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No competitor can match the scope of services we deliver to our customers. Nor can they match our commitment to growth. The year ahead will be marked with significant developments as we move decisively to make investments and forge alliances that will propel us into the new millennium as the only Canadian company equipped to compete in the global communications arena. As we chart a course through an industry swept by change and upheaval, the Bell brand, Nortel Networks and our millions of customers remain our strongest assets. It is our responsibility, therefore, to safeguard BCE's attributes of service excellence, innovation and reliability. We will continue to develop our enormous potential for our shareholders, employees and all Canadians.
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As we move to increase our reach and scope, we are guided by three principles: customer focus, growth and financial performance. These three pillars support our mission and every initiative we undertake.
In 1998, we committed some $2.9 billion to growth-oriented investments. These investments ranged from supporting Bell ExpressVu — which 18 months ago did not exist and now has some 200,000 customers and more than 300 employees — to taking a significant ownership position in the CGI Group Inc., an international player in the integration of information systems.
As these and other developments in this report suggest, the pace of change in our industry is relentless. We must be equally relentless in our pursuit of new opportunities — even if it means changing some of our most cherished assumptions. Bell Canada, for example, is drastically different from what it was just five years ago, and it will have gone through yet another metamorphosis in five years' time.
Sharpening our Focus
To help consolidate our activities and focus our strategic approach to markets, we have grouped with Bell Canada the other parts of our business which offer communications services such as Bell ActiMedia and Bell Mobility. This move helps us enhance the overall value of our offering to our customers and thereby creates greater value for our shareholders. We are also creating two new groups that we believe will provide greater growth opportunities. Our new media group will offer content and satellite services; and the second will focus on systems integration and Internet solutions.
Internet: Power and Potential
Our different businesses have varying degrees of growth potential. Our e-commerce activities can serve as a case in point. Electronic commerce represents the burgeoning potential of life on the Internet — an environment where connectivity is widespread and where information, entertainment and transactional services abound.
Consider that nearly 150 million people are today connected to the Internet; that Internet traffic doubles every three months; and that in less than one year, 80 per cent of the traffic on telecommunications networks will be data. This explains why most areas of our business are moving to capitalize on this tremendous potential.
It also explains why Nortel is re-inventing itself to become a company focused on the Internet needs of its customers. Nortel's purchase of Bay Networks in 1998 has enabled it to vault ahead of the competition in this critical growth area.
BCE Nexxia, which will operate in Canada under the name Bell Nexxia, is another example of positioning for growth on the Internet. While Bell Nexxia will offer a full range of traditional telephone services, its real significance is that it is Canada's leader in broadband and Internet-based services, specializing in applications and transport capabilities. We are investing three quarters of a billion dollars in this company, which will operate nationally in Canada and in select U.S. markets.
An Industry Made New Again
It has been said that telecommunications is an old industry that has become new again, giving birth to products and services that are forever changing how we live, work and play. This is why we will continue to invest in areas of business where we see demand growing, and where we can serve our customers better.
Amidst this rich profusion of technologies and options, however, there is the risk of confusion in the marketplace. This is why the BCE group of companies must remain customer focused. Customers want simplicity, and turn to us to provide it. But to do this we must be diversified within the communications industry, with the scope to offer suites of services packaged under a single brand.
Our Financial Targets
Management has set firm financial targets for the BCE group's overall growth. Chiefly, we intend to increase revenues by six to eight per cent per year through new investments and the expansion of existing businesses.
Customer Focus, Growth, Financial Performance
The one sure route to strengthening our financial performance and increasing long-term shareholder value is by growing our business. And the way to grow our business is by serving customers more completely, more competitively and more conscientiously than anyone else.
That is our commitment.
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