BCE Inc (BCE) 2005 Q2 法說會逐字稿

Good morning, ladies and gentlemen. Welcome to the BCE second-quarter results conference call. I would now like to turn the meeting over to Mr. Bernard le Duc.

Good morning, everyone, and thank you for joining us. The purpose of the call is to discuss our second-quarter results. I'm here today with Michael Sabia, our CEO, and Siim Vanaselja, our CFO, as well as Pierre Blouin from Consumer; Isabelle Courville from Enterprise; Karen Sheriff from SMB; Stephen Wetmore from National Markets; and also Kevin Crull, President Consumer Solutions.

As usual, we'd like to take you through the presentation of our results so you can find it on the website after which we'll be happy to take any questions you may have. As always the call is being webcast and the archive will be available on our website.

Just before we get started, it is my role to remind you that today's remarks contain forward-looking statements with respect to items such as revenues, earnings, free cash flow, capital intensity and Galileo savings. There are risks that the actual results will differ materially from those contemplated by the forward-looking statements. For additional information on such risks, please consult BCE's 2004 AAF (ph) dated March 2, 2005 as updated in BCE's 2005 first- and second-quarter MDNAs dated May 3 and August 2, 2005, respectively all of which are filed with the Canadian Security Commission and with the SEC.

These forward-looking statements represent the expectations of BCE and its subsidiaries as of today, August 3, 2005, and accordingly are subject to change after such date. However, we assume no obligation to update or revise any forward-looking status whether as a result of new information, further events or otherwise. With that behind us I'd now like to turn the call over to Michael Sabia.

Thanks, Bernard, and thanks, everyone, for joining us this morning. I think we've had a very busy quarter during which I believe we've accomplished a great deal. At the outset we set out to ramp up our wireless business and indeed to ramp up our other growth businesses both in consumer and in our business markets and I believe that on all those fronts we succeeded. We had almost a record quarter for net ads across all of wireless, video and Internet and at the same time, and very importantly, I believe we've also improved the financial foundations across all of those platforms in terms of programs on cost and the quality of our subscribers.

I think that progress is also clear in our business markets where, over the last few years, we've taken -- the last couple of years I guess -- we've taken a sector that was generally declining and now it's a net contributor to our growth, so very significant progress there. There's no doubt given the amount of progress on the growth side that the kind of acceleration that we've had does put some pressure on our near-term EBITDA performance, but I think we've managed that pretty well holding our margin pretty much constant with good cost management. And I would also say that we're very much on track with a series of planned initiatives to ramp up even more on our cost management in the second half of the year.

Just a couple of quick comments on the labor front where during the quarter and through the month of July we've had some very important, very important accomplishments -- made some very real progress in putting our labor relations on a more realistic footing, a more competitive footing. We had to endure, and it was not easy, a tough 16-week strike at Entourage in Ontario -- no doubt hurt us on service, but we certainly needed to be disciplined in managing that. We were and I'm very pleased now that that strike is over our people are coming back to work; we'll have the backlog that built up during the strike cleaned up by very early September.

And very importantly, we signed what I regard as a landmark agreement with CTEA who represents our call center and clerical folks to better align wages with a very competitive market. That agreement will save us something on the order of about $100 million over the life of the agreement -- so very important progress.

And similarly I think good progress on the three basic pillars of our strategy -- Galileo, bandwidth and next generation services where we're getting good traction. I'll come back to that in a few minutes. At the end of the day if I look back on what we've been doing and look back over the quarter, I think this is really all about pacing the transition from our legacy businesses to our new businesses and we believe -- we're convinced that we made very solid progress in the second quarter and that it will turn out to be a very important milestone in our overall plan for managing that transition. Now that being said, let me be clear on this, no one's declaring victory and certainly not me. We've got a lot of work to do but, again, I do think we've made some pretty solid progress.

Let me turn to wireless. I must say after the last three or so quarters that we've had in wireless it's a pleasure for us to report this one. With billing behind us now we're beginning to demonstrate what this wireless business of ours can do. I think the net adds speak for themselves, up more than 50% -- a 50% step up from second quarter of last year and really I think a complete turnaround from the first quarter, that's what we set out to do and I think we've accomplished that. Best performance in Q2 for the last four years, so pretty good.

At the same time, while we've ramped up on net adds I think we've also made some very solid progress in the underlying value drivers of that business. Relative to what we saw in the first quarter, I think we very much stood the prepaid/postpaid mix on its head; it was important to do and we did it. Seen some improvement in COA and I think that's important because it certainly indicates that in terms of getting to that kind of net add performance we weren't really giving anything away. Much better focus in wireless on high-value high ARPU subscribers, we can elaborate on that if you like. Usage is up, unbundled minutes is up, ARPU is moving in the right direction, up $4 from the first quarter and now recovered to last year's level. We've got more to do on that but we do expect continuing improvement through the remainder of the year as a number of the initiatives that we've already taken or are taking will flow through.

I might add that while we've reinvigorated what's called the core wireless business, I think we're also making some progress with some new thinking trying to drive penetration. One example is what we're doing with 10-4 in the youth market, that's a very large segment, lots of room for growth for all of the players in the wireless industry. And fundamentally we believe that as we continue to take actions to drive penetration that's something that's very good for the industry. So we'll say stay focused on that and on driving the overall profitability of our wireless business.

On video, a very strong quarter. I think the adds speak for themselves -- the gross up 60%, the net's 160%. That reflects many things, but certainly the traction we're getting in our rental program, the improvement we had in programming packages, etc. But just as we did in wireless I think we're also seeing -- and perhaps even greater progress -- in continuing to improve some of the key drivers of the financial performance of our video business, ARPU up $1 over the second quarter of last year, $2 over the first quarter. We've seen that strengthening over the last four or five months. That reflects in part some of the pricing action we've taken and I think some very effective upselling activity in our call centers. So again, we expect to see some continued improvement in that.

I might say that our new customers who are coming in are coming in at an average ARPU that's even higher. So that again I think bodes well for the future. And second, on COA, a big improvement there of about 20% or about $100 per activation, so all of that very helpful to us in driving EBITDA in the quarter and that despite the record activations. I might also say on an operational basis in video I think we're very pleased that we were able to manage and get done the "Smart Card" change-out program that really makes the system very secure against privacy and we were able to get that done and keep our churn levels below 1%. So I think good progress there as well.

