The Telecom Italia Group's first half 2009 results.

1. TELECOM ITALIA GROUP
1H 2009 Results
Milan, August 6th, 2009
Telecom Italia
1H09 Results
FRANCO BERNABE’

2. TELECOM ITALIA GROUP
1H 2009 Results
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.
Such forward looking statements are not guarantees of future performance and involve risks and uncertainties,
and actual results may differ materially from those in the forward looking statements as a result of various factors.
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 Spa 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 Spa business or acquisition
strategy 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.
FRANCO BERNABE’ 1

3. TELECOM ITALIA GROUP
1H 2009 Results
Agenda
TI Group Main Achievements
Focus on Domestic Business
Focus on TIM Brasil
Wrap Up
FRANCO BERNABE’ 2

4. TELECOM ITALIA GROUP
1H 2009 Results
TI Group 1H 09 Progress Report
Enhanced Regulatory Dialogue
Improved Customer Satisfaction
Domestic Reshaped Revenue Mix
Recovered in Fixed Business
Focus on Late on Consumer Mobile Performance
Core Stabilize
Continued Cash Cost Rationalization
Markets Ebitda and
Reversed Commercial Kpis Improve
Brazil Free Cash
Safeguarded Profitability Flow
Generation
Refinancing Completed
Financial
Discipline
Reduced Average Cost of Debt
FRANCO BERNABE’ 3

5. TELECOM ITALIA GROUP
1H 2009 Results
Improved Operating Cash Flow
Euro mln, Reported data
Operating FCF %OFCF on Revenues
+587
2,170
1,583
15.6%
10.7%
I Half 08 I Half 09 I Half 08 I Half 09
FRANCO BERNABE’ 4

6. TELECOM ITALIA GROUP
1H 2009 Results
TI Group Improved Profitability: Organic Results vs. 2008
Euro mln, %
Revenues
-554M€
14,507 -3.8%
13,953
EBITDA
IIQ 7,444 -284, -3.8% 7,160
41.2%
+1.5 p.p.
39.7%
% on
IQ 7,063 -270, -3.8% 6,793 Revenues -12M€
-0.2%
I Half 08 I Half 09 5,759 5,747
Opex IIQ +58, +2.0%
-542M€
8,748 -6.2% -70, -2.4%
8,206 IQ
IIQ -342, -7.5%
I Half 08 I Half 09
IQ -200, -4.8%
I Half 08 I Half 09
FRANCO BERNABE’ 5

7. TELECOM ITALIA GROUP
1H 2009 Results
Cash Cost Control: a Group-Wide Commitment
Euro mln, Organic data, %
Organic OPEX I Half 09 EBITDA Margin
Δ abs. vs. Δ %. vs. Δ %. 1Q09
I Half ‘08 I Half ‘08 vs 1Q08 1H08 1H09
45.7% 46.8%
Domestic 5,799 -403 -6.5% -4.5% +1.1 p.p.
24.2%
TIM 1,743 -47 -2,6% -4.4% 20.5% +3.7 p.p.
Brasil
21.0%
European 484 -39 -7.5% -6.1% 18.5% +2.5 p.p.
Broadband
-5.3%
TI Media 120 -14 -10.4% -12.5% -21.8% +16.5 p.p.
Other BU & 60 -39
Eliminations
39.7% 41.2%
8,206 -542 -6.2% -4.8% +1.5 p.p.
TI Group
FRANCO BERNABE’ 6

8. TELECOM ITALIA GROUP
1H 2009 Results
Domestic: Efficiency Program on Track
Euro mln, Organic data, %, Units
8,154 7,408 -746 -9.1%
Capex -343 -17.6%
Strong Cash Cost-Cutting Program Opex -403 -6.5%
IH08 IH09
Cash Cost on Revenues EBITDA Margin
Reducing Cash Cost on Revenues 71.4% -3.4 p.p. + 1.1 p.p. 46.8%
Improving Profitability 68.0% 45.7%
IH08 IH09 IH08 IH09
+14%
Subsidy (€/unit) 56
49
Selective Cost Control
IH08 IH09
0.4 0.9
0.5 Target FY
Efficiency on Track vs. FY Target
opex capex total
% 1H09 on FY 45% 74% 57%
Target
64.1
Moving towards a Lean Headcount
(’000) - 5.0
59.1 08-09
Target achieved
Organization ~5.0
Jan 1, 08 July 31, 09
FRANCO BERNABE’ 7

9. TELECOM ITALIA GROUP
1H 2009 Results
Agenda
TI Group Main Achievements
Focus on Domestic Business
Focus on TIM Brasil
Wrap Up
FRANCO BERNABE’ 8

