MONTREAL, Dec. 17 2009 -- BCE Inc. (TSX, NYSE: BCE) today
announced a 7% increase in its annual common share dividend to $1.74 per
share for 2010 as well as plans for the use of its year-end 2009 surplus cash
balance that include a Normal Course Issuer Bid (NCIB) for up to $500 million
and a $500 million special voluntary pension contribution.
    "BCE is committed to delivering attractive ongoing returns to our
shareholders and has done so through consistent and sustainable dividend
increases and share buybacks since December 2008," said George Cope,
President and CEO of BCE and Bell Canada. "Our accelerating business
performance built on the Bell team's strong execution of our 5 Strategic
Imperatives, substantial free cash flow generation and ample liquidity
provide us with the financial flexibility to reward shareholders while
maintaining both a strong balance sheet and robust capital investment in
Bell's networks and service programs."
    Today's announcement represents BCE's third increase to the annual common
share dividend and the second share buyback since the termination of its
proposed privatization agreement in December 2008. With this increase, BCE's
annual common share dividend has increased by 19% since the fourth quarter of
2008.
    The BCE annual common share dividend will increase by 7% to $1.74 per
share, effective with BCE's Q1 2010 dividend payable on April 15, 2010 to
shareholders of record at the close of business on March 15, 2010. This
increase maintains BCE's payout ratio conservatively towards the lower end of
its policy of 65% to 75% of Adjusted EPS for 2010.

Deployment of surplus cash

    BCE also announced today that it will return capital to shareholders in
the form of an NCIB for up to $500 million to be executed over the course of
2010. It follows BCE's $1 billion share buyback program announced in December
2008 and completed on May 5, 2009 for 5% of outstanding common shares at an
average purchase price of $24.65 per share. Please refer to the "Normal
Course Issuer Bid" details later in this release for more about BCE's new
NCIB program.
    "This new share buyback program and the significant special voluntary
pension contribution also announced today are further proof of BCE's
well-balanced financial strategy. As we strengthen BCE's balance sheet and
credit profile, we are enhancing our company's ability to maximize total
shareholder returns now and in the future," said Siim Vanaselja, Chief
Financial Officer of BCE and Bell Canada. "This special pension contribution
helps to strengthen Bell's pension plan and will favourably impact our
financial performance going forward, in turn enhancing our ability to return
additional cash to shareholders."
    BCE estimates its $500 million special voluntary pension contribution
will decrease its annual pension funding requirements and pension expense
beginning in 2010 by up to $75 million and $45 million respectively, and will
therefore be accretive to EBITDA, EPS and free cash flow.
    BCE will make its special contribution to Bell Canada's defined benefit
pension plan from cash on hand. This contribution will take place prior to
year-end 2009 and is tax deductible, leading to cash tax savings of
approximately $135 million in early 2010.
    "This special voluntary pension contribution further enhances the
security of pension benefits for all of Bell's retirees and employees in our
defined benefit pension plan," said David Wells, Bell's Executive Vice
President of Corporate Services. "With its positive impacts for both our team
and our company's overall financial performance, the special pension
contribution is an initiative that supports the interests of all our
stakeholders."

Updated 2009 outlook

    As a result of the $500 million special pension contribution, BCE updates
its financial guidance for 2009 as follows:

    -------------------------------------------------------------------------
                            Increased 2009
                                  Guidance
                                  provided      November 12      December 17
                               on August 6      Expectation      Expectation
    -------------------------------------------------------------------------
    Bell (i)
    -------------------------------------------------------------------------
    Revenue Growth                  1% - 2%      Low end of       Low end of
                                                      range            range
    -------------------------------------------------------------------------
    EBITDA(ii) Growth               1% - 2%        On track         On track
    -------------------------------------------------------------------------
    Capital Intensity             15% - 16%        On track         On track
    -------------------------------------------------------------------------
    BCE
    -------------------------------------------------------------------------
    Adjusted EPS             $2.40 - $2.50      High end of      High end of
                                                      range            range
    -------------------------------------------------------------------------
    Free Cash Flow(iii)         $1,750 M -                        $1,250 M -
                                  $1,900 M         On track         $1,400 M
    -------------------------------------------------------------------------

