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<SEC-DOCUMENT>0000718940-06-000004.txt : 20060201
<SEC-HEADER>0000718940-06-000004.hdr.sgml : 20060201
<ACCEPTANCE-DATETIME>20060201082134
ACCESSION NUMBER:		0000718940-06-000004
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20060201
FILED AS OF DATE:		20060201
DATE AS OF CHANGE:		20060201

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			BCE INC
		CENTRAL INDEX KEY:			0000718940
		STANDARD INDUSTRIAL CLASSIFICATION:	TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813]
		IRS NUMBER:				99999999
		STATE OF INCORPORATION:			A8
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		6-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-08481
		FILM NUMBER:		06567840

	BUSINESS ADDRESS:	
		STREET 1:		1000 DE LA GAUCHETIERE OUEST
		STREET 2:		BUREAU 4100 MONTREAL
		CITY:			QUEBEC CANADA
		STATE:			A8
		ZIP:			H3B 4Y7
		BUSINESS PHONE:		5143977000

	MAIL ADDRESS:	
		STREET 1:		1000 DE LA GAUCHETIERE OUEST
		STREET 2:		BUREAU 4100 MONTREAL
		CITY:			QUEBEC CANADA
		STATE:			A8
		ZIP:			H3B 4Y7

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	BELL CANADA ENTERPRISES INC
		DATE OF NAME CHANGE:	19880111
</SEC-HEADER>
<DOCUMENT>
<TYPE>6-K
<SEQUENCE>1
<FILENAME>bceform6ksafeharbor.htm
<DESCRIPTION>SAFE HARBOR NOTICE
<TEXT>
<HTML>
<HEAD>
<TITLE>AutoCoded Document</TITLE>
</HEAD>
<BODY>
<HR style="MARGIN-TOP: -2px" align=center width="100%" color=#000000 noShade
SIZE=4>
<HR style="MARGIN-TOP: -10px" align=center width="100%" color=#000000 noShade
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<p>&nbsp;</p>
<p>&nbsp;</p>
<p align="center"><FONT size="2" FACE="Arial, Helvetica, sans-serif"><B><font size="4">SECURITIES
  AND EXCHANGE COMMISSION</font><br>
  WASHINGTON, D.C. 20549</B><br>
  </FONT></p>
<P ALIGN="center"><FONT size="4" FACE="Arial, Helvetica, sans-serif"><B>FORM 6-K</B></FONT></P>
<p>&nbsp;</p>
<p>&nbsp; </p>
<P ALIGN="center"><FONT SIZE="2" face="Arial, Helvetica, sans-serif"><B>REPORT
  OF FOREIGN PRIVATE ISSUER </B></FONT></P>
<P ALIGN="center"><font size="2" face="Arial, Helvetica, sans-serif">Pursuant
  to Rule 13a-16 or 15d-16 under<br>
  the Securities Exchange Act of 1934</font></P>
<P ALIGN="center">&nbsp;</P>
<table width="94%" border="0">
  <tr>
    <td width="53%"><font size="2" face="Arial, Helvetica, sans-serif">For the
      month of: <b>February 2006</b></font></td>
    <td width="47%"><div align="right"><font size="2" face="Arial, Helvetica, sans-serif">Commission
        File Number: <b>1-8481</b></font></div></td>
  </tr>
</table>
<P ALIGN="center">&nbsp; </P>
<P ALIGN="center"><FONT size="2" FACE="Arial, Helvetica, sans-serif"><B>BCE Inc.<br>
  </B><I>(Translation of Registrant&#146;s name into English)</I></FONT></P>
<font size="2" face="Arial, Helvetica, sans-serif">
<!-- MARKER FORMAT-SHEET="Para Flush" -->
</font>
<P ALIGN="center"><FONT SIZE="2" face="Arial, Helvetica, sans-serif"><B>1000,
  rue de La Gaucheti&egrave;re Ouest, Bureau 3700, Montr&eacute;al, Qu&eacute;bec
  H3B 4Y7, (514) 870-8777<br>
  </B><I>(Address of principal executive offices)</I></FONT></P>
<P ALIGN="LEFT">&nbsp;</P>
<blockquote>
  <p align="LEFT"><FONT size="2" FACE="Arial, Helvetica, sans-serif"> Indicate
    by check mark whether the Registrant files or will file annual reports under
    cover of Form 20-F or Form 40-F.</FONT> </P>
</blockquote>
<table width="80%" border="0" cellpadding="0" cellspacing="0">
  <tr>
    <td width="10%" align="right">&nbsp;</td>
    <td width="32%" align="right"><font size="2" face="Arial, Helvetica, sans-serif">Form
      20-F</font></td>
    <td width="8%"><font size="2" face="Arial, Helvetica, sans-serif"><br>
      </font> <hr align="left" width=100% size=1 noshade color=BLACK> </td>
    <td width="32%" align="right"><font size="2" face="Arial, Helvetica, sans-serif">Form
      40-F</font></td>
    <td width="9%" valign="bottom"><div align="center"><font size="2" face="Arial, Helvetica, sans-serif">X
        </font></div>
      <HR align="left" WIDTH=100% SIZE=1 NOSHADE COLOR=BLACK></td>
    <td width="9%" valign="bottom"> <div align="center"></div></td>
  </tr>
</table>
<p>&nbsp;</p>
<blockquote>
  <p align="LEFT"><FONT size="2" FACE="Arial, Helvetica, sans-serif">Indicate
    by check mark whether the Registrant by furnishing the information contained
    in this Form is also thereby furnishing the information to the Commission
    pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.<br>
    </FONT></p>
</blockquote>
<font size="2" face="Arial, Helvetica, sans-serif"> </font>
<table width="85%" border="0" cellpadding="0" cellspacing="0">
  <tr>
    <td width="20%" align="right">&nbsp;</td>
    <td width="18%" align="right"><font size="2" face="Arial, Helvetica, sans-serif">Yes</font></td>
    <td width="8%"><font size="2" face="Arial, Helvetica, sans-serif"><br>
      </font> <hr width=100% size=1 color=BLACK noshade> </td>
    <td width="27%" align="right"><font size="2" face="Arial, Helvetica, sans-serif">No</font></td>
    <td width="9%"> <div align="center"><font size="2" face="Arial, Helvetica, sans-serif">X
        </font></div>
      <HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></td>
    <td width="14%"> <div align="center"></div></td>
  </tr>
</table>
<P ALIGN="LEFT">&nbsp;</P>
<table width="96%" border="0" cellpadding="0" cellspacing="0">
  <tr>
    <td width="75%"> <blockquote>
        <p><font size="2" face="Arial, Helvetica, sans-serif">If "Yes" is marked,
          indicate below the file number assigned to the Registrant in connection
          with Rule 12g3-2(b): 82-_____.</font></p>
      </blockquote></td>
  </tr>
</table>
<P ALIGN="LEFT">&nbsp;</P>
<blockquote>
  <p align="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">Notwithstanding
    any reference to BCE&#146;s Web site on the World Wide Web in the documents
    attached hereto, the information contained in BCE&#146;s site or any other
    site on the World Wide Web referred to in BCE&#146;s site is not a part of
    this Form 6-K and, therefore, is not filed with the Securities and Exchange
    Commission.</FONT> </p>
</blockquote>
<p>&nbsp;</p>
<HR style="MARGIN-TOP: -2px" align=center width="100%" color=#000000 noShade
SIZE=1>
<HR style="MARGIN-TOP: -10px" align=center width="100%" color=#000000 noShade
SIZE=4>
<p>&nbsp;</p>
<p><img src="bcelogo.gif" width="222" height="86"></p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p align="center"><FONT SIZE="6" face="Arial, Helvetica, sans-serif"><B>BCE INC.</B></FONT></p>
<p align="center">&nbsp;</p>
<p align="center">&nbsp;</p>
<p align="center">&nbsp;</p>
<FONT SIZE="2"><font face="Arial, Helvetica, sans-serif">
<P ALIGN="CENTER"><B><font size="5">Safe Harbor Notice Concerning</font></B><font size="5"><br>
  <B>Forward-Looking Statements</B></font></P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
</font></FONT><FONT SIZE="2"><font face="Arial, Helvetica, sans-serif">
<P ALIGN="CENTER"><B>February 1, 2006</B></P>
</font></FONT>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<HR NOSHADE COLOR="Black" SIZE="2">
<p><FONT SIZE="2"><font face="Arial, Helvetica, sans-serif"></font></FONT></p>
<FONT SIZE="2"><font face="Arial, Helvetica, sans-serif">
<P ALIGN="LEFT"><B><font size="5">Safe Harbor Notice Concerning Forward-Looking
  Statements</font></B></P>
</font></FONT>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">In this
  document, <I>we, us, our</I> and BCE mean BCE Inc., its subsidiaries, joint
  ventures and investments in significantly influenced companies.</FONT> </P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">The presentations
  in the document entitled <I>Bell Canada Enterprises Business Review 2006</I>,
  dated February 1, 2006, and certain oral statements made by our senior management
  at BCE&#146;s 2006 Business Review Conference to the financial community on
  February 1, 2006, contain forward-looking statements about BCE&#146;s objectives,
  plans, strategies, financial condition, results of operations and businesses.
  In addition, we or others on our behalf may make other written or oral statements
  that are forward-looking from time to time.</FONT> </P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">A statement
  we make is forward looking when it uses what we know and expect today to make
  a statement about the future. Forward-looking statements are based on our current
  expectations, estimates and assumptions about the markets we operate in, the
  Canadian economic environment and our ability to attract and retain customers
  and to manage network assets and operating costs. They may include words such
  as <I>anticipate, believe, could, expect, goal, guidance, intend, may, objective,
  plan, outlook, seek, strive, target and will</I>.</FONT> </P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font>
<P ALIGN="LEFT"><FONT size="2" FACE="Arial, Helvetica, sans-serif">It is important
  to know that:</FONT> </P>
<table width="99%" border="0">
  <tr>
    <td width="5%" align="center" valign="top"><font size="2" face="Arial, Helvetica, sans-serif">&#149;</font></td>
    <td width="95%"><div align="justify"><font size="2" face="Arial, Helvetica, sans-serif">forward-looking
        statements describe our expectations on the day that they are made. For
        the forward-looking statements set out in the presentations contained
        in the document entitled <i>Bell Canada Enterprises Business Review 2006</i>,
        or made orally at BCE&#146;s 2006 Business Review Conference, it is February
        1, 2006</font></div></td>
  </tr>
  <tr>
    <td width="5%" align="center" valign="top"><font size="2" face="Arial, Helvetica, sans-serif">&#149;
      </font></td>
    <td width="95%"><div align="justify"><font size="2" face="Arial, Helvetica, sans-serif">our
        actual results could differ materially from what we expect if known or
        unknown risks affect our business, or if our estimates or assumptions
        turn out to be inaccurate. As a result, we cannot guarantee that any forward-looking
        statement will materialize and, accordingly, you are cautioned not to
        place undue reliance on these forward-looking statements</font></div></td>
  </tr>
  <tr>
    <td width="5%" align="center" valign="top"><FONT size="2" FACE="Arial, Helvetica, sans-serif">&#149;</FONT></td>
    <td width="95%"><div align="justify"><font size="2" face="Arial, Helvetica, sans-serif">except
        as otherwise indicated by BCE, forward-looking statements do not take
        into account the effect that transactions or non-recurring or other special
        items announced or occurring after the statements are made may have on
        our business. Such statements do not, unless otherwise specified by BCE,
        reflect the impact of dispositions, sales of assets, monetizations, mergers,
        acquisitions, other business combinations or transactions, asset write-downs
        or other charges announced or occurring after forward-looking statements
        are made. The financial impact of such transactions and non-recurring
        and other special items can be complex and necessarily depends on the
        facts particular to each of them. Accordingly, the expected impact cannot
        be meaningfully described in the abstract or presented in the same manner
        as known risks affecting our business</font></div></td>
  </tr>
</table>
<P ALIGN="LEFT">&nbsp;</P>
<P ALIGN="center"><font size="2" face="Arial, Helvetica, sans-serif">&#151; 2
  &#151;</font></P>
<HR NOSHADE COLOR="Black" SIZE="2">
<P ALIGN="LEFT">&nbsp;</P>
<table width="99%" border="0">
  <tr>
    <td width="5%" align="center" valign="top"><font size="2" face="Arial, Helvetica, sans-serif">&#149;</font></td>
    <td width="95%"><div align="justify"><font size="2" face="Arial, Helvetica, sans-serif">we
        disclaim any intention and assume no obligation to update any forward-looking
        statement even if new information becomes available, as a result of future
        events or for any other reason.</font></div></td>
  </tr>
</table>
<p><FONT size="2" FACE="Arial, Helvetica, sans-serif">Sections A, B and C of this
  document contain a description of:</FONT></p>
<table width="99%" border="0">
  <tr>
    <td width="5%" align="center" valign="top"><font size="2" face="Arial, Helvetica, sans-serif">&#149;</font></td>
    <td width="95%"><font size="2" face="Arial, Helvetica, sans-serif">the principal
      forward-looking statements made by BCE</font></td>
  </tr>
  <tr>
    <td width="5%" align="center" valign="top"><font size="2" face="Arial, Helvetica, sans-serif">&#149;</font></td>
    <td width="95%"><font size="2" face="Arial, Helvetica, sans-serif">the material
      assumptions made by BCE in making such forward-looking statements</font></td>
  </tr>
  <tr>
    <td width="5%" align="center" valign="top"><font size="2" face="Arial, Helvetica, sans-serif">&#149;</font></td>
    <td width="95%"><div align="justify"><font size="2" face="Arial, Helvetica, sans-serif">the
        principal known risks that could cause our actual results and our assumptions
        and estimates to differ materially from our current expectations.</font></div></td>
  </tr>
</table>
<br>
<table width="99%" border="0">
  <tr>
    <td><font size="2" face="Arial, Helvetica, sans-serif"><b>A.</b></font></td>
    <td colspan="2"><font size="2" face="Arial, Helvetica, sans-serif"><b>FORWARD-LOOKING
      STATEMENTS</b></font></td>
  </tr>
  <tr>
    <td width="5%">&nbsp;</td>
    <td width="5%">&nbsp;</td>
    <td width="90%">&nbsp;</td>
  </tr>
  <tr>
    <td width="5%">&nbsp;</td>
    <td width="5%"><strong><font size="2" face="Arial, Helvetica, sans-serif">A.1</font></strong></td>
    <td width="90%"><strong><font size="2" face="Arial, Helvetica, sans-serif">2006
      Guidance</font></strong></td>
  </tr>
</table>
<p><b><font size="2" face="Arial, Helvetica, sans-serif"></font></b><FONT size="2" FACE="Arial, Helvetica, sans-serif">This
  section outlines the principal elements of guidance provided by BCE for 2006.</FONT>
</p>
<table width="99%" border="0">
  <tr>
    <td width="50%"><font size="2" face="Arial, Helvetica, sans-serif"><u><strong>Bell
      Canada</strong></u> </font></td>
    <td width="50%"><font size="2" face="Arial, Helvetica, sans-serif"><strong><u>Guidance
      for 2006</u></strong></font></td>
  </tr>
  <tr>
    <td width="50%">&nbsp;</td>
    <td width="50%">&nbsp;</td>
  </tr>
  <tr>
    <td width="50%"><font size="2" face="Arial, Helvetica, sans-serif">Revenue
      Growth </font></td>
    <td width="50%"><font size="2" face="Arial, Helvetica, sans-serif">1% to 3%</font></td>
  </tr>
  <tr>
    <td width="50%">&nbsp;</td>
    <td width="50%">&nbsp;</td>
  </tr>
  <tr>
    <td width="50%"><font size="2" face="Arial, Helvetica, sans-serif">Cost Savings
      </font></td>
    <td width="50%"><font size="2" face="Arial, Helvetica, sans-serif">$700 million
      to $900 million</font></td>
  </tr>
  <tr>
    <td width="50%">&nbsp;</td>
    <td width="50%">&nbsp;</td>
  </tr>
  <tr>
    <td width="50%"><font size="2" face="Arial, Helvetica, sans-serif">EBITDA
      Margin</font><font face="Arial, Helvetica, sans-serif"><font size="2"><font face="Arial, Helvetica, sans-serif"><sup>1</sup></font></font></font><font size="2" face="Arial, Helvetica, sans-serif">&nbsp;
      </font></td>
    <td width="50%"><font size="2" face="Arial, Helvetica, sans-serif">Stable</font></td>
  </tr>
  <tr>
    <td width="50%">&nbsp;</td>
    <td width="50%">&nbsp;</td>
  </tr>
  <tr>
    <td width="50%"><font size="2" face="Arial, Helvetica, sans-serif">Capital
      Intensity</font><font face="Arial, Helvetica, sans-serif"><font size="2"><font face="Arial, Helvetica, sans-serif"><sup>2</sup></font></font></font><font size="2" face="Arial, Helvetica, sans-serif">&nbsp;
      </font></td>
    <td width="50%"><font size="2" face="Arial, Helvetica, sans-serif">16% to
      17%</font></td>
  </tr>
  <tr>
    <td width="50%">&nbsp;</td>
    <td width="50%">&nbsp;</td>
  </tr>
  <tr>
    <td width="50%"><font size="2" face="Arial, Helvetica, sans-serif"><u><strong>BCE
      Inc.</strong></u></font></td>
    <td width="50%">&nbsp;</td>
  </tr>
  <tr>
    <td width="50%">&nbsp;</td>
    <td width="50%">&nbsp;</td>
  </tr>
  <tr>
    <td width="50%"><font size="2" face="Arial, Helvetica, sans-serif">EPS</font><font face="Arial, Helvetica, sans-serif"><font size="2"><font face="Arial, Helvetica, sans-serif"><sup>3</sup></font></font></font></td>
    <td width="50%"><font size="2" face="Arial, Helvetica, sans-serif">$1.80 to
      $1.90</font></td>
  </tr>
  <tr>
    <td width="50%">&nbsp;</td>
    <td width="50%">&nbsp;</td>
  </tr>
  <tr>
    <td width="50%"><font size="2" face="Arial, Helvetica, sans-serif">Free Cash
