Management's discussion and analysis - Form 6-K

Management's discussion and analysis

In this management's discussion and analysis (MD&A), we, us, our, BCE and the company mean, as the context may require, either BCE Inc. or, collectively, BCE Inc., Bell Canada, their subsidiaries, joint arrangements and associates. Bell means, as the context may require, either Bell Canada or, collectively, Bell Canada, its subsidiaries, joint arrangements and associates.

All amounts in this MD&A are in millions of Canadian dollars, except where noted. Please refer to section 9, Non-GAAP financial measures, other financial measures and key performance indicators (KPIs) on pages 36 to 40 for a list of defined non-GAAP financial measures, other financial measures and KPIs.

Please refer to BCE's unaudited consolidated financial statements for the second quarter of 2022 (Q2 2022 Financial Statements) when reading this MD&A. We also encourage you to read BCE's MD&A for the year ended December 31, 2021 dated March 3, 2022 (BCE 2021 Annual MD&A) as updated in BCE's MD&A for the first quarter of 2022 dated May 4, 2022 (BCE 2022 First Quarter MD&A). In preparing this MD&A, we have taken into account information available to us up to August 3, 2022, the date of this MD&A, unless otherwise stated.

You will find additional information relating to BCE, including BCE's annual information form for the year ended December 31, 2021 dated March 3, 2022 (BCE 2021 AIF) and recent financial reports, including the BCE 2021 Annual MD&A and the BCE 2022 First Quarter MD&A, on BCE's website at BCE.ca, on SEDAR at sedar.com and on EDGAR at sec.gov.

Documents and other information contained in BCE's website or in any other site referred to in BCE's website or in this MD&A are not part of this MD&A and are not incorporated by reference herein.

This MD&A comments on our business operations, performance, financial position and other matters for the three months (Q2) and six months (YTD) ended June 30, 2022 and 2021.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

This MD&A and, in particular, but without limitation, section 1.2, Key corporate and business developments, the section and sub-sections entitled Assumptions, section 3.1, Bell Wireless - Key business developments, section 3.2, Bell Wireline - Key business developments, and section 4.7, Liquidity, contain forward-looking statements. These forward-looking statements include, without limitation, statements relating to BCE's anticipated capital expenditures, network deployment plans and the benefits expected to result therefrom, including our two-year increased capital expenditure acceleration program for the accelerated expansion of our broadband fibre, Fifth Generation (5G) and rural networks, our plans to deliver faster wireless and Internet speeds and Wi-Fi technology and related offerings, the expectation that our available liquidity (as defined in section 4.7, Liquidity) will be sufficient to meet our anticipated cash requirements for the remainder of 2022, our environmental, social and governance (ESG) objectives which include, without limitation, our goal to have carbon neutral operations by 2025 and to achieve our science-based targets for greehouse gas (GHG) emissions reduction, BCE's business outlook, objectives, plans and strategic priorities, and other statements that do not refer to historical facts. A statement we make is forward-looking when it uses what we know and expect today to make a statement about the future. Forward-looking statements are typically identified by the words assumption, goal, guidance, objective, outlook, project, strategy, target, and other similar expressions or future or conditional verbs such as aim, anticipate, believe, could, expect, intend, may, plan, seek, should, strive and will. All such forward-looking statements are made pursuant to the safe harbour provisions of applicable Canadian securities laws and of the United States (U.S.) Private Securities Litigation Reform Act of 1995.

Unless otherwise indicated by us, forward-looking statements in this MD&A describe our expectations as at August 3, 2022 and, accordingly, are subject to change after that date. Except as may be required by applicable securities laws, we do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Forward-looking statements, by their very nature, are subject to inherent risks and uncertainties and are based on several assumptions, both general and specific, which give rise to the possibility that actual results or events could differ materially from our expectations expressed in, or implied by, such forward-looking statements and that our business outlook, objectives, plans and strategic priorities may not be achieved. These statements are not guarantees of future performance or events, and we caution you against relying on any of these forward-looking statements. Forward-looking statements are presented in this MD&A for the purpose of assisting investors and others in understanding our objectives, strategic priorities and business outlook as well as our anticipated operating environment. Readers are cautioned, however, that such information may not be appropriate for other purposes.

We have made certain economic, market, operational and other assumptions in preparing the forward-looking statements contained in this MD&A and, in particular, but without limitation, the forward-looking statements contained in the previously mentioned sections of this MD&A. These assumptions include, without limitation, the assumptions described in the section and sub-sections of this MD&A entitled Assumptions, which section and sub-sections are incorporated by reference in this cautionary statement. Subject to various factors including, without limitation, the future impacts of the COVID-19 pandemic, of the conflict between Russia and Ukraine and of general economic conditions, which are difficult to predict, we believe that our assumptions were reasonable at August 3, 2022. If our assumptions turn out to be inaccurate, our actual results could be materially different from what we expect.

