Quarterly Telecommunications Observatory (updated December 31st, 2012)

1. Autorità per le garanzie nelle comunicazioni
Quarterly Telecommunication Markets Observatory (*)
- Updated to 31 December 2012 -
(*) – Data provided by operators and elaborated by Agcom.

2. Index
Focus - " Top Five" Incumbent - competitive trends
1. Fixed access lines (total)
2. Fixed access lines (new entrants)
3. Retail broadband access lines
4. Mobile subscribers – customer base (excl. mvno)
5. Mobile subscribers by customer/contract type (excl. Mvno)
6. Mobile broadband
7. Mobile virtual operators (MVNO)
8. Mobile telephony: number portability

3. Focus - " Top Five" Incumbent - competitive trends
0,0
10,0
20,0
30,0
40,0
50,0
60,0
70,0
Deutsche
Telekom
Telefonica France
Telecom
Telecom
Italia
British
Telecom
48,0
56,0
46,2
66,9
23,7
44,7
47,9
41,4
52,4
31,4
2006 1H12
-3,3 - 8,1 -4,8 -14,5 +7,7
0
10
20
30
40
50
60
70
Deutsche
Telekom
Telefonica France
Telecom
Telecom
Italia
British
Telecom
47
67
58
64
59
48
55
52
48
39
2006 2011
+1 -12 -6 -16 -20
Source : Digital Agenda scoreboard, http://scoreboard.lod2.eu/index.php?page=export
Source: Ofcom, International Communications Market Report 2012, pag. 248
Fixed
broadband
lines
Market shares
(%)
Fixed voice
call volumes
Market shares
(%)
 During 2006-1H2012 the difference between the
market shares of the major European incumbents in
the broadband access tend to shrink.
 Telecom Italy is the operator with the highest decline
in market share (-14.5%), followed by Telefonica (-
8,1) and France Telecom -4,8).
 British Telecom increased by 7.7 pp.
 Between 2006 and 2011, with the British Telecom
exception, Telecom Italia is the incumbent with the
biggest decrease in the fixed network voice traffic
market share (-16%).
 Telecom Italy market share (48%) is aligned with DT
(up 1%), while is lower than France Telecom (52%)
and Telefonica (55%) shares.

4. 8,00
10,00
12,00
14,00
16,00
18,00
20,00
22,00
24,00
4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
15,38 15,17 14,99 14,86 14,68 14,48 14,30 14,16 14,00
7,09 7,28 7,35 7,31 7,42 7,50 7,53 7,51 7,66
Telecom Italia fixed access lines OLO access lines
21,66
22,47
22,10
Telecom
Italia; 66,4
Wind; 13,2
Fastweb;
7,3
Vodafone
Italia; 9,7
BT Italia; 0,4
Tiscali; 1,8
Others; 1,2
1. Fixed access lines (total) (1) (2) 4Q2012
4Q2011
(1) – Starting from present update, fixed network include WiMax lines. Data serie is in homegenous, consequently the market shares shown are not entirely consistent with previous updates.
(2) Including Telecom Italia physical access, full unbundling (voice and data), Dsl Naked, WLR, Wimax and fiber lines.
Lines[mln]
 Compared with December 2011, direct fixed access lines decreased by about
450 thousands, with a slight acceleration compared to the decrease observed
in 2011 (-360 thousand accesses).
 In the last twelve months, Telecom Italia’s market share further decreased by
1.8% to 64,6%.
 The market position of Vodafone Group is stable on annual basis with a slight
increase (+0,2%) compared to last September.
 Wind has consolidated its market share on a yearly basis (+0.3% with a slight
decline (-0.1%) compared to September.
 Fastweb increases market share both on annual (+1,0%) and quarterly
(+0,4%) basis.
Source: Agcom evaluation on data provided by operators
Telecom
Italia; 64,6
Wind; 13,5
Fastweb;
8,3
Vodafone
Italia; 9,7
BT Italia; 0,3
Tiscali; 1,8
Others; 1,7

