BCE (BCE) BMO 25th Annual Media & Telecom Conference summary

Capital allocation and financial priorities

• Fibre build remains the top capital allocation priority through 2025, targeting 8.3 million locations passed by year-end 2025.

• Free cash flow payout ratio is targeted to reach 100% or below by 2026, balancing investment and returns.

• CapEx intensity peaked in 2022, with significant declines expected in 2024 and further reductions in 2025.

• Efficiency improvements, automation, and copper decommissioning are key to reducing costs and capital needs.

• Debt reduction is a priority, with asset sales like Northwestel supporting leverage improvement.

Competitive and regulatory environment

• Pricing in both wireline and wireless is at historic lows, increasing pressure on ARPU and service revenues.

• Fibre is gaining significant market share from cable, especially in wireline, while cable competitors respond with price cuts.

• Regulatory changes, such as third-party internet access, have been factored into capital plans, with future CapEx adjustments dependent on final access rates.

• Market stabilization is expected, but current conditions remain challenging for revenue growth.

Brand strategy and customer segmentation

• Strong progress in the newcomer segment, with clear stratification between prepaid, flanker, and premium brands.

• Bundling and premium brand loading have driven a 23% year-over-year increase in new customers taking multiple services.

• New brands and distribution channels, such as No Name Mobile and Staples, are performing well.

• Store conversions to Best Buy Express are temporarily reducing volumes but expected to recover next year.