For important disclosures, please see the Morgan Stanley Research Disclosure website at morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales rep. We are excited, I think, to welcome to the conference, I believe for the first time, Mirko Bibic, who has served as President and CEO of Bell and Bell Canada since January of 2020. Mirko, thanks for being here.
Thank you, Ben. Glad to be here.
You had an investor day, as you know, back in October, laid out a long-term vision for the company, a three-year strategic plan. Revenue growth of 2%-4%, adjusted EBITDA of 2%-3% through 2028. Why don't we start, level set for the audience, sort of the key pillars, you know, underpinning that growth outlook for the business?
Yeah. Thanks for the question. Throughout the course of 2025 last year, we really set about kind of outlining with clarity, a forward-looking capital markets and operational strategy. Obviously, they work hand in glove and you've now got before you a BCE and a Bell Canada, essentially a renewed energy, renewed vigor, a lot of optimism around the plan. I think from an investor point of view, what I'd really highlight is, as a management team, we've declared ourselves, like, we've outlined what we are going to do over the next three years. Now we've got a management team that's focused entirely on execution, execution against that plan. We're not managing to yesterday or to this quarter, necessarily. We're managing for to 2026, 2027 and 2028.
The plan is built around, we call the 4 + 1 . The four strategic priorities, you know, putting the customer first, delivering the best fiber and wireless networks, leading an enterprise with AI-powered solutions. On the media side, it's about building a digital media and content powerhouse. They all work together in a very tight, integrated way. It's all supported by the +1 , which is a pretty aggressive cost reduction agenda. Importantly, it's about reducing costs while at the same time improving customer experiences. That's the plan.
Great. We'll dive into all those 4 + 1 as we go through the conversation. Why don't we start with the consumer and SMB segment? This is where you're targeting, I think, 4% to 5% compound growth in your sort of growth services over the next three years. It's still a very competitive environment in Canada. I don't need to tell you that on the telecom side. What are the things that you guys are doing specifically to help drive this accelerating growth from sort of what we've been seeing over the last couple of years?
Right. I'm glad you highlighted the, you know, on the consumer and SMB side. We've done this for enterprise as well as we've outlined for investors, you know, we've shaped for them the profiling of saying, look, we are leaning into the growth vectors, and those are going to grow. In case of consumer, you just mentioned they're at 4% to 5%. We've unpacked for investors the fact that we're a 145-year-old company that has a number of legacy businesses that are in structural decline. We separated the declining legacy businesses from the growth assets. On the consumer side, fiber and wireless, the way we're going to do it is really three key pillars, and it's all about execution again.
Churn and retention, so continue to get churn down on wireless and fiber Internet. Product intensity. You know, we recognized a couple of years ago that we've got a ways to go to match our peers in the number of households in our footprint that buy more than 1 product from us. There's no reason why we can't get that up because we have the best fiber networks and leading wireless networks. The third thing we're gonna do in order to get to those growth numbers is over-index our customer loadings on the premium Bell brand. Churn reduction, product intensity, so it's about mobility, Internet, and content sales combined to as many households as possible, as many as possible on the premium Bell brand, 'cause that's where the highest value customers sit.
Great. We're gonna unpack that more in a bit. I wanted to just stick with some of the big headlines from your investor day. You guys put out a specific dollar number tied to AI, which is a billion and a half of AI-powered solutions revenues over the next three years. Unpack that for us, because I don't think too many people sort of think of Bell Canada as maybe a way to get exposure to AI.
It is. There's a lot of momentum there.
Yeah
Y ou know, the AI vector for us, and we're very optimistic about it. I think that the punchline here is that you'll see that we are creating a significant amount of value in a short period of time. The advantage we have is we essentially sit at the... We're comfortably sitting in, I'd say, or confidently sitting at the intersection of secure networks, trust, 'cause Bell is the most trusted communications brand in the country, distribution relationships, and AI infrastructure.
