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Bell Canada buys Canadian assets of 360networks

-  Bell to retain 360networks' business and network in the West
    -  Eastern Canadian customer base and assets to be sold to Call-Net

    VANCOUVER,May 26 2004 --
Bell Canada today announced the purchase
of the Canadian assets of Vancouver-based 360networks Corporation for
Cdn $275 million. The purchase includes the assets of 360networks' subsidiary,
GT Group Telecom Services Corporation, and certain related U.S. interconnect
assets. Bell will retain 360networks' business, facilities and customer base
in Western Canada, and will sell significant portions of the retail customer
operations and certain network assets in Eastern Canada to Call-Net
Enterprises Inc.
    This transaction will give Bell an extensive fibre network that includes
leading-edge local facilities in Vancouver, Victoria, Calgary, Edmonton and
other cities in Western Canada. The company will also gain access to almost
200 office buildings in Western Canada.
    "This transaction is financially attractive and represents a meaningful
step in our strategy to accelerate the growth of our business in the West,"
said Michael Sabia, Chief Executive Officer of Bell Canada. "The acquisition
doubles both our network footprint and our access to customers in Western
Canada. This move further demonstrates our sustaining commitment to expanding
our presence in the West and solidifies our position as Canada's national
communications company."
    "This transaction is a clear indication of our determination to further
deliver on our long-term promise of serving British Columbian and Albertan
customers under Canada's leading brand," said Stephen Wetmore, Group
President, National Markets. "The state-of-the-art facilities that we are
acquiring will add to Bell's existing network in Western Canada and will be
easily integrated with our existing national IP network. It will also serve as
an important platform from which Bell will develop and deliver new services to
Western Canadians. By rapidly and cost-effectively expanding our Western
Canadian technical, sales and marketing capabilities, we are offering a solid
and competitive alternative for business customers' communications needs."
    "We are very pleased with the accomplishments at Group Telecom over the
last year," said Greg Maffei, Chairman and Chief Executive Officer of
360networks. "Our strong network and people allowed us to grow profitability
and faster than the market which made us an attractive partner for Bell and
Call-Net. We are disappointed to be exiting Canada, but this transaction will
ensure continued excellent service for our customers and is financially
compelling."

    Sale of Operations and Retail Customers in Eastern Canada to Call-Net

    Bell has entered into a letter of intent to sell a significant portion of
360networks' operations in Ontario, Quebec and Atlantic Canada to Call-Net.
Upon the closing of the transaction with 360networks, Bell will transfer most
of the acquired 360networks' Eastern Canadian retail customer base to Call-Net
and provide support services for a two-year period.
    "The sale of assets and customers to Call-Net will allow them to expand
their services and allow us to divest duplicated network capabilities over
time," said Mr. Sabia.
    "We are very pleased to be acquiring 360networks' business in Eastern
Canada," said Bill Linton, President and Chief Executive Officer of Call-Net
Enterprises. "On closing, this transaction will greatly expand our business
customer base. It will also allow us to more rapidly and cost-effectively
expand our local, fibre and IP networks in Eastern Canada, further reducing
our reliance on leased facilities."

    Financial Impact and Other Considerations

    The acquisition of 360networks' business in Western Canada is
expected to:
    -  add revenues and EBITDA to Bell's western operations
    -  reduce Bell's capital requirements in Western Canada, and
    -  produce significant operating synergies and tax benefits.

    The 360networks' business being purchased will have approximately
Cdn $1.5 billion of unused tax losses. Bell expects to fully utilize these
losses by the end of 2005.
    The acquisition will have no material impact on BCE's 2004 financial
targets made public on December 17, 2003.
    Beginning in 2005, the transaction is expected to be neutral to
marginally accretive on an earnings per share basis at Bell's parent company,
BCE Inc.
    The acquired business will operate as a division of Bell Canada under the
360networks and Group Telecom brands.
    Until the deal closes, 360networks' management structure and operating
procedures will continue. Customers should continue to work with their points
of contact within 360networks and Group Telecom for all inquiries pertaining
to product, service, billing and technical matters.
    Bell anticipates these transactions will close by September 2004. Closing
is subject to customary terms and conditions, including the approval of the
Competition Bureau. In addition, the Call-Net transaction is subject to
negotiation of definitive agreements and certain other conditions.

    About Bell Canada
    Bell Canada, Canada's national leader in communications, provides
connectivity to residential and business customers through wired and wireless
voice and data communications, local and long distance phone services, high
speed and wireless Internet access, IP-broadband services, e-business
solutions and satellite television services. Bell Canada is wholly owned by
BCE Inc. For more information please visit www.bell.ca.

