2006

U.S. Securities and Exchange Commission

Washington, D.C. 20549

FORM 40-F

o		REGISTRATION STATEMENT PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934

OR

þ		ANNUAL REPORT PURSUANT TO SECTION 13(a) OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: December 31, 2006		Commission File Number: 1-8481

BCE Inc.

(Exact name of Registrant as specified in its charter)

Canada
(Jurisdiction of incorporation or organization)

4813
(Primary Standard Industrial Classification Code Number (if applicable))

98-0134477
(I.R.S. Employer Identification Number (if applicable))

1000 rue de La Gauchetière Ouest, Bureau 3700, Montréal, Québec, Canada H3B 4Y7, (514) 397-7000
(Address and telephone number of Registrant’s principal executive offices)

CT Corporation System, 111 Eighth Avenue, 13^th Floor, New York, N.Y. 10011, (212) 894-8940
(Name, address (including zip code) and telephone number (including area code)
of agents for service in the United States)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Common shares		Name of each exchange on which registered New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

For annual reports, indicate by check mark the information filed with this Form:

þ Annual information form		þ Audited annual financial statements

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

At December 31, 2006, 807,643,941 common shares and
66,000,000 First Preferred Shares were issued and outstanding.

Indicate by check mark whether the Registrant by filing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934 (the “Exchange Act”). If “Yes” is marked, indicate the file number assigned to the Registrant in connection with such Rule.

YES: o		NO: þ

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

YES: þ		NO: o

 

 

PRIOR FILINGS MODIFIED AND SUPERSEDED

     BCE Inc.’s (“BCE”) annual report on Form 40-F for the year ended December 31, 2006, at the time of filing with the U.S. Securities and Exchange Commission (the “SEC” or “Commission”), modifies and supersedes all prior documents filed pursuant to Sections 13, 14 and 15(d) of the Exchange Act for purposes of any offers or sales of any securities after the date of such filing pursuant to any registration statement or prospectus filed pursuant to the Securities Act of 1933 which incorporates by reference such annual report on Form 40-F.

     Other than:

•

the Annual Information Form of BCE for the year ended December 31, 2006 (the “AIF”) included herein;

•

BCE’s annual audited consolidated financial statements for the year ended December 31, 2006 and the related management’s discussion and analysis of financial condition and results of operations included in the Bell Canada Enterprises 2006 Annual Report to shareholders attached hereto as Exhibit 99.1 (the “BCE 2006 Annual Report”);

•

the reports of BCE’s management and of BCE’s external auditors on the annual audited consolidated financial statements for the year ended December 31, 2006 included in the BCE 2006 Annual Report;

•

the reports of BCE’s management and of BCE’s external auditors concerning internal control over financial reporting included in the BCE 2006 Annual Report; and

•

BCE’s Reconciliation of Canadian GAAP to United States GAAP attached hereto as Exhibit 99.3 and the related report of BCE’s external auditors attached hereto as Exhibit 99.4;

no other information from the Exhibits attached hereto is to be incorporated by reference in a registration statement or prospectus filed by BCE pursuant to the Securities Act of 1933.

ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS AND
MANAGEMENT’S DISCUSSION AND ANALYSIS

A.   Annual Audited Consolidated Financial Statements

     For BCE’s annual audited consolidated financial statements for the year ended December 31, 2006 (the “Financial Statements”), including the external auditors’ report with respect thereto, see pages 65 to 105 and part of page 64, respectively, of the BCE 2006 Annual Report, which pages are incorporated herein by reference.

B.   Management’s Discussion and Analysis

     For management’s discussion and analysis of financial condition and results of operations for the year ended December 31, 2006 (“MD&A”), see pages 2 to 61 and 106 and 107 of the BCE 2006 Annual Report, which pages are incorporated herein by reference.

RECONCILIATION OF CANADIAN GAAP TO UNITED STATES GAAP

     Refer to the document entitled “Reconciliation of Canadian GAAP to United States GAAP” reconciling the significant differences between Canadian and United States generally accepted accounting principles attached hereto as Exhibit 99.3, which is incorporated herein by reference, and to the external auditors’ report with respect thereto attached hereto as Exhibit 99.4, which is also incorporated herein by reference.

DISCLOSURE CONTROLS AND PROCEDURES

     Our disclosure controls and procedures are designed to provide reasonable assurance that information is accumulated and communicated to management, including BCE’s President and Chief Executive Officer (CEO) and Chief Financial Officer (CFO), to allow timely decisions regarding required disclosure.

     As of December 31, 2006, an evaluation of the effectiveness of our disclosure controls and procedures, as defined in Rule 13a-15(e) under the U.S. Securities Exchange Act of 1934 and under Multilateral Instrument 52-109 adopted by the Canadian Securities Administrators, was carried out under the supervision of and with the participation of management, including the President and CEO and the CFO. Based on that evaluation, the President and CEO and the CFO concluded that the design and operation of our disclosure controls and procedures were effective as at December 31, 2006 and ensure that information is recorded, processed, summarized and reported within the time periods specified under U.S. and Canadian securities laws.

INTERNAL CONTROL OVER FINANCIAL REPORTING

A. Management’s report on internal control over financial reporting

     The report of BCE’s management entitled “Management’s Report On Internal Control Over Financial Reporting” appearing at page 62 of the BCE 2006 Annual Report is incorporated herein by reference.

B. Auditors’ report on internal control over financial reporting

     The report of BCE’s external auditors concerning BCE’s internal control over financial reporting appearing at page 63 of the BCE 2006 Annual Report is incorporated herein by reference.

C. Changes in internal control over financial reporting

     No changes were made in our internal control over financial reporting during the year ended December 31, 2006 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

STATEMENT REGARDING CONTROLS AND PROCEDURES

     There can be no assurance that our disclosure controls and procedures will detect or uncover all failures to disclose all material information otherwise required to be set forth in our disclosure. Further, a control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance with respect to the reliability of financial reporting and financial statement preparation. Accordingly, BCE does not expect that BCE’s internal control over financial reporting will prevent or detect all errors and all fraud. BCE will continue to periodically review its disclosure controls and procedures and internal control over financial reporting and may make modifications from time to time as considered necessary or desirable.

AUDIT COMMITTEE FINANCIAL EXPERT

     BCE’s board of directors has determined that at least one of the members of the audit committee, being the Chair of the audit committee, Mr. T.C. O’Neill, is qualified as “audit committee financial expert”, and that all members of the audit committee are independent under the listing standards of the New York Stock Exchange.

CODE OF ETHICS

     All of BCE’s employees, directors and officers must follow the Bell Canada Enterprises Code of Business Conduct (the “Code of Conduct”), which provides guidelines for ethical behaviour. The Code of Conduct includes additional guidelines for BCE’s executive officers, including the President and CEO, CFO, Controller and Treasurer. The Code of Conduct is available in the governance section of BCE’s website at www.bce.ca.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

Auditors’ fees

     The table below shows the fees that BCE’s external auditors, Deloitte & Touche LLP, billed to BCE and its subsidiaries for various services for each year in the past two fiscal years. Fees for audit services increased in 2006 primarily due to additional audit work on internal control over financial reporting as a result of the requirements of the Sarbanes-Oxley Act.

		2006				2005
(millions)
Audit fees		$	13.6			$	10.0
Audit-related fees		$	5.2			$	1.7
Tax fees		$	0.9			$	1.4
Other fees			—				—
TOTAL		$	19.7			$	13.1	*

Audit fees

     These fees include professional services provided by the external auditors for the review of the interim financial statements, statutory audits of the annual financial statements, the audit of the effectiveness of internal control over financial reporting, the review of prospectuses, the review of financial accounting and reporting matters, other regulatory audits and filings and translation services.

Audit-related fees

     These fees relate to non-statutory audits, Sarbanes-Oxley Act initiatives, due diligence, pension plan audits and the review of financial accounting and reporting matters.

Tax fees

     These fees include professional services for tax compliance, tax advice and assistance with tax audits and appeals. Prior to October 2005, these fees included fees for services with respect to compliance with our conflict of interest policy for senior management, which services are no longer provided by the external auditors.

Other fees

     These fees include any other fees for permitted services not included in any of the above-stated categories. No such services were provided in the last two fiscal years.

Auditor Independence Policy

     BCE’s Auditor Independence Policy is a comprehensive policy governing all aspects of BCE’s relationship with the external auditors, including:

•

establishing a process for determining whether various audit and other services provided by the external auditors affect their independence;

•

identifying the services that the external auditors may and may not provide to BCE and its subsidiaries;

•

pre-approving all services to be provided by the external auditors of BCE and its subsidiaries; and

•

establishing a process outlining procedures when hiring current or former personnel of the external auditors in a financial oversight role to ensure auditor independence is maintained.

     In particular, the policy specifies that:

•

the external auditors cannot be hired to provide any services falling within the prohibited services category, such as bookkeeping, financial information system design and implementation and legal services;

•

for all audit or non-audit services falling within the permitted services category (such as prospectus work, due diligence and non-statutory audits), a request for approval must be submitted to the audit committee by the CFO prior to engaging the external auditors;

•

specific permitted services however are pre-approved quarterly by the audit committee and consequently only require approval by the CFO prior to engaging the external auditors; and

•

at each regularly scheduled audit committee meeting, a consolidated summary of all fees paid to the external auditors by service type is presented. This summary includes a breakout of fees incurred within the pre-approved amounts.

     The Auditor Independence Policy is available in the governance section of BCE’s website at www.bce.ca.

     In 2005 and 2006, BCE’s audit committee did not approve any audit-related, tax or other services pursuant to paragraph (c) (7) (i) (C) of Rule 2-01 of Regulation S-X.

OFF-BALANCE SHEET ARRANGEMENTS

     Please see the sections entitled “Off-Balance Sheet Arrangements” and “Derivative Instruments” at page 38 of BCE’s MD&A (which is incorporated by reference in BCE’s AIF) and Notes 11, 22 and 27, entitled “Accounts Receivable”, “Financial Instruments” and “Guarantees”, respectively, of the Financial Statements, all contained in the BCE 2006 Annual Report, for a discussion of off-balance sheet arrangements.

TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS

     Please see the section entitled “Contractual Obligations” at pages 37 and 38 of BCE’s MD&A (which is incorporated by reference in BCE’s AIF), contained in the BCE 2006 Annual Report, for a tabular disclosure and discussion of contractual obligations.

IDENTIFICATION OF THE AUDIT COMMITTEE

     BCE has a separately designated standing audit committee established in accordance with section 3(a)(58) (A) of the Exchange Act. BCE’s audit committee is comprised of five independent members: Mr. T.C. O’Neill (Chair), Mr. A. Bérard, Mr. A.S. Fell, Ms. J. Maxwell and Mr. V.L. Young.

UNDERTAKING

     BCE undertakes to make available, in person or by telephone, representatives to respond to inquiries made by the Commission staff, and to furnish promptly, when requested to do so by the Commission staff, information relating to: the securities in relation to which the obligation to file this annual report on Form 40-F arises; or transactions in said securities.

WEB SITE INFORMATION

     Notwithstanding any reference to BCE’s website on the World Wide Web in this annual report on Form 40-F, in the AIF or in the documents attached as Exhibits hereto, the information contained in BCE’s website or any other site on the World Wide Web referred to in BCE’s website is not a part of this annual report on Form 40-F and, therefore, is not filed with the Commission.

STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

     BCE has made in the documents filed as part of this annual report on Form 40-F, and from time to time may otherwise make, forward-looking statements and related assumptions concerning its operations, economic performance and financial matters. BCE is under no duty to update any of these forward-looking statements or related assumptions. Actual results or events could differ materially from those set forth in, or implied by, the forward-looking statements and the related assumptions due to a variety of factors. Reference is made to the section entitled “About forward-looking statements” on page 3 of the AIF and to the section entitled “Assumptions and Risks underlying our Forward-Looking Statements” on pages 41 to 47 of the AIF for a discussion of certain of such assumptions and risk factors. Reference is also made to the various assumptions and risk factors discussed throughout the AIF and MD&A (which is incorporated by reference in BCE’s AIF), contained in the BCE 2006 Annual Report, including in particular to the sections of BCE’s AIF entitled “The Competitive Environment we operate in” and “The Regulatory Environment we operate in” on pages 28 to 36 of the AIF.

2006

Annual

Information

Form

For the year ended December 31, 2006

March 7, 2007

What’s inside

	2			About this Annual Information Form
	2			Documents incorporated by reference
	2			Trademarks
	3			About forward-looking statements
	4			About BCE
	5			Our corporate structure
	5			Our directors and officers
	8			Our employees
	9			Our capital structure
	17			Our dividend policy
	17			Our policy on corporate responsibility
	18			Business highlights
	22			About our Businesses
	22			Our strategic priorities
	24			Bell Canada
	27			Other BCE segment
	28			The Competitive Environment we operate in
	31			The Regulatory Environment we operate in
	31			Legislation that governs our business
	33			Key regulatory issues
	36			Consultations
	37			Legal Proceedings we are involved in
	41			Assumptions and Risks underlying our Forward-Looking Statements
	48			Management’s Discussion and Analysis
	49			For more Information
	50			Schedule 1 — Audit Committee Information
	52			Schedule 1A — Audit Committee Charter
	56			Schedule 2 — Glossary
Annual Report
Consent of Independent Chartered Accountants
Reconciliation of Canadian GAAP
Report of Independent Chartered Accountants
Certifications of the CEO and the CFO
Certifications of the CEO and the CFO

BCE Inc. 2006 Annual Information Form       |   1

About this Annual Information Form

This Annual Information Form (AIF) contains important information that will help you make informed decisions about investing in BCE Inc. It describes the company and its operations, its prospects, risks and other factors that affect its business.