You add to that we have access to a significant amount of power, and time to compute is a significant advantage. You know, all those ingredients together are going to lead to us executing against that vision that I said about leading an enterprise with AI-powered solutions, it's around, again, the AI infrastructure, which is Bell AI Fabric, AI-powered cybersecurity as a service, which is Bell Cyber and then, systems integration with a specialization in automation and AI, which is Ateko. Put them all together, we're gonna we're offering the full stack AI solutions to customers.
Great. I think the last sort of big piece of the growth outlook stems from your Ziply acquisition last year. Spent CAD 5 billion last August to acquire Ziply Fiber. We have a lot of your competitors at the conference on the U.S. side here. That really expanded your fiber footprint pretty meaningfully. How is the integration progressing? What are your expectations for Ziply's contribution to growth for Bell?
Those were the contributions. Ziply's contributions to growth were outlined at Investor Day. Really what I'd say is, you know, when you ask the question around integration of Ziply, it's not an integration story in the classic M&A.
Yeah
Y ou know, approach where you acquire a company and then you integrate it operationally and you drive synergy. That's not what we're doing here. I view the integration question more as a, as a, you know, the approach is to build a durable high growth fiber platform that's going to continue to contribute meaningfully to BCE's overall revenue and EBITDA growth. Again, fiber is the winning broadband technology. We are a fiber first company. We've turned ourselves into a fiber first company in Canada. It's really about securing growth in the United States through fiber. It's about up, you know, deploying capital to, you know, the highest value areas.
We want to continue to be in fiber, and we want to continue to allocate our fiber CapEx dollars to high growth markets, and the U.S. is a you know, significant growth market for BCE through Ziply Fiber.
Yeah. You know, in many ways, I'm sure you would agree, last year we saw the Canadian telecom market.
Yeah
Y ou know, begin to show some signs of stability. Whereas in the U.S., you know, sort of following Canada over the last couple of years, getting more intense, particularly on the cable side. I guess the question is has the increased promotional intensity from the cable operators, who are Ziply's primary competitors, impacted at all how you see that business performing in the near term?
We're continue to see it growing at a fairly, you know, impressive clip. The reason, there's three keys to that growth. One is having the superior network, which clearly fiber is, and that's what Ziply is, a fiber company. Two is customer experience. You got to deliver what customers expect, and Ziply is second to none in the U.S., frankly, on customer experience scores. Look at churn and particularly NPS. Then the third key thing is pricing. Ziply actually has always been priced despite, you know, the superior network and superior experiences, priced below cable, and that remains the case. Those three ingredients are the winning ingredients, and they still are in Ziply's favor: the network, the experiences, and the pricing.
Okay. All right. Why don't we turn to the Canadian market? Obviously, the bulk of the business. It's been intensely competitive, Quebecor being, in particular, a disruptive fourth challenger over the last several years. How would you describe the landscape today, and how do you see that evolving over the course of the year?
I think the market, you know, both wireline and the wireless side, feels certainly more stability there than there has been in the recent past, in the last two to three years. That's a good sign. You know, Black Friday in November of 2025 was particularly encouraging. I think the first half of December last year as well. I think, you know, there has been, you know, a lot of chatter about pricing in January and February, which I would view, I think over the medium term over the course of a full year. I view January and February as more of a temporary thing.
I think, that all being said, I think the most important thing from, you know, as people assess Bell is Let's go back to my first answer t o your first question. We have a plan. Everyone knows what the plan is. We're executing against the plan. We're not managing the business to January or February. We're managing it over the course of a full year, and we got it to a three-year performance target. That's what we are going to do. In our case, again, I'm repeating myself, but it's fundamentally important.
Got a management team that's focused on reducing churn, increasing product intensity, and going after the highest value customers on the premium Bell brand. We are not about chasing headline net add numbers. We are about discipline, returns, and putting our efforts towards the highest value areas, and that's what we're going to continue to do. I share this stat a lot, and I just...
