##### Table of Contents



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, 13th 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)
  Title of each classCommon shares
    
    Name of each exchange on which registeredNew York Stock Exchange
 None
 None
  þ Annual information form
    
    þ Audited annual financial statements
  At December 31, 2006, 807,643,941 common shares and
66,000,000 First Preferred Shares were issued and outstanding.
  YES: o
    
    NO: þ
  YES: þ
    
    NO: o




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##### Table of Contents



2 PRIOR FILINGS MODIFIED AND SUPERSEDED
   
    
    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;
  ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS AND
MANAGEMENTS DISCUSSION AND ANALYSIS
 A.   Annual Audited Consolidated Financial Statements
  B.   Managements Discussion and Analysis




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##### Table of Contents



3 RECONCILIATION OF CANADIAN GAAP TO UNITED STATES GAAP
  DISCLOSURE CONTROLS AND PROCEDURES
  U.S. Securities Exchange Act of 1934 Multilateral Instrument 52-109
 INTERNAL CONTROL OVER FINANCIAL REPORTING
 A. Managements report on internal control over financial reporting
  B. Auditors report on internal control over financial reporting
  C. Changes in internal control over financial reporting
  STATEMENT REGARDING CONTROLS AND PROCEDURES




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##### Table of Contents



4 AUDIT COMMITTEE FINANCIAL EXPERT
  CODE OF ETHICS
 www.bce.ca
 PRINCIPAL ACCOUNTANT FEES AND SERVICES
 Auditors fees
  2006
    
    
    2005(millions)Audit fees
    
    $
    13.6
    
    
    $
    10.0Audit-related fees
    
    $
    5.2
    
    
    $
    1.7Tax fees
    
    $
    0.9
    
    
    $
    1.4Other fees
    
    
    
    
    
    
    TOTAL
    
    $
    19.7
    
    
    $
    13.1
    *
 
 *
    
    Restated to exclude fees billed to BCE for work related
to CTVGlobemedia Inc. (formerly BellGlobemedia Inc.) Audit fees
  Audit-related fees
  Tax fees
  Other fees




---



##### Table of Contents



5 Auditor Independence Policy
  
    
    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.
  
    
    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.
 www.bce.ca
  OFF-BALANCE SHEET ARRANGEMENTS
  TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS
  IDENTIFICATION OF THE AUDIT COMMITTEE
  UNDERTAKING




---



##### Table of Contents



6 WEB SITE INFORMATION
  STATEMENT REGARDING FORWARD-LOOKING STATEMENTS




---



##### Table of Contents



2006
 Annual
 Information
 Form
 BCE
Inc.




---



##### 



inside
  
 2
    
    
    About this Annual Information Form2
    
    
    Documents incorporated by reference2
    
    
    Trademarks3
    
    
    About forward-looking statements4
    
    
    About BCE5
    
    
    Our corporate structure5
    
    
    Our directors and officers8
    
    
    Our employees9
    
    
    Our capital structure17
    
    
    Our dividend policy17
    
    
    Our policy on corporate responsibility18
    
    
    Business highlights22
    
    
    About our Businesses22
    
    
    Our strategic priorities24
    
    
    Bell Canada27
    
    
    Other BCE segment28
    
    
    The Competitive Environment we operate in31
    
    
    The Regulatory Environment we operate in31
    
    
    Legislation that governs our business33
    
    
    Key regulatory issues36
    
    
    Consultations37
    
    
    Legal Proceedings we are involved in41
    
    
    Assumptions and Risks underlying our Forward-Looking Statements48
    
    
    Managements Discussion and Analysis49
    
    
    For more Information50
    
    
    Schedule 1  Audit Committee Information52
    
    
    Schedule 1A  Audit Committee Charter56
    
    
    Schedule 2  GlossaryAnnual ReportConsent of Independent Chartered AccountantsReconciliation of Canadian GAAPReport of Independent Chartered AccountantsCertifications of the CEO and the CFOCertifications of the CEO and the CFO




---



##### Table of Contents



Annual Information Form
  In this AIF, we, us, our, companyand BCEmean 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.
 
   DOCUMENT
    
    WHERE IT IS INCORPORATED IN THIS AIFBell Canada Enterprises 2006 Annual Report
    
    Managements Discussion and
Analysis, page 48 Managements Discussion and
Analysispages 2 to 61
  
   OWNER
    
    TRADEMARKBell Aliant Regional Communications, Limited Partnership
    
    Aliant(Bell Aliant LP)
    
    Aliant TelecomAliant MobilityBCE Inc.
    
    BCEBell Canada
    
    Rings & head designBell Canada Enterprises corporate logoBellBell MobilityBell WorldEspace BellSympaticoSympatico.ca10-4 & designBell ExpressVu Limited Partnership
    
    ExpressVuBell Mobility Inc.
    
    Mobile BrowserSolo Branding Inc.
    
    Solo
Solo MobileTelesat Canada
    
    AnikNimiqTelesat




---



##### Table of Contents



anticipate, assumption, believe, could, expect, goal,
guidance, intend, may, objective, outlook, plan, seek, should, strive, target will. United States
Private Securities Litigation Reform Act of 1995
 §
    
    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.
 Assumptions and Risks underlying our Forward-Looking Statements. The Competitive Environment we
operate in The Regulatory Environment we operate in.




---



##### Table of Contents



BCE
 Residential, Business, Bell Aliant, Other Bell Canada. Other BCE
   OPERATING REVENUES (IN $ MILLIONS)
    
    2006
    
    2005Residential
    
    $
    7,099
    
    
    $
    7,016Business
    
    $
    6,057
    
    
    $
    5,966Bell Aliant
    
    $
    3,358
    
    
    $
    3,320Other Bell Canada
    
    $
    1,592
    
    
    $
    1,651Inter-segment eliminations  Bell Canada
    
    $
    (758
    )
    
    $
    (719
    )Bell Canada
    
    $
    17,348
    
    
    $
    17,234Other BCE
    
    $
    535
    
    
    $
    538Inter-segment eliminations  other
    
    $
    (170
    )
    
    $
    (167
    )Total operating revenues
    
    $
    17,713
    
    
    $
    17,605
 Residential
  Business
 Bell Aliant Business highlights  2006 highlights  Key acquisitions and
dispositions. Our corporate structure
 Other Bell Canada
 Other BCE
 Business highlights  2006 highlights  Key acquisitions and
dispositions About our Businesses  Other BCE segment
 Business highlights  2006 highlights  Key
acquisitions and dispositions.
 Canada Business Corporations Act
 Business highlights  2006 highlights  Strategic announcements.




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##### Table of Contents



PERCENTAGE OF VOTING SECURITIESWHERE IS IT
    
    
    OR PARTNERSHIP INTEREST THATINCORPORATED
    
    
    BCE INC. HELD ATSUBSIDIARY
    
    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.
 Business highlights  2006
highlights  Key acquisitions and dispositions.
 Our capital structure Business highlights  2006
highlights  Strategic announcements.
 
   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.