In this AIF, we, us, our, company and BCE mean BCE Inc., its subsidiaries, joint ventures and associated companies. References to Bell Aliant include matters relating to, and actions taken by, both Aliant Inc. (Aliant) and its affiliated entities prior to July 7, 2006, and Bell Aliant Regional Communications Income Fund and its affiliated entities, on and after such date.

All dollar figures are in Canadian dollars, unless stated otherwise. The information in this AIF is as of March 7, 2007, unless stated otherwise, and except for information in documents incorporated by reference that have a different date.

The meanings of certain capitalized terms used in this AIF can be found in the Glossary which is in Schedule 2 of this AIF.

Documents incorporated by reference

The document in the table below contains information that is incorporated by reference in this AIF.

DOCUMENT		WHERE IT IS INCORPORATED IN THIS AIF
Bell Canada Enterprises 2006 Annual Report		Management’s Discussion and Analysis, page 48
— Management’s Discussion and Analysis pages 2 to 61

Our annual report is available on SEDAR at www.sedar.com, on EDGAR at www.sec.gov and on BCE Inc.’s website at www.bce.ca.

Trademarks

The table below is a list of our trademarks that are referred to and used as such in this AIF and their owners.

OWNER		TRADEMARK
Bell Aliant Regional Communications, Limited Partnership		Aliant
(Bell Aliant LP)		Aliant Telecom
		Aliant Mobility
BCE Inc.		BCE
Bell Canada		Rings & head design
		Bell Canada Enterprises corporate logo
		Bell
		Bell Mobility
		Bell World
		Espace Bell
		Sympatico
		Sympatico.ca
		10-4 & design
Bell ExpressVu Limited Partnership		ExpressVu
Bell Mobility Inc.		Mobile Browser
Solo Branding Inc.		Solo Solo Mobile
Telesat Canada		Anik
		Nimiq
		Telesat

Any other trademarks, or corporate, trade or domain names used in this AIF are the property of their owners. We believe that our trademarks are very important to our success. Our exclusive trademark rights are perpetual provided that their registrations are timely renewed and that the trademarks are used in commerce by us or our licensees. We take appropriate measures to protect, renew and defend our trademarks. We also spend considerable time and resources overseeing, registering, renewing, licensing and protecting our trademarks and prosecuting those who infringe on them. We take great care not to infringe on the intellectual property and trademarks of others.

2  |       BCE Inc. 2006 Annual Information Form

About forward-looking statements

Securities laws encourage companies to disclose forward-looking information so that investors can get a better understanding of the company’s future prospects and make informed investment decisions.

This AIF contains forward-looking statements about BCE’s objectives, plans, strategies, financial condition, results of operations, cash flows and businesses. A statement we make is forward-looking when it uses what we know and expect today to make a statement about the future. Forward-looking statements may include words such as anticipate, assumption, believe, could, expect, goal, guidance, intend, may, objective, outlook, plan, seek, should, strive, target and will. These statements are forward-looking because they are based on our current expectations, estimates and assumptions about the markets we operate in, the Canadian economic environment and our ability to attract and retain customers and to manage network assets and operating costs. All such forward-looking statements are made pursuant to the ‘safe harbor’ provisions of the United States Private Securities Litigation Reform Act of 1995 and of any applicable Canadian securities legislation. It is important to know that:

§		unless otherwise indicated, forward-looking statements in this AIF describe our expectations at March 7, 2007.
§		our actual results could differ materially from what we expect if known or unknown risks affect our business, or if our estimates or assumptions turn out to be inaccurate. As a result, we cannot guarantee that any forward-looking statement will materialize and, accordingly, you are cautioned not to place undue reliance on these forward-looking statements.
§		except as otherwise indicated by BCE, forward-looking statements do not take into account the effect that transactions or non-recurring or other special items announced or occurring after the statements are made may have on our business. Such statements do not, unless otherwise specified by BCE, reflect the impact of dispositions, sales of assets, monetizations, mergers, acquisitions, other business combinations or transactions, asset write-downs or other charges announced or occurring after forward-looking statements are made. The financial impact of these transactions and non-recurring and other special items can be complex and depends on the facts particular to each of them. We therefore cannot describe the expected impact in a meaningful way or in the same way we present known risks affecting our business.
§		we disclaim any intention and assume no obligation to update or revise any forward-looking statement even if new information becomes available, as a result of future events or for any other reason.

A number of assumptions were made by BCE in making forward-looking statements in this AIF, such as certain Canadian economic and market assumptions, operational and financial assumptions, and assumptions about transactions. Certain factors that could cause results or events to differ materially from our current expectations include, among others, our ability to implement our strategies and plans, the intensity of competitive activity and the ability to achieve customer service improvement while significantly reducing costs. Assumptions made in the preparation of forward-looking statements and risks that could cause our actual results to differ materially from our current expectations are discussed throughout this AIF and, in particular, in the section entitled Assumptions and Risks underlying our Forward-Looking Statements. Important additional risks and assumptions are also discussed under the sections entitled The Competitive Environment we operate in and The Regulatory Environment we operate in.

BCE Inc. 2006 Annual Information Form      |  3

About BCE

BCE is Canada’s largest communications company. Bell Canada, which encompasses our core business operations, is the nation’s leading provider of wireline and wireless communications services, Internet access, data services and video services to residential and business customers. At December 31, 2006, we reported Bell Canada’s results of operations in four segments, each reflecting a distinct customer group: Residential, Business, Bell Aliant, and Other Bell Canada. All of our other activities were reported in the Other BCE segment. Our reporting structure reflects how we managed our business in financial year 2006 and how we classified our operations for planning and measuring performance. Starting in the third quarter of 2006, our segment reporting was modified to reflect the formation of Bell Aliant and it is reported as a separate segment.

In 2006, we had consolidated operating revenues of $17.7 billion. We had total assets of $37.0 billion and 54,434 employees at December 31, 2006.

The table below shows the operating revenues that each segment contributed to total operating revenues for the year ended December 31, 2006.

OPERATING REVENUES (IN $ MILLIONS)		2006				2005
Residential		$	7,099			$	7,016
Business		$	6,057			$	5,966
Bell Aliant		$	3,358			$	3,320
Other Bell Canada		$	1,592			$	1,651
Inter-segment eliminations — Bell Canada		$	(758	)		$	(719	)
Bell Canada		$	17,348			$	17,234
Other BCE		$	535			$	538
Inter-segment eliminations — other		$	(170	)		$	(167	)
Total operating revenues		$	17,713			$	17,605

The Residential segment provides local telephone, long distance, wireless, Internet access, video and other services to Bell Canada’s residential customers, mainly in urban Ontario and Québec. Wireless services and video services are provided nationwide.

Local telephone and long distance services are sold under the Bell brand, wireless services through Bell Mobility Inc. (Bell Mobility), Internet access under the Sympatico brand and video services through Bell ExpressVu Limited Partnership (Bell ExpressVu).

The Business segment provides local telephone, long distance, wireless, data (including Internet access), and information and communications technology (ICT) services to Bell Canada’s large enterprise (Enterprise) customers and small and medium-sized businesses (SMB) in urban Ontario and Québec, as well as to business customers in Western Canada through Bell West, our division offering competitive local exchange carrier (CLEG) services in Alberta and British Columbia.

The Bell Aliant segment provides local telephone, long distance, data (including Internet access), and other information technology (IT) and communication services to residential and business customers in the Atlantic provinces and in rural Ontario and Québec. Bell Aliant combines Bell Canada’s former regional wireline operations in the less populated areas of Ontario and Québec with Aliant’s former wireline, IT and related operations in Atlantic Canada, and also includes Bell Canada’s former 63.4% interest in NorthernTel, Limited Partnership (NorthernTel) and Télébec, Limited Partnership (Télébec) held indirectly through Bell Nordiq Group Inc. At December 31, 2006, BCE owned approximately 45% of Bell Aliant. The remaining 55% was publicly held. For more details on the formation of Bell Aliant, see Business highlights — 2006 highlights — Key acquisitions and dispositions. Also see Our corporate structure for more information regarding our ownership of Bell Aliant.

The Other Bell Canada segment includes Bell Canada’s wholesale business, and the financial results of Northwestel Inc. (Northwestel). Our wholesale business provides local telephone, long distance, wireless, Internet, data and other services to competitors who resell these services. Northwestel provides telecommunications services to less populated areas of Canada’s northern territories. At December 31, 2006, Bell Canada owned 100% of Northwestel.

The Other BCE segment includes the financial results of our satellite businesses, as well as our corporate office. This segment includes Telesat Canada (Telesat). Telesat provides satellite communications and systems management and is a consultant in establishing, operating and upgrading satellite systems worldwide. BCE Inc. owns 100% of Telesat.

On December 18, 2006, BCE Inc. announced the sale of Telesat to a new company formed by Canada’s Public Sector Pension Investment Board (PSP Investments) and Loral Space & Communications Inc. for $3.25 billion. The sale is subject to regulatory approval both in Canada and the United States and other closing conditions including the absence of a material adverse change affecting Telesat’s business. For more details, see Business highlights — 2006 highlights — Key acquisitions and dispositions and About our Businesses — Other BCE segment.

A transaction involving the reorganization of the ownership of CTVglobemedia Inc. (CTVglobemedia) (formerly Bell Globemedia Inc. (Bell Globemedia)) was announced on December 2, 2005 and completed on August 30, 2006. As of August 31, 2006, we have accounted for CTVglobemedia as a discontinued operation and no longer consolidate its financial results. Our remaining 15% investment is accounted for at cost. For more details, see Business highlights — 2006 highlights — Key acquisitions and dispositions.

BCE Inc. was incorporated in 1970 and was continued under the Canada Business Corporations Act in 1979. It is governed by a Certificate and Articles of Amalgamation dated August 1, 2004, by a Certificate and Articles of Arrangement dated July 10, 2006 and by a Certificate and Articles of Amendment dated January 25, 2007. BCE Inc.’s head and registered offices are at 1000, rue de La Gauchetière Ouest, Bureau 3700, Montréal, Québec H3B 4Y7. BCE Inc.’s auditors are Deloitte & Touche LLP.

BCE Inc. will, at its next annual shareholder meeting, submit a proposal to its shareholders to change its name to Bell Canada Inc. Bell Canada intends to change its name to Bell Inc. at the same time as BCE Inc.’s name is changed. For more details, see Business highlights — 2006 highlights — Strategic announcements.

4  |      BCE Inc. 2006 Annual Information Form

Our corporate structure

The table below shows our main subsidiaries, where they are incorporated or registered, and the percentage of voting and non-voting securities or partnership interest that we beneficially own or that we directly or indirectly exercise control or direction over.

We have other subsidiaries, but they have not been included in the table because each represents 10% or less of our total consolidated assets and 10% or less of our total consolidated operating revenues. These other subsidiaries together represented 20% or less of our total consolidated assets and 20% or less of our total consolidated operating revenues at December 31, 2006.

						PERCENTAGE OF VOTING SECURITIES
		WHERE IS IT				OR PARTNERSHIP INTEREST THAT
		INCORPORATED				BCE INC. HELD AT
SUBSIDIARY		OR REGISTERED				DECEMBER 31, 2006		(1)
BellCanada(2)		Canada					100	%
Bell Mobility		Canada					100	%
Bell ExpressVu(3)		Ontario					100	%(4)

(1)		We do not own any outstanding non-voting securities issued by these subsidiaries.
(2)		At December 31, 2006, all of the voting securities of Bell Canada were owned by Bell Canada Holdings Inc. (BCH), a wholly-owned subsidiary of BCE Inc. As part of our corporate simplification process, BCH has been eliminated and since February 1, 2007 all of the voting securities of Bell Canada are directly held by BCE Inc.
(3)		This partnership represents 10% or less of our total consolidated assets and 10% or less of our total consolidated operating revenues. We have included it to provide a better understanding of our overall corporate structure.
(4)		This partnership is indirectly wholly-owned by BCE Inc. 52% is indirectly held by Bell Canada.

As at December 31, 2006, BCE also owned approximately 45% of the voting securities of Bell Aliant on a fully-diluted basis. For so long as we own a 30% or greater interest in Bell Aliant and provided that certain major commercial agreements are in place, we have the right to appoint a majority of the directors and to nominate a majority of the trustees of Bell Aliant. We also have the ability to veto certain actions of Bell Aliant (business plans, significant corporate transactions, material changes in business, leverage in excess of 2.5 times debt to earnings before interest, taxes, depreciation and amortization (EBITDA), appointment and change of Chief Executive Officer and entering into material commercial agreements with competitors of BCE) as long as we own a 20% or greater interest in Bell Aliant. For more details, see Business highlights — 2006 highlights — Key acquisitions and dispositions.

On December 12, 2006, BCE Inc. announced that it intends, at its next annual shareholder meeting, to submit a proposal to its shareholders to change its name to Bell Canada Inc. In addition, under a plan of arrangement effective January 31, 2007, holders of Bell Canada’s Class A preferred shares exchanged their preferred shares of Bell Canada for new first preferred shares of BCE Inc. with the same series rights. For more details, refer to Our capital structure and Business highlights — 2006 highlights — Strategic announcements.

Our directors and officers

The table below shows the number and percentage of securities BCE Inc.’s directors and officers as a group beneficially owned, directly or indirectly, or exercised control or direction over as at December 31, 2006:

BCE Inc.		1,639,571 Common shares			0.2030	%
Bell Canada International Inc. (BCI)(1)		38 Common shares			0.0001	%

(1)		As at December 31, 2006, BCE Inc. owned approximately 62% of the outstanding common shares of BCI.

