opportunities created by IP-based communications should allow us to deliver on the guiding principles of our strategy of customer simplification, innovation and efficiency. This strategy is founded on three priorities: 

## 1 . Deliver an enhanced customer experience with the objective of enabling a significantly lower cost structure at Bell Canada. 

A year ago we announced a far-reaching, company- wide program called Galileo (Galileo) designed to simplify and enhance the customer experience. In the Consumer segment, Galileo aims to unify the cus- tomer experience across all product lines, and elimi- nate the costs of complexity associated with multiple systems and processes. In the Business segment, Galileo aims to deliver to customers a streamlined service offer based on IP, thereby eliminating the costs of multiple data networks and related processes. 

In 2004, we made significant progress on our Galileo initiatives in both our Consumer and Business segments. 

In our Consumer segment: 

• we gained 369,000 subscriptions to the Bell bundle (a combination of wireless, Internet and video services in one offer), bringing our total sales to 431,000 since it was launched in September of 2003. Over the year, 48% of new bundle activations, 49% of fourth quarter activations and 51% of December activations included the sale of at least one new service. 

• the $5 Long Distance Bundle that we introduced in June 2004 was extremely successful, gaining approxi- mately 229,000 customers by year end 

• we completed a major overhaul of Bell ExpressVu’s service offerings to stimulate growth and invigorate the business. This included repackaging programs and simpler pricing. 

• we completed the migration of all Bell Mobility postpaid customer accounts to a new billing platform that will enable us to consolidate all of a customer’s services onto a single bill 

• we also made significant advancements in improving the customer experience in our corporate stores. 

In our Business segment: 

• we made significant progress on our key objective of having 100% of our core traffic moved to a pervasive national IP multi-protocol label switching (IP MPLS) 

network by the end of 2006. At the end of 2004, 61% of the traffic on our core network was IP-based. 

• we also began the process to discontinue several legacy data services by announcing in 2004 that we would not sell these services to customers who do not use them currently. This list of legacy services includes Frame Relay, ATM, Megastream, Bell Elec- tronic Business Network, some business long distance services from the VNet portfolio (virtual corporate network services for large companies) and some packet services from the Datapac portfolio. 

In 2005, we will continue to work on both of these areas. 

In Consumer, we will continue to deliver on our strat- egy to win the broadband home. In particular, we: 

• aim to significantly increase the number of customers on the Bell bundle 

• will launch a redesigned Bell.ca site with the objec- tive of increasing online sales 

• will rollout a new, simpler bill for our customers. 

In Business, we will: 

• continue the process of discontinuing legacy data services by expanding the list of services that will no longer be sold to customers who do not currently use them and by beginning to stop selling these services to existing customers 

• continue to actively encourage customers to adopt new IP-based services as well as to migrate from legacy services to new IP-based services 

• increase the adoption of self-serve and web-based interfaces by Enterprise customers 

• eliminate network elements and standardize core operating processes. 

By the end of 2006, through our Galileo initiatives, we are targeting to remove between $1 billion and $1.5 bil- lion in annual costs from our current cost structure. 

## 2 . Deliver abundant bandwidth to enable all the services of the future with the reliability and security that customers require. 

Over the next four years, we plan to make a significant investment to expand the reach and amount of band- width available to customers. We are aiming to be able to deliver by 2008 up to 26 Mbps to 85% of urban households in the Québec City to Windsor corridor, or 