Again, just to put some data behind what my words. Last year in Q1, Bell was four out of four players in wireless across almost all metrics. When you look at our performance in wireless over the course of 2025, we led the industry in gross wireless sales. In terms of the big three, we're essentially tied in net adds, and we performed, you know, really well on terms of our churn reduction expectations and a number of other financial and key KPIs. That's because we set out to manage our business across 12 months, 24 months, 36 months, and we're gonna continue to do exactly that.
Yep. You mentioned January and February chatter. I mean, these are relatively small months when it comes-
Yeah
-to the year. Is your expectation that that's, you know, I don't know, just chatter and noise, or that you think it moderates here in March, or what do you-
I do think it moderates over the course of-
Okay
-of the year. Q1 is structurally always a low volume quarter.
Right.
We have, you know, a lower growth environment generally, particularly because of the changes in immigration policy from a year and a half ago. Again, back to our plan, we built our plan, which we unveiled in October of last year at Investor Day. We actually built our plan in a low growth environment for a low growth environment. We are well, we are kind of, we are well positioned to operate in that framework. As things stabilize and improve, it is all upside.
I was gonna actually ask you about ND immigration trends next. We have the same issue in the U.S. lately. Is there any line of sight to maybe some improvement in the immigration backdrop in Canada as you look out?
Well, in the very short term, I'd say no. I mean, the policy is what the policy is.
Yeah.
However, if you look out in the medium term, Canada is a country that thrives on immigration and we need the growth, so I fully expect that to come back. In the meantime, though, you know, you've got some newcomer growth, obviously, just not as high as it was three years ago. We're gonna have penetration growth. Canada always lags, has always lagged the U.S. in penetration. As the U.S.'s penetration improves, so does Canada's, albeit just, you know, where there's a lag there. That's gonna continue. Idiosyncratically for Bell, we've got our churn reduction agenda, we've got our product intensity agenda, and we've got our market share ambitions on the premium Bell brand, and we're gonna continue to execute against those three things. Net-net, as things stabilize, we're gonna be able to deliver on our 2026 objectives and our longer term 2028 objectives.
When do you expect to return to positive wireless service revenue growth? What do we need to happen for that inflection to take place?
I won't call a specific quarter on that. I think, you know, the focus ought to be on service revenues, frankly. That's how we're gonna continue to grow the platform. The things that you really need to see are price stabilization, which, you know, I think by and large, I feel more comfortable about that than I did at certainly a year and two years ago. We need to see new win, new acquisition pricing improve vis-a-vis, you know, the same period of time a year ago. I think, you know, we definitely saw that in November 2025 compared to November 2024. We saw that in the first half of December last year.
It's kind of, you know, January, February has been up and down from i n terms of comparing new win pricing to a year ago, that would be the second key thing that we need to look for. The third thing is promotions. Promotions are a fact of a competitive environment. You just don't want promotions to be so constant that they become kind of a baseline feature rather than truly promotions at particular times of the year.
Sure.
Those are the key ingredients, but I won't call a specific quarter. I would say that, you know, our objective, though, is to continue to stabilize service revenue, which we're starting to see. Once you get the stabilization, improvement.
Maybe not as popular as the AI question this week, but we have had a lot of discussion on direct-to-cell-
Right
-satellite connectivity. What is your view of the opportunity set for Bell? Or even maybe if that could be a competitive dynamic as you look out ahead at more and more satellite connectivity to wireless.
Yeah. We're quite excited about the opportunity we're going to have in the direct-to-cell space.
Yeah.
We have a partnership, a privileged partnership with AST SpaceMobile, and you know, we're tied to them, certainly commercially and strategically. Our objective is to have a market trial in the latter half of this year so that we can launch, have a full market launch very early in 2027. The bundles, the plans, the pricing, the promotion, all of that is TBD in terms of how we're gonna approach the market. We believe that our offering through AST SpaceMobile is going to be superior to what our competitors offer in the direct-to-cell space.