Important risk factors that could cause actual results or events to differ materially from those expressed in, or implied by, the previously-mentioned forward-looking statements and other forward-looking statements contained in this MD&A, include, but are not limited to: the adverse effects of the COVID-19 pandemic, including from the restrictive measures implemented or to be implemented as a result thereof, and the adverse effects of the conflict between Russia and Ukraine, including from the economic sanctions imposed or to be imposed as a result thereof, and supply chain disruptions resulting therefrom; adverse economic and financial market conditions, including from the COVID-19 pandemic and the conflict between Russia and Ukraine; a declining level of retail and commercial activity, and the resulting negative impact on the demand for, and prices of, our products and services; the intensity of competitive activity including from new and emerging competitors; the level of technological substitution and the presence of alternative service providers contributing to disruptions and disintermediation in each of our business segments; changing customer behaviour and the expansion of over-the-top (OTT) television (TV) and other alternative service providers, as well as the fragmentation of, and changes in, the advertising market; rising content costs and challenges in our ability to acquire or develop key content; the proliferation of content piracy; higher Canadian smartphone penetration and reduced or slower immigration flow; regulatory initiatives, proceedings and decisions, government consultations and government positions that affect us and influence our business including, without limitation, concerning the conditions and prices at which access to our networks may be mandated and spectrum may be acquired in auctions; the inability to protect our physical and non-physical assets from events such as information security attacks, which risk may be exacerbated by the conflict between Russia and Ukraine, unauthorized access or entry, fire and

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MD&A

natural disasters; the failure to implement effective data governance; the failure to evolve and transform our networks, systems and operations using next-generation technologies while lowering our cost structure; the inability to drive a positive customer experience; the failure to attract, develop and retain a diverse and talented team capable of furthering our strategic imperatives; labour disruptions and shortages; the failure to maintain operational networks; service interruptions or outages due to legacy infrastructure and the possibility of instability as we transition towards converged wireline and wireless networks; the failure by us, or by other telecommunications carriers on which we rely to provide services, to complete planned and sufficient testing, maintenance, replacement or upgrade of our or their networks, equipment and other facilities, which could disrupt our operations including through network failures; the risk that we may need to incur significant unplanned capital expenditures to provide additional capacity and reduce network congestion; the complexity of our operations; the failure to implement or maintain highly effective processes and information technology (IT) systems; events affecting the functionality of, and our ability to protect, test, maintain, replace and upgrade, our networks, IT systems, equipment and other facilities; in-orbit and other operational risks to which the satellites used to provide our satellite TV services are subject; our dependence on third-party suppliers, outsourcers, and consultants to provide an uninterrupted supply of the products and services we need; the failure of our vendor selection, governance and oversight processes, including our management of supplier risk in the areas of security, data governance and responsible procurement; the quality of our products and services and the extent to which they may be subject to defects or fail to comply with applicable government regulations and standards; the inability to access adequate sources of capital and generate sufficient cash flows from operating activities to meet our cash requirements, fund capital expenditures and provide for planned growth; uncertainty as to whether dividends will be declared by BCE's board of directors or whether the dividend on common shares will be increased; the inability to manage various credit, liquidity and market risks; new or higher taxes due to new tax laws or changes thereto or in the interpretation thereof, and the inability to predict the outcome of government audits; the failure to reduce costs, as well as unexpected increases in costs, and the inability to generate anticipated benefits from acquisitions and corporate restructurings; the failure to evolve practices to effectively monitor and control fraudulent activities; pension obligation volatility and increased contributions to post-employment benefit plans; unfavourable resolution of legal proceedings; the failure to develop and implement strong corporate governance practices and compliance frameworks and to comply with legal and regulatory obligations; the failure to recognize and adequately respond to climate change and other environmental concerns and expectations; pandemics, epidemics and other health risks, including health concerns about radio frequency emissions from wireless communications devices and equipment; the inability to adequately manage social issues; and internal factors, such as the failure to implement sufficient corporate and business initiatives, as well as various external factors which could challenge our ability to achieve our ESG targets including, without limitation, those related to GHG emissions reduction and diversity, equity and inclusion.

We caution that the foregoing list of risk factors is not exhaustive and other factors could also materially adversely affect us. Please see section 9, Business risks of the BCE 2021 Annual MD&A for a more complete description of the above-mentioned and other risks, which section, and the other sections of the BCE 2021 Annual MD&A referred to therein, are incorporated by reference in this cautionary statement. In addition, please see section 4.8, Litigation in the BCE 2022 First Quarter MD&A for an update to the legal proceedings described in the BCE 2021 AIF, which section 4.8 is incorporated by reference in this cautionary statement. Please also see section 6, Regulatory environment in the BCE 2022 First Quarter MD&A and in this MD&A for an update to the regulatory initiatives and proceedings described in the BCE 2021 Annual MD&A, which sections 6 are incorporated by reference in this cautionary statement. Please also see section 7, Business risks in the BCE 2022 First Quarter MD&A and in this MD&A for an update to the description of the risk factors relating to the COVID-19 pandemic and general economic conditions described in the BCE 2021 Annual MD&A and for a description of the risk factors relating to the conflict between Russia and Ukraine, which sections 7 are incorporated by reference in this cautionary statement. Any of those risks could cause actual results or events to differ materially from our expectations expressed in, or implied by, the forward-looking statements set out in this MD&A. Except for the updates set out in section 4.8, Litigation, in section 6, Regulatory environment and in section 7, Business risks of the BCE 2022 First Quarter MD&A, as well as in section 6, Regulatory environment and in section 7, Business risks in this MD&A, the risks described in the BCE 2021 Annual MD&A remain substantially unchanged.