      Flow</font><font face="Arial, Helvetica, sans-serif"><font size="2"><font face="Arial, Helvetica, sans-serif"><sup>4</sup></font></font></font></td>
    <td width="50%"><font size="2" face="Arial, Helvetica, sans-serif">$700 million
      to $900 million</font></td>
  </tr>
</table>
<br>
<table width="99%" border="0">
  <tr>
    <td width="5%">&nbsp;</td>
    <td width="5%"><strong><font size="2" face="Arial, Helvetica, sans-serif">A.2</font></strong></td>
    <td width="90%"><strong><font size="2" face="Arial, Helvetica, sans-serif">Forward-Looking
      Statements Subsequent to 2006</font></strong></td>
  </tr>
</table>
<P ALIGN="LEFT">&nbsp;</P>
<table width="99%" border="0">
  <tr>
    <td colspan="3"> <HR style="MARGIN-TOP: -10px" align=center width="100%" color=#000000 noShade
SIZE=1></td>
    <td width="75%">&nbsp;</td>
  </tr>
  <tr>
    <td width="5%" valign="top"><font face="Arial, Helvetica, sans-serif"><font size="2"><font face="Arial, Helvetica, sans-serif"><sup>1</sup></font></font></font><font size="1" face="Arial, Helvetica, sans-serif">&nbsp;</font>
    </td>
    <td colspan="3"><font size="1" face="Arial, Helvetica, sans-serif">EBITDA</font>
      <font size="1" face="Arial, Helvetica, sans-serif">as a percentage of revenues</font></td>
  </tr>
  <tr>
    <td width="5%" valign="top">&nbsp;</td>
    <td width="10%">&nbsp;</td>
    <td width="10%"><font size="2" face="Arial, Helvetica, sans-serif">&nbsp;</font></td>
    <td width="75%">&nbsp;</td>
  </tr>
  <tr>
    <td width="5%" valign="top"><font face="Arial, Helvetica, sans-serif"><font size="2"><font face="Arial, Helvetica, sans-serif"><sup>2</sup></font></font></font></td>
    <td colspan="3"><font size="1" face="Arial, Helvetica, sans-serif">Capital
      expenditures as a percentage of revenues.</font></td>
  </tr>
  <tr>
    <td width="5%" valign="top">&nbsp;</td>
    <td width="10%">&nbsp;</td>
    <td width="10%">&nbsp;</td>
    <td width="75%">&nbsp;</td>
  </tr>
  <tr>
    <td width="5%" valign="top"><font face="Arial, Helvetica, sans-serif"><font size="2"><font face="Arial, Helvetica, sans-serif"><font size="2"><font face="Arial, Helvetica, sans-serif"><sup>3</sup></font></font></font></font></font></td>
    <td colspan="3"><font size="2" face="Arial, Helvetica, sans-serif"><font size="1">Before
      net investment gains/losses, or impairment or restructuring charges.</font></font></td>
  </tr>
  <tr>
    <td width="5%" valign="top">&nbsp;</td>
    <td width="10%">&nbsp;</td>
    <td width="10%">&nbsp;</td>
    <td width="75%">&nbsp;</td>
  </tr>
  <tr>
    <td width="5%" valign="top"><font face="Arial, Helvetica, sans-serif"><font size="2"><font face="Arial, Helvetica, sans-serif"><sup>4</sup></font></font></font></td>
    <td colspan="3"><div align="justify"><font size="2" face="Arial, Helvetica, sans-serif">
        <font size="1">The term &#147;free cash flow&#148; does not have any standardized
        meaning prescribed by Canadian GAAP and is therefore unlikely to be comparable
        to similar measures presented by other issuers. We define it as cash from
        operating activities less capital expenditures, total dividends and other
        investing activities. Free cash flow is presented on a basis that is consistent
        from period to period. We consider free cash flow as an important indicator
        of the financial strength and performance of our business as it demonstrates
        the cash available to repay debt and reinvest in our company. Free cash
        flow allows us to compare our financial performance on a consistent basis.
        We believe that free cash flow is also used by certain investors and analysts
        in valuing a business and its underlying assets. The most comparable Canadian
        GAAP financial measure is cash from operating activities. For 2006, we
        expect to generate approximately $700 million to $900 million in free
        cash flow, excluding 2006 pension contributions funded through asset monetizations.
        This amount reflects expected cash from operating activities of approximately
        $5.5 billion to $5.7 billion less capital expenditures, total dividends
        and other investing activities.</font></font></div></td>
  </tr>
</table>
<P ALIGN="LEFT"><font face="Arial, Helvetica, sans-serif"></font></P>
<P ALIGN="center"><font size="2" face="Arial, Helvetica, sans-serif">&#151; 3
  &#151;</font></P>
<HR NOSHADE COLOR="Black" SIZE="2">
<P ALIGN="LEFT">&nbsp;</P>
<P ALIGN="LEFT"><font size="2" face="Arial, Helvetica, sans-serif">This section
  outlines certain important forward-looking statements made by BCE concerning
  time periods subsequent to 2006.</font></P>
<table width="99%" border="0">
  <tr>
    <td width="50%"><font size="2" face="Arial, Helvetica, sans-serif"><strong><u>BCE
      Inc.</u></strong></font></td>
    <td width="50%"><font size="2" face="Arial, Helvetica, sans-serif"><strong><u>Forward-Looking
      Statement for 2007</u></strong></font></td>
  </tr>
  <tr>
    <td width="50%"><font size="2" face="Arial, Helvetica, sans-serif">&nbsp;</font></td>
    <td width="50%"><font size="2" face="Arial, Helvetica, sans-serif">&nbsp;</font></td>
  </tr>
  <tr>
    <td width="50%"><font size="2" face="Arial, Helvetica, sans-serif">Net Benefit
      Plans Expense</font></td>
    <td width="50%"><div align="justify"><font size="2" face="Arial, Helvetica, sans-serif">Approximately
        $540 million (decreasing annually subsequent to 2006)</font></div></td>
  </tr>
  <tr>
    <td width="50%"><font size="2" face="Arial, Helvetica, sans-serif">&nbsp;</font></td>
    <td width="50%"><font size="2" face="Arial, Helvetica, sans-serif">&nbsp;</font></td>
  </tr>
  <tr>
    <td width="50%"><font size="2" face="Arial, Helvetica, sans-serif"><strong><u>Bell
      Canada</u></strong></font></td>
    <td width="50%"><font size="2" face="Arial, Helvetica, sans-serif"><strong><u>Forward-Looking
      Statement for 2008-2009</u></strong></font></td>
  </tr>
  <tr>
    <td width="50%"><font size="2" face="Arial, Helvetica, sans-serif">&nbsp;</font></td>
    <td width="50%"><font size="2" face="Arial, Helvetica, sans-serif">&nbsp;</font></td>
  </tr>
  <tr>
    <td width="50%"><font size="2" face="Arial, Helvetica, sans-serif">Capital
      Intensity</font></td>
    <td width="50%"><font size="2" face="Arial, Helvetica, sans-serif">15% to
      16% </font></td>
  </tr>
  <tr>
    <td width="50%"><font size="2" face="Arial, Helvetica, sans-serif">&nbsp;</font></td>
    <td width="50%"><font size="2" face="Arial, Helvetica, sans-serif">&nbsp;</font></td>
  </tr>
  <tr>
    <td width="50%"><font size="2" face="Arial, Helvetica, sans-serif"><strong><u>Bell
      Canada</u></strong></font></td>
    <td width="50%"><font size="2" face="Arial, Helvetica, sans-serif"><strong><u>Forward-Looking
      Statement for 2005-2007</u></strong></font></td>
  </tr>
  <tr>
    <td width="50%"><font size="2" face="Arial, Helvetica, sans-serif">&nbsp;</font></td>
    <td width="50%"><font size="2" face="Arial, Helvetica, sans-serif">&nbsp;</font></td>
  </tr>
  <tr>
    <td width="50%"><font size="2" face="Arial, Helvetica, sans-serif">Cumulative
      Cost Savings</font></td>
    <td width="50%"><font size="2" face="Arial, Helvetica, sans-serif">Approximately
      $2 billion</font></td>
  </tr>
</table>
<P ALIGN="LEFT"><font size="2" face="Arial, Helvetica, sans-serif"></font></P>
<table width="99%" border="0">
  <tr>
    <td width="5%"><font size="2" face="Arial, Helvetica, sans-serif"><b>B.</b></font></td>
    <td colspan="2"><font size="2" face="Arial, Helvetica, sans-serif"><b>MATERIAL
      ASSUMPTIONS MADE IN THE PREPARATION OF FORWARD-LOOKING STATEMENTS</b></font></td>
  </tr>
</table>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">A number
  of assumptions were made by BCE in making forward-looking statements for 2006
  and beyond. The material assumptions are outlined in this section. The reader
  should note that assumptions made in the preparation of forward-looking statements,
  although considered reasonable by BCE at the time of preparation of such forward-looking
  statements, may prove to be inaccurate. Accordingly, our actual results could
  differ materially from our expectations as set forth in our forward-looking
  statements.</FONT></P>
<table width="99%" border="0">
  <tr>
    <td width="5%">&nbsp;</td>
    <td width="5%"><strong><font size="2" face="Arial, Helvetica, sans-serif">B.1</font></strong></td>
    <td width="90%"><strong><font size="2" face="Arial, Helvetica, sans-serif">Material
      Assumptions Made in the Preparation of BCE's 2006 Guidance</font></strong></td>
  </tr>
</table>
<font size="2" face="Arial, Helvetica, sans-serif"> </font><font face="Arial, Helvetica, sans-serif">
<P ALIGN="justify"><FONT SIZE="2"><B>Canadian Economic Assumptions</B></FONT><br>
  <FONT size="2" FACE="Arial, Helvetica, sans-serif">BCE&#146;s 2006 guidance
  is based on various assumptions concerning the Canadian economy. First, it assumes
  Canadian GDP growth of approximately 3% for 2006, consistent with estimates
  by the Conference Board of Canada. It also assumes that the Bank of Canada prime
  rate and the Consumer Price Index as estimated by Statistics Canada will rise
  slightly from current levels of 5% and 2% respectively.</FONT> </P>
</font><font size="2" face="Arial, Helvetica, sans-serif"> </font><font face="Arial, Helvetica, sans-serif">
<P ALIGN="justify"><FONT SIZE="2"><B>Market Assumptions<br>
  </B></FONT><FONT size="2" FACE="Arial, Helvetica, sans-serif">Our 2006 guidance
  also reflects various market assumptions. First, we have assumed growth in the
  overall Canadian telecommunications market in 2006 slightly higher than GDP
  growth. Second, we have assumed that the residential voice telecommunications
  market will continue to decrease in 2006 due to cable telephony competition,
  wireless substitution and other factors including e-mail and instant messaging
  substitution. We have also assumed that wireline competition in both the business
  and residential telecommunications markets will increase in 2006 mainly from
  cable companies. Accordingly, we estimate that decreases in our legacy services
  pricing will continue in 2006. Finally, we have assumed that the 2006 revenue
  growth rate of the Canadian wireless industry will be similar to 2005 </FONT></P>
</font><font face="Arial, Helvetica, sans-serif">
<P ALIGN="LEFT">&nbsp;</P>
</font>
<p align="center"><font size="2" face="Arial, Helvetica, sans-serif">&#151; 4&#151;</font></p>
<HR NOSHADE COLOR="Black" SIZE="2">
<font face="Arial, Helvetica, sans-serif"> </font>
<p align="justify">&nbsp;</p>
<p align="justify"><font size="2" face="Arial, Helvetica, sans-serif">(approximately
  15.5%) and that the 2006 revenue growth rates of the Canadian video and Internet
  markets will be slightly lower than 2005 (approximately 5% and 13% respectively
  in 2005).</font> </p>
<font size="2" face="Arial, Helvetica, sans-serif"> </font>
<p align="justify"><font size="2" face="Arial, Helvetica, sans-serif"><b>Financial
  and Operational Assumptions<br>
  </b>BCE&#146;s 2006 guidance is also based on various internal financial and
  operational assumptions. First, we have assumed for 2006 a wireless subscriber
  growth rate of 10% to 15%, a video subscriber growth rate of 8% to 10% and a
  high speed Internet subscriber growth rate of 10% to 15%. We also estimate that
  the number of our network access services will, in 2006, decrease by 3% to 5%
  with significantly higher declines in our Residential segment. We have assumed
  that we will achieve in 2006 total cost reductions in the range of $700 million
  to $900 million<b>.</b> We estimate that in 2006, we will incur restructuring
  costs, mainly in connection with workforce reductions, in the range of $100
  million to $200 million. Our amortization expense for 2006 is estimated to be
  in the range of $3,150 million to $3,250 million. Our 2006 total net benefit
  plans cost is estimated at approximately $570 million (based on a discount rate
  in 2006 of 5.2% vs. 6.2% in 2005) and funding of our total net benefit plans
  in 2006 is estimated to be approximately $600 million (including $300 million
  expected to be funded through asset monetizations). Furthermore, we have assumed
  that BCE&#146;s effective tax rate in 2006 will be approximately 30%. Bell Canada&#146;s
  capital intensity in 2006 is estimated to be in the 16% to 17% range. We have
  assumed that EPS for 2006 will be positively impacted by the planned repurchase
  of common shares under BCE Inc.&#145;s normal course </font><FONT size="2" FACE="Arial, Helvetica, sans-serif">issuer
  bid which is expected to commence as soon as possible under applicable stock
  exchange rules. We have also assumed that we will complete the disposition of
  our remaining interest in CGI Group Inc. and that the agreement to reduce our
  equity interest in Bell Globemedia Inc. (Bell Globemedia) from 68.5% to 20%
  will be completed as announced on December 2, 2005. The expected closing of
  the Bell Globemedia transaction is subject to a number of approvals and closing
  conditions, including approval by the CRTC and the Competition Bureau, and other
  closing conditions that are customary in a transaction of this nature. Finally,
  we have assumed that we will complete the proposed creation of an income trust
  for regional customers.</FONT></p>
<font face="Arial, Helvetica, sans-serif"></font>
<table width="99%" border="0">
  <tr>
    <td width="5%">&nbsp;</td>
    <td width="5%"><strong><font size="2" face="Arial, Helvetica, sans-serif">B.2</font></strong></td>
    <td width="90%"><strong><font size="2" face="Arial, Helvetica, sans-serif">Material
      Assumptions Made in the Preparation of Forward-Looking Statements Subsequent
      to 2006</font></strong></td>
  </tr>
</table>
<font face="Arial, Helvetica, sans-serif">
<P ALIGN="justify"><font size="2">BCE's forward-looking statements for time periods
  subsequent to 2006 involve longer term assumptions and estimates than forward-looking
  statements for 2006 and are consequently subject to greater uncertainty. Therefore,
  readers are especially cautioned not to place undue reliance on such long-term
  forward-looking statements. </font></P>
<P ALIGN="justify"><font size="2">The forward-looking statement concerning BCE
  Inc.'s expected net benefit plans expense for 2007 and subsequent years assumes
  an anticipated discount rate of 5.2% and an expected return on plan assets of
  7.5% in 2007 and return on plan assets of 7.5% in 2006.</font></P>
<P ALIGN="justify">&nbsp;</P>
</font>
<div align="center">
  <p><font size="2" face="Arial, Helvetica, sans-serif">&#151; 5 &#151;</font>
  </p>
</div>
<HR NOSHADE COLOR="Black" SIZE="2">
<font face="Arial, Helvetica, sans-serif">
<P ALIGN="justify">&nbsp;</P>
<P ALIGN="justify"><font size="2">The 2008-2009 projected capital intensity rates
  assume that we can continue to reduce capital expenditures in the legacy business
  and complete major initiatives presently identified within current estimates
  of required spending.</font></P>
<P ALIGN="justify"><font size="2">The forward-looking statement concerning Bell
  Canada's expected cumulative amount of cost savings from 2005-2007 assumes that
  our various planned cost savings initiatives and productivity improvements will
  achieve their objectives.</font></P>
</font> <br>
<table width="99%" border="0">
  <tr>
    <td width="5%"><font size="2" face="Arial, Helvetica, sans-serif"><b>C.</b></font></td>
    <td colspan="2"><font size="2" face="Arial, Helvetica, sans-serif">&nbsp;</font><font size="2" face="Arial, Helvetica, sans-serif"><strong>RISKS
      THAT COULD AFFECT OUR BUSINESS AND RESULTS</strong></font> <font size="2" face="Arial, Helvetica, sans-serif"><b>
      </b></font></td>
  </tr>
</table>
<font face="Arial, Helvetica, sans-serif">
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">This section
  describes general risks that could affect all BCE group companies and specific
  risks that could affect BCE Inc. and certain other BCE group companies.</FONT>
</P>
</font><font size="2" face="Arial, Helvetica, sans-serif"> </font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">A risk is
  the possibility that an event might happen in the future that could have a negative
  effect on the financial condition, results of operations or business of one
  or more BCE group companies. Part of managing our business is to understand
  what these potential risks could be and to minimize them where we can.</FONT>
</P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">Because
  no one can accurately predict whether an event that is only possible will actually
  happen or what its consequences may be, the actual effect of any event on our
  business and results could be materially different from what we currently anticipate.
