2. Safe Harbour
These presentations contain statements that constitute forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements appear in a number of places in this presentation and
include statements regarding the intent, belief or current expectations of 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.
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 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 are encouraged to
consult the Company's Annual 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.
2
4. Brazil: Leveraging on Pure Mobile Competitive Advantage
Voice FMS: Mobile is more convenient than Fixed… Data Going Mobile: Internet has a great potential…
R$/minute, voice Mln Households;
Fixed BB by speed
% of connections
68 Mln
Possess < 2 Mbps
38% 66%
Internet
connection
25.7 Mln
50% mobile
27% Other
discount 3.2 Mln
Does NOT 28% 25% Lack of
Possess 62% 2.9 Mln Coverage
Internet
connection 41.9 Mln Intention
2006 2007 2008 2009 2010 2011 2012 48% Too
to buy
5.6 Mln Expensive
over next 12 months
Total Households Households which does
NOT possess
Voice FMS: …TIM, with no legacies, can only gain on the trend Data Going Mobile …Mobile has greater price efficiency
R$ billion, Net Revenue per Group (9M12) Willingness to pay, % of households
Willingness to pay (% of Households)
Total 25.0 22.8 20.8 13.7 3.1 > R$ 250 1%
FMS R$ 250 2%
UBB
Fixed + Data + Focus R$ 200 3%
9.4 Live TIM
Pay TV R$ 150 6%
Approach
13.7 0.7 R$ 100 13%
14.1 R$ 80 20%
R$ 70 26%
Mobile 15.6 13.0 R$ 50 41%
9.1 6.6 R$ 40 50%
3.1 R$ 30 62%
R$ 20 68% Mobile
Vivo Claro Oi TIM GVT R$ 10 73%
A pure mobile approach is the most suitable strategy to capture both opportunities
Source: Company estimates; CETIC dec’11;
4
5. TIM Fiber: Plan for 2013/2015
Coverage (addressable)
Thousands of Households
4x >2000
Geographic Expansion
Geographic expansion for low-middle class and targeting high
~500 income neighborhood
2012 2013 2014 2015 • 2012: priority coverage in areas with high ‘A/B classes’
concentration
Efficient approach
MSAN port occupancy (%), Capex (R$) • 2013: chess board strategy and entering in class C
Port Occupancy (%)
80 • 2014: additional coverage in Rio de Janeiro and São
60 Paulo metropolitan regions, focusing class C
40 concentration areas
20
0
2012 2013 2014 2015
Coverage Capex Installation Capex Total Capex
per Home Passed per Sub per Sub
~R$2k ~R$800 ~R$5k
~R$300
~R$80 ~R$700
TIM Int. Bench.*
TIM Int. Bench.* TIM Int. Bench.*
Fiber
Fiber Fiber
5
6. Network and Quality Approach
3G Coverage Anatel Plan: Network Development Anatel Plan: Quality Targets
(# Cities, % Urban Population Covered) (Units TRX, Km Fiber) (Preliminary Results)
% Urban Pop 80% TRX (000) SMP5 – Call Completion
Covered 72%
54%
66%
241
271 97%
95% 95% 95%
205 205
# cities 712 2012a Anatel 2013e 2014e 2012a Anatel 2013e 2014e
488 Plan Plan
210 Data Channel Elements (000) SMP7 – Drop Call
741
2010 2011 2012 2013e 2014e 2015e 406 328
517
1.7% 2.0% 2.0% 2.0%
2012a Anatel 2013e 2014e 2012a Anatel 2013e 2014e
Organic Capex (ex- 4G license) Plan Plan
(Capex/Sales, Mix of Investments) FTTS (Km of Fiber 000) SMP8 – Data Connection Rate
53
47
As % of Net Revs.
39 38
99%
95%
98% 98%
18.0% 18.0%
19.6%
10.7 2012a Anatel 2013e 2014e 2012a Anatel 2013e 2014e
3.4
3.0 Plan Plan
2.8
FTTS (#Sites 000) 3.3 SMP9 – Data Connection Drop Rate
Infra 2.7
Invest. 2.3 2.7 3.1
1.3 1.3 3% 5% 5% 5%
Other
Invest. 0.5 0.3 0.2
2012a Anatel 2013e 2014e 2012a Anatel 2013e 2014e
2010 2011 2012 2013e 2014e 2015e Plan Plan
6
7. Business Drivers of Growth
CAGR 12-15
4 Ways of Growth Revenue Growth
(Total Revenues,R$ billion)
High Single
Digit growth
18.8
17.1
14.5
Customer MoU VAS HH ready
Base Revenues to sell
>90 Mln >200 min >26% ~2Mln
Community FMS Internet for Tim Fiber
2010 2011 2012 2013e 2014e 2015e
Expansion (Voice) everybody Ultra BB
Mobile Customer Base FMS – Voice (MOU) Internet for All (Mobile Data)
Million of lines Minutes of usage per line Data as % of Gross Mobile Serv. Revs.
250
>200 25%
>26%
> 90
200
19%
150 20%
70.3 129 15%
64.1
150
116 15%
13%
51.0 100
Double digit 10%
Double digit
growth growth
50
5%
0 0%
2010 2011 2012 2013e 2014e 2015e 2010 2011 2012 2013e 2014e 2015e 2010 2011 2012 2013e 2014e 2015e
7
8. 2013-2015 Guidance
2013 -2015
R$ billion 2011 2012
CAGR Guidance
Total Net High Single Digit
Revenues 17.1 18.8
Growth
Organic EBITDA High Single Digit
4.6 5.1
Growth
Organic CapEx 3.0 3.4 10.7
8
