BCE Inc. (BCE) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. Welcome to the BCE Annual General Meeting. [Foreign Language] I would like to turn the meeting over to Mr. Gordon Nixon, [Foreign Language] Mr. Gordon Nixon [Foreign Language] Please go ahead, sir.

[Foreign Language] Good morning, and welcome to the 2020 Annual General Meeting of Shareholders of BCE. My name is Gordon Nixon, and I'm pleased to preside over this meeting as Chair of the BCE Board of Directors. I now call the meeting to order. This year, due to COVID-19 pandemic and aligned with our priority to protect the health and safety of our shareholders and team members, we are holding the meeting via live webcast only. While circumstances are exceptional, we have made every effort to afford shareholders the same rights they would have at a physical meeting. We will shortly go over the procedures of the meeting and how shareholders can vote and ask questions during the meeting. The business of the meeting will be conducted in English and in French. Please note that you may choose the language of the proceedings by selecting the English, French or live feed at the top right of your screen. If you select the live feed, you will hear the original language spoken without any translation. [Interpreted] Please note that you may choose the language of the proceedings by selecting the English, French or live feed at the top right of your screen. If you select the live feed, you will hear the original language spoken without translation. I will now introduce the members of the BEC team joining me today. Mirko Bibic is our President and Chief Executive Officer; Glen LeBlanc is our Chief Financial Officer; and Michel Lalande is our Chief Legal Officer and Corporate Secretary. Also attending today's meeting via webcast are Pascal Lamoureux and Jacklyn Mercer, representatives of our auditors, Deloitte. Members of the Board of Directors as well as senior management of BCE are also listening to the webcast. Before I begin, I would ask Michel to take us through the procedures of the meeting. Michel?

[Foreign Language] [Interpreted] Thank you, Mr. Chair. Voting at today's meeting will be through the online portal only. Starting now, you can register your vote on all items of business for today's meeting. The polls will close once the last item submitted to a vote has been considered. As described in the proxy circular, only registered shareholders and nonregistered shareholders who received a control number from our transfer agent, AST, may vote during the meeting. Please note that you do not need to vote at the meeting if you already voted by proxy and do not wish to change your vote. To vote, click on the Vote icon at the top of your screen. This will open a separate window with the voting portal. Once on the portal, log in using your control number and the password BCE2020. Shareholder who wishes to address the chair with respect to an item being discussed may submit a question at the relevant time. If you prefer to wait to ask a question or make a comment or if your question or comment does not relate to an item considered at the meeting, there will be a general question and comment period at the end of the meeting. To ask a question, click on Ask a Question at the top of your screen and submit your question. Note that only BCE shareholders may ask questions. For the good conduct of the meeting, only questions of general interest to all shareholders will be answered. If your question is related to an individual matter, a BCE representative will contact you after the meeting. I would now like to bring your attention to the notice appearing on the screen. Today's remarks will contain forward-looking statements. These are based on several assumptions and are subject to important risks. The notice on screen contains a cautionary statement in this regard and is made on behalf of each speaker, whose remarks today will contain forward-looking statements. Finally, I can report that Mr. Bertrand Gely and Ms. Isabelle Vachon, employees of AST Trust Company (Canada) have been appointed to act as scrutineers for this meeting. Mr. Chair, I now turn the meeting over to you.