  In addition, this description of risks does not include all possible risks,
  and there may be other risks of which we are currently not aware.</FONT> </P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">Bell Canada
  is our most important subsidiary, which means our financial performance depends
  in large part on how well Bell Canada performs financially. The risks that could
  affect Bell Canada and its subsidiaries are more likely to have a significant
  impact on our financial condition, results of operations and business than the
  risks that could affect other BCE group companies.</FONT> </P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font><font face="Arial, Helvetica, sans-serif">
<P ALIGN="LEFT"><FONT SIZE="2"><B>Risks that could affect all BCE Group companies</B></FONT></P>
<font size="2">
<P ALIGN="LEFT"><B><I>Strategies and plans</I></B><br>
  <FONT size="2" FACE="Arial, Helvetica, sans-serif">We plan to achieve our business
  objectives through various strategies and plans.</FONT> </P>
</font></font><font size="2" face="Arial, Helvetica, sans-serif"> </font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">In 2006,
  we intend to continue to implement our strategy to deliver unrivalled integrated
  communications to customers across Canada, with an overall objective to take
  a leadership position in setting the standard in IP for the industry and for
  our customers. Leveraging the opportunities created by IP-based communications
  should allow us to deliver on the guiding principles of our strategy of customer
  simplification, innovation and efficiency. This strategy is founded on three
  priorities:</FONT> </P>
<table width="99%" border="0">
  <tr>
    <td width="5%" align="center" valign="top"><font size="2" face="Arial, Helvetica, sans-serif">&#149;</font></td>
    <td width="95%"><font size="2" face="Arial, Helvetica, sans-serif">deliver
      an enhanced customer experience with the objective of enabling a significantly
      lower cost structure at Bell Canada</font></td>
  </tr>
  <tr>
    <td width="5%" align="center" valign="top"><font size="2" face="Arial, Helvetica, sans-serif">&#149;</font></td>
    <td width="95%"><font size="2" face="Arial, Helvetica, sans-serif">deliver
      abundant bandwidth to enable all the services of the future with the reliability
      and security that customers require</font></td>
  </tr>
</table>
<font size="2" face="Arial, Helvetica, sans-serif"> </font>
<P ALIGN="LEFT">&nbsp;</P>
<P ALIGN="center"><font size="2" face="Arial, Helvetica, sans-serif">&#151; 6
  &#151;</font></P>
<HR NOSHADE COLOR="Black" SIZE="2">
<P ALIGN="LEFT">&nbsp;</P>
<table width="99%" border="0">
  <tr>
    <td width="5%" align="center" valign="top"><font size="2" face="Arial, Helvetica, sans-serif">&#149;</font></td>
    <td width="95%"><font size="2" face="Arial, Helvetica, sans-serif">create
      the next-generation services to drive future growth.</font></td>
  </tr>
</table>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">Our strategic
  direction involves significant changes in our processes, in how we approach
  our markets, and in how we develop and deliver products and services. This means
  we will need to be responsive in adapting to these changes. It also means that
  a shift in employee skills will be necessary.</FONT> </P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">We will
  need to invest capital to implement our strategies and to carry out our plans.
  However, the actual amounts of capital required and the returns from these investments
  could differ materially from our current expectations.</FONT> </P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">If we are
  unable to achieve our business objectives, our financial performance, including
  our growth prospects, could be hurt. This could have a material and negative
  effect on our results of operations.</FONT> </P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font><font face="Arial, Helvetica, sans-serif">
<P ALIGN="justify"><FONT SIZE="2"><B><I>Economic and market conditions<br>
  </I></B></FONT><FONT size="2" FACE="Arial, Helvetica, sans-serif">Our business
  is affected by general economic conditions, consumer confidence and spending,
  and the demand for, and prices of, our products and services. When there is
  a decline in economic growth and in retail and commercial activity, there tends
  to be a lower demand for our products and services. During these periods, customers
  may delay buying our products and services, or reduce purchases or discontinue
  using them.</FONT></P>
</font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">Weak economic
  conditions may negatively affect our profitability and cash flows from operations.
  They could also negatively affect the financial condition and creditworthiness
  of our customers, which could increase uncertainty about our ability to collect
  receivables and potentially increase our bad debt expenses.</FONT> </P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font><font face="Arial, Helvetica, sans-serif">
<P ALIGN="justify"><FONT SIZE="2"><B><I>Increasing competition<br>
  </I></B></FONT><FONT size="2" FACE="Arial, Helvetica, sans-serif">We face intense
  competition from traditional competitors, as well as from new entrants to the
  markets in which we operate. We compete not only with other telecommunications,
  media, television and satellite service providers, but also with other businesses
  and industries. These other businesses and industries include cable, software
  and Internet companies, a variety of companies that offer network services,
  such as providers of business information systems, systems integrators and other
  companies that deal with, or have access to, customers through various communications
  networks.</FONT> </P>
</font><font size="2" face="Arial, Helvetica, sans-serif"> </font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">Competition
  affects our pricing strategies and could reduce our revenues and profitability.
  It could also affect our ability to retain existing customers and attract new
  ones. Competition puts us under constant pressure to keep our prices and service
  offerings competitive. This means that we need to be able to anticipate and
  respond quickly to the constant changes in our businesses and markets.</FONT>
</P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">We already
  have several domestic and foreign competitors, but the number of well resourced
  foreign competitors with a presence in Canada could increase in the future.
  In recent years, the Government of Canada has reviewed the foreign ownership
  restrictions that apply to telecommunications carriers and to broadcasting distribution
  undertakings</FONT> </P>
<p>&nbsp;</p>
<p align="center"><font size="2" face="Arial, Helvetica, sans-serif">&#151; 7
  &#151;</font></p>
<HR NOSHADE COLOR="Black" SIZE="2">
<p>&nbsp; </p>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">(BDUs).
  Removing or easing the limits on foreign ownership could result in foreign companies
  entering the Canadian market by making acquisitions or investments. This could
  result in greater access to capital for our competitors or the arrival of new
  competitors with global scale, which would increase competitive pressure. We
  cannot predict what action, if any, the Government will take as a result of
  these reviews or assess how any change in foreign ownership restrictions may
  affect us because the Government continues to consider its position on these
  matters.</FONT> </P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font><font face="Arial, Helvetica, sans-serif">
<P ALIGN="justify"><FONT SIZE="2"><I>Wireline and long distance<br>
  </I></FONT><FONT size="2" FACE="Arial, Helvetica, sans-serif">We experience
  significant competition in the provision of long distance service from dial-around
  providers, prepaid card providers, VoIP service providers and others, and from
  traditional competitors such as interexchange carriers and resellers. We also
  face increasing cross-platform competition as customers replace traditional
  services with new technologies. For example, our wireline business competes
  with VoIP, wireless and Internet services, including chat services, instant
  messaging and email. We are also facing increasing competitive pressure from
  cable companies as a result of their now offering voice services over their
  networks. Since the offering of voice services by cable companies is still relatively
  recent, it is difficult to predict the extent and timing of any resulting loss
  in market share that we might suffer as well as the extent to which customers
  that cease using our voice services will also cease using our other services
  such as video and Internet access. Additional competitive pressure is also emerging
  from other competitors such as electrical utilities. These alternative technologies,
  products and services are now making significant inroads in our legacy services,
  which typically represent our higher margin business.</FONT> </P>
</font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">Technology
  substitution, and VoIP in particular, has reduced barriers to entry in the industry.
  This has allowed competitors with far lower investments in financial, marketing,
  personnel and technological resources to rapidly launch new products and services
  and gain market share. This trend is expected to accelerate in the future, which
  could materially and negatively affect our financial performance.</FONT> </P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">Contracts
  for long distance services to large business customers are very competitive.
  Customers may choose to switch to competitors that offer lower prices to gain
  market share and that are less concerned about the quality of service or impact
  on their margins.</FONT> </P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">These competitive
  factors suggest that our legacy wireline accesses and long distance volumes
  will continue to decline in the future. Continued decline will lead to reduced
  economies of scale in those businesses and, in turn, lower margins. Our strategy
  is to mitigate these declines by building the business for newer growth services
  but the margins on newer services will likely be less than the margins on legacy
  services. If the legacy services decline faster than the rate of growth of our
  newer services, our financial performance could be negatively and materially
  affected. In addition, if a large portion of the customers that cease using
  our voice services also cease using our other services, our financial performance
  could be negatively and materially affected.</FONT> </P>
<p>&nbsp;</p>
<p align="center"><font size="2" face="Arial, Helvetica, sans-serif">&#151; 8
  &#151;</font></p>
<HR NOSHADE COLOR="Black" SIZE="2">
<p>&nbsp; </p>
<font face="Arial, Helvetica, sans-serif">
<P ALIGN="justify"><FONT SIZE="2"><I>Internet access<br>
  </I></FONT><FONT size="2" FACE="Arial, Helvetica, sans-serif">Cable companies
  and ISPs compete with BCE group companies in the provision of broadband and
  Internet access and related services. In particular, competition from cable
  companies has focused on increased bandwidth and discounted pricing on bundles.</FONT>
  <font size="2" face="Arial, Helvetica, sans-serif"> </font> </P>
</font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">In addition,
  regional electrical utilities may continue to develop and market services that
  compete directly with Bell Canada&#146;s Internet access and broadband services.
  Developments in wireless broadband services may also result in increased competition
  in certain geographic areas. This could materially and negatively affect the
  financial performance of our Internet access services business.</FONT> </P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font><font face="Arial, Helvetica, sans-serif">
<P ALIGN="justify"><FONT SIZE="2"><I>Wireless<br>
  </I></FONT><FONT size="2" FACE="Arial, Helvetica, sans-serif">The Canadian wireless
  telecommunications industry is also highly competitive. We compete directly
  with other wireless service providers that aggressively introduce, price and
  market their products and services. We also compete with wireline service providers.
  We expect competition to intensify as new technologies, products and services
  are developed.</FONT> </P>
</font><font size="2" face="Arial, Helvetica, sans-serif"> </font><font face="Arial, Helvetica, sans-serif">
<P ALIGN="justify"><FONT SIZE="2"><I>Video<br>
  </I></FONT><FONT size="2" FACE="Arial, Helvetica, sans-serif">Bell ExpressVu
  competes directly with another DTH satellite television provider and with cable
  companies across Canada. These cable companies have upgraded their networks,
  operational systems and services, which could improve their competitiveness.