On high-speed, really another good quarter following on progress in the first quarter with sales up 42% now from a subscriber perspective, exceeding 2 million overall. We've also seen some pretty good expansion in our value added services, up 100,000 units over Q1. A lot of progress in security that I might say despite Roger's free offer in that area. Home networking, sales of MSN Premium, etc., so a lot of progress on all those fronts. And that obviously, as I said before, is a very important driver of ARPU performance in our DSL business particularly as penetration continues to increase. But overall a nice step up in revenues in the ISP of about 19%.

Let me make a few general comments on our consumer business overall and I do that because it's such an important part of our overall plan to manage this transition that I've talked about between legacy and new businesses in the Company. Now you'll recall a couple of years ago we started talking to you about the importance of multiproduct households and how winning more multiproduct households was really a centerpiece of what we were trying to do -- what we were trying to accomplish in better linking the four basic platforms of our consumer business.

Now based on what we've seen over the last four or five months of cable telephony competition I would say we're even more convinced that this was and is and will be exactly the right focus, exactly the right game plan for the Company going forward. That being said, obviously and realistically, we know that we're going to lose some telephony customers to cable, that's inevitable. We did in the second quarter about 30,000 to video (indiscernible) and there will be more as Rogers enters the market. But I think it's also important to recognize that we've also gained about 260,000 subscribers in our growth businesses over the same period.

Now that's important first because it provides a really essential counterweight to erosion to cable and that counterweight and the size of it contributes very significantly to our overall financial performance and puts us on a better trajectory to manage that transition. And second, that kind of subscriber growth obviously ramps up our multiproduct household. Let me talk about that a little bit.

With respect to those multiproduct households, our objective basically is threefold. One, to maintain the very best customers we can. Two, to increase their loyalty. And three, to do it in the most cost-effective manner. With respect to that I think there's three important insights that we've gained from the experience of cable competition so far. First, a household that's a multiproduct household is three times less likely to switch to cable. Obviously that's good news for us and it validates the basic strategy that we've had in place for some time. Second, it's the multiproduct nature that drives the loyalty of the customer and I say that to draw a distinction between a multiproduct household and a broadbase bundled discount.

So that distinction and this is an extension of the thinking that we started to share with you on the first-quarter call -- that distinction opens the door for us to be much more surgical and much more targeted in how we use discounts and that in turn opens the door for us to get better ROI and better use out of our marketing dollars. Third, and importantly, loyalty increases significantly with just one extra service. Obviously it's better and we're going to stay focused on this -- it's better if our customers have three or four services. But it is here that the propensity is switched, it's markedly lower with just one additional product. So the payback -- if I can put it this way -- is greater at taking a customer from one to two products than from three to four.

So what does that mean for us as we go forward? Well, we'll be continuing to intensify our focus, yes, on moving to three-plus households, but especially two-plus households. At the end of Q2 we had about 1.27 million customers taking three or more services and about 57% of our total base in Ontario and Québec had two or more and hence should be a little less vulnerable. So we'll be continuing to work to increase these numbers with a lot of emphasis on targeted promotions for key segments and with also some incremental geographic differentiation. And as I mentioned on the first quarter call, there will be -- and I think you've seen us take some actions on this already -- there will be less emphasis on large mass market bundled discount.

Now they served their purpose and they helped us drive our initial effort, but with the insights that we've gained from a very interesting period of the initial period of competing with cable telephony I think we do have now a more sophisticated set of tactics to both maximize retention and to improve our overall return.

Let me quickly turn to business markets just for a couple of minutes. I think good progress there in moving this overall business from traditional connectivity to IP and higher value added IPT services. These new growing areas of the business now represent about 47% of our total business revenues and that's up from 39% this time last year. Growth in value added services was obviously a big driver of that change. And increasingly, and I'm glad to see this, more and more third-party recognition of the work of our enterprise group in really establishing itself as the clear leader on IP and IPVPN and IPVPN in particular as the work horse of the IP world. That's important.

And we've also seen across our business markets very good discipline on cost, in operations and in our ISIT department both of which obviously support business markets. A very important contribution there as it affects the business markets with costs improving about 16%. Small and medium business we saw a very, very important 14% improvement in our total cost in call centers, especially in back-office operations. All of that contributing to a very solid 5% EBITDA improvement on 4% revenue growth. And that notwithstanding the margin pressures associated with value-added services and IP growth.

So overall in the business market, given the chronic decline that we had been experiencing in business a few years ago, I think a lot of progress that we've made on building our capabilities, on new services and just generally in the rigor that we have in managing that part of the business. BGM and Telesat, both very strong quarters. The BGM story hasn't changed, continues to be the rating strength of the CTV schedule and how that's driving advertising performance. At Telesat began to see the impact of Anik F2 and Telesat's growing presence in the U.S. markets, so all of that I think is very solid.

Now we said that we'd update you twice a year on the progress that we're making on the three fundamental pillars of the strategy, as I mentioned at the outset -- Galileo, bandwidth and next gen services. So let me just very briefly finish up with a few comments on that. And I guess my first comment on that is we can't really begin to do justice to the breadth of what we're doing in these areas on a call as short as this particularly given that we'd like to leave lots of time for your questions. We've tried to put a lot of information on the slide that you have, but beyond that I encourage you to follow up from this discussion this morning with our IR people if you want to gain further insight into all of this.

So just a few comments, first on Galileo. As we think about it there's two categories here. First, service and second, cost. I'll take those in order. On service or, more broadly, the customer experience, there's no doubt, as I mentioned earlier and to state the obvious, that wireless billing and certainly more recently the Entourage strike has clearly presented us with some challenges over the last eight or ten months -- wireless earlier and then Entourage more recently. Both of those now pretty much behind us, but through that period we looked through some of the than tried to look through to the fundamentals. Again I think pretty good progress.

We are focusing very intensively for obvious reasons on multiproduct customers, they're strategically very important for us as I've mentioned, and we're building I think and making good progress in building some new and important capabilities to support that strategy and to enable customers to get issues resolved quickly. We're doing that in our call centers, in our stores, doing it in even how we deploy our technicians, taking initiatives like launching our Privilege Program in consumers. It seems to be getting a lot of traction and very positive customer satisfaction response and our service promise program in enterprise which is having very significant impact in that segment as well.

Both have done things like launch what we call a want it done program -- that's really all about eliminating rework and waste; in a sense it's a different name for a Six Sigma kind of effort. Why is that important? It's important because rework just increases costs and frustrates customers. So we're working -- focusing very hard on that, focusing on a limited number of key metrics like first order resolution and first call resolution which, based on our customer research, are the two things -- are two of the things at least that really matter to customers. I think that work is having an impact.