Forward-looking statements contained in this MD&A for periods beyond 2022 involve longer-term assumptions and estimates than forward-looking statements for 2022 and are consequently subject to greater uncertainty. In particular, our GHG emissions reduction targets are based on a number of assumptions including, without limitation, the following principal assumptions: implementation of various corporate and business initiatives to reduce our electricity and fuel consumption, as well as reduce other direct and indirect GHG emissions enablers; no new corporate initiatives, business acquisitions or technologies that would materially increase our anticipated levels of GHG emissions; our ability to purchase sufficient credible carbon credits and renewable energy certificates to offset or further reduce our GHG emissions, if and when required; no negative impact on the calculation of our GHG emissions from refinements in or modifications to international standards or the methodology we use for the calculation of such GHG emissions; no required changes to our science-based targets pursuant to the Science Based Targets initiative (SBTi) methodology that would make the achievement of our updated science-based targets more onerous; and sufficient supplier engagement and collaboration in setting their own science-based targets and sufficient collaboration with partners in reducing their own GHG emissions.

Forward-looking statements for periods beyond 2022 further assume, unless otherwise indicated, that the risks described above and in section 9, Business risks of the BCE Inc. 2021 Annual MD&A will remain substantially unchanged during such periods, except for an assumed improvement in the risks related to the COVID-19 pandemic in future years.

Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also have a material adverse effect on our business, financial condition, liquidity, financial results or reputation. From time to time, we consider potential acquisitions, dispositions, mergers, business combinations, investments, monetizations, joint ventures and other transactions, some of which may be significant. Except as otherwise indicated by us, forward-looking statements do not reflect the potential impact of any such transactions or of special items that may be announced or that may occur after August 3, 2022. The financial impact of these transactions and special items can be complex and depends on 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.

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1 MD&A Overview

In April 2022, the International Financial Reporting Interpretations Committee (IFRIC) issued an agenda decision clarifying that an entity should present a demand deposit with restrictions on use arising from a contract with a third party as cash and cash equivalents in the statements of financial position and cash flows, unless those restrictions change the nature of the deposit such that it no longer meets the definition of cash in IAS 7.

In Q2 2022, we applied this agenda decision retrospectively, to each prior period presented, the impact of which was limited to the classification of funding of $97 million received in Q1 2021 under a subsidy agreement with the Government of Québec. For further details, see section 8, Accounting policies in this MD&A.

BCE Q2 2022 SELECTED QUARTERLY INFORMATION

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1 MD&A Overview

BCE INCOME STATEMENTS - SELECTED INFORMATION

Q2 2022 FINANCIAL HIGHLIGHTS

BCE operating revenues increased by 2.9% in Q2 2022, compared to the same period last year, reflecting higher year-over-year service revenues of 3.8%, mainly due to strong wireless, Internet and media performance, moderated by ongoing erosion in voice, and satellite TV revenues. The growth in service revenues was partially offset by lower product revenues of 4.6% year over year, primarily due to lower equipment sales in our large business market due to delayed customer spending attributable to global supply chain challenges.

Net earnings decreased by $80 million in the second quarter of 2022, compared to the same period last year, mainly due to higher other expense, higher depreciation and amortization and higher severance, acquisition and other costs, partly offset by higher adjusted EBITDA, lower impairment of assets and a higher net return on post-employment benefit plans.

BCE's adjusted EBITDA grew by 4.6% in Q2 2022, compared to Q2 2021, led by increases across all three of our segments. The year-over-year growth in adjusted EBITDA reflected higher revenues, partially offset by greater operating costs mainly associated with the revenue growth. This drove an adjusted EBITDA margin of 44.2% in Q2 2022, which represented a 0.7 pts increase over the same period last year, due to greater service revenue flow-through and a decreased proportion of low-margin product sales in our total revenue base.

BCE's EPS of $0.66 in Q2 2022 decreased by $0.10 compared to the same period last year.

In the second quarter of 2022, adjusted net earnings, which excludes the impact of severance, acquisition and other costs, net mark-to-market gains (losses) on derivatives used to economically hedge equity settled share-based compensation plans, net equity gains (losses) on investments in associates and joint ventures, net gains (losses) on investments, early debt redemption costs, impairment of assets and discontinued operations, net of tax and NCI, was $791 million, or $0.87 per common share, compared to $751 million, or $0.83 per common share, for the same period last year.

Cash flows from operating activities in the second quarter of 2022 increased by $98 million, compared to the same period last year, mainly due to higher adjusted EBITDA, lower severance and other costs paid and lower contributions to post-employment benefit plans due to a contribution holiday in 2022, partly offset by lower cash from working capital and higher income taxes paid.

Free cash flow in Q2 2022 increased by $88 million, compared to the same period last year, mainly due to higher cash flows from operating activities, excluding cash from acquisition and other costs paid, partly offset by higher capital expenditures.

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1 MD&A Overview

This section contains forward-looking statements, including relating to our goal to have carbon neutral operations by 2025 and to achieve our science-based targets for GHG emissions reduction. Refer to the section Caution regarding forward-looking statements at the beginning of this MD&A.

BCE NAMED #1 TELECOM COMPANY ON BEST 50 CORPORATE CITIZENS LIST

BCE was ranked the top telecom company and #4 overall in Canada on the Best 50 Corporate Citizens list compiled by Corporate Knights. The annual ranking evaluates 332 of the largest Canadian companies on a set of 24 ESG indicators to single out the Best 50 - which Corporate Knights considers "the vanguard of corporate sustainability leadership in Canada." BCE was also the highest ranked telecom company in the world by Corporate Knights.

