Operator: Good morning, ladies and gentlemen. Welcome to the BCE Q1 2021 Results Conference Call. I would now like to turn the meeting over to Mr. Thane Fotopoulos. Please go ahead, Mr.

Fotopoulos.

Thane Fotopoulos: Thank you, Donna, and good morning to everyone. Also joining me on the call today are Mirko Bibic, BCE's President and CEO, and our CFO, Glen LeBlanc. Before we begin, as usual I’ll draw your attention to our Safe Harbor statement reminding you that today’s slide presentation and remarks made during the call today will include forward-looking information and therefore are subject to risks and uncertainties. Results could differ materially.

We disclaim any obligation to update forward-looking statements except as required by law. Please refer to the company's publicly filed documents for more details on assumptions and risks. With that, over to Mirko.

Mirko Bibic: Thanks Thane. Good morning everyone.

In every successive quarter since the onset of COVID, BCE had delivered sequential quarterly improvement in our operating results and Q1 was no exception. Although the pandemic’s effects are still present, we achieved both consolidated revenue and adjusted EBITDA growth for the first time since Q4 of 2019. This is an important milestone that speaks the stability and resiliency of our operations, our ability to operate effectively under challenging conditions, the strength of our leading broadband network and services and our manangement teams focused execution. We continue to grow broadband market share adding a leading 108,468 total mobile phone, mobile connected device, retail internet and IPTV net subscribers this quarter, an increase of 51% over last year. And with $940 million of free cash flow generated this quarter, we have the financial flexibility with $6.5 billion of available liquidity to drive both our national investment strategy and BCEs higher common share dividend for 2021.

Now for a quick update on the progress we are making in advancing our strategic priorities in 2021. Our broadband investment acceleration program is in full swing with over $1 billion in new capital spend in Q1. We equipped another 148,000 locations with either direct fibre or wireless home internet technology this quarter, and another 370,000 are currently under construction, keeping us on track to reach 6.9 million total homes and businesses passed by the end of this year. And as part of our overarching goal to advance how Canadians connect with each other in the world, we've also made several announcements recently to expand broadband connectivity to more rural and remote areas of Canada. These include a partnership with the government of Quebec that will see direct fibre rolled out to 31,000 locations and 100 underserved communities.

And an initiative enabled by the CRTCs universal broadband funds to bring faster internet to more than 10,000 homes in Yukon and the Northwest Territories, including Inuvik, which just became the first all fibre community in the Arctic Circle. I'll turn now to wireless. Bell’s 5G network is on course to cover more than 50% of the population by year end nationally. However, success in 5G and IoT leadership depends on multiple ingredients beyond coverage. It's about delivering the fastest speeds, the lowest latency, and flexibility that can only be achieved through extensive cell site fibre ideation and slicing of the network and leveraging network points of presence, such as central offices for multi access edge computing, that support product development.

Bell is also the largest B2B provider in Canada benefiting from deep relationships with the biggest Canadian companies that we can service almost anywhere in the country. So those are the multiple ingredients ensuring that Bell will be the leader in 5G. Although the full benefits of 5G technology won't be realized until mid-band spectrum is available, and the partnership ecosystem evolves, we're already launching new services that are taking full advantage of the unprecedented speed and capacity of 5G now. These include the industry's first mobile 5G hotspot, and our innovative TSN and RDS 5G view apps that offer new interactive new ways to watch sports. We are also more generally delivering a better customer experience at every level, driving improved satisfaction, loyalty and retention, and another leading performance among national carriers for sixth consecutive year in the most recent report from the CCTS, which showed a 17% drop in a number of complaints by Bell customers.

We made progress in diversifying our channel mix and expanding digital channel capabilities. Digital sales in Q1 were up more than 200% versus last year, and will grow further over time as we continue to improve online tools and functionality. This past quarter, we introduced some new self serve features online and via My Bell and Virgin Mobile my account apps, which included dynamic call routing, the ability to change a rate plan or upgrade a device as well as in app chat features for Bell, Virgin and lucky wireless customers. Let me turn now to slide four of our presentation. Corporate Responsibility is an integral part of our six strategic imperatives that informs all of Bell’s policies, decisions and actions.