As at December 31, 2006, BCE Inc.’s directors and officers as a group also beneficially owned, directly or indirectly, or exercised control or direction over 125,320 units (or 0.0558%) of Bell Aliant Regional Communications Income Fund.

BCE Inc. 2006 Annual Information Form   |  5

Directors

The table below lists BCE Inc.’s directors, where they lived, the date they have been elected or appointed and their current principal occupation on March 7, 2007.

DIRECTORS
NAME AND PROVINCE/STATE AND		DATE ELECTED OR APPOINTED
COUNTRY OF RESIDENCE		TO THE BCE INC. BOARD		CURRENT PRINCIPAL OCCUPATION
André Bérard, O.C., Québec, Canada		January 2003		Corporate director, since March 2004
Ronald A. Brenneman, Alberta, Canada		November 2003		President and Chief Executive Officer, Petro-Canada (petroleum company), since January 2000
Richard J. Currie, O.C.,(1) Ontario, Canada		May 1995		Chair of the board, BCE Inc. and Bell Canada, since April 2002
Anthony S. Fell, O.C.,(1) Ontario, Canada		January 2002		Chairman of the board, RBC Dominion Securities Limited (investment bank), since December 1999
Donna Soble Kaufman, Ontario, Canada		June 1998		Corporate director (since July 1997) and lawyer
Brian M. Levitt, Québec, Canada		May 1998		Partner and Co-Chair, Osier, Hoskin & Harcourt LLP (law firm), since January 2001
The Honourable Edward C. Lumley, P.C.,(2) Ontario, Canada		January 2003		Vice-Chairman, BMO Nesbitt Burns Inc. (investment bank), since December 1991
Judith Maxwell, C.M., Ontario, Canada		January 2000		Research Fellow, Canadian Policy Research Networks Inc. (non-profit organization conducting research on work, family, health, social policy and public involvement), since February 2006
John H. McArthur, Massachusetts, U.S.A.		May 1995		Dean Emeritus, Harvard University Graduate School of Business Administration, since 1995
Thomas C. O’Neill, F.C.A., Ontario, Canada		January 2003		Corporate director (since October 2004) and chartered accountant
James A. Pattison, O.C., O.B.C.,(3) British Columbia, Canada		February 2005		Chairman and Chief Executive Officer, The Jim Pattison Group (diversified consumer-oriented company), since May 1961
Robert C. Pozen, Massachusetts, U.S.A.		February 2002		Chairman of the board, MFS Investment Management (global investment manager), since February 2004
Michael J. Sabia,(1) Québec, Canada		October 2002		President and Chief Executive Officer (since April 2002), BCE Inc., and Chief Executive Officer (since May 2002), Bell Canada
Paul M. Tellier, PC., C.C., Q.C., Québec, Canada		April 1999		Corporate director, since December 2004
Victor L. Young, O.C., Newfoundland and Labrador, Canada		May 1995		Corporate director, since May 2001

(1)		Was a director or executive officer of Teleglobe Inc. or certain of its affiliates on, or during the year preceding, May 15, 2002, the date when Teleglobe Inc. and certain of its affiliates filed for court protection under insolvency statutes in various countries, including Canada and the United States.
(2)		Was a director or executive officer of Air Canada on, or during the year preceding, April 1, 2003, the date when Air Canada filed for court protection under insolvency statutes in Canada and the United States.
(3)		Was a director or executive officer of Livent Inc. on, or during the year preceding, November 18 or 19, 1998, the dates when Livent Inc. and its United States subsidiaries filed for court protection under insolvency statutes in Canada and the United States, respectively.

6  |      BCE Inc. 2006 Annual Information Form

Past occupation

Under BCE Inc.’s by-laws, each director holds office until the next annual shareholder meeting or until his or her successor is elected. All of BCE Inc.’s directors have held the positions listed in the table on the previous page or other executive positions with the same or associated firms or organizations during the past five years or more, except for the people listed in the table below.

DIRECTOR		PAST OCCUPATION
Mr. A. Bérard		Chairman of the board of National Bank of Canada (chartered bank) from March 2002 to March 2004 Chairman of the board and Chief Executive Officer of National Bank of Canada from 1990 to March 2002 and a director of National Bank of Canada from 1985 to March 2004
Mr. R.J. Currie		President and a director of George Weston Limited (food distribution, retail and production company) from 1996 to May 2002 President and a director of Loblaw Companies Limited (grocery chain) from 1976 to January 2001
Ms. J. Maxwell		Founder and President of Canadian Policy Research Networks Inc. from 1995 to January 2006
Mr. T.C. O’Neill		Chief Executive Officer of PricewaterhouseCoopers Consulting (provider of management consulting and technology services) from January 2002 to May 2002 and then Chairman of the board from May 2002 to October 2002 Chief Operating Officer of PricewaterhouseCoopers LLP global organization (professional services firm in accounting, auditing, taxation and financial advisory services) from July 2000 to January 2002
Mr. R.C. Pozen		Visiting professor, Harvard Law School from 2002 to August 2004
Mr. P.M. Tellier		President and Chief Executive Officer and a director of Bombardier Inc. (manufacturer of business jets, regional jets and rail transportation equipment) from 2003 to December 2004 President, Chief Executive Officer and a director of Canadian National Railway Company (railroad company) from 1992 to December 2002

Committees of the board

The table below lists the committees of BCE Inc.’s board of directors and their members. As a public company, we are required by law to have an audit committee.

COMMITTEE		MEMBERS
Audit		T.C. O’Neill (Chair)
		A. Bérard
		A.S. Fell
		J. Maxwell
		V.L. Young
Corporate governance		D. Soble Kaufman (Chair)
		A. Bérard
		The Honourable E.C. Lumley
		J.H. McArthur
		J.A. Pattison
Management resources and compensation		R.J. Currie (Chair)
		R.A. Brenneman
		A.S. Fell
		J.H. McArthur
		R.C. Pozen
Pension fund		R.C. Pozen (Chair)
		R.A. Brenneman
		B.M. Levitt
		P.M. Tellier
		V.L. Young

BCE Inc. 2006 Annual Information Form      |  7

Officers

The table below lists BCE Inc.’s executive officers, where they lived and the office that they held at BCE Inc. on March 7, 2007.

NAME		PROVINCE AND COUNTRY OF RESIDENCE		OFFICE HELD AT BCE INC.
Michael J .Sabia(1)		Québec, Canada		President and Chief Executive Officer
Alain Bilodeau		Québec, Canada		Senior Vice-President, BCE Inc. and President, BCE Corporate Services
Michael T.Boychuk(1)		Québec, Canada		Senior Vice-President and Treasurer
Karyn A. Brooks		Québec, Canada		Senior Vice-President and Controller
William J. Fox		Ontario, Canada		Executive Vice-President — Communications and Corporate Development
Leo W. Houle		Québec, Canada		Chief Talent Officer
Lawson A.W. Hunter		Ontario, Canada		Executive Vice-President and Chief Corporate Officer
Patricia A. Olah		Québec, Canada		Corporate Secretary and Lead Governance Counsel
L. Scott Thomson		Ontario, Canada		Executive Vice-President — Corporate Development and Planning
Wayne L. Tunney		Québec, Canada		Senior Vice-President — Taxation
Marline Turcotte		Québec, Canada		Chief Legal Officer
Siim A. Vanaselja		Québec, Canada		Chief Financial Officer
Nicholas Zelenczuk		Ontario, Canada		Senior Vice-President — Audit and Risk Management

(1)		Was a director or executive officer of Teleglobe Inc. or certain of its affiliates on or during the year preceding May 15, 2002, the date when Teleglobe Inc. and certain of its affiliates filed for court protection under insolvency statutes in various countries, including Canada and the United States.

Past occupation

All of our officers have held their present positions or other executive positions with BCE Inc. or one or more of our subsidiaries during the past five years or more, except for:

§		Mr. Bilodeau who was Senior Vice-President, Compensation Practice of AON Consulting (consulting company) before April 2002
§		Ms. Brooks who was Vice-President and Controller of Enbridge Inc. (pipeline company) before July 2003
§		Mr. Fox who was Senior Vice-President — Public Affairs of Bombardier Inc. prior to January 2005. He was also Senior Vice-President — Public Affairs of Canadian National Railway Company before January 2003
§		Mr. Hunter who was a partner with Stikeman Elliott LLP (law firm) before March 2003
§		Mr. Thomson who was Vice-President of Mergers and Acquisitions of Goldman, Sachs & Co. in both Toronto and New York before January 2003
§		Mr. Tunney who was partner in the Tax Group of KPMG before October 2006
§		Mr. Zelenczuk who was a partner in the Advisory Services Group of KPMG before February 2006.

Our employees

The table below shows the number of our employees as at December 31, 2006, 2005 and 2004.

NUMBER OF EMPLOYEES
AT DECEMBER 31		2006				2005				2004
Total			54,434				56,044	(1)			50,684

(1)		Includes increases due to acquisitions made during the year.

Approximately 46% of our employees are represented by unions and are covered by collective agreements.

The collective agreements between the Communications, Energy and Paperworkers Union of Canada (CEP) and Expertech Network Installation Inc. (Expertech) representing approximately 160 clerical and 1,300 craft and services employees have both expired on November 30, 2006. The parties have been in negotiations since November 2006. A first offer by Expertech was rejected by both bargaining units’ employees on December 20, 2006.

On February 26, 2007, the craft and services employees rejected Expertech’s final offer at 64.5% whereas its clerical employees accepted the offer at 78.3%. Expertech’s craft and services employees will obtain their right to strike if and once the CEP gives 72-hours notice to Expertech indicating the date after which a strike will occur.

As a result of this vote, Expertech declared it was unable to restructure its operations and announced the wind-down of its operations. Bell Canada announced that it would work with Expertech toward an orderly and timely wind-down of its activities and would transfer its work to many local suppliers in Québec and Ontario.

On March 5, 2007, the CEP and Expertech announced that an agreement had been reached on some refinements to Expertech’s final offer that, if accepted by union members, would allow Expertech to avoid closure. This offer has been put to a vote by the craft and services employees. The results will be announced on March 19, 2007.

As part of the bargaining process, the CEP filed, in December 2006, a single employer and a sale of business application before the Canada Industrial Relations Board (CIRB) against Bell Canada and Expertech. Hearings are scheduled in May and June 2007. Should the CEP be

8  |      BCE Inc. 2006 Annual Information Form

successful with these applications, Bell Canada could be bound by the collective agreements now covering Expertech’s employees.

An arbitration decision was received by Expertech in December 2006 under which it was ordered to make the Bell Canada 2004 Voluntary Early Retirement (VER) program available to all employees covered by the craft and services collective agreement.

The following collective agreements were signed in 2006:

§		The collective agreement between the Canadian Telecommunications Employees’ Association (CTEA) and Bell Canada, representing approximately 700 communications sales employees expired on December 31, 2006. A new two-year collective agreement was signed on December 13, 2006. The new collective agreement will expire on December 31, 2008.
§		The collective agreement between the CTEA and Connexim Inc. (Connexim), representing approximately 200 clerical employees expired on May 31, 2006. A new five-year collective agreement was signed on June 1, 2006. The new collective agreement will expire on May 31, 2011.
§		The collective agreement between the Teamsters Québec Local 1999 and Télébec representing approximately 200 technicians expired on July 22, 2006. A new collective agreement was signed on October 5, 2006. The new collective agreement will expire on July 22, 2013.

On January 21, 2005, the CEP filed a single employer application with the CIRB concerning Bell Canada, Bell West Inc. (now the Bell West division of Bell Canada), Smiston Communications Inc. (Smiston) and GT Group Telecom Services Corporation (Group Telecom) to represent the craft and service employees of Bell West, Smiston and Group Telecom. The parties exchanged written documentation and a pre-hearing conference took place before the CIRB at the end of 2005. In December 2006, the CEP filed a request for certification to represent approximately 120 employees of Bell Canada in the Western operations. On February 1, 2007, the CEP was certified to represent 129 technicians of Bell Canada in the West. Both parties will meet in mid-March to start the bargaining process for the signature of a first collective agreement. The CEP has withdrawn its single employer application that had been filed with the CIRB.

The following collective agreements have expired or will expire in 2007:

§		The collective agreement between the CEP and NorthernTel representing approximately 130 craft, clerical and sales employees expired on February 28, 2007. Negotiations are scheduled to begin on April 2, 2007.
§		The collective agreement between the CTEA and Télébec representing approximately 250 clerical employees will expire on November 1, 2007.
§		The collective agreement between the CEP and Bell Canada representing approximately 6,000 craft and services employees will expire on November 30, 2007.
§		The collective agreement between the CEP and Connexim representing approximately 70 craft employees will expire on November 30, 2007.
§		The collective agreement between the CEP and Bell Aliant LP representing approximately 660 craft and services employees in Ontario and Québec will expire on November 30, 2007.
§		The collective agreement between the CEP and Bell Aliant LP representing approximately 3,500 craft, clerical and operator employees in the four Atlantic provinces will expire on December 31, 2007.

Our capital structure

This section describes BCE Inc.’s and Bell Canada’s securities, the ratings that certain rating agencies have attributed to such securities and the trading of such securities on the Toronto Stock Exchange (TSX).

BCE Inc. securities

BCE Inc.’s articles, as amended, provide for an unlimited number of common shares, an unlimited number of first preferred shares issuable in series, an unlimited number of second preferred shares also issuable in series and an unlimited number of Class B shares. In addition, BCE Inc. has issued debt securities in the form of notes.

