BCE Pushes AI and Fiber at AGM, but Shareholder Dividend Concerns Persist

What happened

At its 2026 annual general meeting, BCE management outlined a strategy centered on artificial intelligence, fiber connectivity, and digital media to drive growth, while shareholders pressed the board on dividend sustainability, share performance, and AI-related risks. The meeting highlights the ongoing tension between management's vision of investing in capital-intensive infrastructure and the market's demand for income stability, especially after the 50% dividend cut in 2025. Despite BCE's bullish rhetoric on AI and fiber, the company faces elevated leverage (net debt/EBITDA ~4.75x), regulatory headwinds from mandated wholesale fibre access, and integration risks from the Ziply Fiber acquisition. Earnings have been severely compressed, with net income collapsing from ~US$2.1bn in 2022 to ~US$0.1bn in 2024, and the stock has underperformed, down ~9% over the past year. The AGM underscores that BCE remains a high-risk turnaround play rather than a stable income investment, and management's growth promises should be viewed with skepticism until cash flow and leverage metrics improve.

Implication

If AI and fiber investments generate sustainable FCF growth and leverage declines, BCE could offer compelling value at current levels (~39% below DCF). But patience is required, and the thesis depends on benign regulatory outcomes and flawless execution of Ziply integration.

Thesis delta

The AGM reinforces that management is doubling down on a capex-heavy growth strategy (AI, fiber) rather than prioritizing dividend stability, pushing the timeline for deleveraging and dividend recovery further out. While the DeepValue report already flagged this shift, the shareholder pushback signals that market patience may be thin, increasing near-term downside risk. The thesis shifts from 'potential buy on value' to 'wait for clearer evidence of FCF improvement and leverage reduction before committing.'