10. TELECOM ITALIA GROUP
1H 2009 Results
Domestic: a Revised Revenues Mix…
EBITDA Margin I Half ’09 Change YoY Strategic Priority
+ ICT Services 18%
Mobile BroadBand 12% Growth
Wireline BroadBand 8%
Wireline Access* 0%
Outgoing Mobile Voice -3%
Mobile Sms -5%
Defend &
-7%
Recover
Wireline Business Data
Outgoing Fixed Voice -13%
Wireline Handsets -9%
Reduce
Mobile Handsets -30%
Wireline Voice VAS -22%
- Reposition
Mobile VAS Content -29%
(*) Retail and Wholesale (includes Naked Fees)
FRANCO BERNABE’ 9

11. TELECOM ITALIA GROUP
1H 2009 Results
…a Rationalized Handset Strategy…
Distribution focused on data enabling devices to support revenues and reduce pay-back period in mobile
Italian mobile handset market: share on sell-out Market share trends confirm overall
units -10.5%
reduction of push by all mobile operators
-50%
-3.9% TI’s rationalization reduces low-end
handsets distributed through TIM channels
-22.9%
without a bundled mobile service
Stop on 2G handset subsidy to finance
+32.1% efficiency & growth
I Half 09
TI confirms leadership in ARPU generating
I Half 08
segments:
Wind H3G VO TIM Fresh Mkt Smartphone: ~42% m-share
Source: GFK i-Phone ~58% m- share
Domestic fixed equipment revenues
Euro mln
Focus on ICT integrated solutions for TOP
Customers
319 290 Exit from Non ARPU generating Voice
equipment to focus on value rather than
16.1% volume
Mark-up % Unitary mark-up and volume increase of ICT
11.3%
drive overall margin uplift
I Half 08 I Half 09
FRANCO BERNABE’ 10

12. TELECOM ITALIA GROUP
1H 2009 Results
Domestic: FY09 EBITDA Guidance
…Positively Impacting Organic Margins Euro bln
-3/-4%
Euro mln, %
10.3
9.9-10.0
Revenues
-537
-4.7% FY08A FY09E
11,428 10,891
-287, -4.9% EBITDA
IIQ
45.7% 46.8%
-250, -4.5% % on
IQ Revenues +1.1 p.p.
I Half 08 I Half 09
-134
-2.6%
Opex 5.226 5.092
-403 -18, -0.7%
IIQ
6,202 -6.5%
5,799
IQ -116, -4.4%
IIQ -269, -8.3%
I Half 08 I Half 09
IQ -134, -4.5%
I Half 08 I Half 09
FRANCO BERNABE’ 11

13. TELECOM ITALIA GROUP
1H 2009 Results
Domestic: Top-Line by Technology
Revenues Wireline Revenues Trend
Euro mln, % Δ % 09 vs 08
-537M€ Services Total
-4.7%
11,428 10,891 1Q 2Q 1Q 2Q
-0 .6 -1 .2
Wireline -121, -1.6% -1 .9 -2 .0
Mobile -329, -7.1% Mobile Revenues Trend
Elim & Δ % 09 vs 08
adj*
I Half 08 I Half 09 Services Total
1Q 2Q 1Q 2Q
-4 .9
-5 .9
-7 .1 -7 .1
* Change mainly attributable to +Δ leased lines
FRANCO BERNABE’ 12

14. TELECOM ITALIA GROUP
1H 2009 Results
Domestic Fixed: TI Access Performance
Telecom Italia Retail Access Evolution TI Line Loss Evolution
1Q08 2Q08 3Q08 4Q08 1Q09 2Q09
TI Line Loss Evolution
1Q08 2Q08 3Q08 4Q08 1Q09 2Q09
OLO Access Growth (TI Wholesale)
ULL WLR NAKED
+346
265 271
223 112 105
141 162 133 83 101
110 104 122 108 41 39
77 66
1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09
-
Level of OLO Infrastructure
+
€/month
+
-
FRANCO BERNABE’ 13

15. TELECOM ITALIA GROUP
1H 2009 Results
Domestic Fixed: Focus on BB
Broadband Market
Broadband Activations 2Q09
Total Italian BB accesses
‘000
‘000
10,660 11,528 11,775 FRESH CHURN MARKET
MARKET
TI retail accesses
‘000 +16
TI <300
6,564 6,610 6,754 6,843 6,859
Free
79% 81%
76% 77%
Flat (%) 75% OLO
2Q08 3Q08 4Q08 1Q09 2Q09
TI BB net adds 7% market share reflects quarter:
Broadband ARPU and Service Revenues
Euro million; Euro/month Backlog reduction
17.9 18.1 Asymmetry in win back for TI
BB ARPU
731 +7.8%
788 - AGCOM Ruling -
days to transfer end user between fixed
network operators
Asymmetry Symmetry
IIQ +8.2%
Today Tomorrow
IQ +7.4%
I Half 08 I Half 09 From OLO From TI TI OLO
to TI to OLO
FRANCO BERNABE’ 14