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##### Table of Contents



Directors
  DIRECTORSNAME AND PROVINCE/STATE AND
    
    DATE ELECTED OR APPOINTEDCOUNTRY OF RESIDENCE
    
    TO THE BCE INC. BOARD
    
    CURRENT PRINCIPAL OCCUPATIONAndré Bérard, O.C., Québec, Canada
    
    January 2003
    
    Corporate director, since March 2004Ronald A. Brenneman, Alberta, Canada
    
    November 2003
    
    President and Chief Executive Officer, Petro-Canada
(petroleum company), since January 2000Richard J. Currie, O.C.,(1) Ontario, Canada
    
    May 1995
    
    Chair of the board, BCE Inc. and Bell Canada, since April 2002Anthony S. Fell, O.C.,(1) Ontario, Canada
    
    January 2002
    
    Chairman of the board, RBC Dominion Securities Limited
(investment bank), since December 1999Donna Soble Kaufman, Ontario, Canada
    
    June 1998
    
    Corporate director (since July 1997) and lawyerBrian
M. Levitt, Québec, Canada
    
    May 1998
    
    Partner and Co-Chair, Osier, Hoskin & Harcourt LLP (law firm),
since January 2001The Honourable Edward C. Lumley, P.C.,(2) Ontario, Canada
    
    January 2003
    
    Vice-Chairman, BMO Nesbitt Burns Inc. (investment bank),
since December 1991Judith 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 2006John H. McArthur, Massachusetts, U.S.A.
    
    May 1995
    
    Dean Emeritus, Harvard University Graduate School
of Business Administration, since 1995Thomas C. ONeill, F.C.A., Ontario, Canada
    
    January 2003
    
    Corporate director (since October 2004) and
chartered accountantJames 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 1961Robert C. Pozen, Massachusetts, U.S.A.
    
    February 2002
    
    Chairman of the board, MFS Investment Management
(global investment manager), since February 2004Michael 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 CanadaPaul M. Tellier, PC., C.C., Q.C., Québec, Canada
    
    April 1999
    
    Corporate director, since December 2004Victor 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.




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##### Table of Contents



Past occupation
  DIRECTOR
    
    PAST OCCUPATIONMr.
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 2004Mr. 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 2001Ms. J. Maxwell
    
    Founder and President of Canadian Policy Research Networks Inc. from 1995 to January 2006Mr. 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 2002Mr. R.C. Pozen
    
    Visiting professor, Harvard Law School from 2002 to August 2004Mr. 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
  COMMITTEE
    
    MEMBERSAudit
    
    T.C. ONeill (Chair)A. BérardA.S. FellJ. MaxwellV.L. YoungCorporate governance
    
    D. Soble Kaufman (Chair)A. BérardThe Honourable E.C. LumleyJ.H. McArthurJ.A. PattisonManagement resources and compensation
    
    R.J. Currie (Chair)R.A. BrennemanA.S. FellJ.H. McArthurR.C. PozenPension fund
    
    R.C. Pozen (Chair)R.A. BrennemanB.M. LevittP.M. TellierV.L. Young




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##### Table of Contents



Officers
  NAME
    
    PROVINCE AND COUNTRY OF RESIDENCE
    
    OFFICE HELD AT BCE INC.Michael J .Sabia(1)
    
    Québec, Canada
    
    President and Chief Executive OfficerAlain Bilodeau
    
    Québec, Canada
    
    Senior Vice-President, BCE Inc. and President,
BCE Corporate ServicesMichael T.Boychuk(1)
    
    Québec, Canada
    
    Senior Vice-President and TreasurerKaryn A. Brooks
    
    Québec, Canada
    
    Senior Vice-President and ControllerWilliam J. Fox
    
    Ontario, Canada
    
    Executive Vice-President  Communications and
Corporate DevelopmentLeo W. Houle
    
    Québec, Canada
    
    Chief Talent OfficerLawson A.W. Hunter
    
    Ontario, Canada
    
    Executive Vice-President and Chief Corporate OfficerPatricia A. Olah
    
    Québec, Canada
    
    Corporate Secretary and Lead Governance CounselL. Scott Thomson
    
    Ontario, Canada
    
    Executive Vice-President  Corporate Development
and PlanningWayne L. Tunney
    
    Québec, Canada
    
    Senior Vice-President  TaxationMarline Turcotte
    
    Québec, Canada
    
    Chief Legal OfficerSiim A. Vanaselja
    
    Québec, Canada
    
    Chief Financial OfficerNicholas 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
  §
    
    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.
   NUMBER OF EMPLOYEESAT DECEMBER 31
    
    2006
    
    
    2005
    
    
    2004Total
    
    
    54,434
    
    
    
    56,044

(1)
    
    
    50,684
 (1)
    
    Includes increases due to acquisitions made during the year.




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##### Table of Contents



§
    
    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.
   §
    
    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.
 
   BCE Inc. securities
  BCE Inc. preferred shares
  Business highlights  2006 highlights  Strategic announcements.




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##### Table of Contents



STATEDCAPITAL ATDECEMBER 31NUMBER OF SHARES
    
    
    (IN $ MILLIONS)ANNUALDIVIDEND
    
    CONVERTIBLE
    
    CONVERSION
    
    REDEMPTION
    
    REDEMPTION
    
    
    
    
    
    ISSUED ANDSERIES
    
    RATE
    
    INTO
    
    DATE
    
    DATE
    
    PRICE
    
    AUTHORIZED
    
    
    OUTSTANDING
    
    
    2006
    
    
    2005Q
    
    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
    
    
    
    200S
    
    floating
    
    Series T
    
    November 1, 2011
    
    At any time
    
    $25.50
    
    
    8,000,000
    
    
    
    2,279,791
    
    
    
    57
    
    
    
    200T
    
    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
    
    
    
    29Z
    
    5.319%
    
    Series Y
    
    December 1, 2007
    
    December 1, 2007
    
    $25.00
    
    
    10,000,000
    
    
    
    8,852,620
    
    
    
    221
    
    
    
    221AA
    
    5.45%
    
    Series AB
    
    September 1, 2007
    
    September 1, 2007
    
    $25.00
    
    
    20,000,000
    
    
    
    20,000,000
    
    
    
    510
    
    
    
    510AB
    
    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
    
    
    
    510AD
    
    floating
    
    Series AC
    
    March 1, 2013
    
    At any time
    
    $25.50
    
    
    20,000,000
    
    
    
    
    
    
    
    
    
    
    
    1,670
    
    
    
    1,670
 Voting rights
  Entitlement to dividends
    Conversion features
  Redemption features
   Liquidation, dissolution or winding up
   BCE Inc. common shares and Class B shares




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##### Table of Contents



2006
    
    
    
    
    
    
    2005NUMBER
    
    
    STATED CAPITAL
    
    
    NUMBER
    
    
    STATED CAPITALOF SHARES
    
    
    (IN $MILLIONS)
    
    
    OF SHARES
    
    
    (IN $MILLIONS)Outstanding, beginning of year
    
    
    927,318,916
    
    
    
    16,806
    
    
    
    925,935,682
    
    
    
    16,781Shares issued under employee stock option plan(1)
    
    
    1,246,932
    
    
    
    35
    
    
    
    1,383,234
    
    
    
    25Shares 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.
 The
Regulatory Environment we operate in  Legislation that governs our business.
 BCE Inc. debt securities
   INTERESTRATE

    
    MATURITY

    
    $ MILLIONSSeries C Notes
    
    
    7.35
    %
    
    October 30, 2009
    
    
    650
      Bell Canada securities
  Bell Canada Class A preferred shares
  Our
capital structure  BCE Inc. securities Business highlights  2006 highlights  Strategic
announcements.