Bell’s ESG commitment supports this purpose driving our unparalleled investments in broadband network infrastructure and service innovation, unmatched environmental leadership, investments in our teams and communities and adherence to the highest financial, operational and data governance standards, all overseen by our board at the Corporate Governance Committee. Our networks and services are important enablers of Canada's clean economy, with the power of 5G Mobile connections poised to be a major factor in helping multiple sectors reduce emissions. Bell's an acknowledged leader in the green economy recently becoming the first communications company in North America to achieve ISO 5001 certification for our energy management system, and announcing our objective to achieve carbon neutral operations in 2025. And I'm happy to report that Bell was again named one of Canada's greenest employers, the only national communications provider to be ranked for fifth straight year. And of course, through Bell let's talk we're supporting mental health action and communities throughout Canada, helping over 1,100 organizations since 2010, with funding commitments now totaling more than $120 million with an ultimate target of at least $155 million by 2025.

We're undertaking meaningful actions to foster a more diverse workplace, including new targets for BIPOC representation and Bell senior management team of 25% by 2025, and 40% of all new graduate and student hires in the same timeframe. Bell is also a member of the 30% Club and a signatory to the catalyst the core 2022, which aim to increase the proportion of women serving on Canadian corporate boards to at least 30%. At our annual shareholders meeting later this morning, we expect to exceed that objective. All this to say that ESG is an important focus area for us, strong environmental, social and governance practices contribute to driving better operating results and creating shareholder value. And given who we are, and the role we play in our industry, we'll continue to build on that leadership position.

Over to slide five, on our operating metrics for Q1, I'll start with wireless. This quarter, we've modified our subscriber results reporting to align with many of our large North American peers as the Canadian industry evolves towards 5G. Specifically, we're now disclosing mobile phone and mobile connected device metrics separately. For comparability, we've restated our 2020 quarterly wireless subscriber metrics to reflect these changes. This change reflects our strategic focus on higher value smartphone loading, and the associated margin and economics in terms of lifetime value and EBITDA growth, while also enhancing the transparency of our disclosure.

Wireless customer activity was strong in Q1, despite on-going COVID restrictions. Subscriber loading showed good year-over-year growth, postpaid churn remained low at 0.89% and ARPU continued to recover. We delivered 33,000 mobile postpaid phone net adds this quarter, up 31,000 over last year. In terms of connected devices, we realized strong net adds of 74,000 or 51%, higher year-over-year, reflecting increased demand for Bell IoT solutions, including connected car subscriptions. In prepaid, despite lower year-over-year churn, our customer base decreased by 31,000 net subscribers.

Lower market activity reflected a slowdown in immigration and international travel to Canada during the pandemic, as well as reduced retail store traffic, resulting in 27% fewer gross ads compared to last year. That said, we've grabbed considerable market share over the past couple of years because of lucky mobile, which has higher than average ARPU, and I see prepaid growth resuming in the back half of this year. Lastly on wireless, blended ARPU decreased 3.4%. This of course reflects the industry wide pressure on roaming associated with travel restrictions, and lower data overdrive revenues as customers continue to subscribe to higher data thresholds and unlimited plans. Notably, around 60% of existing customers who have migrated to unlimited have upgraded to higher rate plans, which sets us up well for the mass commercialization of 5G.

Let's turn to wireline. We added 21,000 total new net internet customers, which compares well to last year's exceptionally strong results when we experienced a surge in demand as consumers began to work and spend more time at home. If we look at Internet net ads within our fibre footprint specifically, it paints an even stronger picture. We delivered 37,000 retail residential internet net ads in our FTTH footprint. That's up an impressive 43% over last year.

As our broadband footprint advantage keeps expanding, we begin to see almost immediately the favorable impact on both subscriber growth and Internet revenue, which grew a very strong 12% in Q1. It's the reason we're so confident in our accelerated capital investment plan. In TV, we added 11,000 net new IPTV subscribers, 8000 higher than last year, representing our first quarter of year-over-year growth in two years. This improvement can be attributed to strong Bell Five TV and Virgin TV performance and lower customer churn particularly in our fibre footprint. So that's a very positive result in a mature Canadian TV market and it speaks to the pull through impact and strong symbiosis between broadband Internet content and digital media.

Satellite net customer losses decreased for six consecutive quarter improving more than 7% versus last year. And we continue to see reduction in home phone customer deactivations, resulting in 17% fewer net losses. And as I mentioned in the past, anytime the rates have declined slow for these high margin services, it's accretive to cash flow. Over to Bell Media now. Although total advertising revenue was down year-over-year, due to COVID impacts on radio and out-of-home, TV advertiser demand continued to recover with a full quarter of major league sports.