[Foreign Language] Michel, thank you, and thank you to everybody for connecting with us today. I would like to begin by acknowledging the tremendous work done by everyone at BCE and Bell to keep Canada connected during the COVID-19 crisis. It is a powerful reflection of Bell's 140-year tradition of stepping up to serve Canadians in any situation. I offer thanks to our senior management team and to the whole team at BCE, but also to those that they serve, including and in particular the health care workers, researchers, emergency responders and others working on the front lines to see our country through this crisis. We cannot thank you enough. As we move forward in 2020, our annual meeting offers us an opportunity to reflect on the fundamental strengths of BCE, which enable a strong financial and operational performance in 2019 as well as an outstanding response to the challenges of the current situation. Bell has been a builder of Canada's next-generation of networks and services since 1880, and that tradition of leadership continued in 2019, where we made capital investments of approximately $4 billion. Our goal and our purpose as a company is to advance how we -- sorry, advance how Canadians connect to each other and to the world. This has never been more important, and we are committed to living up to that responsibility. We reached more than 5 million homes and businesses with all fiber connections by the end of the year, brought more high-speed connections to rural Canada with wireless home Internet and continue to enhance Canada's best national mobile network while also laying the groundwork for the revolutionary advances of mobile 5G. All of Bell's networks have been tested during the COVID-19 crisis, and all have continued to deliver for customers around the clock. I think it is important to emphasize that few countries in the world have a network that compares to that of Canada, and it is a particular source of strength during these challenging times. We should never take that strength for granted. Coupled with the continued improvement in Bell's customer service, this network leadership also delivered an exceptional marketplace performance in 2019 with industry-leading subscriber growth and financial results that are well within our guideline target. BCE remains in a strong financial position with substantial liquidity and investment-grade balance sheet and a fully funded pension plan. Given the significant decline in virtually all asset classes over the past few months, the fact that our pension plan remains close to a fully funded position is a remarkable achievement. Bell successfully accessed the capital markets in 2019 to raise approximately $1.95 billion in debt, maintaining an after-tax cost of outstanding public debt at historically low rate of 3.1%. Underlining the ongoing confidence in your company in these challenging times, we were also able to access a further $1.75 billion in capital in late March. In February, we increased the common share dividend by 5% to $3.33, the 12th consecutive year we have grown the dividend by 1% or more. Given the strength of our balance sheet and liquidity position, we are able to maintain our dividend payments while managing through the challenging period of COVID-19. BCE's reputation as a corporate responsible leader was also further enhanced in 2019 with our acknowledgment as one of Canada's greenest companies, a top employer for young people and a leader in diversity and inclusion. And we further extended the Bell Let's Talk initiative, which continues to break new ground in mental health leadership. We continued that leadership during the present crisis with a number of initiatives to help our customers, our communities and those on the front lines, including Bell's recent donation of 1.5 million protective masks with the distribution in every region of our country. Before closing, I would like to take a moment to acknowledging the passing of my predecessor as Board Chair, Thomas C. O'Neill. Tom's loss has been deeply felt by all of us at BCE, where he played a key role in the successful transformation of our company. Tom led the Board during the challenging period after the collapse of the going private transaction in 2008, and his role in restructuring the Board and advising management during BC's turnaround was critical to our success. Tom was truly an inspirational figure in the Canadian business community, and that included his dedication to the advancement of women in corporate Canada. Last year, 36 senior executives in Canada hosted a private dinner to thank Tom for his mentorship. Everyone liked and respected Tom O'Neill, and we are heartbroken by his loss. I also note the departure of Sophie Brochu from our Board following her recent appointment as CEO of Hydro Quebec. We thank Sophie sincerely for her decade of outstanding service to BCE, and we wish her every success in this important new endeavor. We are nominating Thomas Richards for election to the Board today. Most recently, Tom was Chairman and CEO of CDW Corporation, a Fortune 500 company, and Tom brings a wealth of experience as a senior executive in the U.S. technology and telecommunications sector. Finally, I am pleased to announce that Sheila Murray will be joining our Board following the meeting today. As Board Chair of Teck Resources and former President of CI Financial, Sheila brings a wealth of financial and governance experience and insight to your Board. Welcome, Tom and Sheila, and Sophie, [Foreign Language]. BCE's industry-leading results in 2019, alongside Bell's dedicated response to the challenges of COVID-19, underline the strength of our business and our networks and our team. We recognize the important role and responsibility we have to all stakeholders and to our country, and we are dedicated to leveraging our assets to continue to deliver for you during this crisis and as it recedes. On behalf of my colleagues on the BCE Board and everyone at the Bell group companies, we thank you for your continued confidence and support. The meeting today will proceed as follows. After confirming the establishment of the quorum, we will proceed with the receipt of the 2019 consolidated financial statements and our auditor's report. We will then vote on the election of directors, the appointment of auditors, the advisory resolution on executive compensation and one shareholder proposal. To facilitate the proceedings and the context of this virtual meeting, I have asked Michel to move the first of 3 motions. Our President and Chief Executive Officer, Mirko Bibic, will then address the meeting, following which we will announce the results of those votes. And finally, we will conclude the meeting with a question-and-comment session. So starting with agenda item number one, the scrutineers have provided me with their report on attendance, which will be filed with the records of this meeting. The attendance report, together with the proxies which I hold, confirm that shareholders representing at least 25% of the outstanding shares of BCE entitled to vote attend the meeting. I therefore declare this meeting to be properly constituted for the transaction of such business as may properly be brought before it. The next item on the agenda is item number two. The BCE annual report for the year 2019 contains the consolidated financial statement with the auditor's report thereon. A copy of the 2019 annual report will be followed with the records of this meeting. Attending today is Mr. Glen LeBlanc, our Chief Financial Officer; as well as representatives from Deloitte, your auditors, to answer any questions you may have relating to our financial statement. Michel, are there any questions relating to this item of business?

Mr. Chair, there are no questions related to this item.