---



##### Table of Contents



STATEDCAPITAL ATDECEMBER 31NUMBER OF SHARES
    
    
    (IN $ MILLIONS)ANNUALDIVIDEND
    
    CONVERTIBLE
    
    CONVERSION
    
    REDEMPTION
    
    REDEMPTION
    
    
    
    
    
    ISSUED ANDSERIES
    
    RATE
    
    INTO
    
    DATE
    
    DATE
    
    PRICE
    
    AUTHORIZED
    
    
    OUTSTANDING
    
    
    2006
    
    
    200515 (new AE)
    
    Floating
    
    Series 16 (new AF)
    
    Feb. 1, 2010
    
    At any time
    
    $25.50
    
    
    24,000,000
    
    
    
    1,914,218
    
    
    
    48
    
    
    
    4816 (new AF)
    
    4.40%
    
    Series 15 (new AE)
    
    Feb. 1, 2010
    
    Feb. 1, 2010
    
    $25.00
    
    
    24,000,000
    
    
    
    14,085,782
    
    
    
    352
    
    
    
    35217 (new AG)
    
    4.35%
    
    Series 18 (new AH)
    
    May 1, 2011
    
    May 1, 2011
    
    $25.00
    
    
    22,000,000
    
    
    
    10,051,751
    
    
    
    251
    
    
    
    35018 (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
    
    
    
    35020 (new AJ)
    
    Floating
    
    Series 19 (new AI)
    
    August 1, 2016
    
    At any time
    
    $25.50
    
    
    22,000,000
    
    
    
    
    
    
    
    
    
    
    
    1,100
    
    
    
    1,100
 Voting rights
  Entitlement to dividends
    Conversion features
  Redemption features
    Liquidation, dissolution or winding up
  Bell Canada debt securities
  WEIGHTED

    
    AT DECEMBER 31, 2006AVERAGEINTEREST RATE

    
    MATURITY
    
    
    (IN $ MILLIONS)Debentures and notes
    
    
    6.87
    %
    
    
    2007-2035
    
    
    
    7,025Debentures
    
    
    9.84
    %
    
    
    2041-2054
    
    
    
    700Subordinated debentures
    
    
    8.21
    %
    
    
    2026-2031
    
    
    
    275Total
    
    
    
    
    
    
    
    
    
    
    8,000
  §
    
    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.




---



##### Table of Contents



Ratings for BCE Inc. and Bell Canada securities
   §
    
    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).
   Commercial paper
  HIGHEST QUALITY
    
    
    LOWEST QUALITYOF SECURITIES
    
    
    OF SECURITIESRATED
    
    
    RATEDDBRS
    
    R-1 (high)
    
    
    DS&P
    
    A-1 (high)
    
    
    DMoodys
    
    
    P-1
    
    
    
    P-3
     COMMERCIAL PAPERCREDIT RATINGDBRS
    
    R-1 (low)S&P
    
    A-1 (low)Moodys
    
    
    P-2
   §
    
    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.
    Long-term debt
  HIGHEST QUALITY
    
    
    LOWEST QUALITYOF SECURITIES
    
    
    OF SECURITIESRATED
    
    
    RATEDDBRS
    
    AAA
    
    
    DS&P
    
    AAA
    
    
    DMoodys
    
    Aaa
    
    
    CFitch
    
    AAA
    
    
    D
   §
    
    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




---



##### Table of Contents



§
    
    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.
    BCE INC.
    
    
    BELL CANADA
    
    
    BELL CANADAUNSUBORDINATED
    
    
    UNSUBORDINATED
    
    
    SUBORDINATEDLONG-TERM DEBT
    
    
    LONG-TERM DEBT
    
    
    LONG-TERM DEBTDBRS
    
    A (low)
    
    
    A
    
    
    BBB (high)S&P
    
    BBB+
    
    
    A-
    
    
    BBB+Moodys
    
    Baa2
    
    Baa1
    
    Baa2Fitch
    
    BBB+
    
    BBB+
    
    BBB
   §
    
    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.
   §
    
    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.
    Preferred Shares
  HIGHEST QUALITY
    
    
    LOWEST QUALITYOF SECURITIES
    
    
    OF SECURITIESRATED
    
    
    RATEDDBRS
    
    Pfd-1 (high)
    
    
    DS&P
    
    P-1 (high)
    
    
    D
    PREFERRED SHARECREDIT RATINGDBRS
    
    Pfd-2 (low)S&P
    
    
    P-2
  §
    
    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.




---



##### Table of Contents



Outlook
  Trading of our securities
  BCE Inc. common shares
 VOLUME2006
    
    HIGH
    
    
    LOW
    
    
    TRADEDDecember
    
    $
    31.50
    
    
    $
    27.85
    
    
    
    100,311,684November
    
    $
    28.50
    
    
    $
    26.79
    
    
    
    65,343,412October
    
    $
    34.25
    
    
    $
    30.10
    
    
    
    103,465,748September
    
    $
    31.10
    
    
    $
    27.01
    
    
    
    86,785,489August
    
    $
    28.00
    
    
    $
    25.41
    
    
    
    50,769,722July
    
    $
    26.96
    
    
    $
    25.32
    
    
    
    35,786,736June
    
    $
    27.81
    
    
    $
    25.91
    
    
    
    46,138,711May
    
    $
    27.75
    
    
    $
    26.12
    
    
    
    48,550,885April
    
    $
    28.53
    
    
    $
    27.50
    
    
    
    34,133,692March
    
    $
    28.95
    
    
    $
    27.13
    
    
    
    54,161,271February
    
    $
    28.80
    
    
    $
    26.56
    
    
    
    62,246,216January
    
    $
    29.04
    
    
    $
    27.18
    
    
    
    57,586,682BCE
Inc. preferred shares  Series RVOLUME2006
    
    HIGH
    
    
    LOW
    
    
    TRADEDDecember
    
    $
    25.65
    
    
    $
    25.12
    
    
    
    1,514,084November
    
    $
    25.67
    
    
    $
    24.66
    
    
    
    29,973October
    
    $
    25.87
    
    
    $
    25.25
    
    
    
    41,404September
    
    $
    25.59
    
    
    $
    24.75
    
    
    
    137,037August
    
    $
    25.33
    
    
    $
    24.75
    
    
    
    36,395July
    
    $
    25.59
    
    
    $
    25.05
    
    
    
    45,585June
    
    $
    25.80
    
    
    $
    25.16
    
    
    
    41,402May
    
    $
    25.72
    
    
    $
    24.66
    
    
    
    49,442April
    
    $
    26.19
    
    
    $
    25.07
    
    
    
    50,936March
    
    $
    26.20
    
    
    $
    25.71
    
    
    
    102,660February
    
    $
    25.97
    
    
    $
    25.65
    
    
    
    164,565January
    
    $
    26.09
    
    
    $
    25.78
    
    
    
    468,330BCE Inc. preferred shares  Series SVOLUME2006
    
    HIGH
    
    
    LOW
    
    
    TRADEDDecember
    
    $
    25.09
    
    
    $
    24.70
    
    
    
    472,130November
    
    $
    24.98
    
    
    $
    24.51
    
    
    
    27,150October
    
    $
    25.35
    
    
    $
    24.80
    
    
    
    87,660September
    
    $
    25.00
    
    
    $
    24.28
    
    
    
    61,520August
    
    $
    25.05
    
    
    $
    24.25
    
    
    