Our Super Bowl broadcast which was a third highest in Canadian history, continued strong specialty news performance and the significant gains in primetime viewership and ad sales at our French language conventional network, Noovo. Taken altogether, this drove a 3.5% increase in TV advertising revenue in Q1. That's a very encouraging result that should strengthen as we’re beginning to lap last year's COVID impacts. TSN and RDS remained the top English and French language specialty Pay TV channels in Q1 and building on our celebration of women leaders at Bell, TSN made history just last month with the first all female broadcasts of an NBA game. Consistent with our digital first strategic focus, we made progress on growing our streaming distribution platforms and digital advertising markets.

Crave enjoyed standout performance with its best quarter since the final season of Game of Thrones, adding 139,000 new subscribers in Q1 to surpass 2.9 million total customers. That's up 12% over last year. Digital revenues increased 16% in Q1, and now represents 17% of total Bell Media revenue. And that's up 14% from last year. Going forward, we're expanding our digital ad inventory and modernizing our traditional distribution platforms to ensure they have the capabilities to enable dynamic ads on video-on-demand and ultimately, on live TV.

We want our entire ad inventory both digital and traditional to be more dynamic and addressable, offering targeted advertising capabilities and leveraging data insights from across Bell for advertisers will enable us to take a bigger slice of the ad spending pie on any platform we operate from five TV to all TV and Virgin TV to Bell streamer to the traditional TV channels and the CTV A1 app all the way potentially to Crave. Repatriating digital ad dollars back into Canada is a good thing for our economy, consumers and certainly for Canadian broadcasters. And in support of this objective, yesterday, we announced a new partnership with AT&T Xandr to create Canada's first self-serve omni channel advertising platform for TV and digital that will deliver increased automation functionalities and leverage data to facilitate new and easier media buying capabilities. The new platform will enable Canadian advertisers to run scaled targeted campaigns using premium inventory over multiple platforms and channels. It's a great addition to Bell's strategic asset management suite of data enabled and privacy compliant tools and offers marketers and advertisers the ability to identify, understand and connect with the right audiences.

On that, I'll hand the call over to Glen for a review of our Q1 financial results.

Glen LeBlanc: Thank you, Mirko. And good morning everyone. Let me begin on slide seven, a very positive start to the year as we have achieved consolidated revenue and EBITDA growth, despite on-going COVID impacts on our business. All Bell operating segments delivered meaningfully better performance trajectories that drove a 1.2% year-over-year increase in revenue.

This translated into an EBITDA increase of 0.5% as higher margin wireless roaming and media advertising revenues have not yet recovered to pre-pandemic levels. Despite higher EBITDA, net earnings were down 6.3%. This was due to severance costs recorded in Q1 for workforce reductions undertaken earlier this year, notably at Bell Media, as well as higher depreciation expense driven by growth in capital assets and accelerated depreciation of 4G network elements as we transition to 5G. We invested over 1 billion in CapEx this quarter. The year-over-year increase is consistent with our two year plan to accelerate more than 1 billion of investment on wireline broadband networks and mobile 5G.

Despite the notable step up in capital expenditures free cash flow increased 54% over last year to $940 million. The year-over-year improvement can be attributed to the timing of tax installment payments in 2021 as well as temporary favorable change in working capital that is expected to reverse over the remainder of this year. Let's turn to slide eight. Q1 marked the return to positive top line growth for Bell wireless total revenue was up 3.2%. This was driven by a 20% higher product revenues due to increase sales of premium smartphones that reflects our strategic focus on higher value mobile phone subscribers, as well as stronger online consumer electronic sales at the source.

Direct channels drove a significant portion of the year-over-year volume growth and accounted for one third of total consumer and small business sales in Q1 compared to just 15% year ago. Although year-over-year service revenues declined -- was the decline of 2.1% it did improve sequentially this quarter. Roaming and data overage remain headwinds, which is not a surprise to anyone. Normalizing for the $62 million COVID driven reduction in mobile roaming in Q1, service revenue was actually up 1.9% so a very positive indicator of when borders reopen and travel resumes. Despite the loss of the high margin roaming and overage revenue, EBITDA was right on the cusp of positive growth this quarter, decreasing by only point 5%, which represents a notable improvement from the 3% decline we reported last quarter.

Moving to slide nine, Bell wireline had its best top line performance of the past two years, delivering year-over-year growth of 1.5%, which yielded a 2.1% increase in EBITDA on higher margin of 44.2%. This result was driven by both higher service revenues which grew approximately 1% and a 14% increase in product revenue driven by higher sales of data equipment to the government sector. Bell residential had a standout performance in Q1 growing revenue nearly 4%. This was a result of an impressive 12% year-over-year increase in internet revenue, reduced seasonal service suspensions and an improved rate of voice decline as fewer customers are disconnecting home phone service during this pandemic. At Bell business markets, while overall results continue reflect reduced telecom spending by large enterprise customers, and volume declines in the SME sector because of COVID, we saw improvements in the year-over-year rates of revenue and EBTIDA decline.

