of the related risk factors and assumptions please see the section

entitled "Caution Concerning Forward-Looking Statements" later in this

release.

- Cost reductions lead to Bell EBITDA growth of 3.0%

- Adjusted EPS up 9.4% to $0.58; Statutory EPS stable

- Seventh consecutive quarter of fewer YOY residential local line losses

- Common share dividend increased by 5% to $1.62 per year

- Financial guidance increased

MONTREAL, Aug. 6 /CNW Telbec/ - BCE Inc. (TSX, NYSE: BCE), Canada's largest communications company, today reported BCE and Bell results for the second quarter of 2009 and announced a 5% increase in its annual common share dividend and improved financial guidance for 2009.

BCE reported improved financial performance with solid free cash flow and earnings, despite the economy's adverse impact on revenue growth this quarter; the seventh consecutive quarter of improved year-over-year residential local line losses; and continued progress on the execution of Bell's 5 Strategic Imperatives - Improve Customer Service, Accelerate Wireless, Leverage Wireline Momentum, Invest in Broadband Networks and Services, and Achieve a Competitive Cost Structure.

"Bell continued to make clear progress in executing our strategic imperatives this quarter, with particular success in affirming the culture of cost management and operational efficiency that allowed the Bell team to deliver improved EBITDA performance," said George Cope, President and CEO of BCE and Bell Canada. "With our year-to- date earnings performance and a sound balance sheet, we are in a strong position to continue to return value to shareholders through the dividend increase announced today. This is the second increase to the annual common share dividend this year, demonstrating BCE's commitment to return cash to shareholders through consistent and sustainable dividend increases."

BCE today announced that the annual common share dividend will increase by 5% to $1.62 per share. Accordingly, the Board has declared a quarterly dividend of $0.405 per common share, payable on October 15, 2009 to shareholders of record at the close of business on September 15, 2009. This increase is funded from free cash flow and is consistent with the company's target dividend payout ratio of 65% to 75% of Adjusted EPS.

"Based on the strength of our year-to-date operating performance, our latest expectations for the balance of the year, and the completed acquisitions of The Source and Virgin Mobile Canada, we are increasing our revenue, EBITDA and Adjusted EPS guidance for 2009," said Siim Vanaselja, Chief Financial Officer of BCE and Bell Canada.

"We've also continued to execute against our capital structure objectives. In June, using cash on hand, we repaid a total of $1.35 billion of debt comprised of all the outstanding BCE Series C Notes and Bell Series M-2 Debentures. We raised $1 billion in debt in June and, last week, used part of those proceeds to redeem all of the outstanding $600 million principal amount of Bell Series M-16 Debentures. Our only remaining debt maturity in 2009 is the $150 million principal amount of Bell Series EC Debentures maturing in December, which we will self-fund. The lower cost of debt from this refinancing will result in an annualized pre-tax savings on interest of approximately $25 million," said Mr. Vanaselja.

In line with its strategic imperative to Accelerate Wireless, Bell today announced it has signed a reciprocal wireless roaming agreement with AT&T that will enable AT&T wireless customers to roam on Bell Mobility's new HSPA network when it launches, while providing Bell customers access to AT&T's GSM and 3G wireless networks in the United States.

The news follows several other recent initiatives that directly support Bell's 5 Strategic Imperatives, including:

- The announcement of several new mobile smartphones, including the

popular BlackBerry Tour and the highly anticipated Palm Pre, which will

be available in Canada exclusively from Bell Mobility on August 27,

2009

- The completion on July 1, 2009 of Bell's acquisitions of national

retailer The Source and of leading wireless youth brand Virgin Mobile

Canada

- A minority equity interest in the successful bid led by the Molson

family to acquire the Montreal Canadiens Hockey Club and the Bell

Centre, supporting expanded access to popular Canadiens content via

Bell Mobility, Bell TV and Bell Internet

- Ongoing expansion of Bell TV's leadership in High Definition TV with

the addition of more new channels to what was already the largest

roster of HD channels available in Canada

- Increased investment in Bell's next-generation wireless and Internet

broadband networks for business and residential clients - including the

national HSPA 3G network rolling out in time for the 2010 Winter Games

in Vancouver.

Bell's service revenues decreased slightly to $3,385 million, or by 0.6%, this quarter as growth in video and data revenues was offset by declines in wireless, local and access and long distance revenues. Bell's product revenues declined by 12.0% to $243 million due to a decrease in lower margin product sales. Overall, Bell's operating revenues decreased by 1.5% to $3,628 million this quarter.

Bell's operating income was $628 million, or 8.5% lower than the same period last year due to higher restructuring and other costs. Bell's EBITDA(1) grew by 3.0% this quarter, to $1,450 million as cost reductions more than offset the impact of lower revenues and higher pension expenses which negatively impacted EBITDA by $20 million. Bell's EBITDA margin grew by 1.8 percentage points this quarter to 40.0%.

The Bell Wireless segment(2) had 404,000 gross activations this quarter, or 3.3% more than last year. Postpaid net activations were 64,000 this quarter compared to 111,000 last year. The prepaid client base decreased by 19,000 this quarter compared to a decrease of 28,000 last year.

Bell Wireless service revenues declined slightly by 0.3% and Bell Wireless product revenues declined by 11.1%. Total Bell Wireless operating revenues decreased by 1.4%. Bell Wireless operating income and EBITDA grew by 7.0% and 5.9% respectively. EBITDA margin on wireless service revenues increased 2.8 percentage points to 46.6%. Blended ARPU decreased by $2.22 to $52.05 as the impact of economic pressures on customer usage and lower roaming revenues more than offset data revenue growth of 28%.