Royalty and enterprise, for instance, is up 6%; small and medium business First Call resolution is up 5 %age points; average handle time is now 7%. So good progress there. The second part of Galileo was cost. In the quarter we reported savings for the first half of just under $250 million so far. A major piece of that is the result of downsizing -- Siim can elaborate on this or we can talk about it in the Q&A, but about 160 million so far net savings there, about 130 the net being the difference in what we've had to do with respect to managing through the Entourage strike and some of the temporary backfill that we talked to you about last year when we talked to you about the downsizing itself. But that kind of volume of savings overall will benefit us throughout the year and that's especially so as some of the transitional or temporary things we had to put in place to manage from last year's downsizing begins to wind down.

I think a key point here that I would like to emphasize, though, is that given the work we've been doing we're now ready to roll out two or three very major initiatives that will help us on the cost side in the second half of the year. We're ready and will begin rolling out now a new consolidated One-Bill that over time will save us about 3.5 million bills a month. That change has the potential when it's fully implemented -- it will take us a while to do that -- to save us something on the order of about $100 million.

We're working on the roll out in the fall of a completely different, radically simpler, much more powerful bell.ca as a Web interface for our customers. There's the potential there for very significant COA savings. And we're rolling out a single order entry tool in our call centers that will significantly enhance call center efficiency and improve service. So on all those fronts we feel pretty good about the progress that we're making on the cost side of the business.

On broadband, I'll be very brief especially on fiber to the node, I think pretty good progress. We're making a few adjustments in the roll out plans for that, but nothing that has really a major impact on the program overall. We can talk a little bit more about that in the Q&A if you'd like. Mike just mentioned we're very pleased to get a small acquisition done, VDN, in the Montreal market that will give us very, very cost-effective access and a potentially very, very interesting platform for the penetration of MDU's in Montreal on a, as I say, very cost effective basis.

Next gen services, very much on track. With the planned evolution that we have and the revenue base of the Company I think we've got a pretty good change, a reasonable chance of exceeding our 45% target for the year. Right now we're at 44, we'll see how that goes. I might say with respect to that that the lion's share of that is coming more from expansion in our growth or new businesses rather than by a decline in our legacy businesses.

All that being said, there's no doubt we continue to face some very real challenges, very large undertaking what we're trying to doing and we have a long way to go. But we do believe that the operating progress we're making is sound and you've seen some of the progress reflected in some of the operating statistics that we've reported today. Now, with all that progress on operating systems, on financial tools, on new processes and procedures inside the Company, we believe that we're building a much more solid foundation for this business and for the future of this business.

Now importantly, that progress and that stabilization of the core business and now I think the advancement of the core business -- very importantly I think that opens the door for us to begin to move on some other priorities. As those foundations are being put into place, coming into place, I think we can now turn more in a very focused way to addressing the asset structure of the Company to do a couple of things. First to reinforce our overall strategy; and second to service value.

We've had a great deal of work underway across a range of opportunities in this area and I think we've made, and are continuing to make, quite solid progress. So on that basis our outlook, our plans for the coming months, the coming number of months certainly include taking some actions in this area. And as our work progresses over that period I look forward to getting these launched and to be able to talk to you about them, as I say, over the coming months. So with that I'll stop, apologize for the length of my comments and turn to Siim.

Thanks, Mike. Good morning, everyone, and thanks for joining our call. On our overall financial performance this quarter, DCE posted quite solid results I would say, with 4.2% revenue growth and 2.5% EBITDA growth. As I indicated on the first-quarter call, we did see a moderation in Bell's EBITDA growth rate relative to the first quarter, and that was the result of the higher subscriber acquisition expense that we incurred. Had additions in our growth services been at the same levels as last year, EBITDA growth would have been over 2% points higher in the second quarter. While these subscriber additions slowed EBITDA growth this quarter, the increased customer base will be a strong contributor to our revenue growth going forward.

Our local access revenues declined by 2.4%, stemming from NAS erosion of 1.8% in the quarter. This represents a higher rate of year-over-year decline than we have seen at Bell in previous quarters. However, the biggest component of that NAS loss, over 50% of the decline, was attributable to seasonality, particularly student disconnects in the second quarter at the end of the school year and the residential moves in Québec, which are heaviest on June 30th. We are seeing some higher NAS loss levels stemming from cable telephony competition, and Smart Touch service revenues also declined at a slightly accelerated pace, reflecting reductions by more feature-rich customers.

On the other hand, long distance revenue declines held relatively steady over the past few quarters. We estimate that our in-region LD market share remain more or less at the same level as last year. The LD revenue decline reflects market pricing pressures in the consumer long distance segment and pricing and volume pressures in the business segment. On the growth side, we are quite pleased with our success in driving revenue growth back into double digits, while reducing year-over-year COA rates. Growth services now represent about 44% of Bell Canada's total revenues, which is up from 41% at the beginning of the year. So I think we are on track to meet our target of 55% by year-end 2006.

You'll see on the chart that data revenue growth of 11% -- that was the highest level since the first quarter of 2002 -- reflecting growth in high-speed Internet, business FAS and IP-based services. Much of this growth was attributable to some of the tuck-in acquisitions that we have made over the past year or more to enhance our capabilities in systems, storage, BPO services, and other areas. Organic growth was impacted in the quarter by lower year-over-year construction revenues from the Alberta SuperNet project and from the impact of the CDM regulatory decision in February. That decision, if you recall, expanded the number of service components care of that cost plus 15% markup and that had an overall impact for the quarter of approximately $18 million in revenue loss. Given the contribution from acquisitions in the quarter, we would not expect to see data revenues sustained at the double-digit growth rate going into the second half of the year.

Turning to our earnings story, for the quarter we posted EPS before net gains on investments and restructuring charges of $0.58, that's up about 5.5% from the $0.55 we achieved last year. The main contributors to EPS growth are summarized on the slide. EBITDA growth itself contributed 3% of earnings and that's after about another $0.03 of EPS impact from the higher year-over-year COA expense. Pension costs continue to impact on our year-over-year earnings growth in the amount of about $0.03 this quarter; that is consistent with our guidance. The pressure from higher pension and amortization expense was offset this quarter, however, by net income tax savings from the loss -- tax loss monetization program which we implemented between Bell Canada and BCI and that contributed $0.04 of EPS. You should also know that we expect to see about another $0.02 of EPS gain from that loss monetization program in the third quarter and then that will conclude the earnings benefits from the program.