[Foreign Language] Michel. I remind you that the polls for all items submitted to a vote at the meeting are open. Shareholders may vote by clicking the vote button at the top of the screen. The next item of business on the agenda is the election of directors. There are 14 directors to be elected, and 14 eligible candidates have been nominated. Two nominees are President and Chief Executive Officer, Mirko Bibic, and Thomas Richards stand for election this year for the first time. The 14 directors nominated at today's meeting are Mr. Barry Allen; Mr. Mirko Bibic, Mr. Robert Brown, Mr. David Denison; Mr. Robert Dexter, Mr. Ian Greenberg, Ms. Katherine Lee, Ms. Monique Leroux, Mr. Thomas Richards, Mr. Calin Rovinescu, Ms. Karen Sheriff; Mr. Robert Simmonds; and Mr. Paul Weiss. Along with me, Gord Nixon, these are your Board nominees. Michel, are there any questions relating to this item of business?

Mr. Chair, there are no questions related to this item of business.

Thank you, Michel. Could you please move the motion?

[Interpreted] Mr. Chair, I move that each of the 14 persons previously named be elected a Director of BCE, Inc. until the earlier of the end of the next annual shareholder meeting and the date they cease to hold office.

[Foreign Language] Michel. The next item on the agenda is the appointment of auditors. Again, I remind you that the polls remain open. Michel, are there any questions regarding this item of business?

Mr. Chair, there are no questions relating to this item of business.

Thank you, Michel. Please move the motion.

[Interpreted] Mr. Chair, I move that Deloitte LLP be appointed as auditors of BCE until the next annual shareholder meeting.

Michel. The next item on the agenda is the advisory vote on BCE's approach to executive compensation. Michel, are there any questions regarding the advisory vote on executive compensation?

Mr. Chair, there are no questions relating to this item.

Thank you, Michel. Please move the motion.

[Interpreted] Mr. Chair, I move that the advisory resolution on executive compensation be approved.

[Foreign Language] Michel. The last item on the agenda is submitted to a vote is one of our -- is our shareholder proposal. I would now invite Mr. Willie Gagnon from MÉDAC to move and present the proposal. Mr. Gagnon, you will make brief remarks -- Mr. Gagnon will also make brief remarks regarding 3 proposals that MÉDAC withdrew after discussions with our management team. Operator, please open the line for Monsieur Gagnon.

[Interpreted] Hello. My name is Willie Gagnon. And as you've said, I act on behalf of the Mouvement d'éducation et de défense des actionnaires or MÉDAC. Good morning, Mr. Chairman. This is the first time that we have an opportunity to speak in a virtual shareholders meeting as all of them have been held this year. Thank you for overcoming this technical challenge to give us the floor. We submitted 4 shareholder proposals to BCE this year, as you have just stated. All those proposals are found in -- starting at Page 81 of the English version of the management proxy circular. We would invite shareholders to read these proposals. We had submitted 3 proposals that have been withdrawn based on our discussions with BCE, discussions that were fruitful and productive. We had submitted a proposal to follow-up on last year's advisory vote where certain shareholders, actually 12.49% of shares have been voted against the advisory proposal. We are satisfied with the consultation steps BCE has taken with its shareholders as well as its review of compensation practices, and we are satisfied with the outcome of those discussions. And we have agreed that, that proposal should not be put to a vote. We had also submitted a proposal entitled report on the integration of environmental, social and governance and management, which read as follows. It is proposed that the Board of Directors table at least every 2 years a report on the importance it attaches to the integration of environmental, social and governance criteria in assessing the performance of the company. That proposal was intended to guarantee that BCE align its ESG policies on its compensation policy. And in your reply, you state senior management is responsible for the ESG goals of the company that are built into the company's operational goals that are part of the annual incentive compensation program. The Head of Human Resources and the Chief Legal Officer oversee progress against these objectives. Furthermore, in 2020, the Compensation Committee has introduced a metric to track corporate performance against our ESG targets, some of which are disclosed in our corporate responsibility report. We are satisfied with this answer, and therefore, we have agreed with BCE that, that proposal should not be put to a vote either. Thank you very much, Mr. Chair. We had also tabled a third proposal that will not be put to a vote either, dealing with the compensation of the new President and CEO. You know that senior management compensation disclosure does not cover newly arrived executives or those who came into office during the course of the year. BCE has decided to disclose more information about the new CEO's compensation that it was bound to do under the letter of the regulation. We believe that BCE has complied with the spirit of the regulation, and therefore, we are happy to agree that, that proposal should not be put to a vote either. So only 1 of our 4 proposals will be put to a vote today. That proposal is entitled 40% target for Board gender representation, and it is found that Page 81 of the English version of the circular. It is proposed that the company adopt a target of more than 40% for the composition of its Board of Directors for the next 5 years. For a number of years now, MÉDAC has been calling for an increase in the number of women on the Board. We believe that all corporations, especially listed issuers, should reach parity or have policies in place to attain parity. This is already the case with some companies. We don't understand why it is not yet the case with BCE. We are well aware that there are a number of women on the Board at this point, but we believe that the corporation should adopt a policy aiming at parity. And to that effect, we have made this proposal. We are actually asking for less than what we would hope for. So we would invite shareholders to vote in favor of this proposal. And we would like to add our sincere condolences to those who are close to Mr. O'Neill, with whom we had, over the years, the most cordial relationships. We are very sorry to hear of his passing. Thank you very much, Mr. Chairman.