BCE Inc. preferred shares

The terms set out in the articles authorize BCE Inc.’s directors to issue first and second preferred shares in one or more series and to set the number of shares and conditions for each series.

On January 25, 2007, the articles of BCE Inc. were amended to create the series AE, AF, AG, AH, AI and AJ first preferred shares. These new series of preferred shares were created in connection with a plan of arrangement of Bell Canada where all of the issued and outstanding series of preferred shares of Bell Canada were exchanged for equivalent new first preferred shares of BCE Inc. (BCE new preferred shares). This plan of arrangement became effective on January 31, 2007. As a result of the implementation of the plan of arrangement and of the provision by BCE Inc. of certain guarantees of Bell Canada’s public debt securities effective February 1, 2007, Bell Canada no longer has to prepare and file public disclosure documents separate from those of BCE Inc. For more details, see Business highlights — 2006 highlights — Strategic announcements.

BCE Inc. 2006 Annual Information Form      |  9

The table below is a summary of the principal terms of BCE Inc.’s first preferred shares at December 31, 2006. There were no second preferred shares issued and outstanding at December 31, 2006. BCE Inc.’s articles describe the terms and conditions of these shares in detail.

																				STATED
																				CAPITAL AT
																				DECEMBER 31
												NUMBER OF SHARES								(IN $ MILLIONS)
		ANNUAL
		DIVIDEND		CONVERTIBLE		CONVERSION		REDEMPTION		REDEMPTION						ISSUED AND
SERIES		RATE		INTO		DATE		DATE		PRICE		AUTHORIZED				OUTSTANDING				2006				2005
Q		floating		Series R		December 1, 2015		At any time		$25.50			8,000,000				—				—				—
R		4.54%		Series Q		December 1, 2010		December 1, 2010		$25.00			8,000,000				8,000,000				200				200
S		floating		Series T		November 1, 2011		At any time		$25.50			8,000,000				2,279,791				57				200
T		4.502%		Series S		November 1, 2011		November 1, 2011		$25.00			8,000,000				5,720,209				143				–
Y		floating		Series Z		December 1, 2007		At any time		$25.50			10,000,000				1,147,380				29				29
Z		5.319%		Series Y		December 1, 2007		December 1, 2007		$25.00			10,000,000				8,852,620				221				221
AA		5.45%		Series AB		September 1, 2007		September 1, 2007		$25.00			20,000,000				20,000,000				510				510
AB		floating		Series AA		September 1, 2012		At any time		$25.50			20,000,000				—				—				—
AC		5.54%		Series AD		March 1, 2008		March 1, 2008		$25.00			20,000,000				20,000,000				510				510
AD		floating		Series AC		March 1, 2013		At any time		$25.50			20,000,000				—				—				—
																					1,670				1,670

Voting rights

All of the issued and outstanding preferred shares are non-voting, except under special circumstances, for example if BCE Inc. fails to make dividend payments, then the holders are entitled to one vote per share.

Entitlement to dividends

Holders of Series R, T, Z, AA and AC shares are entitled to fixed cumulative quarterly dividends. The dividend rate on these shares is reset every five years, as set out in BCE Inc.’s articles.

Holders of Series S and Y shares are entitled to floating adjustable cumulative monthly dividends. The floating dividend rate on these shares is calculated every month, as set out in BCE Inc.’s articles.

If Series Q, AB and AD shares are issued, their holders will be entitled to floating adjustable cumulative monthly dividends.

Conversion features

All of the issued and outstanding preferred shares are convertible at the holder’s option into another associated series of preferred shares on a one-for-one basis according to the terms set out in BCE Inc.’s articles.

Redemption features

BCE Inc. may redeem Series R, T, Z, AA and AC shares on the redemption date and every five years after that date should such shares be outstanding.

BCE Inc. may redeem Series S and Y shares at any time at $25.50 per share. If Series Q, AB and AD shares are issued, BCE Inc. may redeem them at any time at $25.50 per share.

Liquidation, dissolution or winding up

The first preferred shares of all series rank on a parity with each other and in priority to all other shares of BCE Inc. with respect to payment of dividends and with respect to distribution of assets in the event of liquidation, dissolution or winding up of BCE Inc., whether voluntary or involuntary, or any other distribution of assets for the purpose of winding up its affairs.

The second preferred shares of all series rank on a parity with each other and after the first preferred shares and in priority to all other shares of BCE Inc. with respect to payment of dividends and with respect to distribution of assets in the event of liquidation, dissolution or winding up of BCE Inc., whether voluntary or involuntary, or any other distribution of assets for the purpose of winding up its affairs.

BCE Inc. common shares and Class B shares

BCE Inc.’s articles of amalgamation provide for an unlimited number of voting common shares and non-voting Class B shares. Each common share entitles its holder to one vote at any meeting of shareholders. The common shares and the Class B shares rank equally in the payment of dividends and in the distribution of assets if BCE Inc. is liquidated, dissolved or wound up, after payments due to the holders of preferred shares.

The following table provides details about the outstanding common shares of BCE Inc. at December 31, 2006 and 2005. No Class B shares were outstanding at December 31, 2006 and 2005.

10 |       BCE Inc. 2006 Annual Information Form

						2006								2005
		NUMBER				STATED CAPITAL				NUMBER				STATED CAPITAL
		OF SHARES				(IN $ MILLIONS)				OF SHARES				(IN $ MILLIONS)
Outstanding, beginning of year			927,318,916				16,806				925,935,682				16,781
Shares issued under employee stock option plan(1)			1,246,932				35				1,383,234				25
Shares repurchased and cancelled			(45,151,666	)			(805	)			—				—
Share reduction(2)			(75,770,241	)			(2,549	)			—				—
Outstanding, end of year			807,643,941				13,487				927,318,916				16,806

(1)		Includes a $6 million reclassification from contributed surplus relating to the exercise of employees’ stock options.
(2)		Reduction of BCE Inc. common shares outstanding, in conjunction with a distribution of Bell Aliant fund units, by way of return of capital, to holders of BCE Inc. common shares.

There are ownership constraints on BCE Inc.’s common shares. For more details, see The Regulatory Environment we operate in — Legislation that governs our business.

BCE Inc. debt securities

On December 28, 2006, BCE Inc. redeemed all of its outstanding 6.75% Series B Notes due October 30, 2007 in the principal amount of $1.050 billion at a price equal to $1,017.210 per $1,000 Notes plus $10.911 for accrued and unpaid interest.

BCE Inc. has issued long-term debt securities as summarized in the table below which remain outstanding.

INTEREST

RATE

MATURITY

$ MILLIONS

Series C Notes

7.35

%

October 30, 2009

650

The Series C Notes issued by BCE Inc. are unsecured. BCE Inc. has the option to redeem the Series C Notes at any time.

BCE Inc. has a shelf prospectus providing for the issue of up to $1.0 billion of medium term notes (MTNs). BCE Inc. has not issued any MTNs under its current shelf prospectus which expires on November 10, 2007.

The indentures governing the Series C Notes and the MTNs contain certain covenants including, but not limited to, a negative pledge, and certain events of default including, but not limited to, a cross-default with respect to Bell Canada’s indebtedness for borrowed money in certain circumstances. The indenture governing the Series C Notes contains, in particular, a provision stating that in the event BCE Inc. disposes of voting shares of Bell Canada in such a number as to hold, directly or indirectly, less than 75% of the voting rights attaching to the outstanding voting shares of Bell Canada, unless the Series C Notes have an approved rating from each of certain rating agencies on each day of a rating period, BCE Inc. shall have the obligation to make an offer to purchase all of the Series C Notes within the five business days following the rating period at 100% of their face value together with accrued and unpaid interest to the purchase date.

BCE Inc. may issue notes under its commercial paper program up to the amount of its supporting committed lines of credit. The total amount of its supporting committed lines of credit available was $291 million at December 31, 2006. BCE Inc. had no commercial paper outstanding at December 31, 2006.

BCE Inc. is in compliance with all conditions and restrictions attaching to its debt securities described above.

Bell Canada securities

Bell Canada’s articles of amalgamation, as amended, provide for an unlimited number of common shares and an unlimited number of preferred shares issuable in series. Bell Canada has also issued debt securities in the form of debentures and notes.

Bell Canada Class A preferred shares

As at December 31, 2006, Bell Canada’s articles provided for an unlimited number of Class A preferred shares (Bell Canada preferred shares). The terms set out in the articles authorized Bell Canada’s directors to issue Bell Canada preferred shares in one or more series and to set the number of shares and conditions for each series.

The table below is a summary of the principal terms of the Bell Canada preferred shares at December 31, 2006. Bell Canada’s articles described the terms and conditions of these shares in detail. For each of Bell Canada’s Series 15 to 20 preferred shares, we have indicated the equivalent Series AE to AJ of BCE new preferred shares for which the Bell Canada preferred shares were exchanged on January 31, 2007 in connection with the implementation of Bell Canada’s plan of arrangement. The terms and conditions of the BCE new preferred shares are equivalent to those of Bell Canada preferred shares described below. For more details on Bell Canada’s plan of arrangement, see Our capital structure — BCE Inc. securities and Business highlights — 2006 highlights — Strategic announcements.

BCE Inc. 2006 Annual Information Form       | 11

																				STATED
																				CAPITAL AT
																				DECEMBER 31
												NUMBER OF SHARES								(IN $ MILLIONS)
		ANNUAL
		DIVIDEND		CONVERTIBLE		CONVERSION		REDEMPTION		REDEMPTION						ISSUED AND
SERIES		RATE		INTO		DATE		DATE		PRICE		AUTHORIZED				OUTSTANDING				2006				2005
15 (new AE)		Floating		Series 16 (new AF)		Feb. 1, 2010		At any time		$25.50			24,000,000				1,914,218				48				48
16 (new AF)		4.40%		Series 15 (new AE)		Feb. 1, 2010		Feb. 1, 2010		$25.00			24,000,000				14,085,782				352				352
17 (new AG)		4.35%		Series 18 (new AH)		May 1, 2011		May 1, 2011		$25.00			22,000,000				10,051,751				251				350
18 (new AH)		Floating		Series 17 (new AG)		May 1, 2011		At any time		$25.50			22,000,000				3,948,249				99				—
19 (new AI)		4.65%		Series 20 (new AJ)		August 1, 2011		August 1, 2011		$25.00			22,000,000				14,000,000				350				350
20 (new AJ)		Floating		Series 19 (new AI)		August 1, 2016		At any time		$25.50			22,000,000				—				—				—
																					1,100				1,100

Voting rights

All of Bell Canada’s issued and outstanding preferred shares at December 31, 2006 were non-voting, except under special circumstances, for example if Bell Canada failed to make dividend payments, then the holders were entitled to one vote per share.

Entitlement to dividends

Holders of Series 15 and 18 shares were entitled to floating adjustable cumulative monthly dividends.

Holders of Series 16, 17 and 19 shares were entitled to fixed cumulative quarterly dividends. The dividend rate on these shares was reset every five years as set out in Bell Canada’s articles.

If Series 20 shares were issued, their holders would have been entitled to floating adjustable cumulative monthly dividends.

Conversion features

All of the issued and outstanding Bell Canada preferred shares at December 31, 2006 were convertible at the holder’s option into another associated series of Bell Canada preferred shares on a one-for-one basis according to the terms set out in Bell Canada’s articles.

Redemption features

Bell Canada could redeem Series 15 and 18 shares at any time.

Bell Canada could redeem Series 16, 17 and 19 shares on the redemption date and every five years after that date should such shares be outstanding.

If Series 20 shares had been issued, Bell Canada could have redeemed them at any time.

Liquidation, dissolution or winding up

In case of liquidation, dissolution or winding up of Bell Canada or any other distribution of its assets among shareholders for the purpose of winding up its affairs, the holders of Bell Canada preferred shares were entitled to receive all amounts provided in Bell Canada’s articles to be payable in respect of return of capital, premium and dividends. These amounts were payable before any amount was paid to or any assets distributed among the holders of common shares or of shares of any other class ranking junior to the Bell Canada preferred shares. Unless the articles of Bell Canada otherwise provided with respect to any series of the Bell Canada preferred shares, after payment to the holders of the Bell Canada preferred shares of the amounts provided in such articles to be payable to them, such holders would not be entitled to share in any further distribution of the assets of Bell Canada.

Bell Canada debt securities

Bell Canada has also issued long-term debt securities as summarized in the table below.

		WEIGHTED				AT DECEMBER 31, 2006
		AVERAGE
		INTEREST RATE				MATURITY				(IN $ MILLIONS)
Debentures and notes			6.87	%			2007-2035				7,025
Debentures			9.84	%			2041-2054				700
Subordinated debentures			8.21	%			2026-2031				275
Total											8,000

All of the above debentures issued by Bell Canada are unsecured and effective February 1, 2007 have been guaranteed by BCE Inc. They include:

§		US$200 million maturing in 2010, which has been swapped into Canadian dollars
§		$125 million of long-term debt with a call option that has been exercised, allowing for the debt to be redeemed on February 15, 2007.

Bell Canada has a shelf prospectus providing for the issuance of $3.0 billion of MTN debentures. As of March 7, 2007, Bell Canada had issued $200 million of MTN debentures under its current shelf prospectus. This shelf prospectus expires in June 2007.

Bell Canada may issue notes under its commercial paper program up to the amount of its supporting committed lines of credit. The total amount of its supporting committed lines of credit available was $872 million at December 31, 2006. Bell Canada had no commercial paper outstanding at December 31, 2006. Bell Canada can issue up to $400 million Class E notes under its commercial paper program. These notes are not supported by committed lines of credit and may be extended in certain circumstances. Bell Canada had no Class E notes outstanding at December 31, 2006.