Bell was recognized as one of Canada's Greenest Employers for the sixth consecutive year in recognition of our environmental leadership and as part of our commitment to the highest ESG standards. After becoming the first communications company in North America to achieve ISO 50001 certification of its Energy Management System in 2020, Bell's annual certification has been renewed for a third consecutive year. Bell was also recognized by the Carbon Disclosure Project (CDP) for our climate transparency leadership and our GHG emissions reduction targets, including our goal to have carbon neutral operations by 2025.

SCIENCE-BASED TARGETS APPROVED BY SBTi

BCE's science-based targets for GHG emissions reduction have been approved by the Science Based Targets Initiative (SBTi) ⁽¹⁾. Science-based targets are emission reduction targets in line with what the latest climate science deems necessary to meet the goals of the Paris Agreement to limit global warming to 1.5°C above pre-industrial levels.

BELL RECOGNIZED FOR CYBER-SECURITY LEADERSHIP

International Data Corporation (IDC) Canada named Bell as the cyber-security services leader among telecommunications companies in their annual Canadian Security Services Vendor Assessment report. IDC evaluates security providers on their current capabilities and future strategies for delivery of security services across several key categories. This report confirms our consistent position as a leader in the Canadian security services market, with Bell's leadership being recognized in all of IDC's published reports since 2015.

As at the date of this MD&A, our forward-looking statements set out in the BCE 2021 Annual MD&A, as updated or supplemented in the BCE 2022 First Quarter MD&A and in this MD&A, are based on certain assumptions including, without limitation, the following assumptions as well as the various assumptions referred to under the sub-sections entitled Assumptions set out in section 3, Business segment analysis of this MD&A.

ASSUMPTIONS ABOUT THE CANADIAN ECONOMY

We have made certain assumptions concerning the Canadian economy. As most public health restrictions in Canada have been lifted, pandemic-related effects on consumer caution and travel are assumed to continue to fade over 2022 and 2023. In particular, we have assumed:

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1 MD&A Overview

MARKET ASSUMPTIONS

ASSUMPTIONS UNDERLYING EXPECTED REDUCTIONS IN CONTRIBUTIONS TO OUR DB PENSION PLANS

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2 MD&A Consolidated financial analysis

This section provides detailed information and analysis about BCE's performance in Q2 and YTD 2022 compared with Q2 and YTD 2021. It focuses on BCE's consolidated operating results and provides financial information for our Bell Wireless, Bell Wireline and Bell Media business segments. For further discussion and analysis of our business segments, refer to section 3, Business segment analysis.

n.m.: not meaningful

BCE NET ACTIVATIONS (LOSSES)

n.m.: not meaningful

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2 MD&A Consolidated financial analysis

TOTAL BCE CUSTOMER CONNECTIONS

BCE added 68,798 net retail subscriber activations in Q2 2022, increasing by 24.7% compared to the same period last year. The net retail subscriber activations in Q2 2022 consisted of:

In the first six months of the year, BCE had 125,169 net retail subscriber activations, increasing by 35.0% compared to the same period in 2021. The year-to-date net retail subscriber activations were comprised of:

At June 30, 2022, BCE's retail subscriber connections totaled 20,808,987, up 2.8% year over year, and consisted of:

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2 MD&A Consolidated financial analysis

BCE

Total BCE operating revenues increased by 2.9% in Q2 2022, and by 2.7% in the first half of the year, compared to the same periods last year. BCE service revenues of $5,233 million in Q2 2022 and $10,410 million in the first six months of the year, increased by 3.8% and by 4.0%, respectively, year-over-year, whereas product revenues of $628 million in Q2 2022 and $1,301 million in the first half of the year, declined by 4.6% and by 6.8%, respectively, over the same periods in 2021.

The growth in year-over-year operating revenue in Q2 2022 and the first six months of the year, was driven by increases in our Bell Wireless and Bell Media segments, offset in part by a decline in our Bell Wireline segment. Bell Wireless operating revenues increased by 5.5% in Q2 2022 and by 5.4% in the first half of the year, due to higher service revenues of 7.8%, and 8.2%, respectively, partially offset by lower product revenues of 0.9% and 2.4%, respectively. Bell Media operating revenues grew by 8.7% in Q2 2022 and by 12.1% in the first half of the year, driven by the return of the Formula 1 (F1) Canadian Grand Prix, which was cancelled in 2021 due to the COVID-19 pandemic, along with higher advertising revenues, and greater subscriber revenues. Bell Wireline operating revenues declined by 0.3% in Q2 2022 and by 1.2% in the first half of the year, compared to the same periods in 2021. The decrease in Q2 2022 was driven by lower product revenues of 23.2%, partially offset by service revenue growth of 0.6%, whereas the decline in the first six months of the year was attributable to reduced product revenues of 26.3% and lower service revenues of 0.1%.

BCE

BCE operating costs increased by 1.5% in Q2 2022 and by 0.6% in the first half of the year, compared to the same periods in 2021, driven by higher expenses in Bell Media of 10.0% in Q2 2022 and 9.1% year to date and in Bell Wireless of 3.3% in Q2 2022 and 2.7% year to date, partially offset by lower expenses in Bell Wireline of 1.8% in Q2 2022 and 3.0% year to date.

