Telecom Italia Group FY 2013 Results - Marco Patuano

1. MARCO PATUANO
TELECOM ITALIA GROUP
FY 2013 Results
Milan, March 7th 2014
Telecom Italia Group
FY 2013 Results

2. 1MARCO PATUANO
TELECOM ITALIA GROUP
FY 2013 Results
Safe Harbour
These presentations contain statements that constitute forward looking statements within the meaning of the Private Securities Litigation
ReformAct of 1995. These statements appear in a number of places in this presentation and include statements regarding the intent, belief or
current expectations of developments and changes in the customer base, estimates regarding future growth in the different business lines and
the global business, market share, financial results and other aspects of the activities and situation relating to the Company and the Group. Such
forward looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ
materially from those projected or implied in the forward looking statements as a result of various factors. Consequently, Telecom Italia S.p.A.
makes no representation, whether expressed or implied, as to the conformity of the actual results with those projected in the forward looking
statements. Forward-looking information is based on certain key assumptions which we believe to be reasonable as of the date hereof, but
forward looking information by its nature involves risks and uncertainties, which are outside our control, and could significantly affect expected
results.Analysts and investors are cautioned not to place undue reliance on those forward looking statements, which speak only as of the date of
this presentation. Telecom Italia S.p.A. undertakes no obligation to release publicly the results of any revisions to these forward looking
statements which may be made to reflect events and circumstances after the date of this presentation, including, without limitation, changes in
Telecom Italia S.p.A. business or acquisition strategy or planned capital expenditures or to reflect the occurrence of unanticipated events.
Analysts and investors should consult the Company'sAnnual Report on Form 20-F as well as periodic filings made on Form 6-K, which are on file
with the United States Securities and Exchange Commission which may identify factors that affect the forward looking statements included
herein.
The accounting policies adopted in the preparation of the Separate and Consolidated Financial Statements as of, and for the full year ended, 31
December 2013 have been applied on a basis consistent with those adopted in theAnnual Separate and Consolidated Financial Statements at 31
December 2012, to which reference can be made, except for the new standards and interpretations adopted by Telecom Italia, which, other than
for the prospective adoption of IFRS 13 (FairValue measurement), didn’t impact on the Separate and Consolidated Financial Statements as of,
and for the full year ended, 31 December 2013. Please note that the audit of theTelecom Italia Separate and Consolidated Financial
Statements at 31 December 2013 has not yet been completed.
Some data for the first quarter 2012, used in comparisons, included in this presentation have been restated as a result of the early adoption,
starting from the first half 2012, of the revised version of IAS 19 (Employee Benefits) and the reclassification of Matrix (company that was
disposed of on October 31, 2012) from the Business Unit Domestic–Core Domestic to the Business Unit OtherActivities. Furthermore, on
November 13, 2013, the Telecom Italia Group accepted an offer to sell its entire controlling stake in Sofora Group –TelecomArgentina (Business
UnitArgentina). Consequently , the latter was accounted for as Discontinued Operations (Assets held for sale) starting from the currentAnnual
Report as of December 31, 2013.

3. 2MARCO PATUANO
TELECOM ITALIA GROUP
FY 2013 Results
Agenda
 TI FY13 Results
 Appendix

4. 3MARCO PATUANO
TELECOM ITALIA GROUP
FY 2013 Results
Group Revenues
Group Ebitda
Group Net Income
Net Debt
4Q13 FY13
6.76 €bln
Organic: -2.0% - YoY
Reported: -9.5% - YoY
2.73 €bln
Organic: -3.0% YoY
Reported: -5.4% YoY
0.23 €bln
27.15 €bln
Organic: -2.1% - YoY
Reported: -8.1% - YoY
10.78 €bln
Organic: -5.9% YoY
Reported: -9.3% YoY
Targets
-0.67 €bln
writedown -2.2 €bln in 1H
Telecom Italia Group results (includingTelecom Argentina line-by-line)
«Stable YoY»:
Revenues below
guidance, as previously
anticipated
«Less than 27 €bln»:
Guidance met
«Mid-single digit decline YoY»:
Guidance met
-1.5 €bln YoY
including 1.3 €bln mandatory bond conversion
26.8 €bln
25.5 €bln
Organic data,
€mln, %YoY