[Foreign Language] Monsieur Gagnon. Michel, are there any questions regarding this shareholder proposal?

Mr. Chair, there are no questions regarding the shareholder proposal.

Thank you. Please note that the polls will close shortly. The results will be announced before the question-and-comment period. I would now ask Mirko Bibic, our President and Chief Executive Officer, to address the meeting. Mirko?

[Foreign Language] [Interpreted] Earlier this year, I created new operational objectives for Bell that I'd introduce you to this morning. They not only inform our financial and operational objectives, but also Bell's comprehensive response to the COVID-19 crisis. Since 1880, Bell has delivered the best in communications networks and services to Canadians. Throughout our 140 years, Bell teams have been there for Canadians through many crises, world wars, natural disasters, pandemics in the past and the present. We are facing a new challenge, but history shows that Canadians can always count on Bell to keep them connected no matter the circumstances. When I became CEO on January 6 of this year, I announced a new goal for Bell, advancing how Canadians connect with each other and the world. At the heart of all communications, network connections are paramount to Canada's social and economic prosperity. This has become even more clear as social distancing, isolation and other responses to the crisis have changed the way we live and work. These are the 3 principles guiding Bell's actions during the crisis. One, we will continue to keep Canadians connected and informed. Two, we will protect the health and safety of the public, our customers and our team. And three, we will help our customers and our communities get through the crisis, thanks to a broad range of supports. We are all learning a lot about how important it is to stay connected in the face of COVID-19 and its many impacts. The strength and resilience of Bell's networks as we respond to the crisis reflects our significant and ongoing capital investment. With the Bell team making the most critical connections happen 24/7 for people and organizations of all kinds across Canada, the importance of access to world-class broadband networks is more clear now than ever. Bell's networks are performing with 99.99% overall availability despite the significant surge in demand for our services. You can see some of the examples on Slide 4 of my presentation. Home Internet volumes up as much as 60% during the day and 20% at night, and landline phone volumes growing as much as 200%. Meanwhile, Bell TV and Bell Media continue to keep Canada informed, entertained and engaged throughout the crisis. This includes unprecedented audience numbers for TV and radio news as Canadians turn to CTV and other trusted Bell Media brands to stay in touch with development. With more people at home both day and night, including families looking for ways to stay entertained, live TV viewership is up 25%, while viewing of our Crave service is up 75%. As I mentioned, a key priority during this crisis is keeping the public, our customers and our teams safe. We've implemented strict sanitation and safety procedures across our business and adapted how we operate. Bell has closed the vast majority of our retail outlets, but kept some open to deliver critical customer services, and we have redeployed thousands of frontline team members from stores into our customer care operation. I should note that we are now working to gradually reopen our outlets as the provinces have begun lifting restrictions, all in strict compliance with federal and provincial public health requirements. Our customer care representatives are doing a fantastic job helping customers resolve issues over the phone through e-chat or on social media, reducing the need to dispatch technicians to customer locations. And when we do need to send out technicians, our new Assisted Self-Installation and Repair program lets them perform virtually all their work outside the home, connecting with customers from their service vehicle via phone or video links. We're also guided by a focus on supporting our customers and our communities as we all work our way through this crisis together. For customers, we've waived Internet overage and roaming charges, provided a broad range of free news and entertainment programming, suspended new price changes and implemented programs to assist customers facing financial difficulty. We've accelerated the rollout of our Wireless Home Internet service to rural location, with the Bell team managing to bring new broadband coverage to 137,000 more homes in 100 small communities last month than we had originally anticipated. As many face isolation and uncertainty in these times, we've increased Bell Let's Talk funding by $5 million, including immediate support for emergency services, youth and families. Bell Mobility is also supporting hospitals, shelters and other social and emergency services with thousands of donated smartphones and tablets. And as we acquired personal protective equipment for the Bell team, we also leveraged our global supply chain to acquire 1.5 million additional protective masks for donation to frontline public workers throughout Canada. I'd like to turn now to the overall strategy we're executing to achieve our goal to advance how Canadians communicate with each other and the world. These 6 strategic imperatives will drive our growth and success as Canada's leading communications company over the coming years. First is build the best networks. As I noted, COVID-19 has clearly demonstrated the consistent performance of our networks in a time of unprecedented demand. There is no doubt that building the best networks really is in our DNA. Our massive all-fiber network deployment across 7 provinces is now more than 50% complete, and we were pleased to announce major new fiber builds in the cities of Winnipeg and Hamilton. Bell LTE remains Canada's best national mobile network, reaching more than 99% of the population and offering a