    55,910July
    
    $
    25.15
    
    
    $
    24.76
    
    
    
    16,875June
    
    $
    25.25
    
    
    $
    25.11
    
    
    
    26,212May
    
    $
    25.30
    
    
    $
    25.11
    
    
    
    28,857April
    
    $
    25.25
    
    
    $
    25.10
    
    
    
    142,599March
    
    $
    25.30
    
    
    $
    25.04
    
    
    
    58,656February
    
    $
    25.25
    
    
    $
    25.05
    
    
    
    279,511January
    
    $
    25.39
    
    
    $
    25.05
    
    
    
    103,978BCE
Inc. preferred shares  Series TVOLUME2006
    
    HIGH
    
    
    LOW
    
    
    TRADEDDecember
    
    $
    25.85
    
    
    $
    25.01
    
    
    
    594,453November
    
    $
    25.50
    
    
    $
    25.00
    
    
    
    20,515BCE
Inc. preferred shares  Series YVOLUME2006
    
    HIGH
    
    
    LOW
    
    
    TRADEDDecember
    
    $
    25.00
    
    
    $
    24.75
    
    
    
    2,200November
    
    $
    25.20
    
    
    $
    24.70
    
    
    
    11,300October
    
    $
    25.48
    
    
    $
    24.41
    
    
    
    15,526September
    
    $
    24.88
    
    
    $
    24.15
    
    
    
    9,175August
    
    $
    25.00
    
    
    $
    24.77
    
    
    
    4,446July
    
    $
    25.20
    
    
    $
    25.00
    
    
    
    9,045June
    
    $
    25.29
    
    
    $
    24.95
    
    
    
    13,997May
    
    $
    25.44
    
    
    $
    25.01
    
    
    
    39,668April
    
    $
    25.39
    
    
    $
    25.16
    
    
    
    44,060March
    
    $
    25.44
    
    
    $
    25.10
    
    
    
    5,585February
    
    $
    25.65
    
    
    $
    25.10
    
    
    
    6,594January
    
    $
    25.60
    
    
    $
    25.10
    
    
    
    9,447BCE
Inc. preferred shares  Series ZVOLUME2006
    
    HIGH
    
    
    LOW
    
    
    TRADEDDecember
    
    $
    25.79
    
    
    $
    25.25
    
    
    
    539,000November
    
    $
    25.57
    
    
    $
    23.72
    
    
    
    285,239October
    
    $
    25.80
    
    
    $
    25.10
    
    
    
    47,045September
    
    $
    25.98
    
    
    $
    25.01
    
    
    
    78,399August
    
    $
    25.85
    
    
    $
    25.01
    
    
    
    26,681July
    
    $
    26.00
    
    
    $
    25.25
    
    
    
    35,178June
    
    $
    26.20
    
    
    $
    25.45
    
    
    
    307,021May
    
    $
    26.74
    
    
    $
    25.01
    
    
    
    317,400April
    
    $
    26.25
    
    
    $
    25.21
    
    
    
    45,480March
    
    $
    26.50
    
    
    $
    25.85
    
    
    
    138,910February
    
    $
    26.35
    
    
    $
    25.40
    
    
    
    47,850January
    
    $
    26.55
    
    
    $
    25.60
    
    
    
    36,615




---



##### Table of Contents



BCE Inc. preferred shares  Series AA
 VOLUME2006
    
    HIGH
    
    
    LOW
    
    
    TRADEDDecember
    
    $
    25.47
    
    
    $
    25.21
    
    
    
    1,380,470November
    
    $
    25.39
    
    
    $
    25.03
    
    
    
    87,793October
    
    $
    25.61
    
    
    $
    24.96
    
    
    
    80,591September
    
    $
    25.73
    
    
    $
    25.14
    
    
    
    37,232August
    
    $
    25.48
    
    
    $
    25.02
    
    
    
    89,728July
    
    $
    25.65
    
    
    $
    25.20
    
    
    
    78,289June
    
    $
    25.74
    
    
    $
    25.25
    
    
    
    675,784May
    
    $
    25.55
    
    
    $
    25.01
    
    
    
    140,256April
    
    $
    25.85
    
    
    $
    25.35
    
    
    
    93,789March
    
    $
    25.83
    
    
    $
    25.44
    
    
    
    294,413February
    
    $
    25.92
    
    
    $
    25.46
    
    
    
    148,853January
    
    $
    26.10
    
    
    $
    25.60
    
    
    
    273,951BCE Inc. preferred shares  Series ACVOLUME2006
    
    HIGH
    
    
    LOW
    
    
    TRADEDDecember
    
    $
    26.00
    
    
    $
    25.42
    
    
    
    2,162,825November
    
    $
    25.65
    
    
    $
    25.15
    
    
    
    89,946October
    
    $
    25.98
    
    
    $
    25.25
    
    
    
    134,733September
    
    $
    26.17
    
    
    $
    25.51
    
    
    
    44,705August
    
    $
    26.53
    
    
    $
    25.18
    
    
    
    47,660July
    
    $
    25.89
    
    
    $
    25.15
    
    
    
    115,246June
    
    $
    25.97
    
    
    $
    25.58
    
    
    
    546,080May
    
    $
    27.50
    
    
    $
    24.75
    
    
    
    246,945April
    
    $
    26.25
    
    
    $
    25.35
    
    
    
    54,680March
    
    $
    26.25
    
    
    $
    25.60
    
    
    
    520,236February
    
    $
    26.30
    
    
    $
    25.50
    
    
    
    205,760January
    
    $
    26.60
    
    
    $
    25.50
    
    
    
    54,356Bell
Canada preferred shares  Series 15 (exchanged effective January 31, 2007 for BCE new
preferred shares  Series AE)VOLUME2006
    
    HIGH
    
    
    LOW
    
    
    TRADEDDecember
    
    $
    25.09
    
    
    $
    24.80
    
    
    
    4,205November
    
    $
    25.09
    
    
    $
    24.50
    
    
    
    6,112October
    
    $
    25.68
    
    
    $
    24.74
    
    
    
    12,925September
    
    $
    24.89
    
    
    $
    24.41
    
    
    
    5,920August
    
    $
    25.25
    
    
    $
    24.75
    
    
    
    7,801July
    
    $
    25.00
    
    
    $
    24.75
    
    
    
    29,200June
    
    $
    25.15
    
    
    $
    24.72
    
    
    
    6,655May
    
    $
    25.85
    
    
    $
    24.80
    
    
    
    70,998April
    
    $
    25.90
    
    
    $
    24.97
    
    
    
    14,123March
    
    $
    25.25
    
    
    $
    24.75
    
    
    
    9,411February
    
    $
    25.55
    
    
    $
    24.90
    
    
    
    11,600January
    
    $
    25.60
    
    
    $
    25.15
    
    
    
    5,327Bell
Canada preferred shares  Series 16 (exchanged effective January 31, 2007 for BCE new preferred
shares  Series AF)VOLUME2006
    
    HIGH
    
    
    LOW
    
    
    TRADEDDecember
    
    $
    25.70
    
    
    $
    25.05
    
    
    
    101,885November
    
    $
    25.69
    
    
    $
    24.67
    
    
    
    19,609October
    
    $
    25.75
    
    
    $
    24.90
    
    
    
    184,308September
    
    $
    25.51
    
    
    $
    24.90
    
    
    
