Canadian domestic financial markets with respect to their own financial obligations.

An S&P Global rating is a forward-looking opinion about the creditworthiness of an obligor with respect to a specific financial obligation, a specific class of financial obligations or a specific financial program, and about the obligor’s capacity and willingness to meet its financial commitments.

LONG-TERM DEBT SECURITIES

The table below shows the range of credit ratings that each rating agency assigns to long-term debt instruments and is based upon public statements from the respective rating agencies as of March 5, 2020.

 

		HIGHEST QUALITY OF SECURITIES RATED		LOWEST QUALITY OF SECURITIES RATED
DBRS		AAA			D
Moody’s		Aaa			C
S&P		AAA			D

 

The DBRS long-term debt rating scale provides an opinion on the risk of default; that is, the risk that an issuer will fail to satisfy its financial obligations in accordance with the terms under which an obligation has been issued. Ratings are based on quantitative and qualitative considerations relevant to the issuer and the relative ranking of claims.

Moody’s long-term debt ratings are assigned to issuers or obligations with an original maturity of one year or more and reflect both on the likelihood of a default or impairment on contractual financial obligations and the expected financial loss suffered in the event of default or impairment.

S&P’s long-term debt credit rating scale provides a forward-looking opinion of the creditworthiness of a company in meeting a specific financial obligation, a specific class of financial obligations or a specific financial program. It takes into consideration the likelihood of payment; that is, the capacity and willingness of the company to meet its financial commitment on an obligation according to the terms of the obligation, among other factors.

PREFERRED SHARES

The table below describes the range of credit ratings that each rating agency assigns to preferred shares and is based upon public statements from the respective rating agencies as of March 5, 2020.

 

		HIGHEST QUALITY OF SECURITIES RATED				LOWEST QUALITY       OF SECURITIES  RATED
DBRS			Pfd-1 (high)				D
S&P (Canadian scale)			P-1 (High)				D
S&P (Global scale)			AA				D

The DBRS preferred share rating scale reflects an opinion of the risk that an issuer will not fulfill its obligations with respect to both dividends and principal commitments. Every DBRS rating is based on quantitative and qualitative considerations relevant to the issuing entity.

S&P’s Canadian preferred share rating is a forward-looking opinion about the creditworthiness of an obligor in meeting a specific preferred share obligation issued in the Canadian market, compared to preferred shares issued by other issuers in the Canadian market.

An S&P Global rating is a forward-looking opinion about the creditworthiness of an obligor with respect to a specific financial obligation, a specific class of financial obligations or a specific financial program, and about the obligor’s capacity and willingness to meet its financial commitments.