  This could materially and negatively affect the financial performance of Bell
  ExpressVu.</FONT> </P>
</font><font size="2" face="Arial, Helvetica, sans-serif"> </font><font face="Arial, Helvetica, sans-serif">
<P ALIGN="justify"><FONT SIZE="2"><B><I>Improving productivity, reducing costs
  and containing capital intensity<br>
  </I></B></FONT><FONT size="2" FACE="Arial, Helvetica, sans-serif">We are intensifying
  the implementation of several productivity improvements and programs to reduce
  costs while containing our capital intensity. Our new cost reduction objectives
  represent aggressive targets when compared to our historical achievements. There
  will be a material and negative effect on our profitability if we do not successfully
  implement these cost reduction programs and productivity improvements and manage
  capital intensity while maintaining the quality of our service. For example,
  each year between 2002 and 2005, we were required to reduce the price of certain
  services offered by the Bell Canada companies that are subject to regulatory
  price caps and may be required to do so again in the future. In addition, we
  have reduced our prices in some business data services that are not regulated
  in order to remain competitive, and we may have to continue doing so in the
  future. The profits of the Bell Canada companies will decline if they cannot
  reduce their expenses at the same rate. There is no assurance that cost reduction
  initiatives that we may undertake will reach their objective. There would also
  be a material and negative effect on our profitability if market factors, such
  as increasing competition or regulatory actions, result in lower revenues and
  we cannot reduce our expenses at the same rate.</FONT> </P>
</font><font size="2" face="Arial, Helvetica, sans-serif"> </font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">Many productivity
  improvements and cost reduction programs require capital expenditures to implement
  systems that automate or assist in our operations. There is no assurance that
  these investments will be effective in delivering the planned productivity improvements
  and cost reductions.</FONT> </P>
<P ALIGN="justify">&nbsp;</P>
<P ALIGN="center"><font size="2" face="Arial, Helvetica, sans-serif">&#151; 9
  &#151;</font></P>
<HR NOSHADE COLOR="Black" SIZE="2">
<P ALIGN="justify">&nbsp; </P>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">In addition,
  customer service improvement is critical to customer retention and average revenue
  per user growth. It might prove to be difficult to improve customer service
  while simultaneously significantly reducing costs. The inability to achieve
  either of these objectives could have a material and negative effect on our
  results of operations.</FONT> </P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font><font face="Arial, Helvetica, sans-serif">
<P ALIGN="justify"><FONT SIZE="2"><B><I>Anticipating technological change and
  investing in new technologies, products and services<br>
  </I></B></FONT><FONT size="2" FACE="Arial, Helvetica, sans-serif">We operate
  in markets that are experiencing constant technological change, evolving industry
  standards, changing client needs, frequent introductions of new products and
  services, and short product life cycles. The investment in new technologies,
  products and services and the ability to launch, on a timely basis, such technologies,
  products and services are critical to grow the number of our subscribers and
  achieve our targeted financial performance.</FONT> </P>
</font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">Our success
  will depend in large part on how well we can anticipate and respond to changes
  in industry standards and client needs, and how quickly and efficiently we can
  introduce new products, services and technologies, and upgrade existing ones.</FONT>
</P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">We may face
  additional financial risks as we develop new products, services and technologies,
  and update our networks to stay competitive. Newer technologies, for example,
  may quickly become obsolete or may need more capital than expected. Development
  could be delayed for reasons beyond our control. Substantial investments usually
  need to be made before new technologies prove to be commercially viable. There
  is also a significant risk that current regulation could be expanded to apply
  to newer technologies. A regulatory change could delay our launch of new services
  and restrict our ability to market these services if, for example, new pricing
  rules or marketing or bundling restrictions are introduced or existing ones
  extended.</FONT> </P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">The Bell
  Canada companies are in the process of moving their migratable traffic on their
  core circuit-based infrastructure to IP technology. This should allow them to:</FONT></P>
<table width="99%" border="0">
  <tr>
    <td width="5%" align="center" valign="top"><font size="2" face="Arial, Helvetica, sans-serif">&#149;
      </font></td>
    <td width="95%"><font size="2" face="Arial, Helvetica, sans-serif">offer integrated
      voice, data and video services</font></td>
  </tr>
  <tr>
    <td width="5%" align="center" valign="top"><font size="2" face="Arial, Helvetica, sans-serif">&#149;</font></td>
    <td width="95%"><font size="2" face="Arial, Helvetica, sans-serif"> offer
      a range of valuable network-enabled business solutions to large business
      </font><font face="Arial, Helvetica, sans-serif"><font size="2">customers</font></font></td>
  </tr>
  <tr>
    <td width="5%" align="center" valign="top"><font size="2" face="Arial, Helvetica, sans-serif">&#149;</font></td>
    <td width="95%"><font face="Arial, Helvetica, sans-serif"><font size="2">improve
      capital efficiency</font></font></td>
  </tr>
  <tr>
    <td width="5%" align="center" valign="top"><font size="2" face="Arial, Helvetica, sans-serif">&#149;</font></td>
    <td width="95%"><font face="Arial, Helvetica, sans-serif"><font size="2">improve
      operating efficiency, including our efficiency in introducing and supporting
      services.</font></font></td>
  </tr>
</table>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">As part
  of this move, the Bell Canada companies are in the process of discontinuing
  certain services that are based on circuit-based infrastructure. This is a necessary
  component of improving capital and operating efficiencies. In some cases, this
  could be delayed or prevented by customers or regulatory actions. If the Bell
  Canada companies cannot discontinue these services as planned, they will not
  be able to achieve the efficiencies as expected.</FONT> </P>
<P ALIGN="justify">&nbsp;</P>
<P ALIGN="center"><font size="2" face="Arial, Helvetica, sans-serif">&#151; 10
  &#151;</font></P>
<HR NOSHADE COLOR="Black" SIZE="2">
<P ALIGN="justify">&nbsp; </P>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">There is
  no assurance that we will be successful in developing, implementing and marketing
  new technologies, products, services or enhancements in a reasonable time, or
  that they will have a market. There is also no assurance that efficiencies will
  increase as expected. New products or services that use new or evolving technologies
  could make our existing ones unmarketable or cause prices to fall.</FONT> </P>
<font size="2" face="Arial, Helvetica, sans-serif"><strong><em>Liquidity</em></strong><br>
</font><FONT size="2" FACE="Arial, Helvetica, sans-serif">Our ability to generate
cash and to maintain capacity to meet our financial obligations and provide for
planned growth depends on our sources of liquidity.</FONT>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">Our cash
  requirements may be affected by the risks associated with our contingencies,
  off-balance sheet arrangements, derivative instruments and assumptions built
  into our business plan.</FONT> </P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">In general,
  we finance our capital needs in four ways:</FONT></P>
<table width="99%" border="0">
  <tr>
    <td width="5%" align="center"><font size="2" face="Arial, Helvetica, sans-serif">&#149;</font></td>
    <td width="95%"><font size="2" face="Arial, Helvetica, sans-serif">from cash
      generated by our operations or investments</font></td>
  </tr>
  <tr>
    <td width="5%" align="center"><font size="2" face="Arial, Helvetica, sans-serif">&#149;</font></td>
    <td width="95%"><font size="2" face="Arial, Helvetica, sans-serif">by borrowing
      from commercial banks</font></td>
  </tr>
  <tr>
    <td width="5%" align="center"><font size="2" face="Arial, Helvetica, sans-serif">&#149;</font></td>
    <td width="95%"><font size="2" face="Arial, Helvetica, sans-serif">through
      debt and equity offerings in the capital markets</font></td>
  </tr>
  <tr>
    <td width="5%" align="center"><font size="2" face="Arial, Helvetica, sans-serif">&#149;</font></td>
    <td width="95%"><font size="2" face="Arial, Helvetica, sans-serif">by selling
      or otherwise disposing of assets.</font></td>
  </tr>
</table>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">Financing
  through equity offerings would dilute the holdings of existing equity investors.
  An increased level of debt financing could lower our credit ratings, increase
  our borrowing costs and give us less flexibility to take advantage of business
  opportunities.</FONT> </P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">Our ability
  to raise financing depends on our ability to access the capital markets and
  the syndicated commercial loan market. The cost of funding depends largely on
  market conditions, and the outlook for our business and credit ratings at the
  time capital is raised. If our credit ratings are downgraded, our cost of funding
  could significantly increase. In addition, participants in the capital and syndicated
  commercial loan markets have internal policies limiting their ability to invest
  in, or extend credit to, any single borrower or group of borrowers or to a particular
  industry.</FONT> </P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">BCE Inc.
  and some of its subsidiaries have entered into renewable credit facilities with
  various financial institutions. They include credit facilities supporting commercial
  paper programs. There is no assurance that these facilities will be renewed
  on favourable terms.</FONT> </P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">We need
  significant amounts of cash to implement our business plan. This includes cash
  for capital expenditures to provide our services, dividend payments and payment
  of our contractual obligations, including repayment of our outstanding debt.</FONT>
</P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">Our plan
  in 2006 is to generate enough cash from our operating activities to pay for
  capital expenditures and dividends. We expect to pay contractual obligations
  maturing in 2006 from cash on hand, from cash generated from our operations
  or by issuing debt. If actual results are different from our business plan or
  if the assumptions in our business plan change, we may have to raise more funds
  than expected by issuing debt or equity, borrowing from banks or selling or
  otherwise disposing of assets.</FONT> </P>
<p>&nbsp;</p>
<p align="center"><font size="2" face="Arial, Helvetica, sans-serif">&#151; 11
  &#151;</font></p>
<HR NOSHADE COLOR="Black" SIZE="2">
<p>&nbsp; </p>
<P ALIGN="LEFT"><FONT size="2" FACE="Arial, Helvetica, sans-serif">If we cannot
  raise the capital we need upon acceptable terms, we may have to:</FONT></P>
<table width="99%" border="0">
  <tr>
    <td width="5%" align="center" valign="middle"><font size="2" face="Arial, Helvetica, sans-serif">&#149;
      </font></td>
    <td width="95%"><font size="2" face="Arial, Helvetica, sans-serif">limit our
      ongoing capital expenditures</font></td>
  </tr>
  <tr>
    <td width="5%" align="center" valign="middle"><font size="2" face="Arial, Helvetica, sans-serif">&#149;
      </font></td>
    <td width="95%"><font size="2" face="Arial, Helvetica, sans-serif">limit our
      investment in new businesses</font></td>
  </tr>
  <tr>
    <td width="5%" align="center" valign="middle"><font size="2" face="Arial, Helvetica, sans-serif">&#149;
      </font></td>
    <td width="95%"><font size="2" face="Arial, Helvetica, sans-serif">try to
      raise additional capital by selling or otherwise disposing of assets.</font></td>
  </tr>
</table>
<P ALIGN="LEFT"><FONT size="2" FACE="Arial, Helvetica, sans-serif">Any of these
  possibilities could have a material and negative effect on our cash flow from
  operations and growth prospects.</FONT> </P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font><font face="Arial, Helvetica, sans-serif">
<P ALIGN="justify"><FONT SIZE="2"><B><I>Making acquisitions and dispositions<br>
  </I></B></FONT><FONT size="2" FACE="Arial, Helvetica, sans-serif">Our growth
  strategy includes making strategic acquisitions and entering into joint ventures.
  We also from time to time dispose of all or part of assets or all or part of
  certain businesses. There is no assurance that we will find suitable companies
  to acquire or to partner with, or that we will have the financial resources
  needed to complete any acquisition or to enter into any joint venture. There
  is also no assurance that we will be able to complete any dispositions or that
  we will use the funds received as a result of such dispositions for any specific
  anticipated purpose. There could also be difficulties in integrating the operations
  of acquired companies with our existing operations or in operating joint ventures.
  Acquisitions and dispositions may be subject to various conditions, such as
  regulatory and securityholders approvals, and other closing conditions, and
  there can be no assurance that, with respect to any specific acquisition or
  dispositions, all such conditions will be satisfied.</FONT> </P>
</font><font size="2" face="Arial, Helvetica, sans-serif"> </font><font face="Arial, Helvetica, sans-serif">
<P ALIGN="justify"><FONT SIZE="2"><B><I>Litigation, regulatory matters and changes
  in laws<br>
  </I></B></FONT><FONT size="2" FACE="Arial, Helvetica, sans-serif">Pending or
  future litigation, regulatory initiatives or regulatory proceedings (including
  the increase of class action claims) could have a material and negative effect
  on our businesses, operating results and financial condition. Changes in laws
  or regulations or in how they are interpreted, and the adoption of new laws
  or regulations (including the coming into force on December 31, 2005 of amendments
  to the Securities Act of Ontario introducing a regime of statutory civil liability
  for misrepresentations in continuous disclosure and failure to timely disclose
  material changes, or changes in, or the adoption of, new tax laws that result
  in higher tax rates or new taxes) could also materially and negatively affect
  us.</FONT> </P>
</font><font size="2" face="Arial, Helvetica, sans-serif"> </font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">Please see
  <I>Legal Proceedings We Are Involved In, </I>in BCE Inc.&#145;s Annual Infomation
  Form for the year ended December 31, 2004 (BCE 2004 AIF) filed by BCE Inc. with
  the Canadian securities commissions and with the U.S. Securities and Exchange
  Commission (SEC) under Form 40-F, as updated in BCE Inc.&#145;s 2005 First Quarter
  MD&amp;A dated May 3, 2005 (BCE 2005 First Quarter MD&amp;A), in BCE Inc.&#145;s
  2005 Second Quarter MD&amp;A dated August 2, 2005 (BCE 2005 Second Quarter MD&amp;A)
  and in BCE Inc.&#145;s 2005 Third Quarter MD&amp;A dated November 1, 2005 (BCE
  2005 Third Quarter MD&amp;A), under <I>Recent Developments in Legal Proceedings,</I>
  for a description of the principal legal proceedings involving us.</FONT> </P>
<p align="justify"><font size="2" face="Arial, Helvetica, sans-serif">Please see
  Risks That Could Affect Certain BCE Group Companies - Bell Canada Companies
  - Changes to wireline regulation and Wireless number portability for a </font></p>
<p>&nbsp;</p>
<p align="center"><font size="2" face="Arial, Helvetica, sans-serif">&#151; 12
  &#151;</font></p>
<HR NOSHADE COLOR="Black" SIZE="2">
<p>&nbsp;</p>
<p><font size="2" face="Arial, Helvetica, sans-serif"> description of certain
  regulatory initiatives and proceedings affecting the Bell Canada companies.</font></p>
<font face="Arial, Helvetica, sans-serif">
<P ALIGN="justify"><FONT SIZE="2"><B><I>Funding and control of subsidiaries<br>
  </I></B></FONT><FONT size="2" FACE="Arial, Helvetica, sans-serif">BCE Inc. and
  Bell Canada are currently funding, directly or indirectly, and may, in the future,
  continue to fund, the operating losses of some of their subsidiaries, but they
  are under no obligation to continue doing so. If BCE Inc. or Bell Canada decides
  to stop funding any of its subsidiaries and that subsidiary does not have other
  sources of funding, this would have a material and negative effect on the subsidiary&#146;s
  results of operations and financial condition and on the value of its securities.
  It could also have, depending on factors such as the size or strategic importance
  of the subsidiary, a material and negative effect on the results of operations
  and financial condition of BCE Inc. or Bell Canada.</FONT> </P>
</font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">In addition,
  BCE Inc. and Bell Canada do not have to remain the majority holder of, or maintain
  their current level or nature of ownership in, any subsidiary, unless they have
  agreed otherwise. The announcement of a decision by BCE Inc. or Bell Canada
  to change the nature of its investment in a subsidiary, to dispose of some or
  all of its interest in a subsidiary, or any other similar decision could have
  a material and negative effect on the subsidiary&#146;s results of operations
  and financial condition and on the value of its securities.</FONT> </P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">If BCE Inc.
  or Bell Canada stops funding a subsidiary, changes the nature of its investment
  or disposes of all or part of its interest in a subsidiary, stakeholders or
  creditors of the subsidiary might decide to take legal action against BCE Inc.
  or Bell Canada, respectively. For example, certain members of the lending syndicate
  of Teleglobe, a former subsidiary of BCE Inc., and other creditors of Teleglobe
  have launched lawsuits against BCE Inc. following its decision to stop funding
  Teleglobe. You will find a description of these lawsuits in the BCE 2004 AIF
  under <I>Legal Proceedings We Are Involved In</I> as updated in the BCE 2005
  First Quarter MD&amp;A, BCE 2005 Second Quarter MD&amp;A and BCE 2005 Third
  Quarter MD&amp;A under <I>Recent Developments in Legal Proceedings.</I> While
  we believe that these kinds of claims have no legal foundation, they could negatively
  affect the market price of BCE Inc.&#145;s or Bell Canada&#146;s securities.
  BCE Inc. and Bell Canada could also have to devote considerable management time
  and resources in responding to any such claim.</FONT> </P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font><font face="Arial, Helvetica, sans-serif">
<P ALIGN="justify"><FONT SIZE="2"><B><I>Pension fund contributions</I></B></FONT><br>
  <FONT size="2" FACE="Arial, Helvetica, sans-serif">We have not had to make regular
  contributions to our pension funds in recent years as most of our pension plans
  had pension fund surpluses. However, historically low interest rates combined
  with new actuarial standards effective February 2005, have eroded the pension
  fund surpluses. This has negatively affected our net earnings and liquidity.</FONT>
</P>
</font><font size="2" face="Arial, Helvetica, sans-serif"> </font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">The funding
  status of our pension plans resulting from future valuations of our pension
  plan assets and liabilities depends on a number of factors, including:</FONT></P>
<table width="99%" border="0">
  <tr>
    <td width="5%" align="center" valign="top"><font size="2" face="Arial, Helvetica, sans-serif">&#149;
      </font></td>
    <td width="95%"><font size="2" face="Arial, Helvetica, sans-serif">actual
      returns on pension plan assets</font></td>
  </tr>
  <tr>
    <td width="5%" align="center" valign="top"><font size="2" face="Arial, Helvetica, sans-serif">&#149;
      </font></td>
    <td width="95%"><font size="2" face="Arial, Helvetica, sans-serif">long-term
      interest rates.</font></td>
  </tr>
</table>
<p>&nbsp;</p>
<p align="center"><font size="2" face="Arial, Helvetica, sans-serif">&#151; 13
  &#151;</font></p>
<HR NOSHADE COLOR="Black" SIZE="2">
<p>&nbsp; </p>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">These factors
  could require us to increase future contributions to our defined benefit pension
  plans and therefore could have a material and negative effect on our liquidity
  and results of operations in 2006.</FONT> </P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font><font face="Arial, Helvetica, sans-serif">
<P ALIGN="justify"><FONT SIZE="2"><B><I>Renegotiating labour agreements<br>
  </I></B></FONT><FONT size="2" FACE="Arial, Helvetica, sans-serif">Approximately
  47% of our employees are represented by unions and are covered by collective
  agreements. Renegotiating collective agreements could result in higher labour
  costs and work disruptions, including work stoppages or work slowdowns. Difficulties
  in renegotiations or other labour unrest could significantly hurt our businesses,
  operating results and financial condition. Bell Canada has established a program
  to implement a number of measures to help minimize disruptions and seek to ensure
  that customers continue to receive normal service during labour disruptions.
