BC Telecom Reports First Quarter Earnings.

BURNABY, BRITISH COLUMBIA--(BUSINESS WIRE)--April 27, 1998-- BC Telecom Inc.(TSE:BCT.) (VSE:BCT.) (ME:BCT.) BC TELECOM today announced consolidated net earnings - before a previously announced extraordinary charge - were $85.2 million or 68 cents per share for the first quarter of 1998, compared to $65.7 million or 52 cents per share during the same period last year.

The extraordinary charge resulted from a change in accounting principles in response to increasing competition and new regulatory requirements that took effect January 1, 1998. The after-tax extraordinary charge to earnings of $530.6 million translates into a net loss of $445.4 million or $3.59 per share in the first quarter.

Contribution to first quarter earnings by BC TEL - BC TELECOM's wholly owned telephone subsidiary - increased 12 cents per share from the same period last year. BC TEL's earnings included $9.7 million or eight cents per share from lower depreciation and amortization charges.

Earnings from other businesses increased four cents per share, including a one-cent increase per share from BC TEL Mobility, which includes our cellular and paging services, and a one-cent increase per share from ISM-BC, a computer systems company that is 75 per cent owned by BC TELECOM.

"We continue to see healthy revenue growth in key segments of our business, such as enhanced local services, cellular and data," said Ken Crump, BC TELECOM's chief financial officer. "This revenue growth signals that we're well-positioned to meet customer needs in our many competitive arenas."

BC TELECOM's operating revenues increased $80.8 million to $773.4 million from $692.6 million in the same period last year. This increase included $15 million that results from changes in accounting methodology.

Higher local-service revenues accounted for approximately $42 million of the remaining increase, reflecting demand for customer access lines, higher revenues from SmartTouch services - such as Call Answer and Call Waiting - and higher monthly local service rates. Partially offsetting this increase was a $6 million reduction in long-distance revenues. Revenues from BC TEL Mobility Cellular increased more than $10 million in the quarter, while ISM- BC reported an $8 million increase.

BC TELECOM's first quarter operating expenses increased $52.3 million to $579.3 million compared to $527 million in 1997. Changes in accounting methodology resulted in a net increase of $15 million in first quarter operating expenses, while higher costs associated with revenue growth from BC TEL Mobility, ISM-BC and other businesses accounted for over half of the remaining increase. BC TEL's operating expenses also increased, reflecting higher marketing and sales costs and the impact of wage inflation.

BC TEL added 20,109 customer access lines in the first quarter and now serves more than 2.5 million customer access lines. BC TEL Mobility Cellular and Paging added 14,234 customers and now serves more than 540,000 customers.

BC TELECOM is Canada's second-largest telecommunications company, offering a complete range of products and services to customers throughout British Columbia. BC TELECOM shares are listed on the Toronto, Montreal and Vancouver stock exchanges. The share symbol is BCT.

For more information about BC TELECOM, please visit our Internet web site at www.bctel.com.

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BC TELECOM Inc.
CONSOLIDATED STATEMENT OF EARNINGS


                                      Three Months Ended
                                            March 31
                                      ------------------
Unaudited (Millions)                  1998          1997
--------------------------------------------------------

OPERATING REVENUES                 $  773.4     $ 692.6  (1)
OPERATING EXPENSES                    579.3       527.0  (1)
                                   ---------------------

OPERATING EARNINGS                    194.1       165.6
Other income (loss)                    (0.4)       (2.7)
Financing costs, net                   28.5        32.2
                                   ---------------------

EARNINGS BEFORE INCOME TAXES
 AND MINORITY INTEREST                165.2       130.7
Income taxes                           78.9        64.1
                                   ---------------------

EARNINGS BEFORE MINORITY INTEREST      86.3        66.6
Minority interest                       1.1         0.9
                                   ---------------------

NET EARNINGS BEFORE
 EXTRAORDINARY ITEM                    85.2        65.7

Extraordinary loss                    530.6         0.0
                                   ---------------------

NET (LOSS) EARNINGS                  (445.4)       65.7
Preference and preferred
 share dividends                        0.9         0.9
                                   ---------------------

COMMON SHARE (LOSS) EARNINGS       $ (446.3)   $   64.8
                                   ---------------------
                                   ---------------------

EARNINGS PER COMMON SHARE ($)
Earnings before extraordinary
 item and accounting methodology
  changes                               0.60        0.52
Earnings before extraordinary item      0.68        0.52
Common share (loss) earnings           (3.59)       0.52

DIVIDENDS DECLARED PER COMMON
 SHARE ($)                              0.34        0.33
AVERAGE COMMON SHARES OUTSTANDING
 (Thousands)                         124,156     123,800

(1)  Restated to include settlement-related revenues and expenses
previously reported on a net basis.

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CONTACT: BC Telecom Inc.

Doug Strachan, 604/ 432-2663 (office)

or

1-800-892-8250 (toll-free pager)

[e-mail] (e-mail address)

http://www.bctel.com (website)