With that let me turn to how we're progressing on our cost savings target and the impact that it had on our EBITDA. The cost savings of 122 million we achieved this quarter were at a comparable level to what we achieved in the first quarter. These gains reflect savings related to the employee reduction plans that we executed in the fourth quarter of last year as well as savings in hardware procurement costs, costs in sales and marketing. About 55% of the total cost reduction was realized in the consumer segment and 45% in the business segment.

Despite these cost savings, Bell's EBITDA growth was limited to 1% as a result of over $100 million of pressures on EBITDA. And as I said, the biggest cost pressure was from the volume impact of higher subscriber growth on COA expense which increased by approximately $46 million year-over-year. And there was also a $20 million negative impact on EBITDA resulting from the CDM repricing decision. It's worth noting I think that we are seeing healthy gains in EBITDA from our growth services which in the quarter adds about $85 million of EBITDA. These gains are coming close to offsetting the loss from the erosion of our higher margin legacy services.

As you can see on the chart, the overall net effect in the quarter of this legacy growth product mix change is about 25 million negative, that's before taking into account the benefits of the cost reduction programs which more than offset that mix change. Through this transition we expect EBITDA margins to continue to be maintained. This quarter Bell's EBITDA margins experienced only a very slight decline which I'd attributed to the higher level of customer acquisition costs. With this quarter's savings we've now realized 242 million in targeted savings on a year-to-date basis and we expect that with headcounts and other cost savings achieved so far this year, which will continue into the second half, and those will obviously be augmented by increased savings from our consumer and business Galileo initiatives which are just starting to roll out as well as from reduced reliance on temporary backfilling as we transition our operations and service processes.

Turning to the next slide, free cash flow this quarter was $138 million, up from free cash flow of 64 million in the second quarter of last year. The improvement was driven by an increase in EBITDA of 48 million in the quarter and strong improvement in working capital. The most significant component of the working capital improvement was a reduction in year-over-year accounts receivable balances, particularly our wireless business which saw receivables return to normal levels after the completion of our billing system immigration. And offsetting these gains were higher capital expenditures in the amount of about $88 million and a further $57 million of higher dividends and payments related to the employee departure programs in the first quarter at Bell Canada and at Aliant.

On a year-to-date basis free cash flow stands at -24 million. As I discussed on the first-quarter call, there are several significant payments that we made during the first quarter which curtailed free cash flow including 150 million for restructuring and pension plan pop-ups and another 200 million in final income tax installments for the 2004 year. The second-quarter performance which saw cash flow from operating activities actually increase by about 325 million shows good strength which we believe will continue through the second half of the year.

With respect to capital expenditures, the increase this quarter over last year reflects higher spending on our key projects. Also in fact, about 60% of our CapEx spending was for key programs such as Galileo, fiber to the node and wireless EVDO bringing our year-to-date spending closer to 50% of our full 2005 CapEx program as compared to only about 43% of our total spending having been incurred this time last year. So while free cash flows for the first half of the year were impacted by large and special payments and a more significant portion of spending on capital programs relative to last year, going forward we should benefit from significant cash improvement with continued EBITDA contribution and strong cash flow from operations, a more balanced pace of capital spending and much more lower pension tax and restructuring payments. So overall we remain well positioned to achieve our free cash flow target for the 2005 year of $700 to $900 million.

Lastly, in terms of our priorities and our outlook for the balance of the year, our business units will continue to execute on their operating plans with an emphasis, as Michael said, on capturing more multiproduct households to meet the competition from cable telephony and we'll maintain momentum in the growth of value added services within the business segment. We're on course with our strategic initiatives to enhance customer experience, to expand bandwidth and to build next generation service growth. Driving these priorities will reward us with stronger growth, a more efficient cost structure and expanded reach and speed in broadband and wireless service applications. And as Michael mentioned, we've also turned our focus to address the asset structure of the Company.

So given the good progress across the board in the first half of the year, I can confirm that there's no changes to our financial guidance. We do expect continued momentum in our consumer growth business through the third quarter and into the fourth quarter which is always the key quarter for subscriber additions. Now relatedly, we do expect some continuation of high year-over-year levels of COA expense into the second half. That being said however, our expectations for revenue growth, cost savings, EPS, free cash flow and capital intensity remain summarized on the table in the last slide. So with that I'll turn the call back to you, Bernard.

Thank you, Siim. We'd like now to move to the Q&A portion of the call. Before we do that I would just apologize for those of you who had trouble getting on the call. I understand there were some problems with the queue. Our conferencing people tell us there was an unusually high number of calls actually starting at 8 AM this morning and an unusually high number of participants. So I do apologize to those of you had trouble getting on. Anyway, let's move to Q&A. Operator, could you please remind us of the procedure?

(OPERATOR INSTRUCTIONS). Simon Flannery, Morgan Stanley.

Good morning. Question was around the video deployment and in particular on IPTV. We've heard some stories out of SDC, out of Telstra Swiss calling about delays around some of the software, about some of the set-top boxes. Could you give us a sense of where you're standing in terms of your timeline for getting delivery and starting to deploy some of those services over the next few quarters? Thanks a lot.

The news that you've seen from some of the other companies, in fact most of them on what you've seen are coming back to our plan -- our deployment plan that we've announced to you a little while ago. So on our side it's still in the lab, it's working fine, we're working closely with Microsoft. You heard Michael talk about our CDM deployment which is key into our deployment of IPTV. So good progress there. And we're still working on the same path here and working closely as well with some of the RBOCs in the U.S. that are working on IPTV as well and are on the same path as what we've announced before.

Okay, thank you.

Rob Goff, Haywood.

My question will be for Siim. Could you dive a little bit deeper into the data numbers and the business revenue numbers in terms of the reported 11% data revenue growth and the 4% business revenue growth to give us an idea of what the underlying growth would be once one strips out the impact of acquisitions? Thank you.

It's a little bit tricky to split out the impacts of the acquisitions. Some of those were made well into last year and we are clearly benefiting from the Bell customer base being able to more broadly deploy those. I think if we look at the second quarter and data growth would largely have been something slightly in excess of 1% if you exclude those acquisitions. But as I say, a number of the TV acquisitions are clearly benefiting from the customer presence that Bell brings. I think that's a conservative number.