Let's move over to Bell Media on slide 10. Further sequential improvement this quarter as revenue declined 5.2% compared to 10% in Q4, although TV advertising revenue was up 3.5% in the quarter, selecting stronger sports and news specialty performance, as well as incremental contribution from Noovo, out-of-home and radio advertising have been much slower to recover. Subscriber revenue reflected strong Crave streaming growth, but overall remained relatively stable year-over-year. However, growth is expected to strengthen during the course of the year due to the flow through of contract renewals with some of the Canadian TV distributors. Operating costs decreased 4.5% driven mainly by lower costs of revenue because of TV production, shutdowns and delays, as well as labor savings and a temporary waiving of part one, part two fees by the federal government due to the pandemic.

Consistent with year-over-year decline in advertising this quarter, which is a very high revenue flow through impact EBITDA was down 7.7%. Let's turn to adjusted EPS on slide 11, detail key components of adjusted EPS which was $0.78 per share for Q1 as COVID related impacts continue to moderate throughout most of Q1. Higher EBITDA as well as lower net interest expense in pension financing cost contributed favorably to adjusted EPS. But we're effectively offset by the increased depreciation and amortization expense I mentioned earlier and lower year-over-year tax adjustments. Turning to slide 12, despite the on-going financial impacts of COVID and higher year-over-year capital spending, which I've previously mentioned, free cash flow increased 54% to $940 million.

We ended Q1 with 6.5% available liquidity and a steady debt leverage ratio providing us with very good financial flexibility as we continue to execute on our capital acceleration investment strategy and we head into wireless spectrum auction in June. Free cash flow was exceptionally high exceptionally high this quarter as a result of higher cash working capital, due partly to the slowdown in commercial activity that we began to experience in the latter stages of Q1 2020 as the COVID crisis began. This quarter's results also reflect an expected decrease in cash taxes due to the profiling of installment payments in calendar 2021. That said, as the pace of CapEx picks up with the increased construction activity during the spring and summer months, and as working capital reverses course, with increased customer activity, free cash flow growth were moderate consistent with our guidance target for the year. Lastly, a quick pension status plan status update and an important milestone that I wanted to highlight regarding our funded position.

For the first time ever, and despite a persistently low interest rate environment all of BCE's major defined benefit pension plans are in a surplus position on a solvency basis. With the largest of those plans being Bell Canada at over 105%. More recently, we've been able to take contribution holiday on one of our smaller plans. This bodes well for the opportunity of taking contribution holidays on our larger defined benefit plans in the near future. The thought of a contribution holiday five years ago wasn't even on the horizon.

Fast forward to today, with all plans more than fully funded, it is reasonable to assume that a contribution Holiday is imminent. Wrap up on slide 13, we are extremely pleased by the operational execution delivered by the bell team in Q1 with consistent, steady improvement that continues to build momentum back into every part of the business, which sets us up very nicely for the balance of the year. With this promising start to the year and the strengthening financial profile across all operating segments, I am reconfirming all of our guidance targets for 2021. And on that, I'll turn the call back over to Thane and the operator to begin the Q&A.

Thane Fotopoulos: Thanks, Glen.

So before we do start the Q&A period, just want to remind participants that due to some time constraints this morning because of our annual general meeting, shareholders meeting which is taking place shortly after this call, please limit yourself to one question and a brief follow up so that we can get to as many in the queue as possible. Thank you for that. So Donna, we're ready to take our first question.

Operator: Thank you. [Operator Instructions] And the first question is from Jeff Fan from Scotiabank.

Please go ahead.

Jeff Fan: Thank you. Good morning, Mirko. Good morning, Glen. Perhaps the big question that we've been getting a lot in the past week is related to the Rogers and Shaw.

And I guess the revelation that BCE was involved. Merkel, I just want to give you maybe an opportunity to address that at a higher level, if you will, perhaps the rationale and whether there is a next best option. And then a very quick follow up perhaps for Glen, Q1 revenue and EBITDA grew year-over-year, even with a difficult comp. I'm just wondering if that was ahead of your expectations going into this year, and whether there's any color that you can give on guidance, it's a wider range than usual. And I know you didn't change your guidance, but do you have any color that you can give given the stronger than expected start? Thanks.

