BCE Reports Improved 1996 Fourth-Quarter and Year-End Results Announces Two-For-One Stock Split.

MONTREAL--(BUSINESS WIRE)--Jan. 27, 1997--BCE Inc. (ME;TSE;VSE;NYSE:BCE) today reported unaudited net earnings of $429 million ($1.29 per common share) for the fourth quarter of 1996 compared with $289 million ($0.86 per common share) for the same period in 1995. Results for the quarter include a one-time gain (referred to under Bell Canada International), net of provisions, of $38 million ($0.12 per common share). Total revenues for the fourth quarter increased 14 per cent to $8.5 billion compared with $7.4 billion for the same period last year.

Unaudited net earnings for the year ended December 31, 1996 were $1.15 billion ($3.40 per common share) compared with $782 million ($2.23 per common share) for the full year 1995. Results for the twelve months include one-time gains, net of provisions, of $125 million ($0.39 per common share) compared with $55 million ($0.18 per common share) for the prior year. Total revenues for the year increased 14 per cent to $28.2 billion compared with $24.6 billion for 1995.

Return on common equity was 10.6 per cent for the year compared with 7 per cent for 1995.

Commenting on the results, L.R. Wilson, chairman and chief executive officer, said: "1996 was a year of successful recovery at BCE, with improved results in all major operating units. We must, however, achieve continued improvement in 1997. This year's return on equity of 10.6 per cent is clearly inadequate to sustain the growth of the company."

STOCK SPLIT

Following significant growth in share price over the last eighteen months, BCE's Board of Directors will recommend for shareholder approval at the company's annual shareholder meeting, which will be held in Montreal on April 30, 1997, a two-for-one stock split of its common shares. The purpose of the proposed stock split is to bring the shares of the company into a more affordable price range for individual investors.

RESULTS BY GROUP

The BCE Canadian Telecommunications group is comprised of Bell Canada (excluding its directories business), BCE Mobile and other telecommunications interests. In the fourth quarter, this group contributed $196 million to consolidated net earnings compared with $154 million in 1995; the full year contribution for 1996 was $777 million compared with $574 million last year.

BELL CANADA

Bell Canada's contribution to the Canadian Telecommunications group was $185 million for the quarter compared with $126 million for the same period in 1995. For the year, its contribution was $663 million compared with $452 million last year.

Bell Canada's earnings for 1996 are in line with the financial target included in its three-year transition plan. The consolidated rate of return for 1996 was 9.8 percent compared with 6.7 percent in 1995.

On a consolidated basis, Bell Canada's operating revenues for the quarter, which include results from its directories business, were $2.3 billion compared with $2.2 billion for the same period in 1995. Results for the quarter reflect higher revenues in local and access services and terminal, directory and other revenues offset by lower revenues in long distance services resulting from continued market share erosion. For the year, operating revenues were $8.7 billion, up from $8.2 billion last year. This six per cent increase is due primarily to growth in local and access service revenues and terminal, directory advertising and other revenues. Despite a slight increase in conversation minutes, long distance revenues decreased due to lower average prices.

For the fourth quarter of 1996, Bell Canada's consolidated net income applicable to common shares was $198 million compared with $138 million for the same period in 1995, the seventh consecutive quarter of growth. For the full year, net income applicable to common shares was $714 million compared with $502 million for the same period last year. The increase in earnings reflects revenue growth, the impact of the three-year transition plan, reduced pension expense and increased depreciation expense, primarily reflecting reduced service lives for switching and transmission equipment and outside plant. The number of employees decreased by 3,400 during 1996 to 44,900 at year end.

BCE MOBILE

BCE Mobile's impact on the Canadian Telecommunications group in the fourth quarter was a loss of $11 million which included provisions of $18 million relating to the write-off of customer hardware costs. Earnings from operations for the quarter were $7 million compared with $8 million for the same quarter last year due to a lower contribution from paging operations partly offset by a higher contribution from cellular service. For the year ended December 31, 1996, the contribution was $38 million, before one-time gains (net of provisions) of $2 million, compared with $32 million for the same period last year. Continued growth in cellular clients and a loyal customer base contributed to the year's results.

NORTHERN TELECOM (NORTEL)

Nortel contributed $224 million to BCE's consolidated earnings for the fourth quarter of 1996 compared with $179 million in 1995. For the year 1996, the contribution was $435 million compared with $334 million last year. The company achieved record orders and revenues with strong sales across all major product lines, in the U.S. and internationally, especially Europe and Asia/Pacific.

BELL CANADA INTERNATIONAL

Bell Canada International (BCI) posted earnings of $27 million for the fourth quarter compared with a loss of $19 million recorded for the same period in 1995. The results for the fourth quarter reflect a $56 million gain on the reduction of its ownership in Bell Cablemedia plc resulting from the issuance of shares to Cable and Wireless plc to finance the acquisition of Videotron Holdings plc. For the full year, BCI reported a contribution of $10 million compared with a loss of $66 million for the same period in 1995. Results for 1996 also include a $50 million gain on the sale of BCI's investment in CLEAR Communications, New Zealand; while results for 1995 included a one-time gain of $14 million. Overall, BCI's results reflect strong performances at Mercury Communications, U.K. and Comcel, Colombia; and lower results at Bell Cablemedia, U.K. and Jones Intercable, U.S.

DIRECTORIES

The Directories group contributed $17 million to BCE's consolidated earnings for the fourth quarter compared with $15 million for the same period last year. For the year, the contribution was $56 million compared with $50 million in 1995. Results for both the quarter and the full year are due mainly to higher revenues from domestic operations and improved results internationally.

BCE is Canada's largest telecommunications company. Its common shares are listed on stock exchanges in Canada, the United States and Europe. -0-

Results by Operating Group (unaudited)

($ millions, except per share amounts)

                              Fourth Quarter     Twelve Quarter

For the periods ended         1996     1995      1996     1995
December 31                   ____     ____      ____     ____

Revenues
Canadian Telecommunications
   -Bell Canada (excluding
    directory operations)     2,141    2,035     8,223   7,710
   -BCE Mobile                  262      203       926     781
   -Other Canadian Telecom      179      168       702     683
                              _____    _____     _____   _____
                              2,582    2,406     9,851   9,174

Nortel                        5,670    4,755    17,511  14,626
Bell Canada International        68       66       221     223
Directories                     136      187       556     570
Corporate                         7        8        28      31
                              _____    _____    ______  ______
Total revenues                8,463    7,422    28,167  24,624

Net earnings
Canadian Telecommunications
    -Bell Canada (excluding
     directory operations)      185      126       663     452
    -BCE Mobile                 (11)       8        40      32
    -Other Canadian Telecom      22       20        74      90
                              _____     _____     _____  _____
                                196      154       777     574
Nortel                          224      179       435     334
Bell Canada International        27      (19)       10     (66)
Directories                      17       15        56      50
Corporate                       (35)     (40)     (126)   (110)
                               ____     _____     _____   ____
Net earnings                    429      289     1,152     782
Dividends on preferred shares   (19)     (19)      (76)    (87)
                               ____     _____     _____   ____
Net earnings applicable to
 common shares                  410      270     1,076     695
                               ____     _____     _____   ____

Earnings per common share      1.29     0.86      3.40    2.23
                               ____     _____     _____   ____
Operating cash flow per
 common share(1)               4.70     3.78     14.73   12.09
                               ____     _____     _____   ____

(1) After payment of preferred dividends.

CONTACT: BCE Inc.

Don Doucette, 514/397-7192

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