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2 MD&A Consolidated financial analysis

Net earnings in the second quarter of 2022 decreased by $80 million compared to the same period last year, mainly due to higher other expense, higher depreciation and amortization and higher severance, acquisition and other costs, partly offset by higher adjusted EBITDA, lower impairment of assets and a higher net return on post-employment benefit plans.

Net earnings on a year-to-date basis in 2022 increased by $167 million, compared to the same period last year, mainly due to higher adjusted EBITDA, lower impairment of assets, lower severance, acquisition and other costs and a higher net return on post-employment benefit plans, partly offset by higher other expense, higher income taxes, and higher amortization and depreciation.

BCE

BCE's adjusted EBITDA increased by 4.6% in Q2 2022 and by 5.5% in the first six months of the year, compared to the same periods in 2021, driven by growth across all three of our segments. The year-over-year growth reflected higher operating revenues, partially offset by greater operating costs. Adjusted EBITDA margin of 44.2% in both Q2 2022 and the first six months of the year, increased by 0.7 pts and 1.2 pts, respectively, over the same periods last year, mainly driven by greater service revenue flow-through and a decreased proportion of low-margin product sales in our total revenue base.

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2 MD&A Consolidated financial analysis

2022

Severance, acquisition and other costs of $40 million in the second quarter of 2022 and $53 million on a year-to-date basis included:

2021

Severance, acquisition and other costs of $7 million in the second quarter of 2021 and $96 million on a year-to-date basis included:

DEPRECIATION

Depreciation in the second quarter and on a year-to-date basis in 2022 increased by $28 million and $24 million, respectively, compared to the same periods in 2021, mainly due to a higher asset base as we continued to invest in our broadband and wireless networks as well as our IPTV services, partly offset by lower accelerated depreciation of Fourth Generation (4G) network elements as we transition to 5G.

AMORTIZATION

Amortization in the second quarter and on a year-to-date basis in 2022 increased by $18 million and $40 million, respectively, compared to the same periods in 2021, mainly due to a higher asset base.

INTEREST EXPENSE

Interest expense in the second quarter of 2022 increased by $1 million, compared to the same period last year, mainly due to higher average debt levels and higher average interest rates on floating-rate debt, partly offset by higher capitalized interest.

Interest expense on a year-to-date basis in 2022 decreased by $6 million, compared to the same period last year, mainly due to higher capitalized interest, partly offset by higher average debt levels and higher average interest rates on floating-rate debt.

NET RETURN (INTEREST) ON POST-EMPLOYMENT BENEFIT PLANS

Net return (interest) on our post-employment benefit plans is based on market conditions that existed at the beginning of the year as well as the net post-employment benefit plan asset (liability). On January 1, 2022, the discount rate was 3.2% compared to 2.6% on January 1, 2021.

In the second quarter and on a year-to-date basis in 2022, net return on post-employment benefit increased by $12 million and $35 million, respectively, compared to the same periods last year, as a result of a net asset position in our post-employment benefits plans at the beginning of 2022 compared to a net obligation position at the beginning of 2021, and due to a higher discount rate in 2022.

The impacts of changes in market conditions during the year are recognized in other comprehensive income (OCI).

2022

During the second quarter of 2022, we recorded an impairment charge of $106 million on right-of-use assets for certain office spaces we ceased using as part of our real estate optimization strategy as a result of our hybrid work policy.

2021

During the second quarter of 2021, we identified indicators of impairment for our Bell Media radio markets, notably a decline in advertising revenue and an increase in the discount rate resulting from the impact of the ongoing COVID-19 pandemic. Accordingly, impairment testing was required for our group of radio cash-generating units (CGUs).

Impairment charges for the three and six months ended June 30, 2021 of $164 million and $167 million, respectively, related primarily to $163 million of charges for various radio markets within our Bell Media segment. These charges included $150 million allocated to indefinite-life intangible assets for broadcast licences, and $13 million to property, plant and equipment mainly for buildings and network infrastructure and equipment.

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2 MD&A Consolidated financial analysis

2022

Other expense of $97 million in the second quarter of 2022 included net mark-to-market losses on derivatives used to economically hedge equity settled share-based compensation plans and losses on our equity investments which included a loss on BCE's share of an obligation to repurchase at fair value the minority interest in one of BCE's joint ventures, partly offset by a gain on investment related to an obligation to repurchase at fair value the minority interest in one of our subsidiaries.

Other expense of $4 million on a year-to-date basis in 2022 due to losses on our equity investments which included a loss on BCE's share of an obligation to repurchase at fair value the minority interest in one of BCE's joint ventures and early debt redemption costs, partly offset by gains on investments related to the sale of our wholly-owned subsidiary, 6362222 Canada Inc. (Createch), and an obligation to repurchase at fair value the minority interest in one of our subsidiaries.

2021

Other income of $91 million and $99 million in the second quarter and on a year-to-date basis in 2021, respectively, included net mark-to-market gains on derivatives used to economically hedge equity settled share-based compensation plans, partly offset by losses on our equity investments, which included a loss on BCE's share of an obligation to repurchase at fair value the minority interest in one of BCE's joint ventures. Additionally, on a year-to-date basis in 2021, other income included early debt redemption costs.

Income taxes in the second quarter of 2022 decreased by $4 million, compared to the same period in 2021, mainly due to lower taxable income.