    62,179August
    
    $
    25.05
    
    
    $
    24.91
    
    
    
    164,130July
    
    $
    25.50
    
    
    $
    24.90
    
    
    
    101,944June
    
    $
    25.25
    
    
    $
    24.95
    
    
    
    407,349May
    
    $
    25.80
    
    
    $
    24.62
    
    
    
    73,449April
    
    $
    25.78
    
    
    $
    24.00
    
    
    
    19,797March
    
    $
    26.20
    
    
    $
    25.43
    
    
    
    19,076February
    
    $
    25.99
    
    
    $
    25.50
    
    
    
    11,789January
    
    $
    26.30
    
    
    $
    25.66
    
    
    
    17,692Bell
Canada preferred shares  Series 17 (exchanged effective January 31, 2007 for BCE new preferred
shares  Series AG)VOLUME2006
    
    HIGH
    
    
    LOW
    
    
    TRADEDDecember
    
    $
    25.73
    
    
    $
    25.05
    
    
    
    241,300November
    
    $
    25.51
    
    
    $
    25.05
    
    
    
    30,262October
    
    $
    25.69
    
    
    $
    25.10
    
    
    
    53,751September
    
    $
    25.45
    
    
    $
    24.35
    
    
    
    160,699August
    
    $
    25.10
    
    
    $
    24.21
    
    
    
    38,885July
    
    $
    25.10
    
    
    $
    24.75
    
    
    
    41,054June
    
    $
    25.40
    
    
    $
    24.85
    
    
    
    650,400May
    
    $
    25.50
    
    
    $
    25.01
    
    
    
    83,890April
    
    $
    25.20
    
    
    $
    24.81
    
    
    
    302,534March
    
    $
    25.70
    
    
    $
    25.00
    
    
    
    84,220February
    
    $
    25.75
    
    
    $
    25.35
    
    
    
    22,465January
    
    $
    25.90
    
    
    $
    25.11
    
    
    
    46,739Bell
Canada preferred shares  Series 18 (exchanged effective January 31, 2007 for BCE new preferred
shares  Series AH)VOLUME2006
    
    HIGH
    
    
    LOW
    
    
    TRADEDDecember
    
    $
    25.55
    
    
    $
    25.10
    
    
    
    24,900November
    
    $
    25.40
    
    
    $
    25.05
    
    
    
    27,130October
    
    $
    25.40
    
    
    $
    25.13
    
    
    
    102,470September
    
    $
    25.17
    
    
    $
    25.07
    
    
    
    882,930August
    
    $
    25.15
    
    
    $
    25.05
    
    
    
    212,984July
    
    $
    25.20
    
    
    $
    25.00
    
    
    
    10,965June
    
    $
    25.15
    
    
    $
    25.05
    
    
    
    175,400May
    
    $
    25.30
    
    
    $
    25.05
    
    
    
    171,925




---



##### Table of Contents



Bell
Canada preferred shares  Series 19 (exchanged effective January 31, 2007 for BCE new preferred
shares  Series AI)
 VOLUME2006
    
    HIGH
    
    
    LOW
    
    
    TRADEDDecember
    
    $
    26.24
    
    
    $
    25.01
    
    
    
    525,828November
    
    $
    26.25
    
    
    $
    25.06
    
    
    
    125,527October
    
    $
    26.49
    
    
    $
    25.30
    
    
    
    99,832September
    
    $
    25.80
    
    
    $
    25.03
    
    
    
    1,033,049August
    
    $
    25.10
    
    
    $
    24.94
    
    
    
    2,374,749July
    
    $
    25.29
    
    
    $
    24.75
    
    
    
    1,847,355June
    
    $
    25.33
    
    
    $
    24.90
    
    
    
    306,157May
    
    $
    25.55
    
    
    $
    24.52
    
    
    
    112,327April
    
    $
    25.59
    
    
    $
    25.01
    
    
    
    41,484March
    
    $
    26.25
    
    
    $
    25.00
    
    
    
    220,046February
    
    $
    26.25
    
    
    $
    25.00
    
    
    
    254,087January
    
    $
    26.25
    
    
    $
    25.43
    
    
    
    32,085
 
         2006
    
    
    2005
    
    
    2004Common
    
    $
    1.32
    
    
    $
    1.32
    
    
    $
    1.20Preferred 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
  2006
    (1)
    
    2005
    
    
    2004Series 15 (exchanged for BCE Inc. Series AE)
    
    $
    0.96979
    
    
    $
    0.80885
    
    
    $
    1.375Series 16 (exchanged for BCE Inc. Series AF)
    
    $
    1.10
    
    
    $
    1.10
    
    
    
    Series 17 (exchanged for BCE Inc. Series AG)
    
    $
    1.143755
    
    
    $
    1.31252
    
    
    $
    1.31252Series 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 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.
    §
    
    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.




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##### Table of Contents



§
    
    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.
      
    Key acquisitions and dispositions
 Bell Aliant




---



##### Table of Contents



Completion of Bell Globemedia reorganization
    Investment in Clearwire Corporation
  Business highlights
 2005 highlights
 Sale of Telesat
  Exchange of interests in Mobile Satellite Ventures, L.P. and TerreStar Networks Inc. for shares
of SkyTerra Communications, Inc. and Motient Corporation
    Strategic announcements
 Normal course issuer bid




---



##### Table of Contents



Simplification of corporate structure and approval of Bell Canadas plan of
arrangement for exchange of Bell Canada preferred shares
    Other developments
 Labour settlement
    §
    
    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.




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##### Table of Contents



§
    
    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.




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##### Table of Contents



Businesses
 
     Service quality 
 Broadband acceleration 
 Wireless growth 
 Business sector profitability 
 Productivity improvements 
   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.




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##### Table of Contents



§
    
    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.
  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.




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##### Table of Contents



Transforming our cost structure
   §
    
    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.
   §
    
    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.
 
  Residential, Business, Bell Aliant Other Bell Canada
  Products and services
  §
    
    local and access services§
    
    long distance services§
    
    wireless services§
    
    data services§
    
    video services§
    
    terminal sales and other.
 Local and access services
   §
    
    VAS, such as call display, call waiting and voicemail§
    
    services provided to competitors accessing our local network§
    
    connections to and from our local telephone service customers for competing long distance
service providers§
    
    subsidies from the National Contribution Fund to support local service in high-cost areas.
 The Regulatory Environment we
operate in  Key regulatory issues.
  Long distance services




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##### Table of Contents



Wireless services
  Bell Mobility, Solo Mobile Aliant Mobility
  §
    
    95% of the population of Ontario and Québec§
    
    approximately 90% of the population of Atlantic Canada§
    
    the major cities in the Provinces of Alberta and British Columbia.
 Data services
   Sympatico Optimax,
   Video services
  §
    
    direct-to-home (DTH) satellite we have been offering DTH video services nationally since
1997 and currently use four satellites: Nimiq 1, Nimiq 2, Nimiq 3, and Nimiq 4-Interim. Telesat
operates or directs the operation of these satellites.§
    
    VDSL this allows us to expand our reach to the multiple-dwelling unit (MDU) market. By the
end of 2006, we had signed access agreements with a total of 988 buildings and had
provisioned 514 of them.§
    
    hybrid fibre co-axial cable on August 2,2005, we acquired the residential assets of Cable
VDN, a Montréal-based cable company selling residential analog and digital TV. Cable VDN has
over 14,600 residential cable subscribers in the Montréal area, representing an approximate
28% penetration within its current footprint. We believe that Cable VDN provides us with a
more cost effective way of addressing the MDU market in Montréal, compared to VDSL, allowing
for quicker access to smaller, harder to reach MDUs.