    (i)   Bell's 2009 financial guidance for revenue, EBITDA and capital
          intensity is exclusive of Bell Aliant
    (ii)  EBITDA includes pension expense
    (iii) The most comparable Canadian GAAP financial measure is cash flows
          from operating activities. For 2009, BCE expects to generate
          approximately $1,250 million to $1,400 million in free cash flow
          after a $500 million special contribution to Bell Canada's defined
          benefit pension plan. This amount reflects expected BCE cash flows
          from operating activities of approximately $4.4 billion to $4.6
          billion.

BCE will provide its 2010 financial outlook on February 4, 2010.

Call with financial analysts

    BCE will hold a conference call for financial analysts to discuss its
cash deployment strategy on Thursday, December 17 at 8:30 a.m. (Eastern).
Media are welcome to participate on a listen-only basis. To participate,
please dial (416) 340-2216 or toll-free 1-866-226-1792 shortly before the
start of the call. A replay will be available for one week by dialing (416)
695-5800 or 1-800-408-3053 and entering pass code 5525128No..
    There will also be a live audio webcast of the call available on BCE's
website at: http://www.bce.ca/en/news/eventscalendar/webcasts/2009/20091217/.
The mp3 file will be available for download on this page later in the day.

Normal Course Issuer Bid

    BCE has received approval from the Toronto Stock Exchange (TSX) in
respect of its notice of intention to make an NCIB for its common shares
through the facilities of the TSX. Under the NCIB, BCE may purchase for
cancellation up to 20,000,000 common shares (subject to a maximum aggregate
purchase price of $500 million) over the twelve-month period starting
December 29, 2009 and ending on December 28, 2010, representing approximately
2.6% of its 767,166,281 issued and outstanding common shares as at December
11, 2009.
    Purchases under the BCE NCIB program announced today will be effected
through the facilities of the TSX and/or the New York Stock Exchange (NYSE)
or by such other means as may be permitted by the TSX and/or the NYSE, and
under applicable laws, including pre-arranged crosses, exempt offers, private
agreements under an issuer bid exemption order issued by a securities
regulatory authority and/or block purchases in accordance with the applicable
regulations of the TSX. In the event that BCE purchases common shares by
pre-arranged crosses, exempt offers or private agreements, the purchase price
of the common shares may be different than the market price of the common
shares at the time of the acquisition.
    The average daily trading volume (ADTV) for BCE's common shares during
the six-month period preceding December 1, 2009 was 2,804,896 common shares.
Consequently, under the regulations of the TSX, BCE will have the right to
repurchase, during any one trading day, a maximum of 25% of the ADTV
representing 701,224 common shares. In addition, BCE may make, once per week,
a block purchase (as such term is defined in the TSX Company Manual) of
common shares not directly or indirectly owned by insiders of BCE, in
accordance with the regulations of the TSX. The common shares purchased
pursuant to the NCIB will be cancelled.
    BCE has purchased 40 million common shares, or approximately 5% of
outstanding common shares, at a weighted average price of approximately
$24.65 per share, pursuant to its previous NCIB during the preceding twelve
months. The Board of Directors of BCE has concluded that the repurchase of
common shares represents an appropriate use of funds to increase shareholder
value.