Income taxes on a year-to-date in 2022 basis increased by $78 million, compared to the same period in 2021, mainly due to higher taxable income.

Net earnings attributable to common shareholders in the second quarter of 2022 of $596 million, decreased by $89 million, compared to the same period last year, mainly due to higher other expense, higher depreciation and amortization and higher severance, acquisition and other costs, partly offset by higher adjusted EBITDA, lower impairment of assets and a higher net return on post-employment benefit plans.

Net earnings attributable to common shareholders on a year-to-date basis in 2022 of $1,473 million increased $146 million compared to the same period last year, mainly due to higher adjusted EBITDA, lower impairment of assets, lower severance, acquisition and other costs and a higher net return on post-employment benefit plans, partly offset by higher other expense, higher income taxes, and higher amortization and depreciation.

BCE's EPS of $0.66 in Q2 2022 decreased by $0.10, compared to the same period last year. BCE's EPS of $1.62 on a year-to-date basis increased by $0.15, compared to the same period last year.

In the second quarter of 2022, adjusted net earnings, which excludes the impact of severance, acquisition and other costs, net mark-to-market gains (losses) on derivatives used to economically hedge equity settled share-based compensation plans, net equity gains (losses) on investments in associates and joint ventures, net gains (losses) on investments, early debt redemption costs, impairment of assets and discontinued operations, net of tax and NCI, was $791 million, or $0.87 per common share, compared to $751 million, or $0.83 per common share, for the same period last year. Adjusted net earnings in the first half of 2022 was $1,602 million, or $1.76 per common share, compared to $1,455 million, or $1.61 per common share, for the first six months of 2021.

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3 MD&A Business segment analysis - Bell Wireless

This section contains forward-looking statements, including relating to our network deployment plans and the benefits expected to result therefrom, and our plans to deliver faster wireless speeds and related offerings. Refer to the section Caution regarding forward-looking statements at the beginning of this MD&A.

KEY BUSINESS DEVELOPMENTS

LAUNCH OF 5G+, THE NEXT EVOLUTION OF 5G

On July 28, 2022, Bell announced the availability of 5G+ service in southern Ontario, offering customers the country's fastest mobile technology yet on Canada's top-ranked 5G wireless network. Bell began deploying 3500 Megahertz (MHz) wireless spectrum in early July, unleashing the next phase of 5G advancement. Available for Bell 5G customers with compatible devices in Toronto, Guelph, Kitchener-Waterloo, London, Barrie and select areas of Mississauga, Bell 5G+ is expected to be faster and more responsive, allowing for a superior mobile experience. In Toronto, speeds with 5G+ are now over 50% faster than before. 5G customers with a compatible 5G+ device and rate plan, and who are inside Ontario's 5G+ coverage areas, can immediately take advantage of Bell 5G+ speeds. Bell will continue to expand 5G+ across the country and is on track to offer coverage to approximately 40% of the Canadian population by the end of 2022, including the Greater Toronto Area, Halifax, Nova Scotia, St. John's, Newfoundland and Sherbrooke, Québec, with the availability of peak theoretical download speeds of 3 gigabits per second (Gbps) in select markets.

INTRODUCTION OF 5G STANDALONE CORE

Bell announced the upcoming roll out of its nationwide 5G standalone (SA) core network, starting in Toronto. The addition of 3500 MHz wireless spectrum allows Bell to deliver a new 5G core network to Canadian businesses, supported by world-class SA architecture, and which is expected to unlock even faster speeds and ultra-low latency. Over time, 5G SA core will provide additional benefits such as network slicing and will enable a full range of 5G features and functionality for both enterprise and consumer use cases and support the massive growth of Internet of Things (IoT).

LAUNCH OF 5G-READY WIRELESS PRIVATE NETWORK AT THE PIER

Bell launched its wireless private network (WPN) at The Port Innovation, Engagement and Research (PIER), an innovation hub in Halifax focused on developing innovative solutions for supply chain and logistics in the transportation industry. The WPN will enable PIER members to trial innovative new solutions that will help improve worker safety, increase port operations efficiency and further enhance the reputation of the Port of Halifax. Bell is a Founding Partner and the exclusive telecommunications provider of The PIER. Our WPN will enable IoT solutions that will help support business-critical functions with real-time data monitoring and reporting, as well as support all partners as they work to develop commercial opportunities that will benefit Canadian and global companies and their customers.

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3 MD&A Business segment analysis - Bell Wireless

FINANCIAL PERFORMANCE ANALYSIS

Q2 2022 PERFORMANCE HIGHLIGHTS

BELL WIRELESS RESULTS

REVENUES

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3 MD&A Business segment analysis - Bell Wireless

Bell Wireless operating revenues increased by 5.5% in Q2 2022 and by 5.4% in the first half of the year, compared to the same periods last year, due to higher service revenues, partly offset by lower product revenues.

Service revenues increased by 7.8% in Q2 2022 and by 8.2% year to date, compared to the same periods last year, driven by:

Product revenues decreased by 0.9% in Q2 2022 and by 2.4% year to date, compared to the same periods last year, mainly driven by lower mobile phone upgrades, partly offset by greater sales mix of premium devices.