Certain of Bell Canada’s debt agreements impose covenants which place limitations on the issuance of additional debt with a maturity date exceeding one year based on certain tests related to interest and asset coverage. Bell Canada is in compliance with all conditions and restrictions attaching to its debt securities.

12 |       BCE Inc. 2006 Annual Information Form

Ratings for BCE Inc. and Bell Canada securities

Ratings generally address the ability of a company to repay principal and interest or dividends on securities.

BCE Inc.’s and Bell Canada’s securities are rated by the following rating agencies:

§		Dominion Bond Rating Service Limited (DBRS)
§		Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. (S&P)
§		Moody’s Investors Service, Inc. (Moody’s)
§		Fitch Ratings Ltd. (Fitch).

This section describes the credit ratings that BCE Inc. and Bell Canada have asked for or received for their securities. These ratings provide investors with an independent measure of credit quality of an issue of securities. Each rating should be evaluated independently.

These credit ratings are not recommendations to purchase, hold or sell any of the securities discussed above, or a comment on the market price or suitability for a particular investor. There is no assurance that any rating will remain in effect for any given period of time or that any rating will not be revised or withdrawn in the future by a rating agency.

Commercial paper

The table below shows the range of credit ratings that each rating agency which rates BCE Inc.’s or Bell Canada’s short term debt instruments assigns to short-term debt instruments.

		HIGHEST QUALITY				LOWEST QUALITY
		OF SECURITIES				OF SECURITIES
		RATED				RATED
DBRS		R-1 (high)					D
S&P		A-1 (high)					D
Moody’s			P-1				P-3

The DBRS short-term debt rating scale indicates DBRS’ assessment of the risk that a borrower will not fulfill its near-term debt obligation in a timely manner. Every DBRS rating is based on quantitative and qualitative considerations relevant to the borrowing entity.

An S&P commercial paper rating indicates S&P’s assessment of whether the company can meet the financial commitments of a specific commercial paper program or other short-term financial instrument, compared to the debt servicing and repayment capacity of other companies in Canada’s financial markets.

Moody’s short-term ratings indicate Moody’s assessment of the ability of issuers to meet short-term financial obligations. It may assign ratings to issuers, short-term programs or to individual short-term debt instruments. These short-term obligations generally have an original maturity of 13 months or less, unless explicitly noted.

BCE Inc. and Bell Canada have received the following credit ratings for commercial paper.

		COMMERCIAL PAPER
		CREDIT RATING
DBRS		R-1 (low)
S&P		A-1 (low)
Moody’s			P-2

DBRS has also assigned an R-l (low) rating to Bell Canada and an R-2 (high) rating to BCE Inc. for extendible commercial notes.

The R-l (low) rating for short-term debt ranks third among the 10 credit ratings given by DBRS, and according to DBRS, indicates:

§		satisfactory credit quality
§		respectable overall strength and outlook for key liquidity, debt and profitability ratios, but not as favourable as higher rating categories
§		any qualifying negative factors that exist are considered manageable, and the company is normally of sufficient size to have some influence in its industry.

The R-2 (high) rating for short-term debt ranks fourth among the 10 credit ratings given by DBRS, and according to DBRS, indicates the upper end of adequate credit quality. The ability to repay obligations as they mature remains acceptable, although the overall strength and outlook for key liquidity, debt and profitability ratios is not as strong as higher rating categories.

The A-l (low) rating ranks third among the eight short-term credit ratings given by S&P and, according to S&P, indicates the short-term obligation is slightly more susceptible to the adverse effects of changes in circumstances and economic conditions than short-term obligations in higher rating categories and a satisfactory capacity to meet financial commitments on short-term obligations. Obligations rated A-l (low) on the Canadian commercial paper rating scale would qualify for a rating of A-2 on S&P’s global short-term rating scale.

The P-2 rating provided for BCE Inc. and Bell Canada commercial paper ranks second among the three short-term credit ratings given by Moody’s and according to Moody’s, indicates a strong ability to repay short-term debt obligations.

Long-term debt

The table below shows the range of credit ratings that each rating agency assigns to long-term debt instruments.

		HIGHEST QUALITY				LOWEST QUALITY
		OF SECURITIES				OF SECURITIES
		RATED				RATED
DBRS		AAA					D
S&P		AAA					D
Moody’s		Aaa					C
Fitch		AAA					D

The DBRS long-term debt rating scale indicates the risk that a company may not meet its obligations to pay interest and principal in a timely manner. Every DBRS rating is based on quantitative and qualitative considerations relevant to the borrowing entity.

S&P’s credit rating scale provides a current assessment of the creditworthiness of a company in meeting a specific financial obligation, a specific class of financial obligations, or a specific financial program. It takes into consideration:

§		the creditworthiness of guarantors, insurers, or other forms of credit enhancement on the obligation
§		the currency that the obligation is denominated in
§		current information provided by the company or obtained by S&P from other reliable sources

BCE Inc. 2006 Annual Information Form      |  13

§		unaudited financial information from time to time, as S&P does not perform an audit
§		the likelihood of payment — capacity and willingness of the company in meeting its financial commitment on an obligation according to the terms of the obligation
§		the nature of and provisions of the obligation
§		the protection afforded by, and relative position of, the obligation in the event of bankruptcy, reorganization, or other arrangement under the laws of bankruptcy and other laws affecting creditors’ rights.

Moody’s long-term obligation ratings are an assessment of the relative credit risk of fixed-income obligations with an original maturity of one year or more. They address the possibility that a financial obligation will not be honoured as promised. Such ratings reflect both the likelihood of default and any financial loss suffered in the event of default.

Fitch’s international long-term credit ratings assess the capacity to meet foreign or local currency commitments. Both foreign and local currency ratings are internationally comparable assessments. The local currency rating measures the probability of payment only within the sovereign state’s currency and jurisdiction.

BCE Inc. and Bell Canada have received the following credit ratings for long-term debt:

BCE INC.

BELL CANADA

BELL CANADA

UNSUBORDINATED

UNSUBORDINATED

SUBORDINATED

LONG-TERM DEBT

LONG-TERM DEBT

LONG-TERM DEBT

DBRS

A (low)

A

BBB (high)

S&P

BBB+

A-

BBB+

Moody’s

Baa2

Baa1

Baa2

Fitch

BBB+

BBB+

BBB

The DBRS A, A (low) and BBB (high) ratings on long-term debt rank sixth, seventh and eighth, respectively, among the 26 long-term debt credit ratings given by DBRS.

According to DBRS, a company with long-term debt rated A by DBRS:

§		is satisfactory credit quality
§		protection of interest and principal is still substantial, but the degree of strength is less than that of AA rated entities.

While A is a respectable rating, companies that fall into this category are considered to be more susceptible to adverse economic conditions and have greater cyclical tendencies than higher-rated securities.

According to DBRS, long-term debt rated BBB by DBRS:

§		is adequate credit quality
§		protection of interest and principal is acceptable, but the company is fairly susceptible to adverse changes in financial and economic conditions, or there may be other adverse conditions present which reduce the strength of the company and its rated securities.

The A- and BBB+ ratings rank seventh and eighth, respectively, among the 22 long-term debt credit ratings given by S&P. According to S&P, an obligation rated A is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher-rated categories. However, the company still has a strong capacity to meet its financial commitment on the obligation. According to S&P, a company rated BBB has adequate capacity to meet its financial commitments. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the company to meet its financial commitments.

The Baal and Baa2 ratings rank eighth and ninth, respectively, among the 21 long-term debt credit ratings given by Moody’s. According to Moody’s, obligations rated Baa are subject to moderate credit risk. They are considered medium-grade and may have certain speculative characteristics.

The BBB+ and BBB ratings rank eighth and ninth, respectively, among the 23 long-term ratings given by Fitch. According to Fitch, BBB ratings indicate that there is currently expectations of low credit risk and good credit quality. The capacity for payment of financial commitments is considered adequate but adverse changes in circumstances and economic conditions are more likely to impair this capacity.

Preferred Shares

The table below describes the range of credit ratings that each rating agency assigns to preferred share instruments.

		HIGHEST QUALITY				LOWEST QUALITY
		OF SECURITIES				OF SECURITIES
		RATED				RATED
DBRS		Pfd-1 (high)					D
S&P		P-1 (high)					D

The DBRS preferred share rating scale indicates their assessment of the risk that a borrower may not be able to meet its full obligation to pay dividends and principal in a timely manner. Every DBRS rating is based on quantitative and qualitative considerations relevant to the borrowing entity.

S&P’s preferred share rating is a current assessment of the credit worthiness of a company in meeting a specific preferred share obligation issued in the market, compared to preferred shares issued by other issuers in the Canadian market.

BCE Inc. has received the following credit ratings for the first preferred shares it has issued.

		PREFERRED SHARE
		CREDIT RATING
DBRS		Pfd-2 (low)
S&P			P-2

The Pfd-2 (low) rating for preferred shares ranks sixth among the 16 preferred share credit ratings given by DBRS. According to DBRS, a company with preferred shares rated Pfd-2 by DBRS:

§		is satisfactory credit quality
§		protection of dividends and principal is still substantial, but earnings, balance sheet, and coverage ratios are not as strong as Pfd-1 rated companies. Generally, companies with Pfd-2 ratings have senior bonds rated in the A category.

The P-2 rating ranks fifth among the 18 preferred share credit ratings given by S&P. A P-2 rating on the Canadian scale is equivalent to a BBB rating on the global scale. According to S&P, an obligation rated BBB exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to weaken the company’s ability to meet its financial commitment on the obligation.

14 |       BCE Inc. 2006 Annual Information Form

Outlook

BCE Inc. and Bell Canada have stable outlooks from DBRS, Moody’s and Fitch and a negative outlook from S&P.

Trading of our securities

The common and preferred shares of BCE Inc. are listed on the TSX and, up to January 31, 2007, the Bell Canada preferred shares were also listed on the TSX. In addition, BCE Inc.’s common shares are also listed on the New York Stock Exchange (NYSE) and the SWX Swiss Exchange. The tables below and on the next pages show the range in share price per month and volume traded on the TSX in 2006 for each class of BCE Inc. securities.

BCE Inc. common shares

										VOLUME
2006		HIGH				LOW				TRADED
December		$	31.50			$	27.85				100,311,684
November		$	28.50			$	26.79				65,343,412
October		$	34.25			$	30.10				103,465,748
September		$	31.10			$	27.01				86,785,489
August		$	28.00			$	25.41				50,769,722
July		$	26.96			$	25.32				35,786,736
June		$	27.81			$	25.91				46,138,711
May		$	27.75			$	26.12				48,550,885
April		$	28.53			$	27.50				34,133,692
March		$	28.95			$	27.13				54,161,271
February		$	28.80			$	26.56				62,246,216
January		$	29.04			$	27.18				57,586,682
BCE Inc. preferred shares — Series R
										VOLUME
2006		HIGH				LOW				TRADED
December		$	25.65			$	25.12				1,514,084
November		$	25.67			$	24.66				29,973
October		$	25.87			$	25.25				41,404
September		$	25.59			$	24.75				137,037
August		$	25.33			$	24.75				36,395
July		$	25.59			$	25.05				45,585
June		$	25.80			$	25.16				41,402
May		$	25.72			$	24.66				49,442
April		$	26.19			$	25.07				50,936
March		$	26.20			$	25.71				102,660
February		$	25.97			$	25.65				164,565
January		$	26.09			$	25.78				468,330
BCE Inc. preferred shares — Series S
										VOLUME
2006		HIGH				LOW				TRADED
December		$	25.09			$	24.70				472,130
November		$	24.98			$	24.51				27,150
October		$	25.35			$	24.80				87,660
September		$	25.00			$	24.28				61,520
August		$	25.05			$	24.25				55,910
July		$	25.15			$	24.76				16,875
June		$	25.25			$	25.11				26,212
May		$	25.30			$	25.11				28,857
April		$	25.25			$	25.10				142,599
March		$	25.30			$	25.04				58,656
February		$	25.25			$	25.05				279,511
January		$	25.39			$	25.05				103,978
BCE Inc. preferred shares — Series T
										VOLUME
2006		HIGH				LOW				TRADED
December		$	25.85			$	25.01				594,453
November		$	25.50			$	25.00				20,515
BCE Inc. preferred shares — Series Y
										VOLUME
2006		HIGH				LOW				TRADED
December		$	25.00			$	24.75				2,200
November		$	25.20			$	24.70				11,300
October		$	25.48			$	24.41				15,526
September		$	24.88			$	24.15				9,175
August		$	25.00			$	24.77				4,446
July		$	25.20			$	25.00				9,045
June		$	25.29			$	24.95				13,997
May		$	25.44			$	25.01				39,668
April		$	25.39			$	25.16				44,060
March		$	25.44			$	25.10				5,585
February		$	25.65			$	25.10				6,594
January		$	25.60			$	25.10				9,447
BCE Inc. preferred shares — Series Z
										VOLUME
2006		HIGH				LOW				TRADED
December		$	25.79			$	25.25				539,000
November		$	25.57			$	23.72				285,239
October		$	25.80			$	25.10				47,045
September		$	25.98			$	25.01				78,399
August		$	25.85			$	25.01				26,681
July		$	26.00			$	25.25				35,178
June		$	26.20			$	25.45				307,021
May		$	26.74			$	25.01				317,400
April		$	26.25			$	25.21				45,480
March		$	26.50			$	25.85				138,910
February		$	26.35			$	25.40				47,850
January		$	26.55			$	25.60				36,615