5. 4MARCO PATUANO
TELECOM ITALIA GROUP
FY 2013 Results
4Q13
5.88 €bln
Organic: -4.8% - YoY
Reported: -9.7% - YoY
2.49 €bln
Organic: -3.5% YoY
Reported: -3.5% YoY
0.23 €bln
-1.5 €bln YoY
Organic data,
€mln, %YoY
FY13
23.44 €bln
Organic: -5.2% - YoY
Reported: -9.1% - YoY
9.75 €bln
Organic: -7.6% YoY
Reported: -9.4% YoY
-0.67 €bln
writedown -2.2 €bln (occurred in 1H)
Telecom Italia Group results (excludingTelecom Argentina)(1)
(1) accounted as discontinued operations in accordance with IFRS 5
including 1.3 €bln mandatory bond conversion
26.8 €bln
25.5 €bln
Group Revenues
Group Ebitda
Group Net Income
Net Debt

6. 5MARCO PATUANO
TELECOM ITALIA GROUP
FY 2013 Results
Telecom Italia performance by markets
Group
23.44 €bln
-5.2% YoY
9.75 €bln
-7.6% YoY
5.35 €bln
Revenues
Weight(1)
Ebitda
Weight(1)
Ebitda-Capex
Weight(1)
Domestic
16.21 €bln
-9.4% YoY
7.96 €bln
-9.8% YoY
4.93 €bln
69%
82%
92%
Brazil
6.95 €bln
+6.2% YoY
1.81 €bln
+2.7% YoY
0.46 €bln
30%
19%
9%
FY13
Organic data,
€mln, %YoY
(1) Including TI Media, Olivetti, other&elim.

7. 6MARCO PATUANO
TELECOM ITALIA GROUP
FY 2013 Results
13,416 12,069
4,481
4,138
FY'12 FY'13
6,711 5,982
2,115
1,979
FY'12 FY'13
Domestic performance dashboard
-7.7%
-10.0%
17,897
16,207-9.4%
4Q
9M
Total Revenues Service Revenues trend
Ebitda Ebitda trend
8,826 7,961-9.8%
-6.4%
-10.9%
on revenues 49.3% 49.1%
4Q
9M
-10.4%
-10.9%
-9.2%
-8.7%
1Q 2Q 3Q 4Q
-9.8%
-11.9%
-10.9%
-6.4%
1Q 2Q 3Q 4Q
FY -9.8%
FY -9.8%
Below
«Mid-single digit
decline YoY»
guidance
In line with
«High-single digit
decline YoY»
guidance
Organic data,
€mln, %YoY

8. 7MARCO PATUANO
TELECOM ITALIA GROUP
FY 2013 Results
-35
-27
+1 +12
1Q'13 vs 1Q'12 2Q'13 vs 2Q'12 3Q'13 vs 3Q'12 4Q'13 vs 4Q'12
1,299
1,135
166
120
191
215
4Q'12 4Q'13
Domestic Mobile Revenues
4QTotal Revenues Service RevenuesTrend
Innovative vsTraditional VAS
business
generated
business
received
service 1,465
1,255
handsets
total 1,656
1,470
+12.7%
-12.6%
-11.2%
-14.3%
-27.9%
€mln
Δ YoY Browsing Revenues plus Messaging Revenues
-17.9% -18.3%
-14.8% -14.3%
-50.9% -47.7%
-28.1% -27.9%
-12.0%
-12.8% -13.1% -12.6%
service
business
generated
business
received
YoY
Organic data,
€mln, %YoY
Service RevenuesTrend – Italian Market
3Q'13 4Q'13
TIM Op.2 Op.3 Op.4
stable
decresing
growing
decreasing
YoY

9. 8MARCO PATUANO
TELECOM ITALIA GROUP
FY 2013 Results
Steep decline in MNP
volume implies lower
churn level, reduced
pressure on ARPU,
less commercial/
advertising costs
Paving the way for mobile UBB
• High differentiation on UBB mobile coverage for healthy
technological competition
End of the MTR Dislocation
• No more MTR cuts on which to build new discounted offers
• Stable premium price between tier-one and tier-two players
• Less F-M substitution effect driven by higher prices in the market
Recent mobile pricing evolution in Italy
3Q’13 4Q’13
high competition
in the market
2014
moving towards more
sustainable entry-level
prices for the whole
market
8-10
€/month
12-15
€/month
MNP stepping down
1Q'13 2Q'13 3Q'13 4Q'13 1Q'14
+40% +40% +40%
-20%
YoY
Opening to ARPU accretion
1Q'13 2Q'13 3Q'13 4Q'13 1Q'14
ARPU outgoing entry price bundle ARPU outgoing
New portfolio offer
on entry level price
is not anymore
ARPU dilutive
pricing
position lowest + ++
A better Mobile Outlook is already perceivable
bundles
size reduction
among all
competitors
€/month