strong foundation for 5G wireless. Bell is ready to deliver initial 5G service in urban centers across Canada, and we will be enhancing 5G as additional wireless spectrum becomes available, including in this year's federal government auction of 3.5 gigahertz spectrum. Second imperative is driving growth with innovative services. Leveraging our networks is a key driver of Bell's ongoing growth. For example, with our unparalleled fiber backbone, we're fortunate to offer the highest performing services in the residential marketplace, including the fastest Internet, the best WiFi and innovative new Bell smart home services that enable customers to easily manage all their services in a single app. I'll now turn to our third imperative, deliver the most compelling content. The world is undergoing a total transformation in the way we consume content, and we're focused on delivering the best across any screen our customers may choose. Bell Media is a Canadian leader in content creation, investing hundreds of millions each year in original production. At the same time, we've secured strategic agreements with blockbuster names like HBO, Showtime and Starz, as well as innovative new brands like the recently launched Quibi short-form video platform backed by legendary TV producer, Jeffrey Katzenberg. [Foreign Language] Last month, we obtained CRTC's approval for a new French language television channel. We are strengthening our position in Quebec by offering news and entertainment of great quality. Given the success we've had in the English channel, we've launched Crave, which provides content in French. This allows us to strengthen our leadership position and provide more choices in the Quebec market. Largest TV provider between 5 Bell Satellite TV and Alt TV, which is our innovative live TV streaming service, as well as our growing range of app-based viewing options like TSN and RDS day passes, we truly are offering customers more choices for watching TV on the screen of their choice. I'll now turn to our fourth imperative, which is champion customer experience. Bell is transforming our culture to champion customer experience at every level of the organization from product development to sales to ongoing customer service and support. By investing in our service teams and technology while continuing to innovate and self-serve with our MyBell platform, our mission each and every day is to make it easier for customers to do business with Bell in every way. We're seeing significant improvements in a range of customer experience metrics, like answering 80% of our incoming calls in 20 seconds or less and cutting hold times by almost 30%. And just yesterday, J.D. Power announced that Virgin Mobile has once again been ranked #1 in customer care by Canadians, the fourth straight year it has topped the rankings. Congratulations to the Virgin Mobile team. Turn now to our fifth imperative, which is operate with agility and cost efficiency. Operating with agility and cost efficiency is crucial to our ability to compete in an intense marketplace. We are transforming our business by leveraging technology to simplify and accelerate our operation. We're finding innovative online and automated ways to improve service while reducing costs, a win for our customers and a win for our shareholders. Turning now to our sixth imperative, engage and invest in our people. The Bell team is our company's greatest competitive advantage, especially in an era of rapid technological change. We're investing in our people with a range of leading programs. This includes introducing a new wide-ranging flexible work policy in February, which has certainly been timely and further accelerated by COVID-19. We launched a new virtual health care program for our team members and their families that offers free and confidential online medical consultations 24/7, another welcome benefit during the current crisis. And of course, Bell remains a trailblazer in workplace mental health, leading by example and helping other corporations to set up their own programs. [Interpreted] I would like to take a moment to acknowledge -- especially during the COVID-19 crisis. The crucial work our people are doing has been widely acknowledged by our consumer and business customers, by governments and health care workers and others working on the front lines. This crisis is one of the greatest challenges our country has ever faced in many generations, and I am very proud to work alongside my more than 50,000 fellow Bell team members to keep Canada connected and informed throughout it. Thank you to you all for everything you do to serve Canadians during this crisis. And while I can't thank our Bell colleagues enough, we've launched a series of new ads on TV and social media to show our appreciation to our team, and you can watch them on the Annual Meeting page at bce.ca. [Interpreted] The mission of BCE is to provide its shareholders with value, and I'd like to discuss our success. BCE is widely renowned for steadfast dividend growth. And even in the current crisis, our dividend remains secure. Our 2020 dividend represents our 12th annual consecutive increase of 5% or more. BCE offers consistent leadership in a competitive marketplace, and it has clearly outperformed the leading indices. We continue to offer very attractive yield in this low interest rate environment and a stable and secured dividend. In closing, I would like to highlight Bell's history of always being there for Canadians, especially when they need us most. April 29 marked Bell's 140th anniversary. Since 1880, the Bell team has delivered the best in communications to Canadians. Bell in 2020 is proud to share in this long legacy of service, and I'm honored to work with this outstanding team to serve our customers, our shareholders, our team and our broader communities, as, together, we deliver on our goal of advancing how Canadians connect with each other and the world. Thank you, everyone, and I'll now turn the microphone over to our Chair. Back over to Gord.