---



##### Table of Contents



Terminal sales and other
  §
    
    renting, selling and maintaining business terminal equipment§
    
    wireless handset and video STB sales§
    
    network installation and maintenance services for third parties§
    
    IT services provided by Bell Aliant.
 Wholesale business
  Marketing and distribution channels
  §
    
    call centre representatives§
    
    447 Bell
WorldTM/EspaceBell and Bell Mobilityretail locations, of which 201
are corporately-owned stores with dealers owning the rest§
    
    over 3,800 retail points of presence through both national retailers such as Future Shop,
Best Buy, Wireless Wave, T-Booth and Costco and regional retailers such as London Drugs and
Visions in the West and Audiotronics/Dumoulin in Québec, in addition to a number of
independent retailers in all regions§
    
    the bell.ca website.
        Networks
    §
    
    national transport for voice and data, including Internet traffic§
    
    urban and rural infrastructures for delivering services to customers§
    
    national wireless networks that provide voice and data services§
    
    satellite and VDSL delivery of video services to customers.




---



##### Table of Contents



Business highlights  2006 highlights  Key acquisitions and dispositions.
 Telesat
   Business highlights  2006 highlights 
Key acquisitions and dispositions.




---



##### Table of Contents



Competitive Environment
   The Regulatory
Environment we operate in
     §
    
    Allstream (a division of MTS Allstream Inc.)§
    
    Cogeco Cable Inc. (a subsidiary of Cogeco Inc.) (Cogeco), in
parts of Ontario and Québec§
    
    Eastlink, in the Maritime provinces§
    
    Futureway Communications Inc., in the greater Toronto area§
    
    Maskatel Inc., in Québec§
    
    Primus Telecommunications Canada Inc. (Primus)§
    
    Rogers Cable Inc. (Rogers Cable)§
    
    Shaw Communications Inc. (Shaw), in Western Canada§
    
    TELUS Corporation (TELUS)§
    
    Vidéotron Itée (Vidéotron), in Québec§
    
    Vonage Canada (a division of Vonage Holdings Corp.).
  §
    
    Allstream§
    
    Cogeco, in parts of Ontario and Québec§
    
    dial-around providers, such as Yak and Looney Call, which are divisions of YAK
Communications (Canada) Inc.§
    
    Eastlink, in the Maritime provinces§
    
    prepaid long distance providers, such as Group of Goldline§
    
    Primus§
    
    Rogers Cable§
    
    TELUS§
    
    Vidéotron, in Québec§
    
    Vonage Canada.
  The Regulatory Environment we operate in  Key regulatory issues  Wireless number portability,




---



##### Table of Contents



The
Regulatory Environment we operate in  Consultations  Additional mobile spectrum,
   §
    
    Rogers Wireless Inc. (including its subsidiary Fido Inc.) (Rogers Wireless)§
    
    TELUS Mobility (a business unit of TELUS).
     Sympatico
  §
    
    Cogeco§
    
    Eastlink, in the Maritime provinces§
    
    Persona Communications Corp.§
    
    Rogers Cable§
    
    Vidéotron.




---



##### Table of Contents



The Regulatory
Environment we operate in  Broadcasting Act
   §
    
    Cogeco§
    
    Eastlink, in the Maritime Provinces§
    
    Persona Communications Corp.§
    
    Rogers Cable§
    
    Shaw§
    
    Vidéotron.




---



##### Table of Contents



Regulatory Environment
    
   Telecom
Policy Review Panels final report
  Telecommunications Act.
  Policy direction
  Regulatory Framework for Voice
Communications Services Using Internet Protocol,
 An Act to Amend the Competition Act
 Bell Canada Act
 Bell Canada Act,
 Telecommunications Act
 Telecommunications Act




---



##### Table of Contents



Telecommunications Act, Telecommunications Act
 Telecommunications Act
 §
    
    they must be eligible to operate as Canadian carriers§
    
    they must be Canadian owned and controlled corporations. Direct ownership must be at least
80% Canadian and indirect ownership, such as indirect ownership by BCE Inc., must be at least
662/3% Canadian§
    
    they must not otherwise be foreign controlled§
    
    at least 80% of the members of their board of directors must be Canadian.
  An Act to Amend the Telecommunications Act,
 Broadcasting Act
 Broadcasting Act Broadcasting Act
 §
    
    protect and strengthen the cultural, political, social and economic fabric of Canada§
    
    encourage the development of Canadian expression.
  §
    
    it must be Canadian owned and controlled. At least 80% of all outstanding and issued voting shares and at least 80% of the votes must be beneficially owned directly by Canadians§
    
    it must not otherwise be controlled by non-Canadians§
    
    at least 80% of the board of directors, as well as the chief executive officer, must be
Canadian§
    
    at least 662/3% of all outstanding and issued voting shares, and at least
662/3% of the votes of the parent corporation, must be beneficially owned and
controlled, directly or indirectly, by Canadian interests.
     Radiocommunication Act
 Radiocommunication Act.
 §
    
    radio communication in Canada is developed and operated efficiently§
    
    the set up of, and any changes to, radio stations are implemented in an orderly manner.
  §
    
    issue radio licences§
    
    set technical standards for radio equipment§
    
    establish licensing conditions§
    
    decide how radio spectrum is allocated and used.
 Radiocommunication Regulations, Telecommunications Act.
 Radiocommunication Act Radiocommunication Act




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##### Table of Contents



Commitment under the CRTC deferral account mechanism
    Price cap framework review
    Review of regulatory framework for wholesale services
  Competitor Digital Network (CDN) services
  §
    
    the prices for all new CDN services were applied on a going-forward basis, as of the date of
the decision, and Bell Canada and Bell Aliant will be relieved of some of their obligations
from the deferral account for the revenue losses from this decision§
    
    Bell Canadas and Bell Aliants obligations under the deferral account will also be reduced
for applying lower rates retroactively for the CDN access components that were tariffed at
interim rates prior to the decision.
  Forbearance from regulation of local exchange services




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Competition Act
   Winback rules
   Canadian Charter of Rights and Freedoms
  Regulatory issues related to the
implementation of wireless number portability.
  Wireless number portability




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Regulatory issues related to the implementation of wireless
number portability  Follow-up to Public Notice 2006-3,
 Retail quality of service indicators
  force majeure
   Application to change bundling rules
    Bell ExpressVu




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Licences and changes to wireless regulation
 Licences
 Radiocommunication Act.
  Wireless and radio towers
  Additional mobile spectrum




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Legal Proceedings
   Purported class action concerning wireless access charges
 Class Actions Act
   Competition Bureaus investigation concerning system access fees
 Competition Act Competition Act,
  Competition Act.
 Purported class action concerning Bell Mobility billing system
   Purported class action concerning Bell ExpressVu late payment charges
 Class Proceedings Act,
 Criminal Code (Canada).
 Criminal Code.