  There can be no assurance that a strike, if one occurs, would not disrupt service
  to Bell Canada&#146;s customers. In addition, work disruptions at our service
  providers, including work slowdowns and work stoppages due to strikes, could
  significantly hurt our business, including our customer relationships and results
  of operations.</FONT> </P>
</font><font size="2" face="Arial, Helvetica, sans-serif"> </font><font face="Arial, Helvetica, sans-serif">
<P ALIGN="justify"><FONT SIZE="2"><B><I>Events affecting our networks<br>
  </I></B></FONT><FONT size="2" FACE="Arial, Helvetica, sans-serif">Network failures
  could materially hurt our business, including our customer relationships and
  operating results. Our operations depend on how well we protect our networks,
  equipment, applications and the information stored in our data centres against
  damage from fire, natural disaster, power loss, hacking, computer viruses, disabling
  devices, acts of war or terrorism and other events. Our operations also depend
  on the timely replacement and maintenance of our networks and equipment. Any
  of these events could cause our operations to be shut down indefinitely.</FONT>
</P>
</font><font size="2" face="Arial, Helvetica, sans-serif"> </font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">Our networks
  are connected with the networks of other telecommunications carriers, and we
  rely on them to deliver some of our services. Any of the events mentioned in
  the previous paragraph, as well as strikes or other work disruptions, bankruptcies,
  technical difficulties or other events affecting the networks of these other
  carriers, could also hurt our business, including our customer relationships
  and operating results.</FONT> </P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font><font face="Arial, Helvetica, sans-serif">
<P ALIGN="justify"><FONT SIZE="2"><B><I>Software and system upgrades<br>
  </I></B></FONT><FONT size="2" FACE="Arial, Helvetica, sans-serif">Many aspects
  of the BCE group companies&#146; businesses including, but not limited to, the
  provision of telecommunication services and customer billing, depend to a large
  extent on various IT systems and software, which must be improved and upgraded
  on a regular basis and replaced from time to time. The implementation of system
  and software upgrades and conversions is a very complex process, which may have
  several adverse consequences including billing errors and delays in customer
  service. Any of these events could significantly hurt our customer relationships
  and businesses and have a material and adverse effect on our results of operations.</FONT>
</P>
</font><font size="2" face="Arial, Helvetica, sans-serif"> </font><font face="Arial, Helvetica, sans-serif">
<P ALIGN="justify"><FONT SIZE="2"><B><I>Income Trust for Regional Customers<br>
  </I></B></FONT><FONT size="2" FACE="Arial, Helvetica, sans-serif">The completion
  of the proposed transaction involving the formation of an income trust that
  will manage certain of Bell Canada's rural lines and the expected distribution
  of trust </FONT></P>
<P ALIGN="LEFT">&nbsp;</P>
</font>
<div align="center"><font size="2" face="Arial, Helvetica, sans-serif">&#151;
  14 &#151;<br>
  <br>
  </font> </div>
<HR NOSHADE COLOR="Black" SIZE="2">
<font face="Arial, Helvetica, sans-serif">
<P ALIGN="LEFT">&nbsp; </P>
</font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif"> </FONT><font face="Arial, Helvetica, sans-serif"><font size="2" face="Arial, Helvetica, sans-serif">units
  to BCE Inc. shareholders </font></font><FONT size="2" FACE="Arial, Helvetica, sans-serif">is
  subject to a number of conditions including, without limitation, the receipt
  of an advance tax ruling and applicable securities commissions, regulatory and
  stock exchange approvals and possibly third party consents on satisfactory terms,
  the receipt of required securityholder approvals, and the arranging of satisfactory
  bank financing. As a result, there can be no assurance that the transaction
  will be completed in its current form or at all. In addition, the proposed regional
  trust transaction is expected to take a number of months to complete and, during
  such period, especially given the rapid pace of change in the industry and potential
  regulatory developments and/or changes in laws, or for business reasons, the
  proposed regional trust transaction may cease to be as favourable, and/or other
  transactions and opportunities that BCE or Bell Canada consider to be more attractive
  than the proposed regional trust transaction may emerge, in which case the proposed
  transaction could be modified, restructured or terminated.</FONT> </P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">Although
  it is intended that the proposed transaction will be completed without adverse
  effects on our customers or on future customers of the regional trust, there
  can be no assurance that the proposed transaction will not result in customer
  service disruptions. Customer service disruptions may have a negative adverse
  impact on the operations and the financial results of BCE and, in particular,
  of the regional trust.</FONT> </P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">Although
  it is intended that the regional trust will make regular monthly cash distributions
  to unitholders, these cash distributions are not assured and may be reduced
  or suspended. The ability of the trust to maintain cash distributions will be
  subject to certain risks associated with its business and operations, including
  risks relating to general economic conditions, risks from increasing competition
  for both local and long distance as well as Internet services, risks relating
  to changes in technology, industry standards and client needs, the regional
  trust&#146;s ability to quickly and efficiently introduce new products, services
  and technologies, and upgrade existing ones in response to such changes, the
  impact of pending or future litigation or regulatory proceedings and the other
  risk factors referred to herein applicable to BCE companies. The value of the
  regional trust units could decline substantially in the future if the trust
  is unable to meet its cash distribution targets.</FONT> </P>
<P ALIGN="justify"><font size="2" face="Arial, Helvetica, sans-serif"><strong><em>Telesat
  Canada (Telesat)</em></strong></font><br>
  <font size="2" face="Arial, Helvetica, sans-serif">The proposed Telesat recapitalization
  and IPO is expected to take a number of months to complete. During such period,
  especially given the rapid pace of change in the industry and potential regulatory
  developments or changes in laws, or for business reasons (including, without
  limitation, the availability of financing on acceptable terms and the condition
  of the relevant capital markets), it may cease to be as favourable, and/or other
  transactions and opportunities that BCE considers to be more attractive than
  the proposed Telesat recapitalization and IPO may emerge, in which case the
  proposed Telesat recapitalization and IPO could be modified, restructed or temrinated.</font><font face="Arial, Helvetica, sans-serif"></font></P>
<font face="Arial, Helvetica, sans-serif"></font><font face="Arial, Helvetica, sans-serif">
<P ALIGN="justify">&nbsp;</P>
</font>
<p align="center"><font size="2" face="Arial, Helvetica, sans-serif">&#151; 15
  &#151;</font> </p>
<HR NOSHADE COLOR="Black" SIZE="2">
<font face="Arial, Helvetica, sans-serif">
<P ALIGN="justify">&nbsp; </P>
</font>
<p align="LEFT"><font size="2" face="Arial, Helvetica, sans-serif"><b>Risks that
  could affect BCE Inc.</b></font></p>
<p align="justify"><font size="2" face="Arial, Helvetica, sans-serif"><b><i>Holding
  company structure</i></b><br>
  BCE Inc. is a holding company. That means it does not carry on any significant
  operations and has no major sources of income or assets of its own, other than
  the interests it has in its subsidiaries, joint ventures and significantly influenced
  companies. BCE Inc.</font><font face="Arial, Helvetica, sans-serif"><FONT size="2" FACE="Arial, Helvetica, sans-serif">'</FONT></font><font size="2" face="Arial, Helvetica, sans-serif">s
  cash flow and its ability to service its debt and to pay dividends on its shares
  all depend on dividends or other distributions it receives from its subsidiaries,
  joint ventures and significantly influenced companies and, in particular, from
  Bell Canada. BCE Inc.</font><font face="Arial, Helvetica, sans-serif"><FONT size="2" FACE="Arial, Helvetica, sans-serif">'</FONT></font><font size="2" face="Arial, Helvetica, sans-serif">s
  subsidiaries, joint ventures and significantly influenced companies are separate
  legal entities.</font> </p>
<font size="2" face="Arial, Helvetica, sans-serif"> </font>
<p align="justify"><font size="2" face="Arial, Helvetica, sans-serif"><b><i>Stock
  market volatility<br>
  </i></b>The stock markets have experienced significant volatility over the past
  few years, which has affected the market price and trading volumes of the shares
  of many telecommunications companies in particular. Differences between BCE
  Inc.</font><font face="Arial, Helvetica, sans-serif"><FONT size="2" FACE="Arial, Helvetica, sans-serif">'</FONT></font><font size="2" face="Arial, Helvetica, sans-serif">s
  actual or anticipated financial results and the published expectations of financial
  analysts may also contribute to volatility in BCE Inc.</font><font face="Arial, Helvetica, sans-serif"><FONT size="2" FACE="Arial, Helvetica, sans-serif">'</FONT></font><font size="2" face="Arial, Helvetica, sans-serif">s
  common shares. A major decline in the capital markets in general, or an adjustment
  in the market price or trading volumes of BCE Inc.&#145;s common shares or other
  securities, may materially and negatively affect our ability to raise capital,
  issue debt, retain employees, make strategic acquisitions or enter into joint
  ventures.</font> </p>
<font size="2" face="Arial, Helvetica, sans-serif"> </font><font face="Arial, Helvetica, sans-serif">
<P ALIGN="LEFT"><FONT SIZE="2"><B>Risks that could affect certain BCE Group companies</B></FONT></P>
<font size="2">
<P ALIGN="LEFT"><B>Bell Canada companies</B></P>
<P ALIGN="LEFT"><B><I>Changes to wireline regulation</I></B></P>
<P ALIGN="justify"><I>Decisions of regulatory agencies<br>
  </I><FONT size="2" FACE="Arial, Helvetica, sans-serif">The business of the Bell
  Canada companies is affected by decisions made by various regulatory agencies,
  including the CRTC. For example, many of the decisions of the CRTC indicate
  that they try to balance requests from competitors for access to facilities,
  such as the telecommunications networks, switching and transmission facilities,
  and other network infrastructure of incumbent telephone companies, with the
  rights of the incumbent telephone companies to compete reasonably freely. There
  is a risk that such decisions of the CRTC, and in particular the decisions dealing
  with prices at which we must provide such access, may adversely affect our business
  and results of operations.</FONT> </P>
</font></font><font size="2" face="Arial, Helvetica, sans-serif"> </font><font face="Arial, Helvetica, sans-serif">
<P ALIGN="justify"><FONT SIZE="2"><I>Second Price Cap decision<br>
  </I></FONT><FONT size="2" FACE="Arial, Helvetica, sans-serif">In May 2002, the
  CRTC issued decisions relating to new price cap rules that govern incumbent
  telephone companies for the four-year period starting in June 2002. These decisions:</FONT></P>
</font>
<table width="99%" border="0">
  <tr>
    <td width="5%" align="center" valign="top"><font size="2" face="Arial, Helvetica, sans-serif">&#149;
      </font></td>
    <td width="95%"><div align="justify"><font face="Arial, Helvetica, sans-serif"><font size="2" face="Arial, Helvetica, sans-serif">set
        a 3.5% productivity factor on many capped services, which has required
        the Bell Canada companies to reduce prices for these services</font></font></div></td>
  </tr>
</table>
<p align="justify"><font face="Arial, Helvetica, sans-serif"></font><FONT size="2" FACE="Arial, Helvetica, sans-serif">
  </FONT></p>
<font face="Arial, Helvetica, sans-serif"></font>
<p align="center"><font size="2" face="Arial, Helvetica, sans-serif">&#151; 16
  &#151;</font></p>
<HR NOSHADE COLOR="Black" SIZE="2">
<font face="Arial, Helvetica, sans-serif">
<P ALIGN="justify">&nbsp;</P>
</font>
<table width="99%" border="0">
  <tr>
    <td width="5%" align="center" valign="top"><font size="2" face="Arial, Helvetica, sans-serif">&#149;
      </font></td>
    <td width="95%"><font face="Arial, Helvetica, sans-serif"><font size="2" face="Arial, Helvetica, sans-serif">extended
      price cap regulation to more services</font></font></td>
  </tr>
  <tr>
    <td width="5%" align="center" valign="top"><font size="2" face="Arial, Helvetica, sans-serif">&#149;
      </font></td>
    <td width="95%"><font face="Arial, Helvetica, sans-serif"><font size="2" face="Arial, Helvetica, sans-serif">reduced
      the prices that incumbent telephone companies can charge competitors for
      services</font></font></td>
  </tr>
  <tr>
    <td width="5%" align="center" valign="top"><font size="2" face="Arial, Helvetica, sans-serif">&#149;
      </font></td>
    <td width="95%"><font face="Arial, Helvetica, sans-serif"><font size="2" face="Arial, Helvetica, sans-serif">set
      procedures for enforcing standards of service quality</font></font></td>
  </tr>
  <tr>
    <td width="5%" align="center" valign="top"><font size="2" face="Arial, Helvetica, sans-serif">&#149;
      </font></td>
    <td width="95%"><font face="Arial, Helvetica, sans-serif"><font size="2" face="Arial, Helvetica, sans-serif">effectively
      froze rates for residential basic services.</font></font></td>
  </tr>
</table>
<font face="Arial, Helvetica, sans-serif">
<P ALIGN="justify"><font size="2" face="Arial, Helvetica, sans-serif">The CRTC
  also established the deferral account, an obligation which changes as amounts
  are added to the account, or the CRTC approves initiatives that serve to reduce
  the account. Balances remaining in the deferral accounts bear interest at the
  incumbent telephone companies&#146; short-term cost of debt each year until
  disposition.</font><font face="Arial, Helvetica, sans-serif"> </font></P>
</font>
<div align="justify"><font size="2" face="Arial, Helvetica, sans-serif">The total
  balance in Bell Canada&#146;s and Aliant&#146;s deferral accounts at December
  31, 2005 is estimated to be approximately $107 million. This amount represents
  Bell Canada&#146;s and Aliant&#146;s estimated annual commitments under the
  deferral account mechanism, calculated in terms of permanent rate reductions,
  from January 1, 2006 onwards. The CRTC may</font><font face="Arial, Helvetica, sans-serif">
  </font><FONT size="2" FACE="Arial, Helvetica, sans-serif">decide to clear the
  amount in the accounts by means of permanent rate reductions or other initiatives,
  including capital initiatives.</FONT> </div>
<font face="Arial, Helvetica, sans-serif"></font><font size="2" face="Arial, Helvetica, sans-serif">
</font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">On March
  24, 2004, the CRTC initiated a public proceeding inviting proposals on the disposition
  of the amounts accumulated in the accounts of the incumbent telephone companies
  during the first two years of the price cap period. Bell Canada and Aliant have
  filed proposals for the disposition of their respective deferral accounts. Bell
  Canada&#146;s proposal takes into account, among other things, the draw down
  impact associated with Decision 2005-6 of the CRTC discussed below under <I>Competitor
  Digital Network Service</I>.</FONT> </P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font>
<P ALIGN="LEFT"><FONT size="2" FACE="Arial, Helvetica, sans-serif">The record
  of this proceeding is now closed and a decision is expected in early 2006.</FONT>
</P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">There is
  a risk that the funds in Bell Canada&#146;s and Aliant&#146;s deferral accounts
  could be used in a way that could have a negative financial effect on Bell Canada
  and Aliant.</FONT> </P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">On May 13,
  2005, the CRTC issued a Public Notice calling for comments on a proposal to
  extend the current price cap regime, which is to expire on May 31, 2006, for
  another two years. On December 16, 2005, the CRTC issued Decision 2005-69 in
  which it extended the current price cap regime without changes for a period
  of one year, to May 31, 2007. In the decision, the CRTC also indicated that
  it will initiate a proceeding to review the existing price regulation regime
  following the release of the decision in the proceeding initiated by <I>Forbearance
  from regulation of local exchange services</I>, Public Notice 2005-2, which
  is expected to be issued in March 2006.</FONT> </P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font><font face="Arial, Helvetica, sans-serif">
<P ALIGN="justify"><FONT SIZE="2"><I>Competitor Digital Network Service<br>
  </I></FONT><FONT size="2" FACE="Arial, Helvetica, sans-serif">The CRTC released
  Decision 2005-6 on February 3, 2005, concerning CDN services. This decision
  determined the rates, terms and conditions for the provision of digital network
  services by Bell Canada and the other incumbent telephone companies to their
  competitors. This decision affected both Bell Canada and Aliant as providers
  of CDN </FONT></P>
</font>
<p>&nbsp;</p>
<p align="center"><font size="2" face="Arial, Helvetica, sans-serif">&#151; 17
  &#151;</font></p>
<HR NOSHADE COLOR="Black" SIZE="2">
<p align="justify">&nbsp;</p>
<p align="justify"><font size="2" face="Arial, Helvetica, sans-serif">services
  in their respective operating territories and as purchasers of those services
  elsewhere in Canada.</font> </p>
<font size="2" face="Arial, Helvetica, sans-serif"> </font>
<p align="justify"><font size="2" face="Arial, Helvetica, sans-serif">The CRTC
  determined that CDN services should include not only digital network access
  components but also include intra-exchange facilities, interexchange facilities
  in certain metropolitan areas, channelization and co-location links (expanded
  CDN services). However, other than for the low speed accesses and link components,
  the CRTC determined that these expanded CDN services should not be priced as
  essential facilities but will be priced to include &#147;appropriate mark-ups&#148;
  so as to encourage competitors to construct their own facilities. Furthermore,
  on January 6, 2006, the CRTC released Decision 2006-1 where it clarified that
  in order to qualify for CDN service a competitor&#146;s circuit must terminate
  at a point of presence located in Canada.</font> </p>
<font size="2" face="Arial, Helvetica, sans-serif"> </font>
<p align="justify"><font size="2" face="Arial, Helvetica, sans-serif">There are
  two important financial aspects to note in this decision. First, the prices
  for all CDN services were applied on a going-forward basis, effective the date
  of the decision, and Bell Canada will be compensated for the resulting revenue
  losses from the deferral account. Secondly, Bell Canada will also be compensated
  through the deferral account for the application of reduced rates on a retroactive
  basis for the CDN access components that were tariffed at interim rates prior
  to the decision. Bell Canada has filed its estimated drawdown from the deferral
  account as a result of this decision. In a letter dated September 1, 2005, the
  CRTC postponed the due date for the filing of updated estimates until certain
  outstanding issues related to CDN services currently before the CRTC are resolved.
