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Across this network will flow voice, video, music, business data, interactive gaming, the Internet and anything else that can be put into digital form. This is an area where we must lead. And we will. 

## 3 . Next Generation Services 

Providing our customers with the information, entertainment, connec- tion and productivity that are the true purpose of our network. 

The same new technology that represents such a promising future for Bell also hastens the decline of our legacy telephone business. Rather than resist this decline, we are embracing it. 

An example: in 2004, we introduced virtually unlimited long distance for $5 to promote our consumer product bundle. It was a signal that we are prepared to lever our existing legacy business to attract new customers and drive new value-added growth. 

Some observers think this approach is too aggressive. 

Some would like us to play defence. We disagree. We think being bold is the best defence. 

Our growth will come from new products delivered over our new IP network. In 2004, fully 40 per cent of our revenue was generated by such “growth services.” In just two years, we expect this to increase to 55 per cent. 

A case in point: our IPTV partnership with Microsoft announced last year. Building on our Sympatico-MSN relationship, we are now working with Microsoft to begin trials of television over existing copper-wire telephone connections—in 2005. 

These services, and many others like them, are the long- term growth story for the company. We are moving aggressively to bring new technologies and new services to market—in ways that our customers can use and will value. Technology is not an end in itself. It is a means to build a high-value relationship with each and every customer. 

## A cultural transformation 

To reach these ambitious goals, we will draw fully on the great talents of all of our people. My meeting in February 

with employees was just one of many. In thousands of conversations I have had with people at Bell, one thing is clear: all of us want and expect to deliver what our customers need and want—great experiences, reliable bandwidth, next generation services. 

We know that, too often, the very processes, procedures, and systems we have put in place in the past to run our business stand in the way. So now our challenge—perhaps the toughest and most important one we face—is to get out of the way of our people so they can do what they know they need to do. What they want to do. 

That means changing our culture—not just what  we do, but how  we do it. How we work, how we do business. 

Today, we are still too hierarchical. We tie up good ideas with red tape. 

## Where we are headed 

But every day we are working to get in step with the future. We are doing what it takes to instill a culture of confi dence: an environment that promotes accountability, personal initiative and merit. A place that cultivates the creativity and the leadership of our people. 

We have a clear long-term strategy. Our business results tell us it’s the right direction. 

But perhaps what matters most is what I heard from the employees I met with that February morning. In their words, in their stories, and in their dedication, I see the clearest path to building a company that inspires our people and that offers our shareholders a future of increasing returns. 

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