It'll improve the customer experience and certainly will, as a result, improve our churn performance and I think will lead to over time a market share shift.
How do you think about the market opportunity? Is this something that a lot of your wireless customers will pay for, even if it's maybe as a backup or just peace of mind? What do you think the market opportunity is for direct-to-cell?
Yeah. I mean, we... I won't go so far in the early days as the size of total market opportunity, but I do believe there's demand for the service. I definitely see it being included in the highest value wireless plans, again, to generate a higher service revenue and to lower churn. If we make it easy to subscribe to, that's the key thing, right? Just make it easy for customers. I think there's gonna be, you know, important demand there on a pay per use, either on a pay per use basis or just subscription on demand. If you're all of a sudden out of coverage, if we send you an alert, "You're out of coverage. Click here." One click, two clicks, and you can have instant coverage.
I think the key determinant to, kinda the key driver to the market potential is going to be how easy we make it for customers to subscribe.
Okay. Let's talk a little bit about the enterprise space. What do you see when you look at cyber, Bell Cyber, Ateko, what differentiates these businesses in the marketplace and allows you to grow.
We are extremely, you know, we're pretty proud and excited about the, you know, what we're doing in the enterprise space compared to, frankly, most legacy telcos in this space. You know, even before these growth vectors, our, you know, the way we were managing the core business in terms of very modest declines, where in most countries you see the legacy telco have significant enterprise declines. Just there in the core business, turning it, you know, turning modest decline to stability and slight growth is a huge accomplishment. Now you add to that, you know, these high growth verticals. Again, the secret here is combining, finding growth verticals that are tightly tied to the core expertise. That's a massive differentiator.
Whether or not you're talking about a telco or cyber or Bell AI Fabric, they are very closely tied to the core business of communication and connectivity. That's one important thing. Two is, you know, the Bell strength in Canada in distribution is second to none.
We have a significant advantage compared to anyone else on distribution in the enterprise space and the trusted Bell brand. You look at Bell AI Fabric, for example, it really is combining secure high-performing networks, which are our core business, with our distribution, the trusted Bell brand, and now you add AI infrastructure to that. It's a very potent and powerful combination. You know, we're approaching this entire growth, these growth verticals in a very disciplined way. By that I mean it's demand led. Once we have the demand, a committed customer, we will build a data center, AI data center for them. That is a key thing. High growth, low risk from that perspective. We're not speculating on a data center build and hoping customers will come.
The second thing we do is we are not ourselves investing in GPUs. We partner with those who bring GPUs to the data centers. In many cases, the GPU owners are actually the key committed tenants for our AI fabric facilities. All of which to say is we do not take the technology obsolescence risk.
Right.
You know, high growth, disciplined way, you know, high growth secured in a disciplined way. Lots of potential there.
Got it. Great. Let's make sure we touch on Bell Media.
Yeah.
Can't leave that out right now. You guys are talking about driving digital revenue from 45% of revenue last year to 60% by 2028. I don't know how many people here know about Crave. They all know about Heated Rivalry, though. Maybe you could talk a little bit about... Congratulations, by the way, on that show.
Thank you.
Talk a little bit how you have positioned your streaming businesses in the marketplace, you know, relative to all the other options, you know, that consumers have today.
We are also pretty excited and energized by, you know, the growth potential of Bell Media. For those who don't know, we are the largest broadcaster in Canada and have either been a majority owner or an owner, or a 100% owner of what is now Bell Media since 2000. I mean, I don't think it's appreciated that the media business is actually a core business of Bell. We are not immune to the, you know, worldwide forces that have impacted legacy media over decades. We just haven't sat there and let it continue to decline. We took an approach five years ago that we were going to change this business back to growth by leaning exclusively into digital.
