This FreeSight report contains an executive summary of our 3Q11 Italy Mobile Operator Forecast, 2011 - 2015. IEMR’s Mobile Operator Forecast on Italy provides over 50 operational and financial metrics for Italy’s wireless market and is one of the best forecasts in the industry. We provide five-year forecasts at the operator level going out to 2015. We also provide quarterly historical and forecast data starting in 1Q2003 and ending in 2Q2013. Mobile network operators covered for Telecom Italia Mobile (TIM), Vodafone Italy (Vodafone Group Plc), Wind Telecomunicazioni SpA, 3 Italy (Hutchison Telecommunications International Limited), Poste Italiane, and Coop Italia. Our Mobile Operator Forecasts are updated quarterly and are available for one-time delivery or through regular updates. Notable highlights of the 3Q11 Italy Mobile Operator Forecast include: · The operator-wide average subscriber growth (YoY) was 2.8% in 2Q.2011, up from 1.1% in 2Q.2010. Vodafone Italy saw its subscriber growth decrease from 3.2% in 2Q.2010 to 0.7% in 2Q.2011. 3 Italy’s subscriber growth (YoY) also decreased from 1.3% in 2Q.2010 to 1.2% in 2Q.2011. · ARPU growth in Italy remains negative. The industry average monthly ARPU was US$ 27.73 in 2Q.2011, down -0.7% YoY. TIM’s ARPU growth continues to decline. It was -12.6% in 2Q.2011, down from 1.8% in 2Q.2010. Vodafone Italy’s monthly ARPU decreased by -3.4% (YoY) to reach US$ 28.79 in 2Q.2011. While the three largest operators in Italy all had negative ARPU growth, 3 Italy saw its ARPU increase by +38.1% (YoY) in 2Q.2011.

1. 3Q.2011 Italy Mobile Operator
Forecast
Italy to have 100 million mobile subscriber connections in 2015 with Wind taking 31%
market share
October 2011

2. Subscriber growth has turned positive in Italy
+2.8% industry average subscriber growth in 2Q.2011
INDUSTRY AVERAGE Chart 1: Subscriber Growth (4Q08 – 2Q11), %
SUBSCRIBER GROWTH IN
ITALY’S WIRELESS MARKET WAS 20%
2.8% IN THE LATEST QUARTER
The operator-wide average 10%
subscriber growth (YoY) was 2.8% in
2Q.2011, up from 1.1% in 2Q.2010. 0%
Vodafone Italy saw its subscriber
growth decrease from 3.2% in -10%
2Q.2010 to 0.7% in 2Q.2011.
3 Italy’s subscriber growth (YoY) -20%
also decreased from 1.3% in 2Q.2010
to 1.2% in 2Q.2011.
-30%
On the other hand, Telecom Italia
Mobile (TIM)’s subscriber growth -40%
increased to 2.3% in 2Q.2011, up 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11
from -6.4% in 2Q.2010.
Telecom Italia Mobile Vodafone Italy
Wind Telecomunicazioni SpA 3 Italy
Industry Total
Source: IEMR
© 2011 IE Market Research Corp.
All rights reserved.
2

3. ARPU growth in Italy remains negative
-0.7% industry average ARPU growth in 2Q.2011
INDUSTRY AVERAGE ARPU IN Chart 2: ARPU Growth (4Q08 – 2Q11), %
ITALY IS DECLINING
15%
The industry average monthly ARPU
was US$ 27.73 in 2Q.2011, down -0.7% 10%
YoY. 5%
TIM’s ARPU growth continues to 0%
decline. It was -12.6% in 2Q.2011,
down from 1.8% in 2Q.2010. -5%
Vodafone Italy’s monthly ARPU -10%
decreased by -3.4% (YoY) to reach US$ -15%
28.79 in 2Q.2011.
-20%
While the three largest operators in
-25%
Italy all had negative ARPU growth, 3
Italy saw its ARPU increase by +38.1% -30%
(YoY) in 2Q.2011. 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11
Telecom Italia Mobile Vodafone Italy
Wind Telecomunicazioni SpA 3 Italy
Industry Total
Source: IEMR
© 2011 IE Market Research Corp.
All rights reserved.
3