5. Wind
39,4%
BTItalia
1,1%
Fastweb
21,9%
Vodafone
28,9%
Tiscali
5,2%
Others
3,5%
Wind
38,3%
BTItalia
1,0%Fastweb
23,6%
Vodafone
27,3%
Tiscali
5,1%
Others
4,7%
0,00
1,00
2,00
3,00
4,00
5,00
6,00
7,00
8,00
4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
0,95 1,01 1,02 0,98 0,96 0,93 0,87 0,83 0,80
4,78 4,89 4,94 4,92 5,02 5,09 5,15 5,18 5,26
0,04 0,05 0,06 0,07 0,09 0,11 0,14 0,17 0,19
1,04 1,05 1,05 1,06 1,09 1,08 1,08 1,06 1,11
0,28 0,28 0,29 0,27
0,28 0,28 0,28 0,28
0,29
Wholesale Line Rental Unbundling (voice, voice + data) (1) WiMax Nakeddsl Fiber
7,09 7,42 7,65
2. Fixed access lines (new entrants) 4Q2012
4Q2011
Lines[mln]
(1) – Including virtual LLU.Source: Agcom evaluation on data provided by operators
 On an annual basis accesses grew by about 230 thousand accesses (340,000 in
2011).
 Given the growth of the lines Full Ull (1) (+240 thousand on annual basis) was
offset by a decline in WLR access by some 160 thousand lines. On a quarterly
basis, the overall growth of approximately 140 thousand lines.
 In direct accesses distribution by operator, Wind positioned in first place (38,3%), is
in decline compared both to last December (-1.1%) and to September (-1,0%).
 Grows, both on an annual and quarterly basis, the weight of Fastweb (respectively
+1,7% and + 0,8%).
 Decrease, in both cases, of Vodafone market share (correspondingly -1.5% and
-0.1%).
 The growth of WiMax lines, representing – with an increase of 110 thousand
accesses - just under half of the total OLO line increase on an annual basis, is the
basis of the increase in weight of "other actors" (+1, 2% on an annual basis).
 Linkem represents over 50% of the specific segment, which at y.e. exceed, overall,
190 thousands subs. (2).
(2) – Including Aria, Linkem, Mandarin e WaveMax

6. 8,00
9,00
10,00
11,00
12,00
13,00
14,00
4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
12,77 12,96 13,01 13,04 13,13 13,16 13,15 13,14 13,17
0,33 0,35 0,37 0,37 0,38 0,41 0,44 0,47 0,51
DSL Other technologies
13,10
13,51 13,68
3. Retail broadband access lines 4Q2012
4Q2011
Lines[mln]
 YoY, broadband lines growth was about +160 thousands. Compared with
September, the customer base increased by some 60 thousands lines (1).
 Telecom Italia’s market share (51.4%) falls (-1.5% compared with the last
year) to the benefit of Fastweb (+1,1%) and the smaller companies,
represented largerly by WiMax operators (+0,7%).
 Compared with December 2011, Vodafone has experienced a slight
subscribers and market share reduction (-65 thousands and -0,6%,
respectively).
 Avg. download speed increased: in the last year, lines with nominal speed
equal to or greater than 2 Mbit/s increased from 86,5% to 88,5%.
(1) Starting to the present Observatory update, data including also WiMax accesses. Data serie is in homogeneous terms
Source: Agcom evaluation on data provided by operators
Telecom
Italia
52,9%
Wind
15,9%
Fastweb
11,8%
Tiscali
3,7%
Vodafone
Italia
12,5%
Others
3,2%
Telecom
Italia
51,4%Wind
16,3%
Fastweb
12,9%
Tiscali
3,6%
Vodafone
Italia
11,9%
Others
3,9%

7. Telecom
Italia
34,9%
Vodafone
32,4%
Wind
22,7%
3 Italia
10,0%
80,0
82,0
84,0
86,0
88,0
90,0
92,0
4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
90,60 90,89 91,13 91,60 92,39 92,60 92,35 92,56 92,78
4Q2012
4Q2011
Lines[mln]
4. Mobile subscribers – customer base (excl. Mvno, see page 9)
Source: Agcom evaluation on data provided by operators
 YoY, the customer base has increased of 400 thousands and of some 200
thousands from last september.
 In 2012, the number of residential lines decreased (-307 thousands), balanced by
a growth of business lines (about +700 thousands).
 In the mean time, the number of prepaid lines decreased of 1,55 million, while the
number of postpaid lines increased of about 2 million, showing that the expansion
of postpaid customer base continues (see the following slide).
 YoY, Telecom Italia’s and Vodafone’s market shares decreased by 0,2 and 0,7%,
H3G’s and Wind’s market shares grow up (+0.3% and +0,7%, respectively).
 Voice traffic (more than 137 billion minutes in 2012) increased by 3,8%. SMS sent
(more than 96 billion) increased by some 7,5%.
Telecom
Italia
34,7%
Vodafone
31,7%
Wind
23,4%
3 Italia
10,3%