Mirko Bibic: Thanks. Thanks, Jeff. Morning, and thanks for the question. I'm going to keep it I will keep it high level given the nature of the issue. Let me start by saying I feel and I've said this, since I became CEO, I feel good about our current asset mix.

And we're well positioned to win in, in a converged era of fibre and 5G networks, 5G IoT mec use cases, the revenue opportunities are going to come with that. I'm really excited about our digital shift in media and digital ad spend monetization that will be able to generate and monetizing big data insights. So I think that's important to mention. I did, I have also said consistently, since I became CEO, because I've been asked this, that we will always look at opportunities that come up and capitalize on the opportunities that makes sense for our shareholders. So the transaction that you referred to in your question, Jeff, it came up, we looked at it, and we decided not to proceed.

I'm not going to add really anything beyond what's already in the public domain. Some of the reasons were some of the reasons why we didn't proceed have been reported on, and at this point, it's not our deal. The merging parties have a regulatory process to go through first instance. And while they're doing that, like I've also said, we'll continue to build and we'll continue to position ourselves to be a formidable competitor. I'll leave it at that, Jeff.

Glen LeBlanc: Good morning, Jeff. It's Glen, and your question on Q1, revenue and EBITDA performance in any color I can provide. Look, we're very, very pleased to have had growth in both revenue and EBITDA and if we remember back we are really laughing a quarter where there was minimal COVID impact in Q1 of 2020, it was really Q2 and we started to feel the, the extreme impacts of this pandemic. So to be able to deliver positive top line revenue growth and, and earnings growth. Yes, we're extremely pleased.

And I wouldn't say it changes our outlook. We look to the next, three quarters for the remainder of 2021. And we know we're going to face uncertainty and volatility during this pandemic. And let's hope that each and every quarter, our country begins to heal and then our economy starts to perform better. And with that, I think the confidence in, in our operations in the form in our performance of our company is underpinned by the fact that we actually provided guidance this year.

Others may not have, but we were very confident in our ability to continue to see sequential improvement, and operational excellence. And I think that's underpinned by firstly, providing guidance, but more importantly, reconfirming it today. So, I think, Jeff, we are extraordinarily pleased with the, with the first quarter and how we came out of the gate and the momentum we can carry into the rest of the year.

Jeff Fan: Great, thank you.

Operator: Thank you.

The next question is from Vince Valentini from TD Securities. Please go ahead.

Vince Valentini: Thanks very much. Glen first, can you confirm the 12% internet growth? That would all be service revenue? Correct? None of the product revenue would be in that?

Glen LeBlanc: Yes, correct. That? Yes.

That is correct, Vince, I'm just double checking. But yes, no, you're right. That is all service.

Vince Valentini: Okay. I mean, that's an amazing number.

I mean, we can see what the subscriber growth is in their ad. So clearly, there's a pretty healthy ARPU gain there. Can you break that down a bit for us? Is there any particular skew by any region, or any particular skew to sort of pricing gains versus people tearing up, versus maybe just less promotional discounting that's flowing through that revenue number?

Glen LeBlanc: You did a pretty damn good job there, Vince. That's exactly. It's all of the above, it's a little bit less promotional activity.

I think we're truly seeing consumers realize the value of our products now in this pandemic, and how important it is to have world class internet speeds and, and upgrading to better performance products. It is happening across our entire footprint. Wherever, we're offering services. So yes, we're extremely pleased with the 12%. But it is I can't give you any more granularity than the areas that you hit on.

But there it's all of the above.

Vince Valentini: Good enough. Thank you.

Glen LeBlanc: Thank you, Vince.

Operator: Thank you.

The next question is from Drew McReynolds from RBC Capital Markets. Please go ahead.

Drew McReynolds: Yes, thanks. Thanks. Good morning.

Mirko, I love to get your thoughts on the outcome of the wireless review while we have you here. And maybe as a follow up completely different the digital transformation at Bell Media, you alluded to 70% of revenue now digital. Is there, some kind of roadmap or, kind of forward looking digital contribution to revenue that you're willing to share? If not just maybe talk to, some of the key leaders of driving that digital contribution higher. Thank you.

Mirko Bibic: Thanks Drew.

So on the on the regulatory decision. Everyone knows what our position has been quite consistently over time and including throughout this kind of last proceeding. Evidence and the facts on the ground, easily would have supported the decision to state of course, with no envy and overtime [ph] mandate. So I think is important to say that. But, that said, given the range of potential NVNO [Ph] approaches that had been considered, the CRTC did at least lay out in a decision and approach that is, in a sense, consistent with our traditional facilities based policies.