Would that 1% number make adjustment for the decline in SuperNet and the CG&A to get the underlying number or not?

No, that is just the number adjusted for acquisitions.

So it's easing the other? Okay.

Yes.

Thank you.

Greg MacDonald, National Bank Financial.

Good morning. Michael, you mentioned earlier on in your comments the benefits of multiproduct households and I wonder if you could give us just a little more color on that in this respect, you mentioned up to three times more loyalty. Could you give us a sense of how you measure that? Can you give us a churn reference on that if possible? And I'm interested, are you seeing primarily an AccessLine plus ADSL as being your major uptick or is that now shifting more to television? I wonder where you focus -- I know your answer is going to be both, but I wonder where you focus on that and where you're getting your best benefit in terms of upselling one product.

And then secondly, as a related question to that, on DSL for the business side, one of the things that telcos have that cable companies don't necessarily have is the possibility or the prospect for DSL growth in small and medium businesses. Could you give us a sense of what the mix is in the subscriber growth that you have between consumer and business? That would be helpful. Thanks.

A quick comment from me and then I'll turn the question on multiproduct to Kevin and then I'll ask Karen to comment briefly on FMB and what we're doing there. What we're finding, but it's very early days, so I think we all -- we are certainly being cautious about it, but it's very early days -- that the products that seem to significantly enhance the ability to retain customers or their inclination do remain with us is DSL but also video. Both of those two seem to create a lot of incremental customer retention.

That's a bit of a wait and see conclusion, Greg, because as we enter into a telephony much more to a competitive market for residential telephony with the entry of Rogers in Ontario. Rogers having wireless capability as well. We're a little bit not coming to any final conclusions with respect to the role of wireless yet because we've been competing with a competitor that doesn't really have a wireless offering. Rogers does and therefore we'll suspend judgment on the role of wireless until we see a little bit more of that through the next number of many months. But so far we see DSL and video being very powerful. With respect to incremental loyalty, etc., Kevin, do you want to comment?

Greg, this is Kevin Crull. On the three times measure that you talked about, this is an actual look at the footprint where we have the cable facilities based competition and we index our losses to look at an average loss across the entire footprint where they are and then we look at various profiles of different customers and that's where we see the three times improvement of customers that have this multiproduct association with us. I would emphasize something that Michael said earlier that it's really the move into a multiproduct relationship and particularly today with DSL or video where we see the greatest leap.

And if you think about how we think about spending our marketing dollars and the ROI there, the amount of the return of those marketing dollars that are attributable to a wireline retention can vary a great deal whenever you go from one product to two products versus three to four in just that retention return. So our efforts are now all about optimizing that spend so that we can compete uniquely against different competitors, in different geographies and the things that we have done in the quarter with our $5 LD and what we've talked about with our bundling strategy changes are geared towards that. But also towards really driving the growth product ARPU and the household ARPU as a result of these focuses.

I'll talk about DSL. We do have a great opportunity to help drive DSL. About 15% of the net adds in the quarter were from the business side of the house. So we have about 5% of the customers. But proportionately a very high share of the growth to and that's improving as time goes on.

You said, Karen, that was 5% of total customers now, our business customers?

5%, 6%, 7%; it's somewhere in the very low mid single digits, 5% to 6%.

That's interesting, Karen. Do you have an estimate of what you think the market size is?

The market for --?

For DSL within the business customer base. Because my impression has always been that small, medium business are still fairly low penetrated in terms of DSL.

They have been. Very significant growth over the last couple of years. A couple of years ago very low awareness, very low recognition that they want DSL. That's changing dramatically right now and we're at about a third of our customers are on business DSL in just SMB. So very strong growth over the last couple years and we see that continuing to be that hot for another couple years.

Do you have an idea of what the total penetration is, what %age of your small/medium business guys are with other DSL providers?

I can't give you accurate share numbers, but we are assuming that we're gaining some share.

That's helpful. Thank you very much.

Vince Valentini, TD Newcrest.

Siim, a couple questions on the guidance. First, on the EPS, can you just clarify that the $0.06 of Bell Canada Int'l (indiscernible) is still part of your single digit EPS guidance because that alone would achieve your guidance because it's about 3% versus last year? And secondly, on Galileo, your ramp from Q1 to Q2 was reasonably small, 120 million up to 122 million. Did I hear you say thought that there's about 30 million of net backs from over time and strike costs related to Entourage? If so, can you just clarify how that impacted Q2 versus Q1 so we can get a better sense of what the underlying ramp was excluding those costs?

First, with respect to the EPS guidance, the BCI (indiscernible) loss monetization is part of our overall guidance. With that benefit in there we expect to be in the single digit EPS growth. With regard to Galileo, as I said, there's some considerable backfill which I think on a year-to-date basis is about $30 to $40 million and that will be coming down significantly over the course of the second half of the year.

But was that amount more material in the second quarter when the Entourage strike was ongoing than it was in the first quarter?

Yes, the Entourage strike added approximately $15 to $20 million of costs to our EBITDA.

So that was a drag on the 122 of Galileo savings in the second quarter?

Yes, it was.

Okay, thanks.

Jonathan Allen, RBC Capital Markets.

Michael or Kevin, I was hoping we could flesh out the multiproduct offers a little bit more because I think it is an important area to focus on. First, you said 57% of customers are now taking two or more products. Could you give us a figure either last quarter or a comparable one a year ago to where that was? And further, could you expand on how you actually plan to increase the number of multiservice bundles without using the promotions and bundle discounts of the past? What sort of targeted promotions do you plan to use going forward?

Jonathan, I would just say that the growth that we saw in subscriber activations across all of the growth products were largely due to focused and targeted a la carte promotions that were geared towards serving specific segments. And I would just emphasize what Michael said earlier that if we increase the multiproduct relationship through those a la carte sales and we find that the retentive benefit of those multiproduct households is equal whether they have actually received this tactic of discounting or not.

And so obviously, given that that's the case, we're focused on promotions and activities with the individual growth products that drive them. Now having said that, the competitive environment varies across our region, as you know, and so we will look to various efforts that are either a bundle type promotion or a specific a la carte promotion that are geared towards that unique competitive environment.

How do you make those targeted promotions? Do you just go to individual customers and customize it, or do you do it more on a geographic basis? Can you give us an example of one of those promotions that you would be using?

I would say both, Jonathan. I'd say that certainly we can tailor things geographically even in our mass marketing, but certainly through direct marketing we can be a lot more sophisticated in how we reach segments. And in our channels, I've been very impressed with the tools that we have in our call center channels and in our retail centers in order to identify specific segments and then tailor the promotions accordingly.