The Bell Wireline segment had its seventh consecutive quarter of year-over-year improvement in residential local line (NAS) losses, which declined by 100,000 this quarter, or 20.0% fewer than the decline of 125,000 in Q2 2008. Business NAS declined by 32,000 this quarter compared to a decline of 7,000 last year, reflecting the continued softening of the SMB market. Bell Wireline operating revenues decreased by 2.0% as more cautious business investment adversely affected revenue performance. Bell Wireline operating income decreased by 21.6% and Bell Wireline EBITDA increased by 1.7%.

Bell invested $679 million of capital this quarter, an increase of 16.5% compared to the same period last year. Capital expenditures supported Bell's strategic imperatives with focused investment on enhancing its wireless networks, including the deployment of an HSPA 3G network expected to be in service nationally by early 2010, and the continuing expansion of the wireline broadband network, including the Fibre-to-the-node (FTTN) program and Fibre to multiple dwelling units (MDUs).

BCE's cash from operating activities this quarter was $1,476 million, or 4.1% lower than the same period last year due to higher pension contributions and restructuring and other costs. Free cash flow(3) was $520 million this quarter, compared to $652 million in the same period last year due to lower cash from operating activities and higher capital expenditures.

BCE's net earnings applicable to common shares this quarter were $346 million, or $0.45 per share, compared to $361 million, or $0.45 per share, for the same period last year. EPS included higher restructuring and other costs of $0.13 per share this quarter compared to $0.06 per share last year. EPS this quarter also included the impact of fewer outstanding BCE common shares as a result of share purchases made through the normal course issuer bid completed in May. BCE's Adjusted EPS(4) was $0.58 this quarter, or 9.4% higher than in Q2 2008.

Financial Highlights

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($ millions except per share amounts) Q2 2009 Q2 2008 % change

(unaudited)

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Bell(i) Operating Revenues $3,628 $3,683 (1.5%)

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Bell EBITDA $1,450 $1,408 3.0%

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Bell Operating Income $628 $686 (8.5%)

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BCE Operating Revenues $4,302 $4,394 (2.1%)

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BCE EBITDA $1,792 $1,744 2.8%

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BCE Operating Income $825 $886 (6.9%)

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BCE Cash From Operating Activities $1,476 $1,539 (4.1%)

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Free Cash Flow $520 $652 (20.2%)

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BCE Net Earnings Applicable to Common

Shares $346 $361 (4.2%)

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BCE EPS $0.45 $0.45 0.0%

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BCE Adjusted EPS $0.58 $0.53 9.4%

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(i) Bell includes the Bell Wireless and Bell Wireline segments.

BCE's operating revenues declined by 2.1% to $4,302 million this quarter due to lower revenues at Bell and Bell Aliant.

BCE's operating income decreased to $825 million this quarter, or by 6.9%, due to lower operating income at Bell and Bell Aliant. BCE's EBITDA increased 2.8% to $1,792 million this quarter due to EBITDA growth at Bell and Bell Aliant.

Bell Wireless Segment

The Bell Wireless segment was impacted by the weaker economy but delivered strong growth in wireless data revenues, increased EBITDA and margin expansion.

- Total Bell Wireless operating revenues decreased by 1.4% to

$1,104 million this quarter due principally to lower wireless product

revenues. Wireless service revenues were largely stable as a larger

subscriber base was offset by lower ARPU. Wireless product revenues

decreased by 11.1% to $88 million due to lower average handset pricing

and discounted acquisition offers in the quarter.

- Postpaid ARPU decreased by $3.61 to $62.58 due to lower usage, lower

roaming revenues, and the migration to lower rate plans as customers

reacted to a weaker economy, partly offset by growth in wireless data

revenues. Prepaid ARPU decreased by $1.07 to $16.41 due to the

elimination of the system access fee for prepaid customers and lower

usage, partly offset by growth in wireless data revenues. Blended ARPU

decreased by $2.22 to $52.05.

- Bell Wireless operating income grew by 7.0% to $338 million this

quarter as a result of higher EBITDA. Bell Wireless EBITDA grew by 5.9%

to $468 million this quarter due to lower subscriber acquisition and

retention costs, partly offset by lower revenues.

- EBITDA margins on wireless service revenues increased to 46.6% this

quarter, or by 2.8 percentage points, when compared to the same period

last year.

- Total gross activations were 404,000 this quarter, an increase of 3.3%

from Q2 of last year.

- Postpaid net activations were 64,000 this quarter compared to net

activations of 111,000 a year ago due to lower postpaid gross

activations and higher churn primarily driven by the soft economy. The

prepaid client base decreased by 19,000 compared to a decrease of

28,000 last year as higher prepaid gross activations were partly offset

by higher churn. Total net activations were 45,000 this quarter, 45.8%

fewer than last year.

- The Bell Wireless client base reached 6,572,000 at the end of the

quarter.

- Postpaid churn increased to 1.3% from 1.1% last year and prepaid churn

increased to 3.3% from 3.0%. Blended churn increased to 1.7% from 1.6%.

- Cost of acquisition decreased to $356 per gross activation this

quarter, or 14.6% lower than last year, due to lower marketing and

commission expense.