10. 9MARCO PATUANO
TELECOM ITALIA GROUP
FY 2013 Results
3,064
2,842
130
125
4Q'12 4Q'13
Domestic Fixed Revenues
4QTotal Revenues Service RevenuesTrend
Retail Service Revenues Breakdown Highlights
-3.2%
-7.2%
3,194
2,967
-7.1%
equipment
service
CoreSparkle
• Stable fixed service revenues trend on quartely basis, due to
improving performance in Core business via:
• consistent internet revenues results, with a positive YoY
growth on BB ARPU @ 19.2€/month
• positive figures in business data driven by a sound
growth in ICT services (+2.5% YoY in FY13)
• better performance in domestic wholesale trend
• Sparkle performance: 2H13 Third Parties revenues turnaround
thanks to a more efficient and effective commercial approach
-6.3%
-7.8%
-8.3% -7.9%
-7.5% -8.1%
-7.2% -7.2%
1Q'13 2Q'13 3Q'13 4Q'13
Total
-4.4%
-2.7%
-4.7%
-5.5%
-8.7%
-9.4% -9.4%
-8.5%
1Q'13 2Q'13 3Q'13 4Q'13
consumer business
-4.6% YoY
net FTR(1)
(1) FTR=F-F termination rates, revised from July 1st 2013 from 0.272 €cent/min to 0.104 €cent/min
-7.9% YoY
net of FTR(1)
Organic data,
€mln, %YoY
-18.4%
-13.1%
+0.6% -3.5%-10.7%
+6.6% +3.6%
total vs third parties

11. 10MARCO PATUANO
TELECOM ITALIA GROUP
FY 2013 Results
1Q'13 2Q'13 3Q'13 4Q'13
Building a better Outlook also for Fixed
BusinessConsumer
• Technological efficiency in the business segment: enterprises are
progressively adopting Unified Communication Solutions, optimizing
the number of lines per site while increasing their spending on a
more diversified ICT Solution
+9.4%
-5.7%
+2.0%
+5.0%
1Q'13 2Q'13 3Q'13 4Q'13
Lines with BB
Lines w/o BB
• BB lines show less exposure to CB erosion than «pure voice» clients
-19 -32 -36
+16
1Q'13 2Q'13 3Q'13 4Q'13
• Leveraging on «Tutto» proposition and convergent concepts to
reduce CB erosion and stimulate traffic from fixed
BBNetaddsF-Mvolume-YoY
-20%
-22% -22%
-14%
-3%
+6%
1Q'13 2Q'13 3Q'13 Oct Nov Dec
«Tutto»
launch FixedNetadds
1Q'13 2Q'13 3Q'13 4Q'13
ICTrevenues-YoY
%YoY reduction

12. 11MARCO PATUANO
TELECOM ITALIA GROUP
FY 2013 Results
Domestic 4Q checklist
ConsumerBusiness
Fixed
Mobile
Fixed
Mobile
Drivers Highlights
• Positive signs from “Tutto” proposition with constant
progression in F-M flat traffic volume
• Competitive arena rationalization
• Better gross adds mix and significant weight increase
of convergent offer on total activations
• Improving trend in Business Data driven by healthier
performance in ICT, including double-digit growth on
Cloud services (weight ~20% of ICT services)
• Positive set of KPIs: ~8mln mobile clients at the end
of 2013 (+8.0% YoY), with positive YoY trend in
human lines after 15 month decrease
7% 5% 11%
36% 39% 41%
Jul Aug Sep Oct Nov Dec
% convergent offers on total activations
acquisitionmix
Mar Jun Sep Dec
2012
2013
humanCB
-2%
-2%
+1%
BusinessData
Revenues
YoY
-4.6% -8.7% -3.4%
+1.0%
1Q'13 2Q'13 3Q'13 4Q'13
4%
15%
27% 28%
3Q'13 Oct Nov Dec
%F-Mflattraffic