The strategy is premium entertainment, which is Crave streaming, premium sports, which is TSN, and news, which is CTV News, all three of those. Entertainment, sports, news on digital platforms. That's the play. We've been aggressively pivoting the revenue mix towards digital since 2020. It's working really well. Take... Let's... You go to Crave now as the proof point. We grew the Crave subscription base by over 1 million subscribers in 2025 year-over-year. Across, you know, on a... We've looked back to any one of our products on the media side, on the telco side, years and years, decades, and it's actually was... Crave in 2025 was the fastest growing Bell product that we can remember. Of course, we have far more wireless sales-
Sure. Yeah.
-than we do Crave sales, but on a net add basis, it was phenomenal. It's on the strength of premium entertainment, including a lot of Canadian content, which is very popular in Canada, as you would expect, on a digital platform that keeps improving. It's pretty remarkable to think that probably the hottest show in the last six months globally-
Yeah
-is a Bell Media Crave, you know, content, Heated Rivalry. We're really proud of the show, but it's not the only one. You know, we had Shoresy and Letterkenny. We have a lot of, you know, French language content on Crave that have sold globally. One of our French language shows that was very popular in Quebec ended up being number one in France as well, most recently. You know, it's got, you know, it's got some momentum.
Is there a Heated Rivalry feature film or a spin-off you wanna announce today?
Oh, God, probably leave that to the experts rather than me.
Okay.
There is a season two, though.
Yep. Yep. For sure.
Yeah.
Nice. Okay. We wanna make sure we talk a little bit about the regulatory environment, TPIA. Let's start with that. The CRTC's decision on wholesale has been controversial. I don't need to tell you that. The final decision mandated that you will provide wholesale access, you know, to your facilities. I know that's, you know, that was upholding a prior decision. How is that impacting your capital allocation plans, if at all?
Oh, it is. I’d say we react... I’m gonna keep back to a common theme, right? We just kinda go back to... We anchor ourselves all the time to our plan.
Yeah.
Our plan includes on the capital market side a capital market strategy, discipline, capital allocation, investment dollars find their own level, we react to the signals around us. What we are going to continue to do is direct our investment dollars to the highest return opportunities in areas that are tightly connected or singularly connected, frankly, to our plan. You know, an important signal was sent with that public policy change, and that is that there is going to be lower returns on future fiber build-
Yeah
-than there had been on previous fiber build. We're still going to build fiber in Canada, although at a significantly lower pace than we had before. Some of those fiber dollars got reallocated to the U.S. that are higher growth opportunities, and still more capital investment got directed to more capital light areas that are higher growth, like AI Fabric, some of the digital media areas.
It's kinda, you know, the decision highlights the importance of revenue diversification and geographic diversification. It's kinda back to the same point. We've got geographic diversification in our core business with Ziply, and we've got revenue diversification, particularly with our push in the AI-powered solutions.
You guys, I believe, did announce plans to launch internet service in British Columbia and Alberta through wholesale. I'm sure you've thought about the competitive response and all and gamed it all out. Why is this an attractive opportunity for Bell shareholders?
Yeah, we'll be very disciplined. We do not intend to use TPIA in the West to become a mass market internet provider. It's actually, I'm repeating myself, but it's really kind of, I want demonstrating the focus. It's the same plan out west, which is multi-product bundling on the Bell brand. We're only going to offer Bell-branded services out west, and it's not about being a solo internet provider. It's frankly using TPIA to improve lower churn-
-improve churn in the West for our high-value wireless base. What we wanna do is we wanna protect the high-value wireless base that we have, and we wanna grow the high-value, you know, our high-value wireless market share out West, and we're gonna do that for those customers who want multiple products. We're gonna use TPIA as one lever, and we're gonna use our streaming content bundles as a third lever. Taking a step back, what are we trying to do? Increase our mark... protect our wireless base to increase our high-value wireless market share on the premium Bell brand through churn reduction and product intensity.
It's actually the same plan as it is across the board in Canada for Bell, and it's a very disciplined approach that we don't plan on, you know, aggressively pricing solo internet to gain internet market share in its own right. That's not the play.