8. TI
32,7%
Vod
32,1%
Wind
26,9%
"3"
8,4%
TI
43,0%
Vod
29,9%
Wind
8,8%
"3"
18,3%
TI
59,2%
Vod
28,2%
Wind
5,8%
"3"
6,8%
TI
30,9%
Vod
32,2%
Wind
26,1%
"3"
10,8%
0,00
20,00
40,00
60,00
80,00
4Q10
4Q11
4Q12
14,29 15,96 17,95
76,32 76,43 74,84
Postpaidlines Prepaidlines
0,00
20,00
40,00
60,00
80,00
4Q10
4Q11
4Q12
10,92
11,71
12,41
79,69 80,68 80,38
Business lines Residential lines
5. Mobile subscribers – by customer/contract type (excl. Mvno)
Residential
Lines[mln]
Business
Prepaid Postpaid
Market share by contracts – 4Q2012 (%)
Market share by customers – 4Q2012 (%)Customer type Contract type
Contract type
 80, 6% of active lines about the "prepaid“ (82,7%, in December 2011).
 In two years, mainly due to growth of smartphones and tablets, postpaid lines grew by 3,7
millions and, correspondingly, the "prepaid" declined slightly less than 1,5 million lines.
 In the “prepaid” market Telecom Italy and Vodafone are both just under 33% while Wind is
close to 27%, an increase of about 1% compared to 2011.
 In the "postpaid" segment Telecom Italy has confirmed market leader with 43%, but was
down by 2.4%, compared to December 2011 and by 5% vs end of 2010.
Source: Agcom evaluation on data provided by operators
(31,5)
(32,9)
(25,2)
(10,4) (7,2)
(5,9)
(28,9)
(58,0)
(32,7)
(32,6)
(25,8)
(8,9)
(45,4)
(15,0)
(31,6)
(8,1)
(the corresponding values for December 2011 are shown​​ in brackets)
Customer type
 The business customers (12,4 million in December) grew by about 700,000 lines on annual
basis, while at the same time the residential segment (80,4 million of sim at year end)
declined by about 300,000 lines.
 The business customers weight increased by 0.7% (from 12,7 to 13,4% of the total
customer base).
 The first operator in the residential segment is Vodafone with 32.2% (32.9% in 2011),
followed by Telecom and Wind.
 Telecom Italy, with 59.2% (58.0 in 2011), is widely leader in business segment.

9. 0
10.000
20.000
30.000
40.000
50.000
60.000
4Q11 4Q12
192.254 251.202
+30,7%
6. Mobile broadband (1)
Sim data traffic (*1000) Connect card (internet key) (*1000)
Data traffic from the b.y. (terabyte)
 In December, SIMs with broadband data traffic exceeded 31,5
millions (+17% compared with Dec. 2011).
 The dedicated "connect card" (the keys) reached about 8,6
millions (+27,5% compared with end 2011).
 YoY, data traffic has grown by 30.7%.
(1) As a result of a change in the methodologies used in data management by operators, the values are not consistent with the corresponding data in previous Observatory updates . Starting from present update, data included also​​
Mvno mobile broadband,.
0
5.000
10.000
15.000
20.000
25.000
30.000
35.000
4Q11 4Q12
26.978
31.557
+17,0%
0
1.000
2.000
3.000
4.000
5.000
6.000
7.000
8.000
9.000
4Q11 4Q12
6.739
8.590
+27,5%

10. 1,00
1,50
2,00
2,50
3,00
3,50
4,00
4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
3,06 3,26 3,46 3,62 3,65
3,95 4,31 4,40 4,50
7. Mobile virtual operators (MVNO)
Lines[*‘000]
4Q2012
4Q2011
 The growth of MVNO subscribers continues (+850 thousands in
2012), total lines reached 4,5 millions (about 4.6% of the total
customer base).
 Poste Mobile’s market share is about 55% due to the integration of
mobile and postal services. It is worth noting Noverca performance,
its customer base increased, during 2012, from 20 thousand to 130
thousands subscribers.
 YoY, voice traffic and SMSs sent has increased by about 29% and
60%, respectively.
Poste
Mobile
55,7%
Fastweb
14,8%
Coop Italia
7,7%
Daily
Telecom
6,4%
ErgMobile
6,9%
Others
8,5%
Poste
Mobile
55,3%Fastweb
15,0%
Coop Italia
7,2%
Daily
Telecom
5,0%
ErgMobile
7,1%
Others
10,4%
(1) – Starting from the present update, are included also Bip Mobile and Green ICN data

11. 0,0
5,0
10,0
15,0
20,0
25,0
30,0
35,0
40,0
45,0
50,0
4T10 1T11 2T11 3T11 4T11 1T12 2T12 3T12 4T12
28,8 30,9 32,8 34,7 37,1 39,6
43,1 46,2
49,9
8. Mobile telephony: number portability
4Q12 - Lines as donor (in the quarter)
Lines[mln]
 In 3Q2012, the number of ported mobile lines reached, cumulatively, some 50
millions.
 Mobile virtual operators were able to gain more than 1.3m net adds in the number
of lines, a slight decrease compared to September
 On annual basis, the net balance “donating-recipient" is negative for Telecom Italy
(-490 thousand sim) and Vodafone (-420 thousand) and is positive for Wind (+185
thousand), MVNOs (+278 thousand) but especially for H3G (+446 thousand)
 Correspondingly, on a quarterly basis the indicator improves only for Telecom Italy
(from -353 to -118 thousand). H3G and Wind maintain, albeit reduced, a positive
balance. Vodafone worsens its position (already negative in September) while for
the first time the value is negative also for mvno.
4Q12 - Lines as recipient (in the quarter)
H3G
7,6%
Telecom
Italia
29,1%
Vodafone
31,8%
Wind
25,8%
Mvno
5,8%
H3G
12,3%
Telecom
Italia
25,8%
Vodafone
29,3%
Wind
28,1%
Mvno
4,5%