13. 12MARCO PATUANO
TELECOM ITALIA GROUP
FY 2013 Results
849
992
332
357
FY'12 FY'13
1,300 1,326
465 486
FY'12 FY'13
4,922 5,280
1,620
1,665
FY'12 FY'13
TIM Brasil performance dashboard
+3.1%
+7.3%
6,542 6,945+6.2%
4Q
9M
Revenues Ebitda
4Q
9M
+4.5%
+2.0%
+2.7%1,765 1,812
on revenues 27.0% 26.1%
Capex
1,181
1,349+14.3%
+8.6%
+16.8%
Highlights
• Total Revenues +6.2% YoY in FY13 backed by mobile handset sales
(+37% YoY) and VAS revenues (above +20% YoY), offsetting fixed
business performance, MTR cuts, macroeconomic slowdown and
worse competitive landscape
• Healthy EBITDA Margin at 26.1% in FY13, with a solid rebound in
4Q13 at 28.9% (+0.4pp YoY) confirming the to company’s efficient
cost control model
• High commitment to Quality improvement: total Capex+14.3% YoY
in FY13 (19.4% of revenues) with more than 90% allocated to
infrastructure
• Growing top and bottom line, increasing dividend payout
4Q
9M
Organic data,
€mln, %YoY

14. 13MARCO PATUANO
TELECOM ITALIA GROUP
FY 2013 Results
TIM Brasil: 4Q Check List
Key Drivers Takeaways
• Improvements on all Anatel Quality metrics, delivering on quality
• Least complained mobile operator at National Consumer Protection agency
• Preparing network for data evolution: 39 main cities in the country covered with Fiber to the Site / MBB ready
• Focused Capex and Opex allocation
Network Quality
& Infrastructure
• Customer base growing above market:TIM lines at 73.4mln lines with 27.1% market share (#1 Pre-
Paid, #2 Post Paid) with >3 mln net adds in 2013 (of which 1.6mln in postpaid)
• Managed customer base with segmented offers
• Evolved offers toward data and internet services: increased 3G and 4G Market Share positions (close
to 31%), leader in Internet on Smartphones
Commercial Strategy
&
Offer Evolution
• Participating actively in industry discussions
• Recovered institutional image and dialogue
• “Open Doors” transparency initiative generated excellent results for customer interactions
(>400k collaborations/month)
• Took corporate governance to the next level and implemented a Statutory Audit Committee
Institutional
Relation
• M&A rumors did not affect in any way our best-in-class workforce
• Driving sense of belonging and employee pride
• Seeking “Best Company to Work For” status
People &
Organization

15. 14MARCO PATUANO
TELECOM ITALIA GROUP
FY 2013 Results
 TI FY13 Results
 Appendix
Agenda

16. 15MARCO PATUANO
TELECOM ITALIA GROUP
FY 2013 Results
Domestic Mobile KPIs
Total SIM cards Net adds‘000, QoQ mln, QoQ
31.9 31.7 31.6 31.2
1Q'13 2Q'13 3Q'13 4Q'13
-301
-152 -152
-333
1Q'13 2Q'13 3Q'13 4Q'13
TIM MNP Balance
-97 -88
-164 -157
-127
-74
+78
-12 -12
-53
-21
-50
Jan Feb Mar April May June July Ago Sept Oct Nov Dec
Op.2 Op.3 Op.4 Cum.

17. 16MARCO PATUANO
TELECOM ITALIA GROUP
FY 2013 Results
Domestic Fixed KPIs
Fixed Access
21,016 20,788 20,536
OLOTIretail
M/S 63.5% 63.4% 63.0%64.0%
13,777 13,555 13,372 13,210
7,238 7,233 7,164 7,169
1Q'13 2Q'13 3Q'13 4Q'13
20,378
Line LossesTrend
-201 -222
-183 -162
+63
-5 -69
+5
1Q'13 2Q'13 3Q'13 4Q'13
TI OLO
BB Access‘000
6,984 6,933 6,892 6,915
6,828 6,872 6,861 6,919
1Q'13 2Q'13 3Q'13 4Q'13
13,812 13,805 13,753
OLOTIretail
M/S 50.2% 50.1% 50.0%50.6%
13,834
‘000
BB net adds
+90
+44
-11
+58
-36 -51 -41
+23
1Q'13 2Q'13 3Q'13 4Q'13
OLOTIretail
ARPU
€/month
19.1 19.2 19.218.9