Thank you very much [Audio Gap] important update. I will ask now Michel -- I will now ask Michel to provide the preliminary results of the scrutineers' tabulation for today's vote.

Thank you, Mr. Chair. The scrutineers confirm the following preliminary vote results. All director nominees received at least 95% vote for, approximately 96% of votes are favorable to the appointment of Deloitte as auditors, the advisory resolution on executive compensation is approved by approximately 95%, and the shareholder proposal was defeated by approximately 95%. The scrutineers' final report will be available shortly after the meeting.

Thank you very much, Michel. We will now take questions and comments from shareholders. Michel, can you remind us of the procedure to ask a question?

[Interpreted] To ask a question, click on Ask a Question at the top of your screen and submit your question. Note that only BCE shareholders may ask questions. For the good conduct of the meeting, only questions of general interest to all shareholders will be answered. If your question is related to an individual matter, a BCE representative will contact you after the meeting. To allow us to respond to as many questions as possible, we will limit each shareholder to one question and ask that it be succinct.

Thank you, Michel. Let us now address the first question.

[Interpreted] Thank you, Mr. Chair. MÉDAC. What would be different in the organization as the virtual AGM if the company had prepared it without the pandemic or any state of emergency?

And I will answer. Thank you very much for the question. We made every effort to provide shareholders the same rights as an in-person meeting, including the right to vote and ask questions. And in such cases where we would have a normal AGM with no health crisis, I suppose the Board members would have been with me. But in the current circumstances, they are online. And much like with an in-person AGM, shareholders today were allowed to vote by proxy, to vote during the meeting by clicking on the icon to ask questions, as we're doing now, during the question-and-answer period, to select the language of their choice and to see my presentation that I just made a few minutes ago as they would have in an in-person meeting. And finally, we also allowed MÉDAC to share its shareholder proposal over the phone. So we feel that we've provided the same rights to our shareholders as an in-person meeting.

I have another question from [ Jeff Carlson ], a shareholder. BCE's dividend payout ratio when compared to diluted earnings per share is upwards of 95%. This ratio is considerably higher than BCE's stated free cash flow payout policy range of 65% to 75%, as noted in the BCE's letter to shareholders. This payout ratio has been the case for BCE for several years and leaves very little room for error. It is fully diluted earnings per share, not free cash flow, that ultimately sustains dividend growth. My question is, what specific step is BCE taking to improve its earnings per share in order to be able to support and grow its dividend?

Thank you for the question. I'll start. And Glen, if you would like to add on, please do, but I'll start. During the -- this crisis, in particular, we have decided to take the step to maintain absolute dollar level of capital spending in -- on projects that are very strategic for BCE for today and for the long-term health of the company to serve all our stakeholders. So that is our customers, the communities we operate in, our shareholders and, of course, our team members. So even despite the crisis, we are continuing to build our networks, whether they be our fiber networks, our mobile networks or our Wireless Home Internet networks. We are making investments now to meet the demands for capacity during the crisis. As you can imagine, during this COVID crisis, there's been a big surge in demand for our networks as people are at home using the Internet day and night. And we are also making investments and customer experience so that we are able to serve customers the way they want to be served and the way we now need to serve them, particularly with stores having been closed. So we're making those investments. This is for the long-term health of BCE, for the long-term growth prospects of BCE to manage during the crisis. And at this time, our liquidity is strong. Our balance sheet is strong, and the dividend is secure for the foreseeable future. And just this morning, we announced that we will be making the next dividend payment effective July 15. Glen, if you would like to add, go ahead. Otherwise, we'll queue on to the next question.

Sure. Mirko, I will be happy to add. Although we understand and respect the importance of EPS as a financial metric, how much of our earnings gets converted to cash is critical in the sustainability of the dividend. And with that, we constantly report against our payout ratio -- against free cash flow payout ratio, which historically has been, as stated, between 65% and 75%. What that allows us is between 25% and 35% of our free cash flow unencumbered to make debt repayments or making strategic investments. Our focus is always in growing earnings to support our current dividend and support dividend growth into the future. And that is why, historically, including 2019, our financial guidance was growth in EBITDA of 2% to 4% and prior to the withdrawal of guidance in 2020 due to COVID-19. Once again, our growth in earnings, as defined by EBITDA, organic earnings of 2% to 4% was our objective. Thank you.