  The CRTC also stated that it will provide direction to the incumbent telephone
  companies regarding the deadline to provide the updated deferral account estimates
  when it releases its decision regarding the issues being examined in Public
  Notice 2004-1: <I>Review and disposition of deferral accounts for the second
  price cap period</I>, which is expected in early 2006.</font> </p>
<font size="2" face="Arial, Helvetica, sans-serif"> </font><font face="Arial, Helvetica, sans-serif">
<P ALIGN="justify"><FONT SIZE="2"><I>Retail quality of service indicators<br>
  </I></FONT><FONT size="2" FACE="Arial, Helvetica, sans-serif">On March 24, 2005,
  the CRTC released Decision 2005-17 which, among other things, established the
  rate adjustment plan to be applied when incumbent telephone companies do not
  meet mandated standards of quality of service provided to their retail customers.
  As a result of this decision, incumbent telephone companies are subject to a
  penalty mechanism when they do not meet one or more service standards for their
  retail services. For Bell Canada, this maximum potential penalty amount equates
  to approximately $245 million annually, based on 2004 revenues. For the period
  during which this plan was interim, July 1, 2002 to December 31, 2004, Bell
  Canada did not have to pay any penalties. Regarding the current penalty period
  of January 1 to December 31, 2005, the CRTC standard for several indicators
  was not met on an annual average basis, as a direct result of the strike by
  the Communications, Energy and Paperworkers&#146; Union of Canada against Bell
  Canada&#146;s supplier of installation and repair services, Entourage Technology
  Solutions. The strike commenced on March 28, 2005 and all employees were to
  have returned to work by August 8, 2005. Given that this situation meets the
  criteria stipulated by the CRTC for <I>force majeure</I> type exclusions to
  the penalty plan, Bell Canada has requested that the CRTC approve the application
  made by Bell Canada on December 5, </FONT></P>
</font><font face="Arial, Helvetica, sans-serif">
<P ALIGN="justify">&nbsp;</P>
</font>
<p align="center"><font size="2" face="Arial, Helvetica, sans-serif">&#151; 18
  &#151;</font></p>
<HR NOSHADE COLOR="Black" SIZE="2">
<font face="Arial, Helvetica, sans-serif">
<P ALIGN="justify">&nbsp;</P>
<P ALIGN="justify"><font size="2" face="Arial, Helvetica, sans-serif">2005 for
  the purpose of excluding below-standard strike-related results. However, there
  is no assurance that the CRTC will issue a favourable decision.</font> </P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font> </font>
<p align="justify"><font size="2" face="Arial, Helvetica, sans-serif">For Aliant,
  the CRTC determined that it did not meet certain service standards during the
  period January 1, 2004 to December 31, 2004. Applying the rate adjustment plan
  would result in an estimated penalty of $3 million. Aliant has applied to the
  CRTC for an exclusion from having to pay a penalty due to its labour disruption
  last year, as allowed for in the decision. The CRTC has not yet ruled on this
  application. Regarding the penalty period of January 1 to December 31, 2005,
  the CRTC standard for two indicators was missed on an annual average basis,
  resulting in a possible penalty of approximately $2 million.</font> </p>
<font size="2" face="Arial, Helvetica, sans-serif"> </font>
<p align="justify"><font size="2" face="Arial, Helvetica, sans-serif"><i>Decision
  on incumbent affiliates<br>
  </i>On December 12, 2002, the CRTC released its decision on incumbent affiliates,
  which requires Bell Canada and its carrier affiliates to receive CRTC approval
  on contracts that bundle tariffed and non-tariffed products and services. This
  means that:</font></p>
<table width="99%" border="0">
  <tr>
    <td width="5%" align="center" valign="top"><font size="2" face="Arial, Helvetica, sans-serif">&#149;</font></td>
    <td><div align="justify"><font size="2" face="Arial, Helvetica, sans-serif">all
        existing contracts that bundle tariffed and non-tariffed products and
        services must be filed with the CRTC for approval</font></div></td>
  </tr>
  <tr>
    <td width="5%" align="center" valign="top"><font size="2" face="Arial, Helvetica, sans-serif">&#149;</font></td>
    <td><div align="justify"><font size="2" face="Arial, Helvetica, sans-serif">all
        new contracts that bundle tariffed and non-tariffed products and services
        must receive CRTC approval before they are carried out</font></div></td>
  </tr>
  <tr>
    <td width="5%" align="center" valign="top"><font size="2" face="Arial, Helvetica, sans-serif">&#149;</font></td>
    <td><div align="justify"><font size="2" face="Arial, Helvetica, sans-serif">carrier
        affiliates must meet the same approval requirements as Bell Canada on
        products and services they offer in Bell Canada&#146;s operating territory.</font></div></td>
  </tr>
</table>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">On September
  23, 2003, the CRTC issued a decision that requires Bell Canada and its carrier
  affiliates to include a detailed description of the bundled services they provide
  to customers when they file tariffs with the CRTC. The customer&#146;s name
  will be kept confidential, but the pricing and service arrangements it has with
  the Bell Canada companies will be available on the public record.</FONT> </P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">This decision
  increased the regulatory burden for Bell Canada and its carrier affiliates at
  both the wholesale and retail levels. It could also cause some of their large
  customers to choose another preferred supplier, which could have a material
  and negative effect on their results of operations. Following the dismissal
  of its appeal by the Federal Court of Canada, Bell Canada has submitted tariffs
  for CRTC approval for those contracts with bundles that have not yet expired
  in order to provide more detailed descriptions of the bundled services.</FONT>
</P>
<div align="justify"><font size="2" face="Arial, Helvetica, sans-serif"><em>Application
  seeking consistent regulation and regulatory framework for VoIP<br>
  </em></font><FONT size="2" FACE="Arial, Helvetica, sans-serif">On November 6,
  2003, Bell Canada filed an application requesting that the CRTC start a public
  hearing to review how similar services offered by cable companies and telephone
  companies are regulated. This would allow consistent rules to be developed that
  recognize and support the growing competition between these sectors. Bell Canada
  also requested that this proceeding address any rules that might be needed to
  govern VoIP services provided by cable companies and others.</FONT> </div>
<P ALIGN="justify">&nbsp;</P>
<p align="center"><font size="2" face="Arial, Helvetica, sans-serif">&#151; 19
  &#151;</font></p>
<HR NOSHADE COLOR="Black" SIZE="2">
<p>&nbsp;</p>
<p><font size="2" face="Arial, Helvetica, sans-serif">After conducting a public
  proceeding relating to VoIP, on May 12, 2005, the CRTC released Decision 2005-28
  which determined the way the CRTC will regulate VoIP services. The CRTC determined
  that VoIP services (other than peer-to-peer services, defined in the decision
  as Internet Protocol communications services between two computers) provided
  by Bell Canada and other incumbent telephone companies will be regulated in
  the same way as traditional telephone services. As a result of this decision,
  VoIP services that use telephone numbers that conform to the North American
  Numbering Plan, and that provide universal access to and/or from the Public
  Switched Telephone Network will, for incumbent telephone companies, be treated
  as regulated local exchange services. Accordingly, tariffs have to be filed
  by incumbent telephone companies, but not by their competitors, when they provide
  customers with local VoIP services using a telephone number associated with
  that incumbent telephone company&#146;s territory. In addition, the winback
  rules will apply, which means that incumbent telephone companies cannot attempt
  to directly contact a former residential local service customer for a period
  of 12 months from the time the customer takes a traditional local telephone
  service or VoIP service from a competitor. Other restrictions on promotions
  and bundling which apply to traditional local wireline services also apply to
  VoIP. These </font><FONT size="2" FACE="Arial, Helvetica, sans-serif">regulatory
  requirements could reduce Bell Canada&#146;s and Aliant&#146;s flexibility to
  compete with both traditional and new competitors, and thus could adversely
  affect our business and results of operations.</FONT> </p>
<font size="2" face="Arial, Helvetica, sans-serif"> </font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">Also as
  a result of Decision 2005-28, incumbent telephone companies as well as competitive
  local exchange carriers will have to fulfill, in relation to VoIP services,
  other requirements that apply to traditional telephone services, such as local
  number portability, allowing customers to use any long distance provider of
  their choice, listing telephone numbers in the directory associated with the
  local telephone number chosen by the customer, offering services for the hearing
  impaired, and privacy safeguards. These regulatory requirements could increase
  operational costs and reduce Bell Canada&#146;s and Aliant&#146;s flexibility
  to compete with resellers, and thus could adversely affect our business and
  results of operations.</FONT> </P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">In 2005,
  Bell Canada introduced three retail VoIP services in Qu&eacute;bec and Ontario.
  Bell Digital Voice Lite and Bell Digital Voice are offered to residential customers
  and Business IP Voice is offered to business customers. These services are offered
  pursuant to tariffs which have received interim approval from the CRTC. CRTC
  public processes relating to these filings were held in 2005 and decisions on
  final approval of the tariffs are expected in March 2006. The CRTC has, on an
  interim basis, permitted Bell Canada to file VoIP tariff notices for the CRTC&#146;s
  approval, on a confidential basis, which provide for minimum and maximum rates
  associated with each proposed VoIP service plan. Once the minimum and maximum
  rates are approved, for all future price changes within that range, Bell Canada
  can issue new tariff pages on their effective date. No additional CRTC approvals
  are required for price changes within the ranges. The CRTC has also, on an interim
  basis, permitted Bell Canada to price its Bell Digital Voice service differently
  on a province-wide basis in Ontario and Qu&eacute;bec. A final decision from
  the CRTC regarding these tariff notices could result in a different outcome,
  and thus could adversely affect our business and results of operations.</FONT>
</P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font>
<P ALIGN="justify">&nbsp;</P>
<font face="Arial, Helvetica, sans-serif"></font>
<p align="center"><font size="2" face="Arial, Helvetica, sans-serif">&#151; 20
  &#151;</font></p>
<HR NOSHADE COLOR="Black" SIZE="2">
<font face="Arial, Helvetica, sans-serif">
<P ALIGN="justify">&nbsp;</P>
<P ALIGN="justify"><font size="2" face="Arial, Helvetica, sans-serif">On July
  5, 2005, the Province of Saskatchewan filed a Petition with the Governor in
  Council requesting that it address the inequities of Decision 2005-28 by directing
  the CRTC to ensure that all companies offering VoIP services in Saskatchewan
  are competing on a level playing field. Bell Canada together with Aliant, TELUS
  Communications Inc. (TELUS), T&eacute;l&eacute;bec, soci&eacute;t&eacute; en
  commandite and SaskTel Telecommunications (SaskTel) have jointly filed a Petition
  with the Governor in Council on July 28, 2005 to vary the Decision so as to
  eliminate economic regulation of VoIP services and thereby remove inequities
  in the regulatory framework for VoIP services applicable to the incumbent telephone
  companies, including the requirement to file and obtain approval of tariffs
  and the application of the bundling rules, promotions restrictions and winback
  rules.</font> </P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font> </font>
<p align="justify"><font size="2" face="Arial, Helvetica, sans-serif"><i>Winback
  rules</i></font><font face="Arial, Helvetica, sans-serif"><br>
  <font size="2">On June 13, 2005, Bell Canada, together with TELUS and Sasktel,
  sought leave from the Federal Court of Appeal to appeal the winback rules included
  in Decision 2005-28 on the grounds that such winback rules constitute a violation
  of Bell Canada&#146;s, and its </font></font><FONT size="2" FACE="Arial, Helvetica, sans-serif">customers&#146;,
  freedom of expression, which is a freedom protected under the Canadian Charter
  of Rights and Freedoms (<I>Charter</I>). On December 7, 2005, Bell Canada and
  the other applicants applied to the Federal Court of Appeal for permission to
  adjourn, or suspend, their leave to appeal application. The reason underlying
  this request to adjourn is a separate, on-going Bell Canada and SaskTel application
  to the CRTC. In their application before the CRTC, Bell Canada and SaskTel have
  requested that the CRTC discontinue the winback rules on the grounds that these
  rules violate the <I>Charter </I>guarantees to freedom of expression of the
  incumbent telephone companies and their consumers. In another CRTC application,
  dated November 23, 2005, Bell Canada applied to the CRTC to stay the winback
  rules in Bell Canada&#146;s traditional local territories. The records of the
  Bell Canada and SaskTel winback application, and Bell Canada&#146;s stay application,
  are closed and decisions are pending.</FONT> </p>
<font face="Arial, Helvetica, sans-serif"></font><font size="2" face="Arial, Helvetica, sans-serif">
</font><font face="Arial, Helvetica, sans-serif">
<P ALIGN="justify"><FONT SIZE="2"><I>Forbearance from regulation of local exchange
  services<br>
  </I></FONT><FONT size="2" FACE="Arial, Helvetica, sans-serif">On April 28, 2005,
  the CRTC issued a Public Notice on a framework for forbearance from the regulation
  of residential and business local exchange services offered by the incumbent
  telephone companies. The rules resulting from this Public Notice are intended
  to clarify the conditions under which Bell Canada and the other incumbent telephone
  companies will be able to seek regulatory forbearance for local exchange services.
  The CRTC will also address Aliant&#146;s April 2004 application which requested
  forbearance from the regulation of specified residential wireline local services
  in 32 exchanges. The CRTC plans to issue a decision in March 2006. Bell Canada&#146;s
  and the other incumbent telephone companies&#146; flexibility to compete could
  be adversely affected in the event that the CRTC, in its decision, establishes
  onerous conditions to be satisfied in order for the incumbent telephone companies
  to obtain regulatory forbearance of residential and business local exchange
  services.</FONT><font face="Arial, Helvetica, sans-serif"> </font><font face="Arial, Helvetica, sans-serif">
  </font></P>
</font><font face="Arial, Helvetica, sans-serif">
<P ALIGN="justify"><FONT SIZE="2"><I>Price floor safeguards for retail services</I></FONT><br>
  <FONT size="2" FACE="Arial, Helvetica, sans-serif">On April 29, 2005, the CRTC
  issued its decision on price floor safeguards (minimum prices for the regulated
  services of incumbent telephone companies) and other related </FONT> </P>
</font>
<P ALIGN="justify">&nbsp;</P>
<P ALIGN="center"><font size="2" face="Arial, Helvetica, sans-serif">&#151; 21
  &#151;</font></P>
<HR NOSHADE COLOR="Black" SIZE="2">
<P ALIGN="justify">&nbsp;</P>
<P ALIGN="justify"><font size="2" face="Arial, Helvetica, sans-serif">issues.