A lot of details to work through, though, Drew so we'll do that, of course over time, and we're going to continue to, to assess implications of the decision. And like we said, the first day, right out of the gates when the decision came out, as we do the regulatory work that we need to do. First and foremost, we're going to continue to be focused on our customers, and that's about delivering the highest quality networks by delivering a wide variety of plans and continuing to deliver ever better customer experience that we can continue to generate the results that that we're seeing. On media, I'm really, really pleased with, with how well we're pivoting towards a digital first approach to the business. And really, I can’t really unpack at this at this stage for you Drew too much of the key drivers there, it's early stages.

But I think, really, it's about bypassing the suite of digital ad inventory that we can make available to advertisers and providing an easy to use one stop platform for advertisers to engage with as they're developing their campaigns. And we talk a lot about SAM, Strategic Asset Management, I think. I think that would be key driver right now of the success in the in the early days of our strategic pivot.

Drew McReynolds: Okay, thank you.

Operator: Thank you.

The next question is from David Barden from Bank of America. Please go ahead.

Unidentified Analyst: Good morning, guys. This is Matt sitting in for Dave, thanks for taking the question. Just two if I could.

I was wondering if you could talk about some of the underlying trends in leasing from wireless as service revenue. And if we should expect going forward leaving aside roaming. Obviously, everyone can make an assumption about when that will come back, and how strong. But should we assume that service revenue growth is going to be driven going forward both by subscriber growth and by underlying ARPU growth. And just secondly, on the comment, Glen, about the contribution holiday on the pension being imminent, is that -- are you referring -- are you leading us to believe that this is a 2021 event and is a holiday contemplated in the guidance range that you provided for free cash flow?

Mirko Bibic: So okay, Glen, I'll start first on the wireless question.

You could supplement as you wish on that and then go into the pension question. So about -- on the wireless side, you can see that our focus on smartphone loadings is bearing fruit. You can see it in the results there with 33,000 postpaid net ads and up 31,000 year-over-year. And as we de-emphasize tablets, we haven't walked away completely from tablets, but we're focused on profitable tablets and the profitability of our tablet sale has gone up 90% year-over-year. So that's an impressive number.

The digital transformation is working, while store traffic continues to be down pretty appreciably given the restrictions, you've seen the gross add numbers, they’re up. Other factors speaking to the growth in wireless here, promotional intensities, been fairly rational in Q1, January and February were especially stable. I think handset discounting is acceptable. So positive trajectory there. That's a good sign.

And where I see growth going forward, obviously, roaming will come back. Immigration and population growth will continue when we get through this. There is pent up demand. And with that comes penetration growth. I mentioned the mobile phone strategy 5G monetization on the horizon.

And prepaid as well, as I mentioned in my opening remarks, prepaid will come back, some of these other factors that I've mentioned improve as we get through COVID. Glen, anything to add and then pension?

Glen LeBlanc: Good morning, Matt. I'll touch on the pension contribution holiday that I alluded to earlier. Look, as many on this call will know, it's been probably 15 or 16 years, I've been coming on these calls talking about the state of our pension deficit, whether that be at Bell Alliance, or here at BCE and all of our plants. And to reach this historic milestone, where they're all fully funded with something that I wondered if I'd ever seen in my career.

When I say imminent, I do not -- I am not referring to 2021, it will not be this year. It is not in the targets or the guidance we provided. But I see it now in our planning horizon, meaning, in the next 12 months to 24 months, so post 2021 this is now real and it's gone from being a sizable cash flow burden of having to make special contributions into our pension plan for well over more than a decade to an opportunity that is going to present itself in our planning horizon. So not this year, Matt, but it’s pretty exciting after all of these years to see it literally on the horizon.

Unidentified Analyst: Right, great.

Thanks so much.

Glen LeBlanc: Thank you.

Operator: Thank you. The next question is from Aravinda Galappatthige from Canaccord Genuity. Please go ahead.

Aravinda Galappatthige: Good morning. Thanks for taking my question. I wanted to go back to the international revenue growth number obviously very impressive. And you alluded to sort of the upgrade cycle, the trend as subscribers tearing up in terms of the highest speed products. just to sort of help us understand how much more running room there is, with respect to that trend, either Mirko or Glen, I was wondering if you can talk about sort of the proportion of subscribers that, perhaps have taken that up still taking speeds under 50 megabits or 25 megabits in particular, your fibre customers, that can obviously easily sort of tear up to its 100, even up to 500.