And could you actually give us an example of one of those promotions that you've been using?

In the second quarter you saw that on mobility we had a unique rate plan in the Québec market that was targeted towards long distance usage in the Québec market and it was unique only to that. We also had a video promotion that was unique in even more targeted ways to certain areas of Québec.

And those would only be available for bundled customers, is that right?

No. I mean, those were each a la carte growth product promotions that, as I said earlier, when the customer purchased them they increased our multiproduct relationships.

Okay. But they're being offered a la carte and not actually focused on improving multiservice products?

The answer is yes to both of those. They are focused on increasing multiservice relationships. Don't get confused by the word bundle meaning only the $5 discount which we have used tactically to increase multiproduct relationships. Again a household that purchases multiple products from us, we're seeing that retentive benefit.

That's an important distinction. And just to follow-up on that first question. Do you have a comparable 57% figure for us either from a prior quarter or year ago?

Yes, I'd say if you went back about a year ago, then that 57% number that we use today, that would represent something on the order of about 5 percentage points or perhaps a bit more of improvement from a year ago.

Okay, great. Thanks very much.

Glen Campbell, Merrill Lynch.

Good morning. The end of the $5 long distance plan, could you give us a sense of what the long distance revenue decline would have been in the quarter had the plan not been in place?

Actually we didn't see, because of the timing of that move in the second quarter, I don't think that you see any material impact in the second quarter as a result of that. Am I answering your question, Glenn?

I'm thinking more had the plan not existed at all.

I don't think that we have that broken out.

We haven't calculated it.

Okay, maybe I'll try a different one if I might. The local customers you are losing to cable, could you talk a little bit about the profile of those customers? You said hopefully that these are typically not multiproduct customers, but are these typically customers taking one, two or three features? Are they typically your own long distance customers or somebody else's? What sort of ARPU impact should we be modeling in for customers being lost?

I'd say that generally, Glen, that you're seeing lower average spend on long distance and lower penetration of STS in the customers that we are losing. So generally lower value customers and then I'll just emphasize that they are overwhelmingly single product households with us and not multiproduct.

To clarify on the LD though, are they any more or less likely to be your long distance customers than a competitors at the time that they leave?

When we look at the average, I'm not sure that I've looked at it as far as whose customers they are, but the average spend with those customers that we're losing is less than our base as a whole. I think you would conclude that, yes, there are competitor LD customers that are in there and they're leaving.

Okay, thanks very much.

Peter Rhamey, BMO Nesbitt Burns.

Good morning. Michael, you mentioned briefly some of the alternatives you're looking at in terms of asset optimization. I was wondering if you could clarify what exactly you meant from that and as well perhaps take it down to if you're thinking of asset sales, etc., wouldn't that be for cash or would it be taking something public and try to benchmark a value creation through the value that you get in such an exercise? Thank you.

Peter, thanks for the question. What I'll say on this, and I'm sure you'll understand why. I reiterate what I said during my earlier comments. We've a game plan in place for the Company for some time and once we address the immediate issues that we faced in refinancing the Company couple of years ago the focus shifted to a lot of work -- internal work that you're beginning to see the benefits and the dividends from now as we have a much more solid foundation for ramping up some of the growth aspects of the business and therefore far better managing the inevitable transition that we face from our legacy services to our growth services.

That's now progressing and with the progress made there my point here is that that in a sense opens another sort of chapter or subchapter of the Company's agenda overall and in that chapter is a lot of focus on what I'll describe as an asset structure. By that I mean the composition of the asset base of the Company, how we participate in those assets, the restructuring of some partnerships or relationships that we may have. All of that designed to either further the strategy and the surface value, as I said.

We're looking at a whole bunch of things -- a pretty wide spectrum of opportunities that we see that work is moving along well. And that work, having moved along well across that range of opportunities, gives me the confidence this morning to say to you that those are areas where we believe that we can now look to take action on in the period that I've described as the coming months.

So I think you should conclude from that the across a range of opportunities our progress is good and our confidence level is growing with respect to our ability to execute that. We think that that is an important further step in the evolution of the Company and we'll again, as we have been, in sticking to the knitting and focusing on the internal operations and repositioning the Company through changes in the internal operations of the Company, this will then add another step forward in building a really solid foundation for this business to perform well for the years ahead.

As to what exactly -- what shape that will take, exactly what those assets are, how we will structure that, etc., obviously I'm not going to comment further on that because I certainly want you to stay interested in what we're doing. So I guess I'd say on that patience is a virtue and coming months is just that, coming months. And we'll have more to say and lots more discussions to have with you with respect to that when we get there.

We look forward to it, but just a quick question. I think, Siim, last time you indicated from a balance sheet point of view you were fairly happy with the capital structure of the Company in terms of leverage -- obviously you'd like a higher rating but nonetheless you were happy. So to what extent when you look at any potential moves would you focus on in getting cash in the door, Michael, and getting that cash back to shareholders?

Peter, I don't think we're going to answer that specifically with respect to any plans that we're contemplating other than to say that we continue to focus on opportunities for surfacing value, rewarding common shareholders, looking for opportunities to reinvest in the Company and continuing to maintain and improve our overall balance sheet and credit profile which is obviously important to the rating agencies and the debt holders of the Company as well. We will look to balance all of those objectives in an appropriate manner once we define the transactions more specifically.

And Siim, did I misquote you as saying that you're pretty well happy with the capital structure of the Company or you'd like to see further deleveraging?

I'd say that the balance sheet is in pretty good form, supported by a strong cash flow. I think we've got good operating discipline and cost reduction initiatives in place at this time. The rating agencies I would say are focused on the free cash flow position of the Company relative to the overall debt level. You saw the actions taken by Moody's, S&P and DBRS with regard to our outlook. That's the key metric I think that we're going to need to focus on in order to maintain our levels at the current level.

Thank you very much.

Peter MacDonald, JMP Securities.

Just a little bit more on the loyalty programs. Are you implying that we should be expecting potential price increases or reductions in discounts for new loads as well as existing customers on existing loans? As well, when you talk about your targeted promotions, should we expect that the general ARPU will remain flat as you react to certain competitors or is there a potential that ARPU can go up here?

