BCE (BCE) TD Cowen 28th Annual Telecom & Media Conference summary

AI Fabric and data center strategy

• Focused on delivering end-to-end solutions, leveraging expertise in data centers, cybersecurity, and managed services, while partnering for AI technologies rather than competing with hyperscalers.

• Secured significant power access (800 MW line of sight), with contractual rights to claw back capacity for sovereign AI use cases, supporting Canadian digital sovereignty.

• Revenue recognition for new facilities will shift to operating leases, smoothing EBITDA and free cash flow over contract life.

• EBITDA from data centers projected to reach CAD 900 million to CAD 1.5 billion by 2028+ as capacity grows, with strong precedent valuations in the private market.

• Asset sales and capital allocation decisions are driven by free cash flow and balance sheet improvement, with opportunistic approach to further divestitures.

U.S. fiber expansion and Ziply

• Pursuing a first-to-fiber strategy in U.S. markets, targeting areas where fiber can compete directly with cable, not overbuilding existing fiber.

• Confident in fiber's competitive advantage over fixed wireless and cable, with build engine focused on ramping up penetration and long-term value.

• Targeting 3 million fiber passings by 2028, with current build split between Ziply and Fiber Network Co.; future growth expected to shift toward Fiber Network Co.

• CapEx per home remains stable, with focus shifting from lowest cost per passing to maximizing long-term free cash flow and value.

• Enterprise and wholesale fiber revenue is stable with growth potential, but consumer fiber remains the primary driver.

Canadian wireline and wireless operations

• Fiber has achieved over 8 million passings in a 12 million ILEC footprint, with ongoing builds in MDUs and adjacent regions.

• Competitive intensity in wireline has slightly eased, with recent price increases in Ontario and Quebec sticking and driving ARPU growth.

• Bundling of streaming services (especially Crave) is both a retention/acquisition tool and a margin driver, though not matching traditional TV ARPU.

• Wireless market saw aggressive promotions in Q1, but discipline returned in Q2; focus remains on ARPU, bundled subs, and free cash flow.

• Ancillary wireless revenue (roaming, overage, activation fees) is a declining headwind, with IoT growth not fully offsetting declines.