Wanted to get a sense of sort of that upside? Thank you.

Mirko Bibic: I'm not going to break, I'm not going to break down the tearing of our fibre customers on, the various plans, but let me leave it at that this Aravinda there is definitely upside in having customers tear up from the plans they currently are on to plans all the way up to one 1.5 gigabits per second. And, that would come with quite clearly an ARPU bump. And so there we are focused on that. On 90% of our internet subscribers are on unlimited plan.

So really the move is to encourage subscribers who are on plan below a gig, let's say that to tier up to higher rate plans and therefore drive higher ARPU.

Glen LeBlanc: Yes, and Aravinda, it’s Glen, just to build on what Mirko said, Our fibre strategy is clear. And that is, is advancing our network, and our fibre to the home footprint faster, 1.7 million total Bell fibre to the home internet subscribers at the end of Q1. That's up 17% year-over-year. And so as we continue to make the necessary investment in rolling fibre out and to bringing world class connectivity to our customers, naturally, they're going to migrate to a better, better speed tier.

And that's where a big opportunity still remains for us is to continue to roll out fibre and offer world class internet speeds. So there's I think there's a significant runway in front of us and why this fibre infrastructure investment is so critical.

Mirko Bibic: What factors? I mean, there's three components to it. Right? There's one that Glen just mentioned, as we roll out more fibre, just a natural growth opportunity there for our current fibre subscribers, encouraging them to migrate up to higher rate plans. And of course, there is a cost side.

And just the customer experience churn and cost benefits that come that we've talked about before with a broader fibre footprint.

Aravinda Galappatthige: Thank you.

Operator: Thank you. The next question is from Simon Flannery from Morgan Stanley. Please go ahead.

Diego Barajas: Hi, good morning. This is Diego Barajas, filling in for Simon, thank you for taking the questions. Just to follow up on that fibre point, can you just speak to what penetration levels you're seeing in the fibre markets in year one and how you see that trending over time. And then on wireless, you spoke to traffic being down materially in the stores, but still had solid postpaid gross and net ads? And you also spoke to the direct channel? Can you just speak to how you expect that direct channel or online sales? What percentage, you see that making up over time? And maybe any cost benefits there? Thank you.

Mirko Bibic: Okay, thanks.

On the fibre question. Again, when we enter when we enter a market and overly fibre, where we didn't have fibre before, so might have had FTTN or ATM, lower speed, DSL technology. And by the way, the same thing goes with wireless home internet, we're seeing we're seeing rapid penetration gains. I'm not going to unpack that. But you can see you can see kind of the top line numbers of the sub games that Glen shared with you the top line revenue gains that we're seeing that, Vince asked us about.

So clearly the fibre strategy is working. We're taking strong revenue share. We're taking strong net add share quarter after quarter where we have fibre, I mean, it's the right thing to do to accelerate that plan. When we announced that in February, I was confident than I'm more confident than ever that this is the right strategy. On the wireless side and digital, that we have, we're a lot better than we were a year ago at direct channel sales.

So that would be online in the apps and through our call centers. And again, I pointed to the gross increase year-over-year in my opening remarks. That's going to continue. I mean those direct sales are going to continue to be a growing portion of our overall sales and therefore our overall channel mix and it definitely comes with lower COA. It allows us to be more competitive.

It does provide a better customer experience in the sense that those customers who want to deal with us in those channels can now do it easily intuitively. And they're happier customer at the end of it. And then of course, the customers who want to continue to deal with us, the retail stores will continue to, to have that benefit, because we're going to continue to lead and traditional retail store distribution. And, the omni channel journey is going to be important that seamless, transitioning between channels is going to be top of mind for us. And we'll give you an exact number.

But I will say Diego that year-over-year, total cash channel cost has gone down. And that's largely a function of direct sales and the mix. Now, as retail stores reopen the mix is going to rebalance a bit, but direct sales are going to continue to be a meaningful component of that and growing.

Glen LeBlanc: Just to build on, said Diego, just one brief comment. I've said it before, and I continue to remind everyone again, where we build fibre, we take a disproportionate share of net new ads.

It is that simple. It's an every footprint where we build fibre, we have the opportunity to take share, and that continues. So although I won't share with you specifically, what the penetration rate is in the first six to 12 months as is difference by region. What is important is we continue to take a disproportionate share of net new.

Operator: Thank you.

[Operator Instructions] And the next question is from [Indiscernible]. Please go ahead.