BCE Inc. 2006 Annual Information Form       | 15

BCE Inc. preferred shares — Series AA

										VOLUME
2006		HIGH				LOW				TRADED
December		$	25.47			$	25.21				1,380,470
November		$	25.39			$	25.03				87,793
October		$	25.61			$	24.96				80,591
September		$	25.73			$	25.14				37,232
August		$	25.48			$	25.02				89,728
July		$	25.65			$	25.20				78,289
June		$	25.74			$	25.25				675,784
May		$	25.55			$	25.01				140,256
April		$	25.85			$	25.35				93,789
March		$	25.83			$	25.44				294,413
February		$	25.92			$	25.46				148,853
January		$	26.10			$	25.60				273,951
BCE Inc. preferred shares — Series AC
										VOLUME
2006		HIGH				LOW				TRADED
December		$	26.00			$	25.42				2,162,825
November		$	25.65			$	25.15				89,946
October		$	25.98			$	25.25				134,733
September		$	26.17			$	25.51				44,705
August		$	26.53			$	25.18				47,660
July		$	25.89			$	25.15				115,246
June		$	25.97			$	25.58				546,080
May		$	27.50			$	24.75				246,945
April		$	26.25			$	25.35				54,680
March		$	26.25			$	25.60				520,236
February		$	26.30			$	25.50				205,760
January		$	26.60			$	25.50				54,356
Bell Canada preferred shares — Series 15 (exchanged effective January 31, 2007 for BCE new preferred shares — Series AE)
										VOLUME
2006		HIGH				LOW				TRADED
December		$	25.09			$	24.80				4,205
November		$	25.09			$	24.50				6,112
October		$	25.68			$	24.74				12,925
September		$	24.89			$	24.41				5,920
August		$	25.25			$	24.75				7,801
July		$	25.00			$	24.75				29,200
June		$	25.15			$	24.72				6,655
May		$	25.85			$	24.80				70,998
April		$	25.90			$	24.97				14,123
March		$	25.25			$	24.75				9,411
February		$	25.55			$	24.90				11,600
January		$	25.60			$	25.15				5,327
Bell Canada preferred shares — Series 16 (exchanged effective January 31, 2007 for BCE new preferred shares — Series AF)
										VOLUME
2006		HIGH				LOW				TRADED
December		$	25.70			$	25.05				101,885
November		$	25.69			$	24.67				19,609
October		$	25.75			$	24.90				184,308
September		$	25.51			$	24.90				62,179
August		$	25.05			$	24.91				164,130
July		$	25.50			$	24.90				101,944
June		$	25.25			$	24.95				407,349
May		$	25.80			$	24.62				73,449
April		$	25.78			$	24.00				19,797
March		$	26.20			$	25.43				19,076
February		$	25.99			$	25.50				11,789
January		$	26.30			$	25.66				17,692
Bell Canada preferred shares — Series 17 (exchanged effective January 31, 2007 for BCE new preferred shares — Series AG)
										VOLUME
2006		HIGH				LOW				TRADED
December		$	25.73			$	25.05				241,300
November		$	25.51			$	25.05				30,262
October		$	25.69			$	25.10				53,751
September		$	25.45			$	24.35				160,699
August		$	25.10			$	24.21				38,885
July		$	25.10			$	24.75				41,054
June		$	25.40			$	24.85				650,400
May		$	25.50			$	25.01				83,890
April		$	25.20			$	24.81				302,534
March		$	25.70			$	25.00				84,220
February		$	25.75			$	25.35				22,465
January		$	25.90			$	25.11				46,739
Bell Canada preferred shares — Series 18 (exchanged effective January 31, 2007 for BCE new preferred shares — Series AH)
										VOLUME
2006		HIGH				LOW				TRADED
December		$	25.55			$	25.10				24,900
November		$	25.40			$	25.05				27,130
October		$	25.40			$	25.13				102,470
September		$	25.17			$	25.07				882,930
August		$	25.15			$	25.05				212,984
July		$	25.20			$	25.00				10,965
June		$	25.15			$	25.05				175,400
May		$	25.30			$	25.05				171,925

16 |       BCE Inc. 2006 Annual Information Form

Bell Canada preferred shares — Series 19 (exchanged effective January 31, 2007 for BCE new preferred shares — Series AI)

										VOLUME
2006		HIGH				LOW				TRADED
December		$	26.24			$	25.01				525,828
November		$	26.25			$	25.06				125,527
October		$	26.49			$	25.30				99,832
September		$	25.80			$	25.03				1,033,049
August		$	25.10			$	24.94				2,374,749
July		$	25.29			$	24.75				1,847,355
June		$	25.33			$	24.90				306,157
May		$	25.55			$	24.52				112,327
April		$	25.59			$	25.01				41,484
March		$	26.25			$	25.00				220,046
February		$	26.25			$	25.00				254,087
January		$	26.25			$	25.43				32,085

Our dividend policy

BCE Inc.’s dividend policy takes into consideration a number of factors including the corporation’s earnings and cash flow trends, financial condition and capital requirements. We seek to allow our shareholders to participate in the company’s operational progress through growth in dividend distributions, while maintaining a healthy capital structure that provides sufficient financial flexibility for investment in strategic priorities and future growth.

On that basis, on December 12, 2006, BCE Inc. announced that its board of directors approved an increase in BCE Inc.’s common share dividend of 11% increasing the dividend from $1.32 to $1.46 per common share on an annualized basis.

The board of directors of BCE Inc. has established a targeted common share dividend payout ratio of 70-75% of earnings. Going forward, increases in the common share dividend will be directly linked to growth in the company’s earnings.

BCE Inc.’s board of directors reviews BCE Inc.’s dividend policy from time to time.

Subject to being declared by the board of directors, BCE Inc. pays quarterly dividends on common shares at a rate of $1.46 per year.

Subject to being declared by the board of directors, BCE Inc. pays dividends on preferred shares every quarter, except for dividends on Series S, Series Y, Series AE and Series AH preferred shares, which BCE Inc. declares and pays monthly.

The table below shows the amount of cash dividends declared per share of each class of BCE Inc. shares for 2004, 2005, and 2006.

		2006				2005				2004
Common		$	1.32			$	1.32			$	1.20
Preferred shares
– Series R		$	1.135			$	1.441375			$	1.5435
– Series S		$	0.97808			$	0.7546			$	0.66022
– Series T		$	0.281375				—				—
– Series Y		$	0.97212			$	0.79798			$	0.66267
– Series Z		$	1.3298			$	1.3298			$	1.3298
– Series AA		$	1.3625			$	1.3625			$	1.3625
– Series AC		$	1.385			$	1.385			$	1.385

As previously discussed, effective January 31,2007, the outstanding Bell Canada preferred shares were exchanged for equivalent BCE new preferred shares. The table below shows the amount of cash dividends declared in 2004, 2005 and 2006 per class of Bell Canada preferred shares.

		2006		(1)		2005				2004
Series 15 (exchanged for BCE Inc. Series AE)		$	0.96979			$	0.80885			$	1.375
Series 16 (exchanged for BCE Inc. Series AF)		$	1.10			$	1.10				—
Series 17 (exchanged for BCE Inc. Series AG)		$	1.143755			$	1.31252			$	1.31252
Series 18 (exchanged for BCE Inc. Series AH)		$	0.88802				—				—
Series 19 (exchanged for BCE Inc. Series AI)		$	1.27501			$	1.38752			$	1.38752

(1)		Excludes $0.20 special dividend per share declared on December 11, 2006.

Our policy on corporate responsibility

On November 2, 2004, BCE Inc. adopted an environmental policy that affirms:

§		our commitment to environmental protection
§		our belief that environmental protection is an integral part of doing business, and needs to be managed systematically under a continuous improvement process.

The policy contains principles that support our commitment, varying from exercising due diligence to meet or exceed the environmental legislation that applies to us, to preventing pollution and promoting cost-effective initiatives that minimize resources and waste.

We have instructed subsidiaries subject to this policy to support these principles, and have established a management-level committee to oversee the implementation of the policy.

Bell Canada monitors its operations to ensure that it complies with environmental requirements and standards, and takes action to prevent and correct problems, when needed. It has had an environmental management and review system in place since 1993, that:

§		provides early warning of potential problems
§		identifies management and cost-saving opportunities
§		establishes a course of action
§		ensures ongoing improvement through regular monitoring and reporting.

BCE Inc. 2006 Annual Information Form      | 17

One of its key tools is the corporate environmental action plan, which outlines the environmental activities of Bell Canada’s various business units. The plan identifies funding requirements, accountabilities and deliverables, and monitors Bell Canada’s progress in meeting its objectives. As of December 31, 2006, Bell Canada has integrated the following entities into its corporate environmental action plan: Bell Canada, Bell Aliant (Québec and Ontario), Bell Mobility, Bell ExpressVu, Bell West, Bell Technical Solutions Inc. (Bell Technical Solutions), BCE Nexxia Corp., Expertech, Télébec, NorthernTel, Northwestel and Telesat.

For the year ended December 31, 2006, Bell Canada spent $12.5 million on environmental activities, 64% of this was expenses and 36% was for capital expenditures. For 2007, Bell Canada has budgeted $13.4 million (74% for expenses and 26% for capital expenditures) to ensure that its environmental policy is applied properly and its environmental risks are minimized.

In 2002 Bell Aliant adopted a comprehensive environment policy for Atlantic Canada updated in 2006 which affirms its commitment to working to create a sustainable future by integrating long-term economic, environmental and social considerations into the way the business is operated. The policy provides for the identification of activities and situations which may have potential to harm the environment, and the implementation of environmentally positive practices and preventive measures. Bell Aliant’s program seeks to ensure that it complies with all environmental regulatory requirements and that its activities are carried out in a manner that minimizes risk to the environment through a continuous improvement process.

Bell Aliant manages its environment program through processes similar to those employed by Bell Canada, and collaborates on many levels to seek harmonization with Bell Canada’s environment program. Bell Aliant has adopted an environment action plan which sets out specific environmental goals for 2007.

We are committed to sustainable development and integrate environmental, social and economic considerations into our business decisions. We engage with stakeholders to identify opportunities to create benefits for both society and the company while minimizing where we can, any negative impact our activities may generate. In line with this commitment, in 2006, BCE Inc. adopted a resolution to support the United Nations Global Compact principles.

We are an active member of the Global e-Sustainability Initiative (GeSI) (www.gesi.org), an international organization that promotes sustainable development in the ICT industry. Partners of the GeSI acknowledge the need for the ICT industry to take a leadership role in:

§		better understanding the impact and opportunities offered by its evolving technology in a fast growing information society; and
§		providing individuals, businesses and institutions with sustainable solutions to the challenges they face in attempting to maintain a balance between economy, ecology and society.

BCE Inc. is a component of socially responsible investment indices such as the Dow Jones Sustainability Index, the FTSE4 GOOD Index and the Jantzi Social Index.

Our duty as a responsible corporate citizen also extends to using our financial resources and the expertise of our employees to invest in the communities we serve.

We believe the future of our country is being determined today by our collective ability to enable our children to reach their full potential.

That is why our investment is focused on organizations that help children and youth grow up strong and healthy. We therefore invest, for example, in innovative programs in children’s hospitals and we support initiatives such as cybertip.ca — a web portal through which ordinary Canadians can report suspected abuse. We also continue to grow the Bell Walk for Kids Help Phone which has raised $9 million in five years for Canada’s only toll-free, 24-hour bilingual phone and web counselling, referral and information service for young people.

In 2006, we contributed over $20 million in donations and local community sponsorships. In addition, our employees and pensioners committed over $1.6 million in charitable gifts and logged more than 300,000 hours in volunteer time. All of this is indicative of our belief that we have an important role to play in the sustainability of the communities in which we live and work.

Business highlights

This section describes significant events in the past three years that have influenced our business.

2006 highlights

Key acquisitions and dispositions

Bell Aliant

On July 7, 2006, BCE Inc. and Aliant formed Bell Aliant. Bell Aliant combines Bell Canada’s former regional wireline operations in rural Ontario and Québec with Aliant’s former wireline, information technology and related operations in Atlantic Canada, and also includes Bell Canada’s former 63.4% interest in NorthernTel and Télébec held indirectly through Bell Nordiq Group Inc. As part of the transaction, we acquired Aliant’s wireless assets and the shares of Aliant’s subsidiary, DownEast Ltd., which operates retail outlets throughout Atlantic Canada. Upon closing of the transaction, we held a 73.5% indirect interest in Bell Aliant, which we subsequently reduced to approximately 45% through a distribution of trust units by way of a return of capital to holders of BCE Inc. common shares on July 10,2006. In conjunction with this distribution, BCE Inc. reduced its outstanding common shares by 75.8 million. Bell Aliant began trading on the TSX on July 10, 2006 under the symbol ‘BA.UN’. The financial results of Bell Aliant continue to be consolidated by BCE Inc.

For so long as we own a 30% or greater interest in Bell Aliant and provided that certain major commercial agreements are in place, we have the right to appoint a majority of the directors and to nominate a majority of the trustees of Bell Aliant. We also have the ability to veto certain actions of Bell Aliant (business plans, significant corporate transactions, material changes in business, leverage in excess of 2.5 times debt to EBITDA, appointment and change of Chief Executive Officer and entering into material commercial agreements with competitors of BCE) as long as we own a 20% or greater interest in Bell Aliant.

18 |       BCE Inc. 2006 Annual Information Form

In the fourth quarter of 2006, Bell Aliant announced a proposal to acquire all of the units of Bell Nordiq Income Fund (Bell Nordiq), the holder of the remaining 36.6% interest in NorthernTel and Télébec. The transaction, including the payment by Bell Nordiq to Bell Nordiq unitholders of a special distribution of $4.00 per unit, or $131 million and the issuance of 0.4113 of a Bell Aliant unit in exchange for each Bell Nordiq unit for a total of 13.5 million units, was completed at the end of January 2007. Bell Nordiq units ceased trading on the TSX as of the close of business on January 29, 2007 and were delisted at the close of business on January 30, 2007. We currently own an approximate 42% interest in Bell Aliant.