  In this decision, the CRTC rejected most of its preliminary proposals (set out
  in its October 23, 2003 Public Notice on changes to minimum prices) to change
  the pricing and bundling rules that apply to the incumbent telephone companies
  and modified others. The CRTC&#146;s preliminary proposals, if implemented,
  would have resulted in significantly higher price floors for services offered
  to residential, small and medium business and enterprise customers. The CRTC
  also denied an application by Rogers Communications Inc. to prohibit the incumbent
  telephone companies from bundling residential tariffed services with forborne
  services.</font> </P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font>
<p align="justify"><font size="2" face="Arial, Helvetica, sans-serif">Although
  the CRTC decision rejected most of its preliminary proposals, it made minor
  changes to the imputation tests to be satisfied by incumbent telephone companies
  with respect to stand-alone services, generally offered in bundles, and term
  and volume contracts. In some circumstances, the changes will, in the future,
  result in higher price floors for new services and bundles which could negatively
  limit Bell Canada&#146;s ability to compete.</font><font face="Arial, Helvetica, sans-serif">
  </font></p>
<font face="Arial, Helvetica, sans-serif">
<P ALIGN="justify"><FONT SIZE="2"><I>Application to change bundling rates<br>
  </I></FONT><FONT size="2" FACE="Arial, Helvetica, sans-serif">On September 2,
  2005, Bell Canada applied to the CRTC for a modification of the bundling rules
  applicable to customer-specific arrangements (CSAs), which are arrangements
  tailored to a particular customer&#146;s needs for the purpose of customizing
  the offering in terms of rate structure and levels.</FONT> </P>
</font><font size="2" face="Arial, Helvetica, sans-serif"> </font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">At present,
  the CRTC requires that a CSA involving both tariffed and non-tariffed services
  (Mixed CSAs) be filed for approval with the CRTC before it can be provided to
  customers. Bell Canada&#146;s proposal would exempt a Mixed CSA from the bundling
  rules and associated tariff requirements, provided that the revenues from a
  CSA exceed the price of the tariffed components of the CSA and provided that
  the CSA is not part of a practice designed to circumvent tariffs. Bell Canada&#146;s
  flexibility to compete may continue to be encumbered if the proposal is not
  approved.</FONT> </P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font><font face="Arial, Helvetica, sans-serif">
<P ALIGN="justify"><FONT SIZE="2"><I>Bell Canada proposals to Telecom Policy Review
  Panel<br>
  </I></FONT><FONT size="2" FACE="Arial, Helvetica, sans-serif">On April 11, 2005
  the Minister of Industry announced the creation of the Telecom Policy Review
  Panel (Panel) to conduct a review of Canada&#146;s telecommunications policy
  and regulatory framework, and make recommendations. The Government of Canada
  had asked the Panel to deliver a final report by the end of 2005. However, issuance
  of the report has been delayed and it is not clear when the report will be released
  to the public.</FONT> </P>
</font><font size="2" face="Arial, Helvetica, sans-serif"> </font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">The Panel
  itself called for submissions on all the issues within its mandate. On August
  15, 2005, Bell Canada submitted its recommendations to the Panel including a
  proposal for the adoption of a comprehensive &#147;next generation&#148; regulatory
  framework that relies on market forces to the maximum extent possible to ensure
  the telecommunications industry&#146;s continued role as a key enabler of Canada&#146;s
  overall economic performance. The proposal included detailed suggestions for
  significant changes to the <I>Telecommunications Act </I>and related statutes,
  and for the realignment of responsibilities for the CRTC, Industry Canada and
  the Competition Bureau. The proposal also </FONT></P>
<P ALIGN="justify">&nbsp;</P>
<P ALIGN="center"><font size="2" face="Arial, Helvetica, sans-serif">&#151; 22
  &#151;</font></P>
<HR NOSHADE COLOR="Black" SIZE="2">
<P ALIGN="justify">&nbsp;</P>
<P ALIGN="justify"><font size="2" face="Arial, Helvetica, sans-serif">recommended
  that the Minister of Industry issue a policy direction to the CRTC which would
  result in significant regulatory reform.</font> </P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font>
<p align="justify"><font size="2" face="Arial, Helvetica, sans-serif">There can
  be no guarantee that the Panel will adopt any or all of Bell Canada&#146;s proposals,
  and even if they were adopted, that the Minister of Industry and Parliament
  would implement the Panel&#146;s recommendations. Furthermore, a number of intervenors
  to the Panel have opposed the regulatory reforms suggested by Bell Canada and
  advocated different reforms including significantly expanding the extent of
  wholesale regulation of Bell Canada and other incumbent telephone companies&#146;
  facilities. There is a risk that the Panel could follow those recommendations
  and propose that they be adopted by the Minister of Industry and Parliament.
  Implementation of the recommendations and proposals of opposing parties could
  have a material and negative effect on the Bell Canada companies.</font></p>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif"><I>Access
  to Bell Canada loops for Competitor Local Exchange Carriers&#146; customers
  served via remotes </I><br>
  On September 2, 2005, Rogers Telecom Inc. (Rogers) submitted an application
  pursuant to Part VII of the <I>CRTC Telecommunications Rules of Procedure </I>requesting
  that the CRTC direct Bell Canada to make unbundled loops, which are transmission
  paths between the users&#146; premises and the central office that are provided
  separately from other components, available to competitors in a timely manner
  in certain specified areas where Rogers is present. On October 3, 2005, Bell
  Canada provided its response to the Rogers&#146; application. In Bell Canada&#146;s
  response it explained the reasons why in some areas where competitors are present
  and the competitors&#146; potential end customer is served via a Bell Canada
  remote, unbundled loops should not have to be provided unless Bell Canada is
  compensated by competitors for the costs it incurs on their behalf.</FONT> </P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">The cost
  to equip Bell Canada&#146;s network in order to provide unbundled loops to competitors
  in locations where a potential competitor&#146;s end customer is currently served
  via a Bell Canada remote could be significant should the CRTC grant Rogers&#146;
  request. It is anticipated that the CRTC will institute a further process to
  examine this matter prior to rendering a decision.</FONT> </P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font><font face="Arial, Helvetica, sans-serif">
<P ALIGN="justify"><FONT SIZE="2"><B><I>Wireless number portability<br>
  </I></B></FONT><FONT size="2" FACE="Arial, Helvetica, sans-serif">The Government
  of Canada in its 2005 Budget announced that it intended to ask the CRTC to implement
  wireless number portability. Number portability enables customers to retain
  the same phone number when changing service provider within the same local serving
  area. On September 16, 2005 the CRTC issued Telecom Public Notice CRTC 2005-14,
  <I>Implementation of Wireless Number Portability</I>, which dealt with a number
  of preliminary regulatory issues that are required to enable portability to
  proceed.</FONT> </P>
</font><font size="2" face="Arial, Helvetica, sans-serif"> </font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">On December
  20, 2005 the CRTC released Telecom Decision 2005-72. Among other things the
  decision directed Bell Mobility, Rogers Wireless and TELUS Mobility to implement
  wireless number portability in Alberta, British Columbia, Ontario and Quebec
  by March 14, 2007. This accelerated timeframe will be challenging for Bell Mobility
  and the rest of the wireless industry to meet. The CRTC has also indicated that
  it will issue a </FONT> </P>
<font face="Arial, Helvetica, sans-serif">
<P ALIGN="justify">&nbsp;</P>
</font>
<p align="center"><font size="2" face="Arial, Helvetica, sans-serif">&#151; 23
  &#151;</font></p>
<HR NOSHADE COLOR="Black" SIZE="2">
<font face="Arial, Helvetica, sans-serif">
<P ALIGN="justify">&nbsp;</P>
<P ALIGN="justify"><font size="2" face="Arial, Helvetica, sans-serif">subsequent
  Public Notice in January 2006 to address a wide range of details associated
  with the implementation of wireless number portability in Canada.</font> </P>
<font size="2" face="Arial, Helvetica, sans-serif"> <b></b></font> </font>
<p align="justify"><font size="2" face="Arial, Helvetica, sans-serif"><b><i>Licences
  for broadcasting<br>
  </i></b>On November 18, 2004, the CRTC issued Broadcasting Decision CRTC 2004-496,
  which approved Bell Canada&#146;s applications for licences to operate terrestrial
  BDUs, using its wireline facilities, to serve large cities in Southern Ontario
  and Qu&eacute;bec. Bell Canada was licensed under the same terms and conditions
  that apply to major cable operators, without any delays or other conditions
  that would negatively affect its ability to compete with them. The licences
  will be issued once Bell Canada informs the CRTC that it is ready to commence
  operations and will expire on August 31, 2011. Bell Canada is required to have
  the terrestrial BDUs operational no later than November 18, 2006, unless an
  extension of time is approved by the CRTC. On August 2, 2005, Bell Canada acquired
  certain assets and the</font> <FONT size="2" FACE="Arial, Helvetica, sans-serif">residential
  cable business of Cable VDN Inc. operating in the Montr&eacute;al. Bell Canada
  advised the CRTC that it was commencing operations in the Montr&eacute;al service
  area under its terrestrial BDU licence and that under this licence it was continuing
  the cable operations of Cable VDN Inc.</FONT> </p>
<font face="Arial, Helvetica, sans-serif"></font><font size="2" face="Arial, Helvetica, sans-serif">
</font><font face="Arial, Helvetica, sans-serif">
<P ALIGN="justify"><FONT SIZE="2"><B><I>Licences and changes to wireless regulation<br>
  </I></B></FONT><FONT size="2" FACE="Arial, Helvetica, sans-serif">Companies
  must have a spectrum licence to operate cellular, PCS and other radio-telecommunications
  systems in Canada. The Minister of Industry awards spectrum licences, through
  a variety of methods, at his or her discretion under the <I>Radiocommunication
  Act</I>.</FONT></P>
</font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">As a result
  of an Industry Canada decision, the cellular and PCS licences under which Bell
  Mobility, Aliant Telecom and MT&amp;T Mobility provide service, which would
  have expired on March 31, 2006, will now expire in 2011. The PCS licences that
  were awarded in the 2001 PCS auction will expire on November 29, 2011. While
  we expect that they will be renewed at term, there is no assurance that this
  will happen. Industry Canada can revoke a company&#146;s licence at any time
  if the company does not comply with the licence&#146;s conditions. While we
  believe that we comply with the conditions of our licences, there is no assurance
  that Industry Canada will agree. Should there be a disagreement, this could
  have a material and negative effect on the Bell Canada companies.</FONT> </P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">In October
  2001, the Minister of Industry announced plans for a national review of Industry
  Canada&#146;s procedures for approving and placing wireless and radio towers
  in Canada, including a review of the role of municipal authorities in the approval
  process. Industry Canada released its report in February 2005. Among other things,
  the report recommends that the authority to regulate the siting of antennae
  and supporting structures remain exclusively with the Government of Canada.
  In August 2005, Industry Canada convened a meeting of the wireless carriers
  and broadcasters and presented a revised draft policy for comment. The wireless
  and broadcasting industries both have a number of concerns with the draft policy
  and are now working with Industry Canada to attempt to resolve these concerns.
  Government &#150; industry consultative working group meetings, examining specific
  details of the draft policy, were convened in December 2005 and </FONT></P>
<P ALIGN="justify">&nbsp;</P>
<font face="Arial, Helvetica, sans-serif"></font>
<p align="center"><font size="2" face="Arial, Helvetica, sans-serif">&#151; 24
  &#151;</font></p>
<HR NOSHADE COLOR="Black" SIZE="2">
<font face="Arial, Helvetica, sans-serif">
<P ALIGN="justify">&nbsp;</P>
<P ALIGN="justify"><font size="2" face="Arial, Helvetica, sans-serif">January
  2006. It is not possible to predict at this time if or when the final policy
  will be issued. If the final policy requires more municipal or public consultation
  in the approval process, there is a risk that it could significantly slow the
  expansion of wireless networks in Canada. This could have a material and negative
  effect on the operations of the Bell Canada companies.</font> </P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font> </font>
<p align="justify"><font size="2" face="Arial, Helvetica, sans-serif"><b><i>Revenue
  from major customers<br>
  </i></b>A significant amount of revenue earned by Bell Canada&#146;s Enterprise
  unit comes from a small number of major customers. If we lose contracts with
  these major customers and cannot replace them, it could have a material and
  negative effect on our financial results.</font> <font face="Arial, Helvetica, sans-serif">
  </font></p>
<font face="Arial, Helvetica, sans-serif"></font><font face="Arial, Helvetica, sans-serif">
<P ALIGN="justify"><FONT SIZE="2"><B><I>Competition Bureau&#146;s investigation
  concerning system access fees<br>
  </I></B></FONT><FONT size="2" FACE="Arial, Helvetica, sans-serif">On December
  9, 2004, Bell Canada was notified by the Competition Bureau that the Commissioner
  of Competition had initiated an inquiry under the misleading advertising provisions
  of the <I>Competition Act </I>concerning Bell Mobility&#146;s description or
  representation of system access fees (SAFs) and was served with a court order,
  under section 11 of the <I>Competition Act</I>, compelling Bell Mobility to
  produce certain records and other information that would be relevant to the
  Competition Bureau&#146;s investigation. Bell Canada has complied with the court
  order and provided the requested information.</FONT> </P>
</font><font size="2" face="Arial, Helvetica, sans-serif"> </font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">SAFs are
  charged on a monthly basis to Bell Mobility cellular subscribers to assist Bell
  Mobility to recover certain costs associated with its mobile communications
  network. These costs include maintenance costs, the installation of new equipment,
  retrofitting of new technologies and fees for spectrum licences. These costs
  also include the recovery of the contribution tax charged by the CRTC to support
  telephone services in rural and remote areas of Canada.</FONT> </P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">Bell Mobility
  may be subject to financial penalties by way of fines, administrative monetary
  penalties and/or demands for restitution of a portion of the SAFs charged to
  cellular subscribers if it is found to have contravened the misleading advertising
  provisions of the <I>Competition Act</I>.</FONT> </P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font><font face="Arial, Helvetica, sans-serif">
<P ALIGN="justify"><FONT SIZE="2"><B><I>Potential legislation restricting in-vehicle
  use of cellphones<br>
  </I></B></FONT><FONT size="2" FACE="Arial, Helvetica, sans-serif">Some studies
  suggest that using cellphones while driving may result in more motor vehicle
  collisions. It is possible that this could lead to new regulations or legislation
  banning the use of handheld cellphones while driving, as it has in Newfoundland
  and Labrador and in several U.S. states, or other restrictions on in-vehicle
  use of wireless devices. If any of these happen, cellphone use in-vehicles may
  decline, which may negatively affect the business of the Bell Canada companies.</FONT>
</P>
</font><font size="2" face="Arial, Helvetica, sans-serif"> </font><font face="Arial, Helvetica, sans-serif">
<P ALIGN="justify"><FONT SIZE="2"><B><I>Health concerns about radio frequency
  emissions<br>
  </I></B></FONT><FONT size="2" FACE="Arial, Helvetica, sans-serif">It has been
  suggested that some radio frequency emissions from cellphones may be linked
  to certain medical conditions. In addition, some interest groups have requested
  investigations into claims that digital transmissions from handsets used with
  digital wireless technologies pose health concerns and cause interference with
  hearing aids and other medical devices. This could lead to additional government
  regulation, which could </FONT></P>
<P ALIGN="justify">&nbsp;</P>
</font>
<P ALIGN="center"><font size="2" face="Arial, Helvetica, sans-serif">&#151; 25
  &#151;</font></P>
<HR NOSHADE COLOR="Black" SIZE="2">
<P ALIGN="justify">&nbsp;</P>
<P ALIGN="justify"><font size="2" face="Arial, Helvetica, sans-serif"> have a
  material and negative effect on the business of the Bell Canada companies. In
  addition, actual or perceived health risks of wireless communications devices
  could result in fewer new network subscribers, lower network usage per subscriber,
  higher churn rates, product liability lawsuits or less outside financing being
  available to the wireless communications industry. Any of these would have a
  negative effect on the business of the Bell Canada companies.</font> </P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font>
<p align="LEFT"><font size="2" face="Arial, Helvetica, sans-serif"><b>Bell ExpressVu</b></font></p>
<p align="justify"><font size="2" face="Arial, Helvetica, sans-serif">Bell ExpressVu
  currently uses three satellites, Nimiq 1, Nimiq 2 and Nimiq 3, for its video
  services. Bell ExpressVu plans to start using an additional satellite, Nimiq
  4i, in the first quarter of 2006. Telesat, a wholly-owned subsidiary of BCE
  Inc., operates or directs the operation of these satellites.</font> </p>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">Satellites
  are subject to significant risks. Any loss, failure, manufacturing defects,
  damage or destruction of these satellites, of Bell ExpressVu&#146;s terrestrial
  broadcasting infrastructure, or of Telesat&#146;s tracking, telemetry and control
  facilities that operate the satellites, could have a material and negative effect
  on Bell ExpressVu&#146;s results of operations and financial condition. Please
  see <I>Risks that could affect certain BCE group companies &#150; Telesat </I>for
  more information on the risks relating to Telesat&#146;s satellites.</FONT>
</P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">Bell ExpressVu
  is subject to programming and carriage requirements under CRTC regulations.