    360networks
    360networks provide telecommunications services in North America to over
10,000 carrier and commercial customers. We offer a comprehensive range of
services from traditional local and long distance voice products to innovative
products such as optical transport, wavelengths, Internet transport, Gigabit
Ethernet, and optical virtual private networks (OVPNs). Our broadband fibre-
optic network is one of the largest and most advanced on the continent,
spanning 44,000 route miles (70,000 kilometers), and reaching 60 major cities,
including 17 metro fibre networks in nine Canadian provinces and a unique
footprint in the rural Western United States. For more information about
360networks and Group Telecom, please visit www.360.net.

    About Call-Net
    Call-Net Enterprises Inc., (TSX: FON, FON.B) primarily through its wholly
owned subsidiary Sprint Canada Inc., is a leading Canadian integrated
communications solutions provider of home phone, wireless, long distance and
IP services to households, and local, long distance, toll free, enhanced
voice, data and IP services to businesses across Canada. Call-Net,
headquartered in Toronto, owns and operates an extensive national fibre
network, has over 148 co-locations in five major urban areas including 31
municipalities and maintains network facilities in the United States and the
United Kingdom. For more information, visit www.callnet.ca and
www.sprint.ca.

    CAUTION CONCERNING FORWARD-LOOKING STATEMENTS

    Certain statements made in this press release, including, but not limited
to statements appearing under the Financial Impact section, and other
statements that are not historical facts, are forward-looking and are subject
to important risks, uncertainties and assumptions. The results or events
predicted in these forward-looking statements may differ materially from
actual results or events. These statements do not reflect the potential impact
of any non-recurring 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.
    Other factors that could cause results or events to differ materially
from current expectations include, among other things: the fact that the
closing of the transactions announced in this press release is subject to
approval by the Competition Bureau and customary closing terms and conditions;
our ability to integrate the assets and operations of 360networks to be
acquired with ours; and the intensity of competitive activity.
    For additional information with respect to certain of these and other
factors, refer to Bell Canada's 2004 First Quarter Shareholder Report dated
May 4, 2004 filed by Bell Canada with the U.S. Securities and Exchange
Commission, under Form 6-K, and with the Canadian securities commissions. The
forward-looking statements contained in this press release represent our
expectations as of May 26, 2004 and, accordingly, are subject to change after
such date. However, we disclaim any intention and assume no obligation to
update any forward-looking statements, whether as a result of new information
or otherwise.

    Call with Financial Analysts:
    -----------------------------
    BCE will hold a teleconference/Webcast (audio only) for financial
analysts to discuss this transaction on Wednesday, May 26, 2004 at
4:00 p.m. ET (1:00 p.m. PT). The media is welcome to participate on
a listen-only basis. Siim Vanaselja, Chief Financial Officer, and Stephen
Wetmore, Group President, National Markets, will be present for the
teleconference. Interested participants are asked to dial (877) 211-7911
between 3:50 p.m. and 3:58 p.m. (ET). If you are disconnected from the call,
simply redial the number. If you need assistance during the teleconference,
you can reach the operator by pressing "0". This teleconference will also be
Webcast live (audio only) on our Web site at www.bce.ca.

    Call with the Media:
    --------------------
    BCE President and Chief Executive Officer, Michael Sabia, will host
a media conference following the conclusion of BCE Inc.'s Annual and
Special Meeting at the Vancouver Convention & Exhibition Centre (Meeting
Room 18), 999 Canada Place, Vancouver, B.C., at approximately 11:00 a.m. PT
(2:00 p.m. ET). Media are invited to attend in person. Print or broadcast
photographic equipment will be allowed in the room. All media will be required
to present their credentials. Only duly registered media will be allowed to
attend the media conference in person. Please note that the actual start time
of the media conference will depend on the adjournment of the BCE Annual and
Special Meeting.
    Media unable to attend the media conference in person may join by
telephone by dialing 1 800 387-6216 or 416 405-9328 a few minutes prior to
the beginning of the conference call (Note: the conference bridge will open
at 11:00 a.m. PT/2:00 p.m. ET; the conference will start upon conclusion of
the Annual and Special Meeting). Media can also join the Webcast (audio only)
of the media conference, which will be available on the BCE web site,
www.bce.ca and which will also be available later in the day in
archive format
(for two weeks).




For further information: Nick Kaminaris, Corporate Communications,
(514) 786-3908, Between May 24 and May 27: (604) 647-7506; Roland Ribotti,
Investor Relations, (514) 870-9034; Gina Gottenberg, Bell Canada Media
Relations, (403) 410-4221 or (604) 340-6192;
To request a free copy of this organization's annual report, please go to
http://www.newswire.ca and click on reports@cnw.

SOURCE Corporate

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