OPERATING COSTS AND ADJUSTED EBITDA

Bell Wireless operating costs increased by 3.3% in Q2 2022 and by 2.7% year to date, compared to the same periods last year, driven by:

These factors were partly offset by:

Bell Wireless adjusted EBITDA increased by 8.3% in Q2 2022 and by 8.8% in the first six months of the year, compared to the same periods last year, due to greater operating revenues, moderated by higher operating costs. Adjusted EBITDA margin of 46.7% in Q2 2022 and 46.2% year to date, increased by 1.2 pts and 1.5 pts, respectively, compared to the same periods last year, primarily driven by the flow-through of the service revenue growth and a lower proportion of low-margin product sales in our total revenue base.

BELL WIRELESS OPERATING METRICS

n.m.: not meaningful

Mobile phone blended ARPU of $59.54 in Q2 2022 and $58.77 year to date increased by 3.8% and 4.4%, respectively, compared to the same periods last year, driven by:

Mobile phone gross subscriber activations increased by 19.2% in Q2 2022 and by 11.1% in the first half of the year, compared to the same periods last year, due to higher prepaid and postpaid gross subscriber activations.

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3 MD&A Business segment analysis - Bell Wireless

Mobile phone net subscriber activations increased by 64,514 in Q2 2022 and by 94,285 in the first half of the year, compared to the same periods last year, due to both higher postpaid and prepaid net subscriber activations.

Mobile phone blended churn of 1.07% in Q2 2022 and 1.10% in the first half of the year, improved by 0.03 pts and 0.07pts, respectively, compared to the same periods last year.

Mobile phone subscribers at June 30, 2022 totaled 9,602,122, an increase of 4.2%, from 9,212,995 subscribers at the end of Q2 2021. This consisted of 8,747,472 postpaid subscribers, an increase of 4.1% from 8,405,697 subscribers at the end of Q2 2021, and 854,650 prepaid subscribers, an increase of 5.9% from 807,298 subscribers at the end of Q2 2021.

Mobile connected device net subscriber activations decreased by 47,793 subscribers in Q2 2022 and by 73,075 subscribers in the first half of the year, compared to the same periods last year, due to greater low-ARPU business Internet of Things (IoT) deactivations driven largely by one customer and higher net losses from data devices, primarily fewer low-ARPU tablet activations.

Mobile connected device subscribers at June 30, 2022 totaled 2,298,327, an increase of 5.5% from 2,177,761 subscribers at the end of Q2 2021.

ASSUMPTIONS

As at the date of this MD&A, our forward-looking statements set out in the BCE 2021 Annual MD&A, as updated or supplemented in the BCE 2022 First Quarter MD&A and in this MD&A, are based on certain assumptions including, without limitation, the following assumptions and the assumptions referred to in each of the other business segment discussions set out in this section 3, Business segment analysis, as well as the economic, market and other assumptions referred to in section 1.3, Assumptions, of this MD&A.

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3 MD&A Business segment analysis - Bell Wireline

This section contains forward-looking statements, including relating to BCE's anticipated capital expenditures, network deployment plans and the benefits expected to result therefrom, and our plans to deliver faster Internet speeds and Wi-Fi technology and related offerings. Refer to the section Caution regarding forward-looking statements at the beginning of this MD&A.

KEY BUSINESS DEVELOPMENTS

INTRODUCTION OF 3-GIGABIT INTERNET SERVICE TO QUÉBEC CITY

Bell introduced 3-gigabit Internet service to Québec City, the fastest Internet speeds ever seen in Québec. Bell pure fibre Internet service now offers download speeds of 3 Gbps, as well as upload speeds of 3 Gbps, providing a faster experience, with upload and download speeds that cable cannot deliver. Unlimited pure fibre 3 Gbps is now available in eligible areas of Québec City and will soon roll out in other regions of Québec.

INTRODUCTION OF 8-GIGABIT INTERNET SERVICE, THE FASTEST INTERNET SPEEDS AND WI-FI TECHNOLOGY OF ANY MAJOR PROVIDER IN NORTH AMERICA

On August 2, 2022, Bell announced that it is introducing download speeds of up to 8 Gbps and upload speeds of up to 8 Gbps, the fastest Internet speeds in North America of any major provider. With symmetrical speeds of up to 8 Gbps, and in select areas of Toronto, Bell pure fibre Internet will have download speeds five times faster than cable technology and upload speeds 250 times faster than cable technology. Bell also will bring Wi-Fi 6E in the home, the fastest Wi-Fi technology available, and when coupled with North America's fastest Internet speeds, is set to transform the at-home experience. Many customers have multiple devices connected in their home, with each in frequent use throughout the day. Bell's unlimited pure fibre package will introduce a new Giga Hub modem with Wi-Fi 6E compatibility and gigabit plus speeds. Wi-Fi 6E is the next phase of Wi-Fi advancement, enabling faster speeds and lower latency when used with a compatible device and allows customers to work, learn, video chat, stream and game online on any or all of their household devices simultaneously. Bell will roll out North America's fastest Internet speeds and Wi-Fi technology of any major provider to customers starting in September. 8 Gbps speeds will be available starting in select Toronto areas, with more regions across the country to follow.