18. 17MARCO PATUANO
TELECOM ITALIA GROUP
FY 2013 Results
+26%
+8%
FY'13FY'13
-19%
-10%
Customer Care: operating KPI’s 2013marketdynamics
caringproduction
capacity
creditproduction
capacity
Front End
(call)
Back Office
(items)
Front End
(call)
Back Office
(items)
Headcount
- 2%
FY 12 FY13
61,5
60,4
-0,5%
15,5 14,4
-536
«make» growth«buy» reduction «in-house» incidence
Contribution CS
on selling activities
Consumer
Enterprise
Annual managed issue
Consumer: 12 mln
Enterprise: 3,9 mln
Sollecit
75%
quality
(CSIcustomercare)
fixed
mobile
FTE
10840 10304
FY 2012 FY 2013
47% 52%
FY 2012 FY 2013
41% 52%
FY 2012 FY 2013
59%
10%
48%
21%
75%
87%
Access MNP BB ULL SI Content
34% 8%
46%
15%
Access MNP BB ULL
7.18
7.32 7.56
6.57 6.67 6,93
1Q'12 4Q'12 4Q'13
Consumer Enterprise
7.84 7.89
8.01
6.7 6.9 7.17
1Q'12 4Q'12 4Q'13
Consumer Enterprise

19. 18MARCO PATUANO
TELECOM ITALIA GROUP
FY 2013 Results
Domestic Mobile Revenues Breakdown
total
4Q’12 4Q’13 YoY
Organic data,
€mln, %YoY
wholesale(1)
Consumer+Business
services
outgoing voice
VAS
business received
handsets
FY YoY
1,656 1,470 -11.2% -14.8%
64 75 +17.2% +3.9%
1,592 1,395 -12.4% -15.6%
1,401 1,181 -15.7% -17.3%
1,310 1,136 -13.2 % -12.8%
798 615 -22.9% -18.8%
511 521 +1.9% -3.2%
92 45 -51.1% -62.1%
191 215 +12.7% +5.9%
business generated(2)
(1) Including Visitors
(2) Total Retail Service Revenues net of Incoming

20. 19MARCO PATUANO
TELECOM ITALIA GROUP
FY 2013 Results
Domestic Fixed Revenues Breakdown
total
4Q’12 4Q’13 YoY
Sparkle group
Core service
voice & access
internet
business data
national wholesale
other & subs
products
eliminations
FY YoY
3,194 2,967 -7.1% -7.6%
340 328 -3.5% -8.7%
2,785 2,566 -7.9% -7.6%
1,307 1,173 -10.2% -9.2%
403 400 -0.8% +0.8%
285 286 +0.3% -2.3%
731 653 -10.7% -10.8%
59 54 n.m. n.m.
130 125 -3.2% -10.9%
(61) (52) n.m. n.m.
Organic data,
€mln, %YoY

21. 20MARCO PATUANO
TELECOM ITALIA GROUP
FY 2013 Results
New Generation VAS: the content start-up
Music
«Serie ATIM» Football League
Television
Sochi Olympic Games
• Monthly music streaming offer (4€/month)
• CB: 1,7 million, mainly mobile users - triple digit
growthYoY
• Portfolio of over 5 million songs
• Streams/month : 14,3 million
• Strong endorsement onYoung target
• Ready to surf streaming service massification
from a leading position
• Reinforcement of sports offering in
partnership with Sky
• Enhancement of the super fast LTE
network «from Super G to super 4G!»
• Willingness to pay for mobile only (9€ for
live broadcasts and special content on
Smartphone andTablet)
• 30k activations
The best of “SerieATIM” Italian Football League: Live
matches,Videogoal, Highlights, Videonews in streaming on
Smartphone and Tablet.
• Leveraging on TIM long-term Sponsorship of Italian
Football Championship
• Users: 350k,App Download: 1,6 million,#
videostreams/month: 10 million
• Future evolution
• Enrich LTE / 4GValue proposition
• Focus on usage Push (M-adv, Try&Buy, ..)
• Enlarge Customer Base
• Affordable and valuable monthly video offer
(from 4.9€/month to 14.9€/month)
• CB: > 250k users, double digit growthYoY
• OTT approach, Multi-vision on Fixed and Mobile
• Valuable content: more than 30 premium
channels in partnership with Studios
• More than 2,000VOD events base
offer
ValueAddon
x
x