Unidentified Analyst: Yes, thanks for taking my questions. Two questions on ARPU growth. We saw we saw a slight change in the methodology for reporting subscribers.

It's easier to see the impact on the subscriber front, but so maybe if you can quantify the impact on the ARPU growth, possibly and also on the transition to unlimited. What are where are you in your plans to to transition in terms of where you want to be?

Mirko Bibic: Glen, you want to start first on ARPU?

Glen LeBlanc: Sure. So the ARPU growth that we show now has changed due to our reporting change and removing the connected devices or items like tablets from the from the ARPU calculation, you would have seen historically. If you look back, we restated all of calendar 2021. So that it is comparable, so that the growth rates were not skewed by that, you'll notice that the ARPU jumped I think it's saying it's in the roughly $5 or $6 on an ARPU… Yes, it's about $7 excuse me, but all of that was restated so as to give you clear comparability.

Mirko Bibic: [Indiscernible] if you go to last year, supplementary versus this year you can see the differences.

Unidentified Analyst: And on, overage, we continue to manage that nicely. I know like I've said before, I'm base management is something we're particularly good at. We're not forced migrating customers, if customers and unlimited plans are available, they're there for those who want them, know that it's there. With 5G, you have to get, you have to take an unlimited plan.

We see 60% of those, as I mentioned, who migrate to unlimited plans are migrating up, which is good. And we're well positioned for 5G. I think, I think really for us the spike in transitions from capital plans to unlimited plans will happen when there's a spike in adoption of 5G handsets.

Glen LeBlanc: And as I said in my opening remarks when we look at ARPU and the fact that if you normalize for the sizable impact roaming continues to have in that number is our service revenue number is positive and therefore, big impact on our ARPU is the is the impacts of roaming.

Unidentified Analyst: Thank you.

Glen LeBlanc: You're welcome.

Operator: Thank you. The next question is from David McFadgen from Cormark Securities. Please go ahead.

David McFadgen: Oh, great.

Thank you. So you talked earlier, about 60% of your customers have migrated to unlimited data plans. I was just wondering, actually then got higher rate plans. But I was just wondering, where do you stand on the whole journey of getting your postpaid customers over and unlimited plans and just wanting to be give us some ideas to know 50% migrated over to unlimited plans and just sort of some idea there. And then secondly on the pension plan hiatus when you talk about a hiatus and funding in 12 months to 24 months I was just wondering could this be something material, and really help you free cash flow to help you deliver faster? Thank you.

Mirko Bibic: Well now on the first question again with unlimited plans very similar to the answer I gave to -- I have no set target in terms of the pace of migration to unlimited that we're seeking. I'm actually trying to manage the data overage decline in the entire kind of portfolio of services we’re providing now of course, we do have to provide unlimited plans it is, it is good consumer initiative and positions as well for 5G. So that migration at in terms of the Bell subscriber base, that migration will evolve naturally, as customers migrate over to 5G. I did I did say that it's positive that when a customer migrates to unlimited 60% of those are on higher kind of higher rate plans but there is that's parking for a second the data overage impacts, so I’m really trying to manage the data overage decline. I think it's the right thing to do for our shareholders.

That data overages, high flow through revenue. And, other than other than providing the suite of plans enhances that customers want no set target. it'll come when it comes, and it'll come when 5G arrives for real.

Glen LeBlanc: Thanks Mirko. And I'll take the pension plan funding question.

The size of the prize is your annual current service cost. And if you look at what it tends to be for us of all plans, it's $200 million to $250 million dollars annually. Now, if there's a monthly test, and each plan has to be tested individually, so one plan could be in a contribution holiday state where another may not be but the size of the prize is absolutely material if we consider that. If you were able to have all plans in a state of a contribution holiday it could be upwards of $200 million to $250 million in any one calendar year. So fingers crossed.

For now we're just we're extremely pleased that it's no longer requiring cash to be put into the plan and to think about that size opportunity in the future is pretty exciting.

David McFadgen: Okay. Thank you.

Operator: Thank you. There are no further questions registered at this time.

I’d like to turn the call back over to Mr. Fotopoulos.

Thane Fotopoulos: Thank you Donna. So, thanks again to everybody for their participation on the call this morning. As usual, I’ll be available throughout the day for any follow up clarifications.

So on that, have a great rest of the day and take care, stay safe. Thank you.

Mirko Bibic: Thank everyone. Thank you.

Operator: Thank you.

The conference has now ended. Please disconnect your lines at this time. And thank you for your participation.