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##### Table of Contents



Vidéotron litigation
  Litigation concerning Bell Distribution Inc. (BDI) decision not to proceed with a
Wireless Income Fund transaction
 Bell World
 Purported class action concerning Bell Canada and Bell Mobility late payment charges
   Teleglobe lending syndicate lawsuit
    §
    
    the actions and representations of BCE Inc. and its management, in effect, amounted to a
legal commitment that BCE Inc. would repay the advances§
    
    the court should disregard Teleglobe Inc. as a corporate entity and hold BCE Inc. responsible
to repay the advances as Teleglobes alter ego.




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BNP Paribas (Canada) lawsuit
  §
    
    oppression against the former directors; and§
    
    breach of contract against BCE Inc.
    Teleglobe unsecured creditors lawsuit
  §
    
    breach of an alleged funding commitment of BCE Inc. towards the debtors§
    
    misrepresentation by BCE Inc., and§
    
    breach and aiding and abetting breaches of fiduciary duty by the defendants.
   VarTec lawsuit
  Securities
Exchange Act
    §
    
    to dismiss the action because of improper venue and on the merits for failure to state a
claim for which relief may be granted and/or failure to plead fraud claims with sufficient
particularity§
    
    to strike VarTecs jury demand.
 Kroll restructuring lawsuit
   Canada Business
Corporations Act
 Canada Business Corporations Act,




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Teleglobe plan administrator lawsuit
 Canada Business Corporations Act. Canada Business Corporations
Act.




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Assumptions and Risks
   Canadian economic assumptions
 §
    
    Canadian GDP growth  essentially in line with GDP growth in 2006, consistent with
estimates set by the Conference Board of Canada§
    
    Canadian business prime rate and Consumer Price Index (estimated by Statistics Canada)  to
decline from their 2006 year-end levels.
 Canadian market assumptions
 §
    
    revenue growth in the overall Canadian telecommunications market  in line with the expected Canadian GDP growth§
    
    residential wireline voice services revenues  to continue to decrease due to wireless
substitution, competition from cable companies and other factors such as e-mail and instant
messaging substitution§
    
    intense wireline competition in both the business and residential telecommunications markets  to continue mainly from cable companies§
    
    growth in revenues for the Canadian wireless and video markets   similar to the rate of growth in 2006§
    
    growth in revenues for the Canadian Internet market  slightly lower than the rate of growth
in 2006.
 Operational and financial assumptions
 Operational
 §
    
    growth in the number of our wireless, video and high-speed Internet subscribers as well as
higher ARPU for these services§
    
    the rate of losses in our residential NAS to stabilize compared to 2006.
 Financial
  §
    
    the incurrence of restructuring costs related to employee reductions in certain areas of the
business and staff relocations to reduce the level of leased office space§
    
    the increase in amortization expense as a result of capital spending that has been higher
than asset retirements over the past few years§
    
    BCEs effective tax rate to increase as the 2006 effective tax rate benefited from one-time
adjustments that are not applicable in 2007§
    
    no significant escalation in cash taxes as we accelerate the use of Bell Canadas research
and development tax credits.
  §
    
    total net benefit plans cost to decrease mainly as a result of improved returns on plan
assets and changes to benefit plans§
    
    funding of our total net benefit plans to decrease due to improved returns on plan assets
and contributions made in 2006§
    
    capital intensity targeted at levels similar to 2006§
    
    further productivity improvements related to internal process redesign and supply
transformation initiatives.
 Assumptions about transactions
 §
    
    BCE Inc. to repurchase up to 5% of its common shares under its previously announced
normal course issuer bid§
    
    BCE Inc. to close the previously announced sale of Telesat in mid-2007.
  The Competitive Environment we operate in The
Regulatory Environment we operate in.
 Risk
management practices
   Economic and market conditions




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Strategies and plans
  §
    
    respond by adapting to these changes and making any necessary shifts in employee skills. If
our management, processes or employees are not able to adapt to these changes, our business
and financial results could be materially and negatively affected§
    
    invest capital to implement our strategies and operating priorities.
   Transforming our cost structure and containing capital intensity
    Anticipating technological change and investing in new technologies, products and
services
     Events affecting our networks




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Software and system upgrades
  Renegotiating labour agreements
         About BCE  Our employees.
 Epidemics, pandemics and other health risks
 Events affecting our networks
 Health concerns about radio frequency emissions
  Potential legislation restricting in-vehicle use of cellphones
  Bell ExpressVu




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Telesat
   R. v.
DArgy and Theriault (DArgy Case) Radiocommunication Act Charter.
 Liquidity
    §
    
    from cash generated by our operations or investments§
    
    by borrowing from commercial banks§
    
    through debt and equity offerings in the capital markets§
    
    by selling or otherwise disposing of assets (including accounts receivable).
       §
    
    limit our ongoing capital expenditures§
    
    limit our investment in new businesses§
    
    limit the size of our share buy-back program§
    
    try to raise additional capital by selling or otherwise disposing of assets.




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Litigation, regulatory matters and changes in laws
   The
Regulatory Environment we operate in.
 Pension fund contributions
  §
    
    actual returns on pension plan assets§
    
    long-term interest rates§
    
    changes in pension regulations.
  BCE Inc.s sources of income and assets
  Dividend Policy
 Anticipating technological change and investing in
new technologies, products and services Liquidity The Competitive
Environment we operate in
 Bell Aliant cash distributions and tax treatment of income trusts




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Stock market volatility
  Acquisitions and dispositions
   Telesat
 Satellite industry risks
   Launch failures
  Construction and launch delays
  Market for satellite insurance




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Discussion and Analysis
 Managements Discussion and Analysis




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##### Table of Contents



Information
   §
    
    this AIF, together
with any document, or
the relevant
pages of any
document, incorporated by reference into
it§
    
    BCE Inc.s most
recent Business
Update and
annual report,
which includes the comparative
financial statements and managements
discussion and analysis for the most
recently completed financial year
together with the accompanying auditors
report§
    
    any interim
financial statements
that were
filed after
the financial statements for
the most recently completed financial
year§
    
    the most recent
BCE Inc.
notice of
annual meeting
and management proxy
circular, which contains more information
about directors and officers
remuneration and indebtedness, principal
holders of BCE Inc.s securities, options
to purchase securities and interests of
insiders in material transactions, where
applicable§
    
    any other
documents that
are incorporated
by reference
into a preliminary
short form prospectus or a short form
prospectus and are not listed above.
 
             Shareholder inquiries
    
    1-800-561-0934Investor relations
    
    1-800-339-6353




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Audit Committee Information
    NAME
    
    INDEPENDENT?
    
    FINANCIALLY LITERATE?T.C. ONeill  Chair
    
    Yes
    
    YesA. Bérard
    
    Yes
    
    YesA.S. Fell
    
    Yes
    
    YesJ. Maxwell
    
    Yes
    
    YesV.L. Young
    
    Yes
    
    Yes
  T.C. ONeill  Chair
  A. Bérard
  A.S. Fell
  J. Maxwell
  V.L. Young
            §
    
    establishing a process for determining whether various audit and other services provided by
the external auditors affect its independence
 §
    
    identifying the services that the external auditors may and may not provide to BCE Inc. and
its subsidiaries
 §
    
    pre-approving all services to be provided by the external auditors of BCE Inc. 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 auditors independence is
maintained.