  Changes to the regulations that govern broadcasting could negatively affect
  Bell ExpressVu&#146;s competitive position or the cost of providing its services.
  Bell ExpressVu&#146;s DTH satellite television distribution undertaking licence
  was renewed in March 2004 and expires on August 31, 2010.</FONT> </P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">Bell ExpressVu
  continues to face competition from unregulated U.S. DTH satellite television
  services that are illegally sold in Canada. In response, it is participating
  in legal actions that are challenging the sale of U.S. DTH satellite television
  equipment in Canada. While Bell ExpressVu has been successful in increasing
  its share of the satellite television market despite this competition, there
  is no assurance that it will continue to do so.</FONT> </P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">Bell ExpressVu
  faces a loss of revenue resulting from the theft of its services but has taken
  significant action to minimize such loss. Bell ExpressVu introduced a smart
  card swap for its authorized digital receivers beginning in 2004, that is designed
  to block unauthorized reception of Bell ExpressVu signals. The smart card swap
  was introduced in phases and was completed in July of 2005. As with any technology-based
  security system, it is not possible to eliminate with absolute certainty a compromise
  of that security system. As is the case for all other pay television providers,
  Bell ExpressVu has experienced, and continues to experience, ongoing efforts
  by persons to steal its services by way of compromise of Bell ExpressVu&#146;s
  signal security systems. Bell ExpressVu has consistently taken, and continues
  to take, the steps necessary to combat this industry-wide issue.</FONT> </P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font>
<P ALIGN="justify">&nbsp;</P>
<p align="center"><font size="2" face="Arial, Helvetica, sans-serif">&#151; 26
  &#151;</font> </p>
<HR NOSHADE COLOR="Black" SIZE="2">
<p>&nbsp; </p>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">On October
  28, 2004, the Court of Qu&eacute;bec ruled in <i>R. v. D&#146;Argy and Theriault
  (D&#146;Argy Case) </i>that the provisions in the <i>Radiocommunication Act
  </i>(Canada) making it a criminal offence to manufacture, offer for sale or
  sell any device used to decode an encrypted subscription signal relating to
  the unauthorized reception of satellite signals violate the freedom of expression
  rights enshrined in the<i> Charter</i>. On March 31, 2005, the Qu&eacute;bec
  Superior Court overruled the Court of Qu&eacute;bec&#146;s decision in the <i>D&#146;Argy
  Case </i>and upheld the constitutional validity of those provisions in the <i>Radiocommunication
  Act </i>(Canada). The defendants in the <i>D&#146;Argy Case </i>have been granted
  leave to appeal the ruling of the Qu&eacute;bec Superior Court to the Qu&eacute;bec
  Court of Appeal. It remains a criminal offence throughout Canada to manufacture,
  offer for sale or sell any device used to engage in the unauthorized reception
  of satellite signals. If the ruling of the Qu&eacute;bec Superior Court is</FONT>
  <FONT size="2" FACE="Arial, Helvetica, sans-serif">overruled by the Qu&eacute;bec
  Court of Appeal, absent Parliament enacting new provisions criminalizing the
  unauthorized reception of satellite signals, Bell ExpressVu may face increasing
  loss of revenue from the unauthorized reception of satellite signals.</FONT>
</P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font><font face="Arial, Helvetica, sans-serif">
<P ALIGN="LEFT"><FONT SIZE="2"><B>Bell Globemedia</B></FONT></P>
<font size="2">
<P ALIGN="justify"><B><I>Dependence on advertising<br>
  </I></B><FONT size="2" FACE="Arial, Helvetica, sans-serif">A large part of Bell
  Globemedia&#146;s revenue from its television and print businesses comes from
  advertising revenues. Bell Globemedia&#146;s advertising revenues are affected
  by competitive pressures, including its ability to attract and retain viewers
  and readers. In addition, the amount advertisers spend is directly related to
  economic growth. An economic downturn tends to make it more difficult for Bell
  Globemedia to maintain or increase revenues. Advertisers have historically been
  sensitive to general economic cycles and, as a result, Bell Globemedia&#146;s
  business, financial condition and results of operations could be materially
  and negatively affected by a downturn in the economy. In addition, most of Bell
  Globemedia&#146;s advertising contracts are short-term contracts that the advertiser
  can cancel on short notice.</FONT> </P>
</font></font><font size="2" face="Arial, Helvetica, sans-serif"> </font><font face="Arial, Helvetica, sans-serif">
<P ALIGN="justify"><FONT SIZE="2"><B><I>Increasing fragmentation in television
  markets<br>
  </I></B></FONT><FONT size="2" FACE="Arial, Helvetica, sans-serif">Television
  advertising revenue largely depends on the number of viewers and the attractiveness
  of programming in a given market. The viewing market has become increasingly
  fragmented over the past decade and this trend is expected to continue as new
  services and technologies increase the choices available to consumers. As a
  result, there is no assurance that Bell Globemedia will be able to maintain
  or increase its advertising revenues or its ability to reach or retain viewers
  with attractive programming.</FONT> </P>
</font><font size="2" face="Arial, Helvetica, sans-serif"> </font><font face="Arial, Helvetica, sans-serif">
<P ALIGN="justify"><FONT SIZE="2"><B><I>Revenues from distributing television
  services<br>
  </I></B></FONT><FONT size="2" FACE="Arial, Helvetica, sans-serif">A significant
  portion of revenues from CTV&#146;s specialty television operations comes from
  contractual arrangements with distributors who are mainly cable and DTH operators.
  Competition has increased in the specialty television market. As a result, there
  is no assurance that contracts with distributors will be renewed on equally
  favourable terms.</FONT> </P>
</font><font size="2" face="Arial, Helvetica, sans-serif"> </font><font face="Arial, Helvetica, sans-serif">
<P ALIGN="justify"><FONT SIZE="2"><B><I>Increased competition for fewer print
  customers<br>
  </I></B></FONT><FONT size="2" FACE="Arial, Helvetica, sans-serif">Print advertising
  revenue largely depends on circulation and readership. The existence of a national
  newspaper, and commuter papers in Toronto and other major markets, has </FONT></P>
<P ALIGN="justify">&nbsp;</P>
</font><font face="Arial, Helvetica, sans-serif"></font>
<p align="center"><font size="2" face="Arial, Helvetica, sans-serif">&#151; 27
  &#151;</font></p>
<HR NOSHADE COLOR="Black" SIZE="2">
<font face="Arial, Helvetica, sans-serif">
<P ALIGN="justify">&nbsp; </P>
</font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">increased
  competition for the Globe and Mail&#146;s print operations. In addition, total
  circulation and readership of Canadian newspapers have continued to decline.
  There is increasing pressure on print profit margins resulting from more competition
  in print advertising rates and higher costs of operation.</FONT> </P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font>
<p align="justify"><font size="2" face="Arial, Helvetica, sans-serif"><b><i>Broadcast
  licences and CRTC decisions<br>
  </i></b>Each of CTV&#146;s conventional and specialty services operates under
  licences issued by the CRTC for a fixed term of up to seven years. These licences
  are subject to the requirements of the <i>Broadcasting Act</i>, the policies
  and decisions of the CRTC, and the conditions of each licensing or renewal decision,
  all of which may change. While these are expected to be renewed at the appropriate
  times, there can be no assurance that any or </font><FONT size="2" FACE="Arial, Helvetica, sans-serif">all
  of CTV&#146;s licences will be renewed. Any renewals, changes or amendments
  to licences and any decisions by the CRTC from time to time that affect the
  industry as a whole or CTV in particular may have a material and negative effect
  on Bell Globemedia.</FONT> </p>
<font size="2" face="Arial, Helvetica, sans-serif"> </font><font face="Arial, Helvetica, sans-serif">
<P ALIGN="LEFT"><FONT SIZE="2"><B>Telesat</B></FONT></P>
<font size="2">
<P ALIGN="justify"><B><I>Satellite risks<br>
  </I></B><FONT size="2" FACE="Arial, Helvetica, sans-serif">There is a risk that
  the delivery of Telesat&#146;s satellites under construction could be delayed
  as a result of delays in the construction of the satellites, delays in the construction
  of the launch vehicle, the failure of a launch vehicle that is similar to the
  model which Telesat intends to use to launch a satellite, or the unavailability
  of a reliable launch opportunity. A delay in delivery could have an adverse
  effect on Telesat&#146;s ability to provide service and could result in additional
  costs. Telesat seeks to mitigate the impact of such a delay through various
  contractual measures including late delivery charges and by planning for contingency
  measures as required.</FONT> </P>
</font></font><font size="2" face="Arial, Helvetica, sans-serif"> </font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">There is
  a risk that Telesat&#146;s satellites currently under construction, or satellites
  built in the future, may not be successfully launched and deployed. Once Telesat&#146;s
  satellites are in orbit, there is a risk that a failure could prevent them from
  completing their commercial mission of providing uninterrupted service to customers.
  Telesat has a number of measures in place that seek to protect itself against
  continuity of service risk. These measures include engineering satellites with
  onboard redundancies, including spare equipment on the satellite, standard testing
  programs that provide high confidence in performance levels, or retaining and
  obtaining redundant capacity on either the same or another in-orbit satellite,
  and the purchase of insurance.</FONT> </P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">Where insurance
  coverage is available on commercially reasonable terms and conditions, Telesat
  seeks to protect itself against some of the consequences of launch and in-orbit
  failures by purchasing satellite insurance. However, there is no assurance that
  Telesat will be able to obtain or renew launch and in-orbit insurance coverage
  for its satellites for the full satellite value, nor is there any assurance
  that coverage will be obtained at a favourable premium rate.</FONT> </P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">With respect
  to in-orbit satellites, Nimiq 1 is insured until the second quarter of 2006
  for approximately its book value. Anik F1R is insured for approximately its
  book value until </FONT></P>
<P ALIGN="justify">&nbsp;</P>
<P ALIGN="center"><font size="2" face="Arial, Helvetica, sans-serif">&#151; 28
  &#151;</font></P>
<HR NOSHADE COLOR="Black" SIZE="2">
<P ALIGN="justify">&nbsp; </P>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">the third
  quarter of 2006. Anik F2 is insured for approximately two thirds of its book
  value until the third quarter of 2007. In the event of a total failure of the
  Anik F2 satellite, the after-tax accounting loss is estimated at $105 million
  to $110 million.</FONT> </P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font>
<p align="justify"><font size="2" face="Arial, Helvetica, sans-serif">In December
  2004, Telesat ceased to insure its interest in the residual value of Nimiq 2
  following the arrival in orbit of the leased satellite Nimiq 3 (formerly DirecTV3)
  a satellite that complements the capacity of Nimiq 1 and Nimiq 2 and which,
  following operational changes, could be used to provide capacity and continuity
  of service in the event of a failure of either Nimiq 1 or Nimiq 2. Telesat has
  also leased Nimiq 4i (formerly DirecTV2) to provide further capacity and continuity
  of service. Service on Nimiq 4i is expected to commence in the first quarter
  of 2006.</font> </p>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">In August
  2001, the manufacturer of the Anik F1 satellite advised Telesat of a gradual
  decline in power on the satellite. This power decline required Telesat to construct
  and launch another satellite to maintain continuity of service to its customers.
  Anik F1R was successfully launched in August 2005 in time to ensure that service
  to Anik F1&#145;s customers was not interrupted. Telesat had insurance in place
  to cover the power loss on Anik F1 and filed a claim with its insurers in December
  2002. In March 2004, Telesat and its insurers reached a final settlement agreement.
  The settlement calls for an initial payment to Telesat in 2004 of US$136.2 million,
  which has already been received, and originally called for an additional payment
  of US$49.1 million in 2007 if the power level on Anik F1 degrades as predicted
  by the manufacturer. In December 2005, Telesat entered into early settlement
  agreements with certain insurance underwriters, and as a result received US$26.2
  million. A balance of US$20.1 million is expected to be received in 2007 if
  the power level on Anik F1 degrades as predicted. In the event that the power
  level on Anik F1 is better than predicted, the amount of the payment(s) will
  be adjusted by applying a formula which is included in the settlement documentation
  and could result in either a pro-rated payment to Telesat of the additional
  US $20.1 million or a pro-rated repayment of up to a maximum of US$14.9 million
  to be made by Telesat to the insurers. Currently, power levels are continuing
  to degrade as predicted.</FONT> </P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font>
<P ALIGN="justify"><FONT size="2" FACE="Arial, Helvetica, sans-serif">Telesat
  has signed contracts with EADS Astrium, SAS, a European satellite manufacturer,
  for construction of two additional satellites, the Anik F3 satellite and the
  Nimiq 4 satellite. Anik F3 is expected to be available for service in the third
  quarter of 2006. Telesat has recently placed launch and in-orbit insurance coverage
  for approximately the book value of Anik F3. As the construction contract for
  Nimiq 4 was recently signed and the satellite is not to be launched until 2008,
  Telesat has not initiated discussions for the placement of insurance. There
  is no assurance that Telesat will be able to obtain launch and in-orbit insurance
  coverage for the full value of Nimiq 4, nor is there any assurance that coverage
  will be obtained at a favourable premium rate.</FONT> </P>
<p>&nbsp;</p>
<p align="center"><font size="2" face="Arial, Helvetica, sans-serif">&#151; 29
  &#151;</font></p>
<p>&nbsp; </p>
<hr width="100%" size=4 color=GRAY noshade>
<p>&nbsp;</p>
<P ALIGN="center"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="3"><B><font size="2" face="Arial, Helvetica, sans-serif">SIGNATURE</font></B></FONT></FONT></P>
<font size="2" face="Arial, Helvetica, sans-serif"> </font>
<p>&nbsp;</p>
<P ALIGN="LEFT"><FONT size="2" FACE="Arial, Helvetica, sans-serif">Pursuant to
  the requirements of the Securities Exchange Act of 1934, the Registrant has
  duly caused this report to be signed on its behalf by the undersigned, thereunto
  duly authorized.</FONT></P>
<P ALIGN="LEFT">&nbsp;</P>
<P ALIGN="LEFT">&nbsp;</P>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr>
    <td width="45%">&nbsp;</td>
    <td width="45%"><FONT size="2" FACE="Arial, Helvetica, sans-serif"><b>BCE
      Inc. </b></FONT></td>
    <td width="10%">&nbsp;</td>
  </tr>
  <tr>
    <td width="45%"> <p>&nbsp;</p>
      <p>&nbsp;</p>
      <p>&nbsp;</p></td>
    <td width="45%" valign="bottom"><font size="2" face="Arial, Helvetica, sans-serif"><em>(signed)
      Siim A. Vanaselja</em><br>
      </font> <hr width=100% size=1 color=BLACK noshade> </td>
    <td width="10%"><font size="2" face="Arial, Helvetica, sans-serif"><br>
      <br>
      <br>
      <br>
      <br>
      </font> </td>
  </tr>
  <tr>
    <td width="45%">&nbsp;</td>
    <td width="45%"><FONT size="2" FACE="Arial, Helvetica, sans-serif">Siim A.
      Vanaselja<br>
      Chief Financial Officer</FONT></td>
    <td width="10%">&nbsp;</td>
  </tr>
  <tr>
    <td width="45%">&nbsp;</td>
    <td width="45%" valign="bottom"><font size="2" face="Arial, Helvetica, sans-serif">Date:
      February 1, 2006</font></td>
    <td width="10%"><font size="2" face="Arial, Helvetica, sans-serif"><br>
      <br>
      <br>
      </font></td>
  </tr>
</table>
<font size="2" face="Arial, Helvetica, sans-serif"><BR>
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end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