Completion of Bell Globemedia reorganization

On August 30, 2006, following the receipt of regulatory approval, BCE Inc. completed the sale of 20% of Bell Globemedia to Ontario Teachers Pension Plan, the sale of an additional 20% to Torstar Corporation and finally the sale of 8.5% to The Woodbridge Company Limited decreasing BCE Inc.’s holding in Bell Globemedia from 68.5% to 20%.

As part of the transaction, we retained certain important rights and have entered into a commercial agreement with Bell Globemedia to have access to existing and future content. Subsequent to the conclusion of this transaction, Bell Globemedia completed its takeover bid of CHUM Limited, resulting in a further reduction of BCE Inc.’s ownership in Bell Globemedia from 20% to approximately 15%.

Effective on January 1, 2007, Bell Globemedia changed its name to CTVglobemedia Inc.

Investment in Clearwire Corporation

On September 6, 2006, Bell Canada exercised its pre-emptive right to subscribe for US$83.8 million of additional common equity of Clearwire Corporation (Clearwire), bringing its total invested capital in Clearwire to US$183.8 million. This investment was made as part of a US$1.1 billion financing round completed by Clearwire.

Clearwire has filed a registration statement in connection with an initial public offering which was declared effective by the U.S. Securities and Exchange Commission on March 7, 2007. The closing of this offering and the issuance of the shares (assuming the over-allotment option is not exercised) is expected to dilute our equity interest to approximately 8%. The shares of Clearwire are now listed on the NASDAQ Global Select Market under the symbol “CLWR”. See Business highlights — 2005 highlights for more information about Clearwire.

Sale of Telesat

Consistent with its strategy of concentrating on its core communications business, on December 18, 2006, BCE Inc. announced the sale of its satellite services subsidiary Telesat to a new acquisition company formed by PSP Investments and Loral Space & Communications Inc. for $3.25 billion. Existing capital losses will be utilized to complete the transaction without any cash taxes being triggered. The sale is subject to regulatory approval both in Canada and the United States, and is expected to close in mid-2007. Other customary closing conditions must also be satisfied. A material adverse change in Telesat’s results and operations prior to closing or the failure of the purchaser to complete its committed financing or to fulfill its obligations to BCE Inc. could prevent the sale from occurring, or may result in the sale occurring on materially different terms and conditions. In conjunction with the sale, we have put in place a set of commercial arrangements between Telesat and Bell ExpressVu that guarantee Bell ExpressVu access to current and expanded satellite capacity, including services available after the launch of Telesat’s Nimiq 5 satellite in 2009. We will not account for Telesat as discontinued operations because of the ongoing commercial relationships between BCE and Telesat that will continue after the sale is completed.

Exchange of interests in Mobile Satellite Ventures, L.P. and TerreStar Networks Inc. for shares of SkyTerra Communications, Inc. and Motient Corporation

On January 5, 2007, we exchanged approximately 8 million units of privately-held Mobile Satellite Ventures, L.P. (MSV) for approximately 22.5 million non-voting common shares of publicly-traded SkyTerra Communications, Inc. (SkyTerra) (over-the-counter under the symbol “SKYT”). Those non-voting common shares are convertible into common shares of SkyTerra upon their transfer by us on the public market and represent an equity interest of approximately 21.2% in SkyTerra. 33% of our SkyTerra shares are subject to certain transfer restrictions, which percentage will be reduced to 25% on October 6, 2007, 20% on October 6, 2008 and zero on April 6, 2010.

On January 15, 2007, we executed an agreement to exchange approximately 5.1 million shares of privately-held TerreStar Networks, Inc. (TerreStar) for approximately 9 million common shares of publicly-traded Motient Corporation (Motient) (over-the-counter under the symbol “MNCP”). Closing of the exchange will occur on March 8, 2007. On March 7, 2007, we executed an agreement to dispose of 4.5 million Motient shares which is also expected to close on March 8, 2007. Our remaining Motient shares, which will not be subject to any transfer restrictions for transfers on the public market, will represent an equity interest of approximately 5.6% in Motient.

These exchange transactions were intended to unlock the value of our MSV and TerreStar investments. BCE may consider disposing or acquiring from time to time shares of SkyTerra or Motient depending on prevailing market conditions.

Strategic announcements

Normal course issuer bid

As at December 31, 2006, BCE Inc. had purchased 45,150,000 common shares under its Normal Course Issuer Bid commenced on February 3, 2006 (2006 NCIB) and ended on February 1, 2007, representing approximately 100% of the total common shares targeted for repurchase, for a total cash outlay of $1.241 billion.

On December 12, 2006, BCE Inc. announced that it would initiate a new normal course issuer bid upon the expiry of the 2006 NCIB. Further to this announcement, BCE Inc. received acceptance from the TSX of its notice of intention to make a Normal Course Issuer Bid on February 6, 2007. The filing of this notice allows BCE Inc. to purchase

BCE Inc. 2006 Annual Information Form       | 19

for cancellation up to 40,000,000 of its common shares, representing approximately five per cent of BCE Inc.’s 807,658,658 common shares outstanding as at January 31, 2007. BCE Inc. is currently contemplating a buyback program of approximately $1.2 billion. Purchase of the shares will be carried out through the TSX and/or the NYSE and will be made in accordance with the by-laws and rules of such exchanges. Purchases of common shares may be made from time to time, at market prices, during the period starting February 9, 2007 and ending no later than February 8, 2008.

Simplification of corporate structure and approval of Bell Canada’s plan of arrangement for exchange of Bell Canada
preferred shares

On December 12, 2006, BCE Inc. announced that it would not move forward with the proposed conversion of Bell Canada into an income trust nor with plans to make a tender offer for all of the outstanding preferred shares of BCE Inc. and Bell Canada, but that it would continue with its previously announced plans to simplify its corporate structure. As part of this process, BCE Inc. intends, at its next annual shareholder meeting on June 6, 2007, to submit a proposal to its shareholders to change its name to Bell Canada Inc. and, if approved, Bell Canada intends to change its name to Bell Inc. at the same time.

In addition, under a plan of arrangement, and as part of the corporate simplification process, holders of Bell Canada preferred shares agreed at a special meeting held on January 23, 2007 to exchange their shares for BCE new preferred shares with the same series rights effective January 31, 2007. The arrangement provided for the payment of a one-time special dividend of $0.20 per Bell Canada preferred share outstanding immediately prior to the exchange. The BCE new preferred shares began trading on the TSX on February 1, 2007. On the same day, BCE Inc. entered into agreements to guarantee all of Bell Canada’s public debt securities.

As a result of the implementation of this plan of arrangement and guarantee, effective February 1, 2007, Bell Canada no longer has to prepare and file public disclosure documents separate from those of BCE Inc.

Other developments

Labour settlement

On May 15, 2006, we reached an agreement with the CEP on pay equity that benefits 4,765 current and former Bell Canada employees. The settlement covers Bell Canada employees represented by the CEP in positions occupied primarily by women. The settlement was for approximately $100 million.

2005 highlights

The following events influenced our business in 2005 or were referred to in our 2005 AIF:

§		On April 7, 2005, Bell Canada completed the acquisition of Nexxlink Technologies Inc., a provider of integrated IT solutions, for a purchase price of $74 million in cash (since integrated within Bell Business Solutions Inc.).
§		On April 30, 2005, Bell Canada completed the purchase of all the shares of Entourage Technology Solutions Inc. (Entourage) that it did not already own. Entourage (since renamed Bell Technical Solutions) is Bell Canada’s residential installation and repair supplier.
§		On March 8, 2005, Bell Canada announced an alliance with Clearwire, a privately-held company led by Mr. Craig O. McCaw, through which Bell Canada became Clearwire’s exclusive strategic partner for Voice over Internet Protocol (VoIP) and certain other value-added Internet Protocol (IP) services and applications in the United States. Bell Canada will also become Clearwire’s preferred provider of these services and applications in markets beyond North America. Clearwire offers advanced IP-based wireless broadband communications services in the U.S. and other international markets. Its core offering is a non line-of-sight (NLOS) wireless broadband data service that allows customers “nomadic” Internet access. “Nomadic” refers to the ability to access the Internet from any place within the service area that has a power supply. Bell Canada manages the deployment and operation of Clearwire’s U.S. VoIP offering. At the same time, Bell Canada completed an investment of US$100 million in Clearwire and the CEO of BCE Inc. joined Clearwire’s board of directors. Concurrently with this transaction, Bell Canada acquired from companies directly or indirectly controlled by Mr. McCaw a 50% interest in NR Communications Ltd., which is one of the two partners in the Inukshuk joint venture (as discussed below).
§		On August 2, 2005, Bell Canada announced the purchase of the residential assets of Cable VDN Inc. (Cable VDN), a Montréal-based cable company selling residential analog and digital TV and high-speed Internet services for $26 million.
§		On September 16, 2005, Bell Canada announced an alliance with Rogers Communications Inc. (Rogers) to jointly build and manage a nationwide wireless broadband network through Inukshuk Wireless Inc. (Inukshuk), which holds approximately 98 MHz of wireless broadband spectrum in the 2.5G Hz frequency range across much of Canada. Inukshuk is owned and controlled equally by Bell Canada and Rogers who jointly and equally fund the initial network deployment costs estimated at $200 million over a three-year period. The development and commercialization of services, as well as sales, marketing and end-user customer care and billing functions is provided directly by Bell Canada and Rogers to their respective customers. Separately, in conjunction with this transaction, Bell Canada reached an agreement with companies controlled directly or indirectly by Mr. McCaw to acquire the remaining 50% of NR Communications Ltd. not already owned by Bell Canada.
§		On December 16, 2005, BCE Inc. announced its decision to sell its 29.8% interest in CGI Group Inc. (CGI). On January 12, 2006, CGI purchased 100 million of its Class A shares held by BCE Inc. at a price of $8.5923 per share for total proceeds to BCE Inc. of $859.23 million. The shareholders’ agreement between BCE Inc. and CGI was terminated upon completion of the transaction. At the same time we extended our outsourcing agreements with CGI. CGI remains Bell Canada’s preferred IS/IT (information systems/information technologies) provider until June 2016. CGI’s outsourcing of its Canadian communications network management requirements to Bell Canada was similarly extended. The commercial alliance between CGI and Bell Canada’s Enterprise group was also extended to 2016. The Bell Canada pension fund acquired 25 million Class A shares of CGI still held by BCE Inc.

20 |     BCE Inc.  2006 Annual Information Form

on July 28, 2006 and BCE Inc.’s last remaining 6.4 million Class A shares on October 23, 2006.

2004 highlights

The following events influenced our business in 2004 or were referred to in our 2004 AIF.