EXPANSION OF ALL-FIBRE INTERNET SERVICE

Bell announced the expansion of pure fibre Internet service to homes and businesses in the Ontario communities of London and Kingsville and in more than 25 communities across New Brunswick. Fully funded by Bell, this broadband expansion program will provide fast and high-capacity 100% fibre connections with Internet download speeds of up to 3 Gbps and access to leading Bell services such as Fibe TV. This is part of Bell's historic two-year capital expenditure acceleration program of almost $10 billion, now in its second year, to accelerate the rollout of its broadband fibre, 5G and rural networks.

NEXT EVOLUTION OF FIBE TV

Bell introduced the new evolution of Fibe TV with thousands of apps and powerful search options to make our customers' experience even better. With the latest Google Android TV technology, Fibe TV now provides access to over 7,000 apps from Google Play, including favourites like Crave, Netflix and Prime Video. Viewers can easily find the content they want to watch, and explore new and exciting entertainment with a voice remote powered by Google Assistant and intuitive universal search capabilities that will find content across Fibe TV and supported subscribed streaming services. With added Cloud PVR capabilities, viewers can store content for up to a year to watch at their own convenience. The new Fibe TV service is available now for residential customers in Ontario and Québec.

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3 MD&A Business segment analysis - Bell Wireline

FINANCIAL PERFORMANCE ANALYSIS

Q2 2022 PERFORMANCE HIGHLIGHTS

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3 MD&A Business segment analysis - Bell Wireline

BELL WIRELINE RESULTS

REVENUES

Bell Wireline operating revenues declined by 0.3% in Q2 2022 and by 1.2% in the first half of the year, compared to the same periods in 2021, mainly attributable to continued voice revenue erosion and lower product sales, partially offset by growth in data and other services revenue.

Bell Wireline operating service revenues grew by 0.6% in Q2 2022, compared to Q2 2021, but declined by 0.1% in the first six months of the year, compared to the same period last year.

These factors were partly offset by:

These factors were partly offset by:

Bell Wireline operating product revenues decreased by 23.2% in Q2 2022, and by 26.3% in the first half of the year, compared to the same periods last year, from reduced or delayed spending by large business customers due to global supply chain challenges.

OPERATING COSTS AND ADJUSTED EBITDA

Bell Wireline operating costs decreased by 1.8% in Q2 2022 and by 3.0% in the first six months of the year, compared to the same periods in 2021, due to:

These factors were partly offset by:

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3 MD&A Business segment analysis - Bell Wireline

Bell Wireline adjusted EBITDA increased by 1.7% in Q2 2022, and by 1.0% in the first half of the year, compared to the same periods last year, due to operating expense savings, offset in part by lower year-over-year operating revenues. Adjusted EBITDA margin of 43.9% in Q2 2022, and 44.6% in the first six months of the year, increased by 0.8 pts and 0.9 pts, respectively, over the same periods in 2021, resulting from the retroactive impact of the CRTC decision on wholesale high-speed Internet access services in Q2 2021, as well as a decreased proportion of low-margin product sales in our total revenue base.

BELL WIRELINE OPERATING METRICS

DATA

Retail high-speed Internet

Retail residential NAS lines net losses grew by 2.8% in Q2 2022, compared to the same period last year, mainly due to lower activations driven by wireless and Internet based technologies substitution, and greater competitive intensity, offset in part by lower deactivations. Conversely, in the first six months of the year, retail residential NAS lines net losses improved by 7.1%, compared to the same period last year, as lower Q1 2022 deactivations driven by the COVID-19 pandemic more than offset the lower year-over-year activations.

Retail residential NAS lines at June 30, 2022 of 2,207,004 declined by 7.3% from 2,381,571 lines reported at the end of Q2 2021. This represented an improvement over the 8.0% rate of erosion experienced in Q2 2021, primarily driven by fewer deactivations.

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3 MD&A Business segment analysis - Bell Wireline

ASSUMPTIONS

As at the date of this MD&A, our forward-looking statements set out in the BCE 2021 Annual MD&A, as updated or supplemented in the BCE 2022 First Quarter MD&A and in this MD&A, are based on certain assumptions including, without limitation, the following assumptions and the assumptions referred to in each of the other business segment discussions set out in this section 3, Business segment analysis, as well as the economic, market and other assumptions referred to in section 1.3, Assumptions, of this MD&A.

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3 MD&A Business segment analysis - Bell Media

KEY BUSINESS DEVELOPMENTS

EXPANSION OF MEDIA RIGHTS AGREEMENT WITH NFL

On June 13, 2022, Bell Media and the National Football League (NFL) announced a long-term expansion of their comprehensive media rights agreement, ensuring Bell Media remains the exclusive TV broadcast partner of the NFL in Canada. From the pre-season all the way through the Super Bowl, fans in Canada can access live coverage of NFL games on Bell Media platforms including TSN, CTV, CTV2, RDS and live streaming through the networks' official websites and apps. TSN has been televising NFL games since 1987, and CTV's partnership with the NFL began in 2007.

FINANCIAL PERFORMANCE ANALYSIS

Q2 2022 PERFORMANCE HIGHLIGHTS

BELL MEDIA RESULTS

REVENUES

Bell Media operating revenues increased by 8.7% in Q2 2022 and by 12.1% in the first half of the year, compared to the same periods last year, driven by higher other revenue, as well as increased advertising and subscriber revenues, including digital revenue (1) growth of 55% in Q2 2022 and of 68% year to date, compared to the same periods last year.

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3 MD&A Business segment analysis - Bell Media

OPERATING COSTS AND ADJUSTED EBITDA