Peter, on the discounting of bundles question, yes, it is accurate to assume that going forward there will be less discounting in that direction. As far as the base of customers, there's not any announcement but we would expect to grandfather those customers that we've made commitments to for the period at that time that they're in that commitment on the bundle discount. We are very, very focused on ARPU at an individual product level and at a household level.

We think it is a key driver of the financial performance of the business and so therefore that comes in a variety of flavors. It comes in the types of customers that we're targeting and acquiring, the kind of plans that we introduced and how we promote those plans. It does come into the discounting that we do or don't do and also pricing actions. We have a great deal of pricing actions in particular in our mobility business that have contributed but mostly will contribute as we move forward into Q3 and Q4 to the ARPU of those customers.

Just to clarify, when you talked about the targeted promotions, would you use them as more of a promotion type of thing where you would go back to a normalized pricing and so we might be some pricing pressure in the beginning, but overall there's a chance that your pricing per customer per service could go up?

I would say that we are testing a lot of things. One of the disciplines that we have introduced over the last four or five months is the capability and the commitment to trial things before we take them broadly to market. And so I'd say we're looking at all of the above. In general I like promotions that are geared towards onetime incentives as opposed to annuities with the customer. So we will be trialing a lot of things to achieve our results in that way.

Okay, thank you.

Dvai Ghose, CIBC.

If I can follow up on the pricing question specifically as well. Videotron obviously is a bit of a challenge for you, a 2.4% decline year-over-year in residential access lines which I think takes account of seasonality because it's year-over-year. Is there anything specific that you're planning for the Québec market in retaliation? You've seen discount price at DSL from the RBOCs in the U.S., why wouldn't you pursue something like that when cable modems is the high margin product for the cable industry, DSL is a relatively low margin product for the telcos?

Also specifically on the Rogers bundles, they've increased -- well, they've reduced the discount to 5%, 10% and 15% tiers. I'm wondering how you'd feel about that sort of pricing and whether you would look to capture some of that in your new bundle pricing. And last but not least, I do have to ask you about your new Solo pricing. Given that your post-paid ARPU is still down 1.6% year-over-year or $1 on a monthly basis, I for the life of me can't understand why you have a price plan which doesn't charge incrementally for wireless data to the segment which probably most uses wireless data, i.e. the youth market?

Lots of questions there. Let's just try to take this a piece at a time. I'm going to make a couple of general comments, and then with respect to Québec I will turn to Pierre and Kevin as well to talk about some of those things. And either you, Pierre, or Kevin on Solo. First, let me just say make one important tonal, I guess, sort of comment which is you used a very powerful word, Dvai, which is not really the way we think about it. We're not really thinking about retaliation, quote-quote-quote, with respect to Québec. What we're -- our whole game plan there is to try and move the industry overall to more rational pricing than we are seeing in the Québec market today. And we have tried some things. We will continue to do other things to try to build a stronger pricing environment in Québec, which we think is much more in the long run interest of the built customers and the industry here. You have seen, Dvai, our acquisition of VDN, which is an important acquisition. It is not a large acquisition, but it is an important acquisition in terms of the platform capability that it gives us, the cost-effectiveness with which we can penetrate the MDU market, and our management of that asset will be a contributor, we hope, to the restoration of a more rational pricing environment in the Québec market. That's on that.

Second, and my final comment, with respect to -- and Pierre and Kevin can elaborate on this, but with respect to Rogers, I think in different ways because our focus as Kevin and I have described today is evolving with respect to the pursuit of our overall multiproduct strategy; that while we will do it in different ways, certainly directionally we would propose and think to be directionally consistent with the move that Rogers has made, although you will see it in different forms and different formats given the different tactics that we are now adopting with respect to multiproduct household. And actually that was longer than I expected it to be, so I apologize for that. Pierre, do you want to --?

Yes. I won't add much on the Québec side, other than we are treating each market to try to win in them. Clearly, as you have said, we are facing some real aggressive pricing in Québec in certain product lines. The interesting thing, though, is facing that with the current tactic that we have in the market and the more rational pricing. If you look at our results and the shares that we think we are gaining, I think we are improving the strength of this brand and the products and services that we are putting and customers still coming in large numbers to us. But no doubt, it is an aggressive pricing strategy that we're facing.

Now, on Solo before I pass it to Kevin on the Rogers bundle and pricing. I guess there, Dvai, there is a few things. First, Solo, we are quite excited about the product. We are quite excited about the reaction that it's having and what we have seen in focus group with you on that product. Now, in terms of the data pricing, I have to say I disagree with you. The $1 a day charge more than compensate for any revenue and any possible revenue than we may have, at least in today's time, from text messages, users. When we look at the users that we have on text messaging charging $1 a day for that service, just at four (ph), does enable us to make an interesting gain on it.

Now, if you haven't done so, you should take a look at what Boost is doing in California, which has a very similar product in the rate plan, and the type of ARPU that they are generating with that product, both on postpaid and prepaid. I think it shows the direction that we are trying to get to, and it shows the contribution that that product can give mobility. Now, text messaging and data clearly on the wireless a huge growth opportunity. Text messaging grows fast. It is still small, though, but also as usual we have increased from $0.10 to $0.15 a minute the text messages price that we are charging throughout mobility. So we are following rational pricing number opinion. We are excited about the product, and from what we have seen in other markets and focus group and surveys, this new offer that we have in new product total in the market will be an exciting one and will contribute to the business and grow the ARPU.

I have nothing to add. I think Michael covered it.

Specifically on discount pricing DSL in Québec, why wouldn't you do it?

Why wouldn't we discount further?

Well, discount price DSL as you have seen what the RBOCs do in the U.S., in particular in the face of stiff cable competition, given that it is a relatively low margin product for you, it is a relatively high margin product for the cable co, and given that it is a foundation for their voice platform, why wouldn't you do $15 DSL?

Let me start first by, I think we're facing very different situation in the market and very different position versus cable and penetration as well. Our penetration is further than the U.S. Contrary to the RBOC, we have made very strong progress versus cable and in the market still winning. We don't feel we have to go there, at least right now, that we have to go to that discounted pricing. We're still getting a whole lot of customers, very highly penetrated, and getting a larger share of the market than cable. So, we don't think that strategy right now is necessary.

Okay, thanks.

Jeffrey Fan, UBS.

Good morning. I want to ask a couple of questions regarding Galileo, particularly on the business side. In your slide you talked about rationalization of about 22 products. I think this was at 19 about six months ago. Can you just talk a little bit about how far along you are on product rationalization and what is the total number you hope to achieve by the end of '06? Then on the data side, I think you disclosed at the end of last year about 1500 legacy data circuits that you have migrated to IP. Can you tell us where that number is today? Thanks.