Caution concerning forward-looking statements

    Certain statements made in this news release, including, but not limited
to, statements relating to our financial guidance for 2009, plans relating to
the return of cash to shareholders, including potential purchases of common
shares for cancellation under a normal course issuer bid, and the projected
sources of funds which may be used for such purpose, and other statements
that are not historical facts, are forward-looking statements and are subject
to important risks, uncertainties and assumptions, and to the discretion of
BCE's Board of Directors in respect of the declaration of dividends.
    The results or events predicted in these forward-looking statements may
differ materially from actual results or events. As a result, we cannot
guarantee that any forward-looking statement will materialize and you are
cautioned not to place undue reliance on these forward-looking statements.
These forward-looking statements assume, in particular, that many of our
lines of business will be resilient to the current economic downturn.
However, we caution that the current adverse economic conditions make our
forward-looking statements and underlying assumptions subject to greater
uncertainty and that, consequently, they may not materialize. It is
impossible to predict with certainty the full impact that the current
economic downturn and credit crisis will have on our business or residential
customers' purchasing patterns. The forward-looking statements contained in
this news release are made as of the date of this release and, accordingly,
are subject to change after such date. Except as may be required by Canadian
securities laws, we do not undertake any obligation to update or revise any
forward-looking statements contained in this news release, whether as a
result of new information, future events or otherwise. Except as otherwise
indicated by BCE, these statements do not reflect the potential impact of any
non-recurring or other special items or of any dispositions, monetizations,
mergers, acquisitions, other business combinations or other transactions that
may be announced or that may occur after the date hereof. Forward-looking
statements are provided for the purpose of providing information about
management's current expectations and plans and allowing investors and others
to get a better understanding of our operating environment. Readers are
cautioned that such information may not be appropriate for other purposes.

Material assumptions

    A number of Canadian economic and market assumptions were made by BCE in
preparing forward-looking statements for 2009 contained in this release,
including, but not limited to: (i) Canadian GDP to decrease by approximately
2%, compared to 2008, consistent with estimates by the six major banks in
Canada, (ii) the Bank of Canada's target overnight rate to remain fairly
stable at approximately 1%, (iii) the Consumer Price Index as estimated by
Statistics Canada to decline to the range of 1.0% to 1.5%, (iv) revenues
generated by the residential voice telecommunications market to continue to
decrease due to wireless substitution and other factors including e-mail and
instant messaging substitution, (v) current levels of competition to continue
for residential and business local voice telephony, as cable operators and
other telecom service providers maintain the intensity of their marketing
efforts and continue to leverage their network footprints to pursue market
share in our regions, (vi) wireless industry penetration growth in 2009 to be
similar to 2008, subject to the economic environment potentially causing a
slowing of growth.
    In addition, BCE's and Bell Canada's 2009 guidance is also based on
various internal financial and operational assumptions. Our guidance related
to Bell (excluding Bell Aliant) is based on certain assumptions concerning
Bell, including, but not limited to: (i) many of our lines of business to
provide good resiliency and protection from an economic downturn so that
spending on our core wireline telephone services should not be severely
impacted given the importance of these services to both residential and
business customers, (ii) reduced housing starts and residential moves to
contribute to reduced customer turnover, (iii) business market demand to be
adversely affected as business clients revisit their investment plans due to
tighter credit availability, economic uncertainty, continued competition from
offshore manufacturing and reduced public sector spending, (iv) the softening
of the Ontario and Québec business market to continue with the potential to
drive business NAS erosion higher, (v) more conservative investments by
business customers to result in lower capital spending requirements to
support business customers, (vi) the economic recessionary environment and
increased price competition to put pressure on ARPU and result in customer
satisfaction and retention becoming even more critical, (vii) residential NAS
losses to decline in 2009 compared to 2008, (viii) Bell's revenue outlook was
derived in the context of a worsening economy, (ix) Bell's total net benefit
plans cost, which is based on a discount rate of 7.0% and a 2008 return on
pension plan assets of approximately (19.5%), is expected to be approximately
$260 million in 2009, * Bell's 2009 retirement benefit plans funding is
estimated to be approximately $1 billion, based on a 10-year amortization of
the pension solvency deficits that arose during 2008 and the payment of a
$500 million special contribution to Bell Canada's defined benefit pension
plan, (xi) Bell's capital intensity in 2009 is estimated to be in the 15% to
16% range, (xii) Bell to continue to invest in extending its fibre network,
and (xiii) Bell's 100-day plan annualized cost savings and other cost
reduction opportunities to be approximately $400 million.
    Our guidance related to BCE is based on certain assumptions for 2009,
including, but not limited to: (i) restructuring and other charges in the
range of $500 million to $550 million, (ii) depreciation and amortization
expense at levels slightly above 2008, (iii) an effective tax rate of
approximately 20%, while the statutory tax rate is approximately 32%, (iv)
relatively stable cash taxes for 2009 given the accelerated utilization of
Bell's investment tax credit carry-forwards, and (v) the permanent repayment
of long-term debt maturing in 2009.
    The foregoing assumptions, although considered reasonable by BCE at the
time of preparation of its financial guidance and business outlook and other
forward-looking statements, may prove to be inaccurate. Accordingly, our
actual results could differ materially from our expectations as set forth in
this news release.