Thank you, Glen.

The next question comes from [ William Weisenthall ]. And the question is, is there sufficient broadband to accommodate the increased demand on the network?

Yes. So as I -- thank you for the question. So as I indicated during my presentation, the Bell team has done an absolutely phenomenal job meeting the surges in demand and the increases in capacity requirements on our network, can see in my slide presentation, in particular the home Internet, residential home internet traffic up by 60%, Wireless Home Internet net traffic up by 40%, some of the voice requirements up by 200%. And we've met these challenges by investing now to meet those demands. And as I mentioned, remarkably, our networks were operating at 99 -- above 99.99% in availability. So congratulations to the Bell team. We stepped up when our customers and our country needed us the most.

The next question comes from [ Kim Miller ], and she's asking, what steps is the company taking to encourage more balanced gender representation in executive management and on its Board?

So we're very mindful of the need to have a diverse representation on the executive team and on the -- in the management ranks. So it is something we look at consistently as an executive team, and we make sure that there is a diverse representation. I'm pleased to say that when I became CEO in January 6, we made 2 very prominent promotions. Claire Gillies became President of Bell Mobility running Canada's -- one of Canada's largest mobile operations. And Karine Moses, who is President of Bell Media Quebec, also became Vice Chair of Quebec. So 2 very highly talented individuals who have are huge contributors to the management team, and it's something we look at very closely. Gord?

Yes. So with respect to the Board, we have an objective of gender representation, female gender representation, of a minimum of 30%. We signed on to the 30% request of Catalyst and other organizations. We have just added Sheila Murray, as I mentioned in my remarks. Unfortunately, Sophie Brochu has left the Board for a very good reason as she's accepted the CEO position at Hydro-Québec and because of the conflict with BCE, is not able to remain on the Board. I would say that while that drops us temporarily just below 30%, we have 3 directors retiring next year, and so we are managing the Board -- a succession at the Board to manage around that. So we have 3 male directors who retire next year. So at our annual meeting next year, if everything stays the same, we'd be around 36% in terms of female representation on the Board. And I would assure you as Chairman that our objective is not just 30%, but we would like to be over 40%. And I'd be very disappointed if we weren't over 40% in terms of female representation on our Board by the next AGM or the AGM after that. So rest assured that we are going to continue not only to meet our requirements to get up to a much more equal representation.

Thank you. The next question comes from [ Daniel Alonde ]. It reads as follows. If the COVID-19 pandemic lockdown continues for several months across Canada, has BCE prepared forecast on eventual impact this could have on BCE's Bell's financials? For example, customers' inability to pay their bills for telecommunications, media services?

Thank you for the question. So while we cannot, as a management team, predict how long and how severe the pandemic will be, we certainly are paying very close attention on a daily basis to developments and to the impacts that it is having on our customers and the impact that it is having on our financials, and we are monitoring this very closely, including with our Board of Directors. And as I mentioned in my opening presentation, we are taking steps to assist our customers, help them manage through this if they are facing difficulties as a result of COVID-19 from a financial perspective. So things like waiving overage charges on residential Internet, waiving roaming charges and making flexible payment arrangements for those who are unable to pay fully on time. So we're monitoring collections very carefully. We are working with our customers because we understand what they're going through. And yes, we are ready for any eventuality, and we'll address those as they come, but we certainly can't predict how long and how severe the pandemic will be.

Thank you, Mirko. The next question comes from [ Ann Startrak ]. And her question is, will you make this virtual access an annual event? I really appreciate taking part. Thank you.

Thank you very much for the question, [ Ann ]. We have not yet made a decision. We certainly see the clear benefits in a virtual meeting, which include the possibility of a much larger base of shareholders able to participate, which we think is a great thing. That said, we will certainly consider comments by our shareholders, large and small, and overall perception by the marketplace before we make any decisions for next year.

Thank you, Gord. Next question comes from [ John Flanagan ]. My question, with the excitement of the introduction of 5G, I need to upgrade my smartphone, and I'm wondering when 5G is going to be launched.

Thank you for the question, [ John ]. So we are ready with our initial 5G network, but we have paused on the official launch of that network because of COVID-19. By and large, it hasn't -- our judgment was that it wasn't the right time to launch this right at the onset of the pandemic and retail stores being closed. So there'll be more news on that soon. I can't give you a precise date because it'll depend on COVID-19 developments. But we will have, at Bell, the best 5G network, for sure. And all 5G phones that are available on market will work on Bell.