4. Minutes of Use per Subscriber is increasing
Industry average MOU/Sub is 158 minutes per month
The operator-wide average Minutes Chart 3: MOU/Sub Growth (4Q08 – 2Q11), %
of Use (MOU) per subscriber was 158
minutes per month in 2Q.2011, up
+7.0 % YoY. 35%
MOU/Sub at TIM continues to
increase and its MOU/Sub growth rate 25%
was 7.7% in 2Q.2011.
MOU/Sub at Vodafone Italy, TIM and
Wind was 167 minutes, 167 minutes, 15%
and 198 minutes respectively in
2Q.2011.
5%
-5%
4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11
Telecom Italia Mobile Vodafone Italy
Wind Telecomunicazioni SpA Industry Total
Source: IEMR
© 2011 IE Market Research Corp.
All rights reserved.
4

5. Negative EBITDA growth at all of Telecom Italia Mobile,
Vodafone Italy and Wind in 2Q.2011
-7.3% INDUSTRY AVERAGE EBITDA Chart 4: EBITDA Growth (4Q08 – 2Q11), %
GROWTH IN 2Q.2011
30%
• The industry average EBITDA growth
rate (YoY) in 2Q.2011 was -7.3%, down
20%
from -1.4% in 2Q.2010.
• TIM's EBITDA growth was -13.1% in 10%
2Q.2011, down from -5.8% in 2Q.2010.
0%
• EBITDA growth at Vodafone Italy was
also negative. In 2Q.2011, Vodafone
-10%
Italy’s EBITDA growth was -3.4% (down
from -3.2% in 2Q.2010).
-20%
• Wind’s EBITDA growth was -4.6% in
2Q.2011. -30%
4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11
Telecom Italia Mobile Vodafone Italy
Wind Telecomunicazioni SpA Industry Total
Source: IEMR
© 2011 IE Market Research Corp.
All rights reserved.
5

6. So what is IEMR’s Forecast?
Total wireless subscriber connections in Italy to reach 100 million in 2015
We forecast that the number of total
Chart 5: Subscribers by operator (CY09 – CY15F)
wireless subscriber connections in 35,000
Italy will reach 100 million in 2015.
Given the latest quarter numbers, 30,000
our model predicts that TIM will have
approximately 33.4 million mobile 25,000
subscribers in 2015.
subscribers (000s)
In our view, TIM and Vodafone Italy 20,000
will continue to hold similar market
shares at approximately 33.2% and 15,000
30.9% respectively in 2015.
10,000
We expect that Wind will have 23.6
million wireless subscribers in 2015
5,000
(23.5% market share).
0
CY09 CY10 CY11F CY12F CY13F CY14F CY15F
Telecom Italia Mobile Vodafone Italy
Wind Telecomunicazioni SpA 3 Italy
Source: IEMR
© 2011 IE Market Research Corp.
All rights reserved.
6

7. So what is IEMR’s Forecast?
ARPU levels in Italy to remain stable
WE EXPECT THE OPERATOR-WIDE Chart 6: Average Revenue per User (ARPU)
AVERAGE ARPU LEVEL TO per month (CY09 – CY13F), EUR
REMAIN AT EUR 17 – EUR 18 OVER
THE NEXT TWO YEARS 25
Our forecasting model predicts that
the industry average ARPU in Italy will 20
be declining over the next two years.
Monthly ARPU (EUR)
The industry average ARPU will be
about EUR 17.50 per month in 2013, 15
according to our model.
We expect that Vodafone Italy’s 10
ARPU level will remain the highest
among the largest operators over the
forecast period. 5
0
CY09 CY10 CY11F CY12F CY13F
Telecom Italia Mobile Vodafone Italy
Wind Telecomunicazioni SpA 3 Italy
Average
Source: IEMR
© 2011 IE Market Research Corp.
All rights reserved.
7

8. So what is IEMR’s Forecast?
Telecom Italia Mobile to enjoy the highest profitability
Vodafone Italy enjoys the highest Chart 7: EBITDA margins (CY09 – CY13F), %
EBITDA margin among the Italian
mobile operators. We expect that 60%
Vodafone Italy’s EBITDA margin
(calculated as EBITDA/service 50%
revenue) will be about 55% in 2013.
Our model is predicting that TIM’s 40%
EBITDA margin will be about 46.6% in
2013.
30%
We forecast that Wind’s EBITDA
margin will remain at about 47% from
20%
2012 to 2013.
10%
0%
CY09 CY10 CY11F CY12F Cy13F
Telecom Italia Mobile Vodafone Italy
Wind Telecomunicazioni SpA 3 Italy
Average
Source: IEMR
© 2011 IE Market Research Corp.
All rights reserved.
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