§		On February 10, 2004, Bell Canada exchanged its 3.24% remaining indirect interest in YPG LP and YPG General Partner Inc. (Yellow Pages Group) for units of the Yellow Pages Income Fund. On July 21, 2004, Bell Canada sold its remaining interest in the Yellow Pages Income Fund for net cash proceeds of $123 million.
§		On March 30, 2004, Bell Canada and The Virgin Group announced plans to launch mobile voice and data services in Canada through a jointly-owned entity, Virgin Mobile Canada. Virgin Mobile Canada launched its services through a national rollout using our 1X digital wireless network on March 1, 2005.
§		On May 20, 2004, Bell Canada filed a lawsuit against Manitoba Telecom Services Inc. (MTS) after MTS announced it would purchase Allstream Inc. Bell Canada sought damages and an injunction that would prevent MTS from breaching the terms and conditions of the commercial agreements it had with Bell Canada. On June 3, 2004, Bell Canada also filed a lawsuit against Allstream Inc. seeking damages related to the same announcement. On June 30, 2004, BCE Inc. reached an agreement with MTS to settle the lawsuits. The terms of the settlement included: a payment of $75 million by MTS to Bell Canada received on August 3, 2004 for unwinding various commercial agreements; the removal of contractual competitive restrictions to allow Bell Canada and MTS to compete freely with each other, effective June 30, 2004; the orderly disposition of our interest in MTS (our voting rights in MTS were waived after receiving the $75 million payment); and a premium payment to us by MTS, if there had been a change of control of MTS before January 1, 2006 and if there had been an appreciation in MTS’ share price from the time of our divestiture to the time of any takeover transaction. On August 1, 2004, the MTS shares held by Bell Canada were transferred to BCE Inc. In late September 2004, BCE Inc. disposed of its 15.96% interest in MTS. Total net cash proceeds from this transaction were $584 million.
§		On May 21, 2004, Bell Canada acquired 100% of the outstanding shares of Infostream Technologies Inc., a systems and storage technology firm.
§		On May 26, 2004, Bell Canada announced an agreement to purchase the Canadian operations of Vancouver-based 360networks Corporation (360networks), a telecommunications service provider, for $293 million (including acquisition costs) in cash. The transaction was completed on November 19, 2004. The purchase included the shares of 360networks’ subsidiary, Group Telecom, and certain related interconnected U.S. network assets. Following the purchase, Bell Canada sold the retail customer operations in Central and Eastern Canada to Call-Net Enterprises Inc. (Call-Net). For a share of the revenues, Bell Canada now provides network facilities and other operations and support services to Call-Net so Call-Net can service its new customer base. This transaction gave Bell Canada an extensive fibre network that includes leading-edge local facilities in Vancouver, Victoria, Calgary, Edmonton and other cities in Western Canada. Bell Canada also gained access to almost 200 office buildings in Western Canada.
§		In June 2004, Bell Canada acquired Emergis Inc.’s (formerly BCE Emergis Inc.) (Emergis) security business. This business provides organizations with the security infrastructure for their electronic service delivery needs to help ensure data is secure and viewed only by the appropriate individuals.
§		In June 2004, Bell Canada announced an employee departure program that consisted of two phases. The first phase was an early retirement plan and the second phase was a departure plan. Under the early retirement plan, eligible employees chose to receive a package that included a cash severance, immediate pension benefits, an additional guaranteed pension payable up to 65 years of age, career transition services and post-employment benefits. Under the early departure plan, employees chose to receive a special cash allowance. Of the 7,000 eligible employees, 3,950 decided to take advantage of the early retirement plan and another 1,050 employees decided to take advantage of the early departure plan. A total of approximately 5,000 employees left the company, which represented approximately 11% of Bell Canada’s total employee base (excluding Bell Aliant). Almost all of the employees who chose to take advantage of the program left Bell Canada in 2004. The rest left during 2005.
§		On June 9, 2004, Bell Canada launched Sympatico.MSN.ca in partnership with Microsoft Corporation (Microsoft). Sympatico. MSN.ca is a single portal combining the best features and Internet tools of MSN Canada Co. with the broadband content and innovative services of Sympatico.ca. At the same time, Bell Canada introduced Sympatico™ with MSN Premium, a custom-built version of the software featuring tools that enable a safer online experience, including pop-up ad blocking, spam filtering and parental controls.
§		On June 16, 2004, BCE Inc. completed the sale of its 63.9% interest in Emergis for net cash proceeds of $315 million.
§		On August 3, 2004, Bell Canada assumed 100% ownership of Bell West Inc. by purchasing the 40% interest held by MTS for $646 million.
§		On August 16, 2004, Bell Canada reached a new four-year agreement with approximately 7,100 technicians represented by the CEP. This agreement will expire in November 2007.
§		On September 16, 2004, Bell Aliant’s predecessor company, Aliant Telecom Inc. (Aliant Telecom), reached a new agreement with its approximately 4,300 unionized employees, represented by the Council of Atlantic Telecommunication Unions. This agreement will expire in December 2007.
§		In October 2004, Bell Aliant offered a voluntary Early Retirement Incentive Program (ERIP) to eligible employees, which was accepted by 693 employees, including 654 employees or 11% of the workforce of Aliant Telecom. Approximately 400 of the ERIP participants retired effective January 1, 2005, and the remainder left during 2005.
§		On October 18, 2004, Bell Canada was selected by the Vancouver Organizing Committee as its Premier National Partner for the 2010 Olympic and Paralympic Winter Games. The partnership continues through to 2012, securing the Canadian Olympic Team sponsorship rights to Torino in 2006, Beijing in 2008, Vancouver in 2010, London in 2012 and for two Pan-American Games. It provides Bell Canada with the opportunity to build its brand by associating with one of the world’s strongest and most recognized brands.

BCE Inc.  2006 Annual Information Form     | 21

About our Businesses

Our strategic priorities

We accelerated the transformation of the company in 2006, further strengthening the operational foundations we have put in place over the last three years. These included driving a shift in our revenue mix towards growth services, resetting our cost base and returning to our core communications business. We also continued to build upon all three strategic pillars — improving the customer experience, enhancing bandwidth and developing next-generation services. Marketing fundamentals came into sharper focus, which enabled us to step up to the competitive challenges of cable telephony more effectively.

The three pillars will continue to be critical in 2007, as will our efforts to improve our operational efficiency and productivity. We will also place a growing focus on enhancing the experience of our customers. It is how we will differentiate our business from the competition to build customer loyalty as we drive the profitable expansion of our growth services and slow the decline of our traditional voice and data businesses. However, service alone will not make us competitive. We must also continue to deliver products, services and solutions that make a difference for customers. We will continue to invest in developing growth services and enhancing the networks on which they run. In 2007, the majority of our capital spending will be in areas such as enhancing customer service, wireless operations and our advanced residential broadband network.

We have established five operational priorities for 2007 to achieve our objective of delivering consistent, reliable, high-quality communications services to customers efficiently and cost-effectively:

1. Service quality — We are determined to consistently meet or exceed customer expectations and enhance their overall experience with Bell Canada. This focus on improving the total customer experience will help to differentiate us from our competitors and ensure long-term customer loyalty to the Bell brand and products.

2. Broadband acceleration — We will continue to invest in advanced network enhancements, such as the continued rollout of fibre-to-the-node (FTTN) technology, in order to expand the reach and speed of our digital subscriber line (DSL) Internet service and to enable video over Internet Protocol (IPTV) services.

3. Wireless growth — A key driver of growth and financial performance, the wireless business will be supported by an expanded array of handsets and devices, new products and features, expected growth in data usage, ongoing enhancements to the broadband Evolution, Data Optimized (EVDO) wireless data network and overall network quality. We are focused on delivering continued improvements in average revenue per user (ARPU) and data growth, while acquiring our competitive share of net subscriber additions.

4. Business sector profitability — With a focus on ICT/virtual chief information officer (VCIO) profitability, we will leverage the unique capabilities and scale in our Enterprise and SMB operations to take advantage of market opportunities and pull through connectivity revenues.

5. Productivity improvements — A core element of financial performance, productivity improvements have enabled Bell Canada’s increased competitiveness in the marketplace. Cost discipline remains a centrepiece of our strategy, with productivity improvements expected to contribute to further improvement in earnings.

We intend to execute these priorities based on a foundation of market leadership behaviour and a balance between profitable growth and enhanced market share. With an increasingly cost-efficient structure, we believe that we are well positioned to leverage our network capabilities as well as our product and brand assets.

In 2006, we made significant progress in building upon each of our three key strategic pillars.

Enhancing customer experience by providing superior products and service that build loyalty

§		Our multi-product household strategy continued to drive increased penetration of households subscribing to three or more products (a combination of local wireline, Internet, video, wireless and long distance services), reaching over 25% of total households in our Ontario and Québec footprint at the end of 2006, up from 22% at the end of 2005.
§		At the end of 2006, approximately six million customers were enjoying the benefits of a single bill for their wireline, Internet, video and/or wireless services (our One Bill program), compared with approximately two million at the end of 2005.
§		As a result of our DSL hardening program, which has improved the performance of the network through software upgrades and the installation of new hardware, we reduced major outages of our high-speed Internet service by 12% in 2006 compared with the previous year.
§		We delivered improved service commitments and service levels in 2006 by reducing the total number of missed appointments for fixed wireline installations and repairs by approximately 3% and 15%, respectively, over the previous year.
§		Our first call resolution rate in the Residential segment improved 2.1 percentage points in 2006 to approximately 81%.
§		Sympatico, our Internet service provider (ISP) to residential and SMB customers, launched new desktop tools enabling customers to diagnose and correct configuration settings on their own or remotely through a call centre agent. These new tools are intended to drive self-service and reduce the average handling time of calls in our contact centres.
§		As at the end of 2006, 93% of our Enterprise customers had adopted our online bill manager tool, a service that provides self-serve capabilities for business customers, enabling them to view, track and pay invoices online and to produce customized reports.
§		Our Enterprise unit began the implementation of Service Desk, which will integrate connectivity and ICT customer care to create a single point of contact for the customer.

22 |      BCE Inc.  2006 Annual Information Form

In 2007, we intend to continue improving service and enhancing the customer experience. In particular, we plan to:

§		drive service quality so that it sets us apart in the market
§		deliver improved service commitments and service levels by significantly reducing the number of missed appointments
§		achieve distribution excellence by expanding our points of presence, refreshing existing stores, and enhancing existing channels such as 310-Bell and bell.ca
§		expand our handset and device portfolios
§		improve processes to simplify customer transactions.

Deliver abundant and reliable bandwidth to enable next generation services

§		We carried on with our rollout of FTTN by deploying another 1,564 neighbourhood nodes in 2006, raising the total number of nodes deployed to 3,612. In total, we currently expect to deploy approximately 11,000 to 12,000 nodes by 2011 for a total cost of approximately $1.2 billion, of which approximately $400 million has been spent as of the end of 2006.
§		We continued to invest in our high-speed EVDO wireless data network by expanding the footprint to a number of cities and towns in Ontario, Québec, British Columbia and Alberta, bringing coverage to 55% of the Canadian population.
§		We launched Sympatico Optimax™, a high-speed Internet service that leverages the latest fibre optic technology, across significant parts of Toronto and Montréal. The service offers an Internet connection that delivers consistently fast Internet service, with speeds of up to 16 megabits per second (Mbps).
§		Inukshuk, our joint venture between Bell Canada and Rogers, completed the initial phase of its new wireless broadband network that reaches five million households representing 40% of the population in 20 urban centres across Canada. This next-generation IP wireless network enables portable services allowing subscribers to access the Internet and other applications such as VoIP and video streaming.

In 2007, we intend to continue to expand the reach and speed of DSL service through our FTTN rollout, which will enable speeds of up to 26 Mbps. In the future, as consumer demand for bandwidth-intensive applications increases, we believe that FTTN bandwidth speeds can be increased to more than 40 Mbps through techniques such as shortening very high data rate DSL (VDSL) loop lengths and bonding twisted-pair copper telephone lines. At the same time, the Inukshuk fixed wireless broadband access network footprint will continue to be expanded. We also plan to complete implementation of the EVDO wireless data network across our remaining wireless coverage areas.

Create next-generation services to drive ongoing profitable growth

§

Bell Mobility launched a number of new services designed to drive data growth, including:

	§		Groove Client, a music download service
	§		a music video ringtones service that allows customers to listen to and/or watch digital music videos directly on their wireless phone
	§		various video clip services featuring exclusive NHL hockey game highlights, MTV video highlights and images, and news and business reports from CTV News and Report on Business Television (ROBTv).

§		Bell ExpressVu continued to build on its expansive retail offering of leading high-definition (HD) services with the launch of 12 new HD channels during the year. HD television, with its high-resolution images and theatre-quality sound, provides a viewing experience that is richer and more visually captivating than standard television. In addition, our video unit enhanced its line-up of interactive TV (iTV) programming, providing the best interactive and on-demand news, weather and sports experience.
§		Sympatico, our ISP to residential and SMB customers, started marketing several new products and services in 2006, including:

	§		an enhanced version of its MSN Music Store, which offers customers safe and secure pay-per-download of high-quality music tracks via credit card payment
	§		‘Personal Vault’, a comprehensive online storage solution that is available exclusively from Bell Canada to back-up, access and share content such as digital photos, financial records, music and video files
	§		Canada’s first subscription-based fraud protection service
	§		Sympatico™ Unplugged, a high-speed portable Internet access product that offers speeds comparable to current residential and SMB offerings.

§		Our Enterprise unit expanded its service offering in 2006 with applications such as IP audio conferencing and an enhanced IP virtual private network (VPN) product with global capabilities and advanced customer reporting functionality.
§		Our SMB unit introduced several new products this year, including:

	§		Business Internet Unplugged, a portable wireless DSL service
	§		Managed IP, an IP Private Branch Exchange (IP PBX) monitoring, management and maintenance service.

In 2007, our objective is to drive the introduction of new products and services that balance innovation with profitability and that are brought to market more quickly. We plan to introduce EVDO-enabled data applications and other services to our wireless customers in order to deliver continued improvements in ARPU and data growth, as well as expand our residential broadband services to help customers manage information needs in their homes by leveraging our Sympatico-MSN portal. In our video unit, we intend to drive growth by investing in new growth areas, such as IPTV and HD programming, in our goal of becoming the leader in “on-demand” television. In the Business segment, our Enterprise unit will continue its efforts to expand its ICT solutions by focusing on network-supported applications and services in the financial services and federal, provincial and large municipal government sectors, as well as by concentrating on key customers in the retail, distribution and manufacturing sectors. We will also strengthen our capabilities in data and network security and business resilience. The overall objective within our SMB unit is to drive greater profitability through stronger organic growth with its refined VCIO strategy and the expansion of existing value-added services (VAS) that build on the strengths of recent business acquisitions, as well as sale force and mid-market customer realignment.

BCE Inc.  2006 Annual Information Form     | 23

Transforming our cost structure

Overall, our various cost-reduction initiatives resulted in savings of $724 million in 2006, which brought the total amount of cost savings since 2004 to approximately $1.6 billion. Cost savings this year were realized primarily through process improvements in our business units and our supply chain transformation program, which contributed to maintaining Bell Canada’s EBITDA margin stable year-over-year.

Cost reductions from efficiency-related process improvements amounted to $341 million in 2006 and were driven primarily by:

§		a reduction in the number of invoices printed and mailed to our residential customers under the One Bill initiative
§		more efficient contact centre operations, resulting in lower call volumes
§		a reduction in the number of missed commitments for fixed wireline installations and repairs
§		workforce reductions stemming from greater use of outsourcing and other productivity initiatives.

With respect to our workforce reduction program for 2006, our original plan called for 3,000 to 4,000 employee departures. In total, over 3,300 employee departures took place. However, this was offset by approximately 550 positions which were added in the year in support of our revenue growth and service quality initiatives. As a result, net employee departures totalled approximately 2,750 in the year.

Supply transformation savings of $383 million in 2006 were realized from:

§		increased controls over discretionary spending
§		reduced spending on IT services
§		outsourcing of selected contact centre call volumes
§		renegotiated contracts resulting in rate reductions and vendor rebates for wireless handsets, wireline data and voice equipment, and Internet portal services that we resell to our customers.