Material risks

    Factors that could cause actual results or events to differ materially
from our expectations expressed in or implied by our forward-looking
statements include: general economic and credit market conditions, the level
of consumer confidence and spending, and the demand for, and prices of, our
products and services; our ability to implement our strategies and plans in
order to produce the expected benefits; our ability to continue to implement
our cost reduction initiatives and contain capital intensity while seeking to
improve customer service; the intensity of competitive activity, including
the increase in wireless competitive activity that could result from Industry
Canada's licensing of advanced wireless services spectrum, and the resulting
impact on our ability to retain existing and attract new customers, and on
our pricing strategies and financial results; increased contributions to
employee benefit plans; our ability to respond to technological changes and
rapidly offer new products and services; events affecting the functionality
of, and our ability to protect, maintain and replace, our networks,
information technology (IT) systems and software; our ability to maintain
customer service and our networks operational in the event of the occurrence
of epidemics, pandemics and other health risks; events affecting the ability
of third-party suppliers to provide to us essential products and services;
labour disruptions; the potential adverse effects on our Internet and
wireless businesses of network congestion due to a significant increase in
broadband demand; our ability to generate or raise the capital we need to
implement our business plan, including for BCE's share buyback program and
dividend payments and to fund capital and other expenditures; our ability to
discontinue certain traditional services as necessary to improve capital and
operating efficiencies; regulatory initiatives or proceedings, litigation and
changes in laws or regulations; launch and in-orbit risks of satellites used
by Bell TV; competition from unregulated U.S. direct-to-home (DTH) satellite
television services sold illegally in Canada and the theft of our satellite
television services; BCE's dependence on its subsidiaries' ability to pay
dividends; stock market volatility; depending, in particular, on the
economic, competitive and technological environment at any given time, and
subject to dividends being declared by the board of directors, there can be
no certainty that BCE's dividend policy will be maintained; Bell Aliant's
ability to make distributions to BCE and Bell Canada; health concerns about
radio frequency emissions from wireless devices; and loss of key executives.
    For additional information with respect to certain of these and other
assumptions and risks, please refer to BCE's 2008 Annual MD&A dated March 11,
2009 included in the BCE 2008 Annual Report, BCE's 2009 First Quarter MD&A
dated May 6, 2009, BCE's 2009 Second Quarter MD&A dated August 5, 2009, and
BCE's 2009 Third Quarter MD&A dated November 11, 2009, all filed by BCE with
the Canadian securities commissions (available at www.sedar.com)
and with the
U.S. Securities and Exchange Commission (available at www.sec.gov).
These
documents are also available on BCE's website at www.bce.ca.

About BCE

    BCE is Canada's largest communications company, providing the most
comprehensive and innovative suite of communication services to residential
and business customers in Canada. Operating under the Bell and Bell Aliant
brands, the Company's services include wireline and wireless voice and data
services, digital television and information and communications technology
(ICT) services. BCE shares are listed in Canada and the United States. For
corporate information on BCE, please visit www.bce.ca. For Bell
product and
service information, please visit www.bell.ca.


For further information: Media inquiries: Claire Fiset, Bell Media Relations,
(514) 870-4739, 1-877-391-2007, claire.fiset@bell.ca;
Investor inquiries:
Thane Fotopoulos, BCE Investor Relations, (514) 870-4619,
thane.fotopoulos@bell.ca