BCE Inc.

The stable outlook is based on the strength of the company's operations, which, combined with good cost control, should help spur annual organic EBITDA growth. In addition, we expect BCE to generate about C$1 billion of annual discretionary cash flow after dividends, providing it with sufficient financial flexibility to fund its wireless spectrum acquisitions. Based on these assumptions and recent proceeds from the data center sale, we expect BCE's adjusted debt-to-EBITDA ratio to remain close to 3x through the next 12 months. We could lower the ratings over the next year if BCE's adjusted debt-to-EBITDA ratio rises above 3.25x, with poor prospects for deleveraging. We believe this scenario could occur in the near term if the company makes large debt-funded

...BCE wireline growth will be driven by net internet adds, further strengthened by steady FTTH expansion. Despite a slowdown in the economy, BCE Inc.'s wireline division has remained resilient as reflected in the company's 63,000 net retail internet adds in third-quarter 2020 versus 19,000 last quarter, as well as the added 19,000 net new IPTV customers compared to losses in second-quarter 2020. As a result of strong net adds over the past few quarters, wireline revenue was mostly unchanged from second-quarter 2019, supported by the 10% improvement in internet revenue. Revenue stability was driven by a combination of pricing changes, reduced promotional activity, and customers choosing higher-priced broadband services amid a shift to a work-from-home environment. S&P Global Ratings believes that the ongoing expansion of BCE's fiber network (covering 56% of broadband footprint) should also contribute to sustained data-revenue growth, helping to offset a temporary reduction in business revenues...

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