Okay. Let me ask you another one, and then we'll see if anybody in the audience has a question for you. One of the things we've heard about over the course of the last year or so on the AI front is data sovereignty, and I wanted to ask you how you think the Canadian government and the Canadian marketplace think about that and whether that is a tailwind to what you're looking at achieving on the AI front at Bell.
Yes, indeed. It's a big opportunity for us, the data sovereignty mindset that exists in Canada but in other jurisdictions around the world.
Yeah.
If data sovereignty is important to you and in the public sector clearly is.
Right
For some critical industries in Canada that, you know, operators within other critical industries in Canada are big customers of ours. If you're the public sector or an operator in another critical industry and you know, data sovereignty becomes an important thing, it comes back to security of networks, trusted brands. We are in a good spot there given, you know, our high-performing networks and our trusted brand. I think it's a potential further accelerant to our AI powered solutions ambition.
You know, the growth projections that we have and that we outlined at Investor Day for AI-powered solutions, the $1.5 billion in revenue, and none of that is necessarily dependent on, you know, data sovereignty as a critical enabler, but it is a big opportunity that would be a further accelerant to the growth plan.
Okay. That makes sense. Any questions? Tony, you wanna just wait quickly for the microphone so the webcast can pick it up.
As you talk about the Ziply opportunity, how should we think about other M&A potential outside of Canada, and how big do you think the fiber opportunity in the U.S. could be?
Our fiber opportunity, we've outlined it on Investor Day. We aim to get over the longer term to 8 million fiber locations passed. Three million of those by the end of 2028, and we're roughly halfway there today. Those are the ambition. Again, we've declared ourselves. That's the ambition. The base case to get to those thresholds is to build. That's the base case. We're gonna build our way to 3 million, and we're gonna build our way to 8 million over time. If there are opportunities, again, over time, that are opportunistic, the right value, and that allow us to get to those targets quicker, we'll take a look at those opportunities. Again, I'll reiterate two things.
Base case is to build, and we wouldn't do anything in the short term that deviates us from our leverage targets, where we plan on getting to a 3.5 leverage ratio by the end of 2027. We're gonna be below 3.5 by the end of 2028, and we're gonna march our way towards 3.0 by 2030. Anything we do, whether or not it's in the U.S. or in any other of our businesses, we're not gonna make investments that cause us to deviate from those leverage ratios.
Yeah. That was gonna be my next question.
Yeah.
Which you sort of touched on. How would, if at all, asset sales play into getting down to that 3x by 2030?
Yeah. It's a plan we outlined last year. In this case, in terms of asset sales, we outlined our objectives in February of 2025, where we indicated that we plan to monetize up to CAD 7 billion of asset sales, CAD 4.7 billion of which or CAD 4.6 billion of which was Maple Leaf Sports & Entertainment, and then we had the Northwestel disposition. Since then we've had a smaller disposition. Sorry, Northwestel disposition.
Yep.
Since then, we've had a smaller disposition of Bell Smart Home. You know, we're not at the CAD 7 billion in proceeds yet, but the plan remains exactly as it was outlined a year ago. I think the target was to reach those proceeds of sale by the end of 2027. We're not deviating from that plan.
Okay.
All the things we said we were gonna do last year, we're gonna continue to execute towards.
Great. Well, we're running out of time, Mirko. Anything you wanna wrap up with before we close it out?
Oh, again, it's very important when you're the CEO, you gotta keep saying the same things just to, you know, reinforce the plan. It's execution, execution. I think, you know, the significant value is going to be created through AI fabric. Bell Media will deliver annual revenue and EBITDA growth, and it's an asset that, you know, generates significant free cash flow. We will hit the leverage targets that we outlined. In fact, executive compensation depends on hitting those targets. I share that with all of you just to say that it is a very serious target that we won't deviate from.
We're going to continue to operate in a disciplined manner to deliver the total shareholder return that we indicated we would deliver to everybody through to the end of 2028.
Great.
Thank you.
Thank you very much. Thanks, everybody.
Thank you.