Thank you, Mirko. The next question comes from [ Scott Bradley ]. The federal government, I suspect, is giving Bell Canada financial resources to expand wireless to the home wireless to the home. Why is this work not being given to Bell Canada Unifor technicians in Ontario and Quebec? Why and who made this decision? Accolades are constantly being given to these technicians, and the work is within the scope of labor currently being performed.

Thank you, [ Scott ]. Well, our technicians and our entire Bell team of 50,000-plus certainly have stepped up for our customers and for Canada and for shareholders, frankly, at all times, and especially during this crisis. And I mean, again, like I said, I can't thank them enough. And that is the reason behind the accolades, which are most sincere. We were on wireless home Internet, just as a factual aside, on wireless home Internet, in fact, there has been no government subsidy support for deployment of that network. But be that as it may, we were very pleased to be able to serve more rural communities than we had initially planned because we understand the need, particularly in rural communities, for the very best in broadband services. And as far as the work being performed, who's performing the work of installation of wireless home Internet, look, my approach is going to be to have constant and constructive dialogue with Unifor and union leadership. And that will be, like I said, constant and productive and constructive, and I'm looking forward to further discussions with Unifor.

Thank you, Mirko. We have received a number of question relating to rural plans deployment for the company. So instead of reading any specific question in that regard, I think I would paraphrase those question as asking what are Bell's plans with regard to rural deployment on the Internet side.

Okay. So on -- wireless home Internet is an innovative new service that we launched last year to serve rural communities with high-speed broadband services that we otherwise wouldn't be able to serve in the near term or potentially at all with fiber. And we understand how important these services are and how they're welcomed when we arrive in a community. We have an overall deployment plan to address approximately 1 million homes in rural communities across our operating footprint with wireless home Internet. And at the moment, we are able to provide service to between 350,000 and 400,000 such homes. So we're not quite yet halfway through our deployment program, but we really just started it in 2018, and we're looking forward to complete the job on the million homes. And for any shareholders customers out there who live in rural communities, I invite you to go on bell.ca, and you'll see the list of communities we're able to serve today with that service.

Thank you, Mirko. The next question comes from [ Al Best ]. Good morning, Mr. Bibic. My name is [ Al Best ]. I am in Ottawa. I am a shareholder and a proxy holder. First, congratulations on your appointment, and I wish you outstanding success. My first question is related to the compensation vote. I apologize for submitting this question out of sequence, but my Bell Internet went down when I was submitting the question earlier. I estimate that about 1/2 of 1 million shares eligible to vote on the compensation matter are held by directors and neos. Certainly more than 0.25 million shares are held by the directors. The voting of these shares put insiders in a position such that its votes might be perceived to be a conflict of interest. Are my estimates fairly accurate? And shouldn't this matter be presented to shareholders in an open way?

Yes. It's Gordon Nixon speaking. I will respond to that question. The shares held by directors would be a very, very miniscule amount compared to the outstanding float of BCE. They would not collectively have the ability to influence that vote in any material way. So it's really -- I appreciate your question, but it's really a nonissue. I mean one of the things about BCE, it's one of the most widely held stocks of any company in this country. So that when it comes to votes, democracy is probably more prevalent in our company than it is in most because there are very few controlling or significant shareholders. So you should be rest assured that the vote is very reflective of the overall shareholder, the base. It would not be influenced by director shareholding.

In fact, to -- just to -- Gord, as you mentioned, we have approximately -- well, we have approximately 900 million shares outstanding in the float, so just to put it in context.

Right.

Okay. So we have one question from [ Peter Ross ]. Given the questionable behavior and the international lack of trust of the Chinese Communist Party related to COVID-19, do you think it's prudent to allow CCP-controlled Huawei Corporation to have any of their infrastructure part of BCE's 5G's initiatives?

Thank you. So we -- in February, early February of this year, we announced that for 5G, our first equipment supplier would be Nokia. And as we work with multiple suppliers, we have multiple suppliers in our supply chain, and we will follow all government requirements as it relates to the use of any particular manufacturer's equipment in our networks. Security is of outmost importance to us. Following government guidelines is also of outmost importance. We haven't yet received direction in that regard from the government of Canada. But the first supplier is -- for 5G is Nokia.

Okay. At this time, Mr. Chair, we no longer have any questions that would not be duplicative or coming from the same shareholders. Therefore, the question-and-period session can be ended. We will respond to any individual questions shareholders may have asked separately at this time.

Thank you very much, Michel. There being no further questions, this session is closed. I would like to thank all our shareholders for attending. We'll be very interested to find out how many were on the line, and we would certainly welcome any views from shareholders in terms of their perspective on virtual versus physical meetings as we move into the decision for next year. But we do appreciate your participation. We appreciate your questions, and we appreciate your support. And with that, the meeting is terminated. Thank you. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]