Yes, we're making progress on all fronts. You've covered almost them all, so I'll cover the third one. With voiceover IP (technical difficulty). On the migration, we are seeing a tremendous (technical difficulty) in the market. We have got -- the number is pretty big. It is 10,000 lines in discussion and signature process, and we have got 2000 lines in implementation mode as we speak during the quarter. So the numbers are quite important and are well ahead of them. Everything we have set for ourselves as the migration to IP on the data side is going. We've got interesting customer, from all sorts of vertical and diversity of Toronto, Pepsi from the retail, Jean Coutu in Québec which is an important retailer with 300 (indiscernible), and we are implementing as well. Customer that we have announced before like BMO and Bank of Montreal and Manulife, those implementations are year or year and a half long, and we're continuing to implement. So on the data side huge progress.

On the voice side, especially the CPE, very good progress as well; 40,000 lines in the (technical difficulty). So we will reach 250, maybe close to 275,000 lines by year-end, which is a huge ramp-up, (technical difficulty) over year. So that is the market. And you had some question about the simplification aspect of Galileo as well, which is as essential as moving customer to IP. At the same time we need to retire product and (technical difficulty). The numbers you are recording are right. What is important to understand there is on the data side, it is all about migrating. And when we are migrating customer after that, we are retiring platform. On the voice side it is all about simplification. So we are standardizing on a very few products and letting go the other product and platform.

So we had a ramp-up in number of product, and as we call that new stock over the last years. And now we are just looking at that again in a huge effort of simplifying everything; product, platform, even contract as well to merge everything on one unique contract and when it is possible for (technical difficulty), that is the effort we are making. (technical difficulty) the important year-over-year group on EBITDA in the business market that is 5%, which is greater than the revenue growth, and you see that because of this work on the cost base on the legacy side in particular.

So what was the number of products you want to rationalize by the end of '06?

Well, the target is 38 and we're well on track for that.

So 38 by the end of '06. And back on the data circuits, what was the number at the end of Q2, the number of legacy data circuits that you have migrated?

Let me check that. Give me a second. We'll get back. I don't have the exact number of circuits.

I will get back to you on this, Jeff, with the details.

Okay. Just one last question on the multiproduct, still on the same line of some of the previous questions. Michael, you said about 5 percentage point increase in terms of the multiproduct household. If I look at your $5 bundle and the number of customers that have added to the $5 bundle over the past year, it looks like it has been about 400,000 households. That's about 6% of your total residential households. So when we look at the year-over-year increase in multiproduct, it's really been driven by the $5 bundle. So looking forward, are you going to see that accelerate on the year-over-year basis if we look at the next 12 months in terms of multiproduct household that you expect to have, say in 12 months' time?

Just one clarification on the LD, and then I will get Pierre or Kevin to comment on this. But with the LD bundle, remember that one of the things that we were seeing and one of the reasons for the change in the LD bundle is that the percentage of customers acquiring new services with the LD bundle was starting to plateau. So you can't just take the total volume of LD bundle customers and say, well, that was X, and then plug in X to the numbers that I gave you, because they are a big chunk, about say half, of those customers that weren't acquiring incremental products, which again is one of the reasons why that big plateau, as soon as we saw that we said, the economics of this, we don't like it so we are going to move. So I think you have to rewind on that one a little bit. Kevin, do you want to elaborate on Jeff's other question?

Well, I think again that we have covered it. I think that you will see continued improvement in that multiproduct number that Michael referenced and as a result of the activities that we are taking.

That is great.

You will see a continuing step-up in that number, and that is a number that we are very, very focused on.

Okay, thanks for the clarification.

John Henderson, Scotia Capital.

A question on your wireless ARPU. You had great net adds in wireless, but I think you're the only company in Canada with declining ARPU on the postpaid side. And I just wonder if you can kind of give some rationale as to why that is happening and what your outlook is for ARPU?

Well, very quickly I'm going to turn to Pierre. I think the perspective I'd like you to take on all of that is let's remember, we are basically turning around and recovering; we're turning around a business and recovering from what was a very difficult period. So, actually, I guess it is a glass half full/half empty issue, but I look at the beginnings of improvement in ARPU and the recoveries on a blended basis back to last year's level, there is a little bit more work to do on postpaid, hear you on that. But as recovery underway, positive momentum and moving in the right direction, given the kinds of constraints that we had on our operation of the business as a result of billing. So I will leave it to you to decide whether you want to have the glass have full or half empty, but from our perspective it is actually not just half full, it's 2/3 and 3/4 full and we're starting to feel a whole lot better about the kind of momentum we've got there, not just on adds but on ARPU and on a whole bunch of other things. Pierre.

Maybe just to add, if you look Q2 over Q1, we have about a $4 increase which is a substantial step-up from where we were. But in addition to that, we have seen the improvement in our usage. We have brought through a bunch of price increases, some matching our competitors but some also in just relieving. There are more that have been announced, our customers for Q3. An example, out of bundled minutes we went from $0.25 which is, I guess, the price of our competitors are to $0.30, and 911 to up by $0.50 and 411 the same thing, and text messaging and more and more.

So that with the additional users that we are seeing and also our focus in higher-end customers, because this quarter, what's really special about this quarter is we don't only have very large growth addition and net adds, but it is the quality of the customers we are getting with products like RIM and the type of rate plan that we had out there, over $100 ARPU; the 10-4 which are very large, much higher than average ARPU, and the IRN (ph) rate plan that Kevin talked about. All of this together should provide us support to continue to grow ARPU through the rest of the year. In fact, month after month this year we have seen on the postpaid side an improvement on ARPU. So we are confident that it is going to move forward and go back to what mobility used to deliver in terms of performance.

Just one quick follow-up if I may. It is unrelated. On your pension side, I guess we have seen increased cash pension costs at Aliant, your subsidiary. Should we expect a similar sort of thing at Bell following a revaluation on the pension assets?

John, we have just filed our actuarial reports for the past year at June 30th with OSPE, and based on those filings we do not expect any cash funding in the Bell Canada plan through the course of 2005.

That is great. Thanks very much.

Thank you, everybody. It's a bit of a long call, but we covered a lot of ground. So if there's any other questions, please feel free to call us today or after that.

The conference has now ended. Please disconnect your lines at this time. We thank you all for your participation, and have a great day.