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(IN $ MILLIONS)
    
    2006
    
    
    2005Audit fees
    
    $
    13.6
    
    
    $
    10.0Audit-related fees
    
    $
    5.2
    
    
    $
    1.7Tax fees
    
    $
    0.9
    
    
    $
    1.4Other fees
    
    
    
    
    
    
    Total
    
    $
    19.7
    
    
    $
    13.1
    *
 
 *
    
    Restated to exclude fees billed to BCE Inc. for work related to CTVglobemedia Inc. (formerly
Bell Globemedia Inc.). Audit fees
  Audit-related fees
  Tax fees
  Other fees




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Audit Committee Charter
          A. Financial reporting and control
  a.
    
    major issues regarding accounting principles and financial
statement presentation, including any significant changes in the
Corporations selection or application of accounting principles,
and major issues as to the adequacy of the Corporations internal
controls and any special audit steps adopted in light of material
control deficiencies;b.
    
    analyses prepared by management and/or the shareholders auditors
setting forth significant financial reporting issues and judgments
made in connection with the preparation of the financial statements, including analyses of the effects of alternative generally
accepted accounting principles methods on the financial statements when such alternatives have been selected in the current
reporting period;c.
    
    the effect of regulatory and accounting initiatives, as well as
off-balance sheet structures, on the financial statements of
the Corporation;d.
    
    the type and presentation of information to be included in earnings
press releases (including any use of pro-forma or adjusted non-
generally accepted accounting principles, information).
  a.
    
    the annual and interim consolidated financial statements, the
Corporations disclosure under Management Discussion and
Analysis, Annual Information Form, earnings press releases,
financial information and earnings guidance provided to analysts and rating agencies and the
integrity of the financial reporting of the Corporation;
 
    
    In addition to the role of the Audit Committee to make recommendations to the Board of
Directors, where the members of the Audit Committee consider that it is appropriate and in
the best interest of the Corporation, the interim consolidated financial statements, the
interim Corporations disclosure under Management Discussion and Analysis for interim
period and interim earnings press releases and earnings guidance, may also be approved on
behalf of the Board of Directors by the Audit Committee, provided that such approval is
subsequently reported to the Board of Directors at its next meeting;
 b.
    
    any audit problems or difficulties and managements response
thereto, including any restrictions on the scope of the activities of
the shareholders auditors or access to requested information and
any significant disagreements with management.
  a.
    
    all critical accounting policies and practices used by
the Corporation;b.
    
    all material alternative treatments of financial information within
generally accepted accounting principles that have been discussed
with management, including the ramifications of the use of such
alternate treatments and disclosures and the treatment preferred by
the shareholders auditors; andc.
    
    other material written communications between the share holders
auditors and management, and discuss such report with the
shareholders auditors.
 B. Oversight of the shareholders auditors




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a.
    
    the independence of the shareholders auditors, including whether
the shareholders auditors performance of permitted non-audit
services is compatible with the shareholders auditors independence;b.
    
    obtaining from the shareholders auditors a written statement
(i) delineating all relationships between the shareholders auditors and the Corporation; (ii)
assuring that lead audit partner rotation is carried out, as required by law; and (iii)
delineating any other relationships that may adversely affect the independence of the
shareholders auditors; andc.
    
    the evaluation of the lead audit partner, taking into account the
opinions of management and internal audit.
  a.
    
    the shareholders auditors internal quality-control procedures;b.
    
    any material issues raised by the most recent internal
quality-control review, or peer review of the shareholders auditors firm,
or by any inquiry or investigation by governmental or professional
authorities, within the preceding five years, respecting one or more
independent audits carried out by the shareholders auditors firm,
and any steps taken to deal with any such issues.
    C. Oversight of internal audit
  a.
    
    the appointment and mandate of internal audit, including
the responsibilities, budget and staffing of the Corporations
internal audit;b.
    
    discuss with the head of internal audit the scope and performance
of the internal audit, including a review of the annual internal
audit plan, and whether there are any restrictions or limitations on
internal audit;c.
    
    obtain periodic reports from the head of internal audit regarding
internal audit findings, including the Corporations internal
controls, and the Corporations progress in remedying any material
control deficiencies.
  D. Oversight of the Corporations internal control system
  a.
    
    the Corporations internal control system;b.
    
    compliance with the policies and practices of the Corporation
relating to business ethics;c.
    
    compliance by Directors, Officers and other management personnel
with the Corporations Disclosure Policy; andd.
    
    the relationship of the Audit Committee with other committees
of the Board of Directors, management and the Corporations
consolidated subsidiaries audit committees.




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E. Oversight of the Corporations risk management
  a.
    
    the Corporations processes for identifying, assessing and managing
risk; andb.
    
    the Corporations major financial risk exposures and the steps the
Corporation has taken to monitor and control such exposures.
 F. Oversight of the Corporations environmental risks
   G. Compliance with legal requirements




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Glossary
   lxRTT
 2006 NCIB
 3G
 360networks
 AIF
 Aliant
 Aliant Telecom
 Allstream
 AMPs
 ARPU
 Audit Committee
 BCE
 BCE new preferred shares
 BCH
 BCI
 BDI
 Bell Aliant LP
 Bell Canada preferred shares
 Bell ExpressVu
 Bell Globemedia
 Bell Mobility
 Bell Nordiq
 Bell Technical Solutions
 Cable VDN
 Call-Net
 CDN
 CEP
 CGI
 Charter
 CIBC Mellon
 CIRB
 Cisco
 Clearwire
 CLEC
 Cogeco
 Computershare
 Connexim
 CRTC
 CSAs
 CTEA
 CTV
 CTVglobemedia
 DBRS
 DSL
 DTH
 EBITDA
 Emergis
 Enterprise
 Entourage
 ERIP
 EVDO
 Expertech
 FETCO
 Fitch
 FTTN
 GeSI
 Group
Telecom
 HD
 ICFR
 ICT
 Inukshuk
 IP
 IP PBX
 IPTV
 IS/IT
 ISP
 IT
 iTV
 Kbps
 Mbps
 MDU
 Microsoft
 Mixed CSAs
 Moodys
 Motient
 MPLS
 MSV
 MTNs
 MTS
 NAS
 NLOS
 NorthernTel
 Northwestel
 NYSE
 Panel
 Primus
 PSP Investments
 PVRs
 ROBTv
 Rogers
 Rogers Cable
 Rogers Wireless
 S&P
 SAFs
 SaskTel
 SFUs
 Shaw
 SkyTerra
 SMB




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Smiston
 STB
 Télébec
 Teleglobe
 Telesat
 TELUS
 TerreStar
 TSX
 VarTec
 VAS
 VCIO
 VDSL
 VER
 Vidéotron
 VoIP
 VPN
 WDIF
 Yellow Pages Group




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SIGNATURES
  BCE Inc.By:
    (signed) Siim A. VanaseljaSiim A. VanaseljaChief Financial OfficerDate: March 14, 2007




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LIST OF EXHIBITS
TO FORM 40-F
 Bell Canada Enterprises 2006 Annual Report
    
    Exhibit 99.1Consent of Independent Registered Chartered Accountants
    
    Exhibit 99.2Reconciliation of Canadian GAAP to United States GAAP
    
    Exhibit 99.3Report of Independent Registered Chartered Accountants
on Reconciliation of Canadian GAAP to United States
GAAP
    
    Exhibit 99.4Certifications of the Chief Executive Officer and the
Chief Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
    
    Exhibit 99.31Certification of the Chief Executive Officer and the
Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
    
    Exhibit 99.32