16. TELECOM ITALIA GROUP
1H 2009 Results
Domestic Fixed: Focus on ICT
Italian ICT Market Revenues Trend (*) Highlights
Euro Bln
-8.0% Top / Large Account segment
Winning “Structured Partnership” approach with
4,6
leading IT/ICT players
4,2
Enhance value of offer through:
9.0% close interaction with client
TI Market 7.1%
Share on ICT valorization of network infrastructure
+1.9 p.p.
Revenues project/realization of nextG IT services
I Half 08 I Half 09
Business segment
Focus Telecom Italia ICT Revenues
Strong leverage on “Impresa Semplice” brand to
Euro Mln
Service Revenues define TI distinctive positioning in SME segment
+13.6%
Enrichment of horizontal solutions: certified
330 375 +17.7% e-mail, web collaboration, desktop mgmt
239 Launch of first ICT vertical solutions tailored on
203 specific client segments
I Half 08 I Half 09 I Half 08 I Half 09
(*) Source SIRMI
FRANCO BERNABE’ 15

17. TELECOM ITALIA GROUP
1H 2009 Results
Domestic Mobile Revenues
Euro mln
1H’08 1H’09 Δ% YoY
Total 4,641 4,312 (7.1) =
€cent/minute Mln minutes
-3.5%
+0,8%
17,778
Outgoing 2,417 2,340 (3.2) (1.7)
12.0 12.1 17,152
Voice
1H 08 1H 09 1H 08 1H 09
+
€cent/minute Mln minutes
Incoming Traffic
-11.0% -3.0%
Business 862 776 (10.0) (1.8)
10.0
8.9
7,155 6,940
Received *
1H 08 1H 09 1H 08 1H 09
+ Euro mln
Messaging Content Browsing
-7%
512 474 +12%
-29%
VAS 1,037 969 (6.6) (1.5)
229 296
332
162
1H 08 1H 09 1H 08 1H 09 1H 08 1HQ 09
+
Mobile Handsets (mln) Sales/unit €
3.1 2.0
Handsets 325 227 (30.2) (2.1) 2G 47% 37%
112
104
3G+Laptops & 53% 63%
Internet keys
1H 08 1H 09 1H 08 1H 09
(*) Incoming, Visiting and Other Revenues
FRANCO BERNABE’ 16

18. TELECOM ITALIA GROUP
1H 2009 Results
Mobile TOP and Business Segments
KPI trend 1H 09 Main Actions 2H09
“Convergent
Offering”
MNP trend
(‘000)
Start service extension and up-selling
Consip contract: of VAS to PA lines base
+160K lines activated Increase Fixed-Mobile-IT convergence
TOP & +72 Extension to 390K by YE
Push Blackberry voice/data bundles and
Large Accounts device management
Strong win-back
of large accounts Develop mobile remote access/ applications
“Integrated
Caring”
Market share Intensify pre-retention actions
10-499 employees Δ YoY
Customer base Push on cross selling to fixed customer base
growth led by non- Develop business driven VAS:
human lines
Entry-level promotions
SME/SOHO -0.5pp Halt of human line Segmented offers according to usage
loss as of June
Increase portfolio of enabling devices
month ’09
Continue improving customer satisfaction
TIM Competitors
FRANCO BERNABE’ 17

19. TELECOM ITALIA GROUP
1H 2009 Results
Mobile Consumer Segments
Market Share trend 1H09 Main Actions 2H09
Δ YoY “Lock-in”
Dedicated customer service for One2One caring
Stable revenues
trend due to Step-up 24 month lock-in with flat offering and
Elite stable high value CB handset subsidy
growth Increase mobile BB penetration through upselling
Strong push on acquisitions leveraging on new MNP and
convenient tariff plans: “Win back &
MNP promotion with handsets value reimbursed in
traffic to improve acquisition quality
invest on
Loss of cost-
conscious Competitive price plan for high usage clients elasticity”
Massive -0.4pp customers Develop usage through:
One2One actions on-net
Broader Messaging offers extended to voice-only target
Push mobile BB with strong lock-in on aggressive bundle offers
Upsell microbrowsing
Broaden Friends&Family options to drive on-net volumes “Reclaim”
Loss of cost- Launch Special tariffs for text messaging using seasonal
conscious Tribù
Young -1.1pp
with high on net
promotions (Carta Vacanze and Summer crash program)
Extend concept of Young communities to attack transversal
volumes
communities leveraging same price architecture
TIM Competitors
FRANCO BERNABE’ 18

20. TELECOM ITALIA GROUP
1H 2009 Results
Agenda
TI Group Main Achievements
Focus on Domestic Business
Focus on TIM Brasil
Wrap Up
FRANCO BERNABE’ 19

21. TELECOM ITALIA GROUP
1H 2009 Results
TIM Brasil: Reversing the Trend in Market Share and MNP
Net Adds e Net Share TIM Market Share TIM
‘000 lines. % Market share % Net share% Ranking in net share
29.1% #1 #2 #1
37.7% 32.2%
24.1%
% Net
2.000
17.4%
0
1,729 0
share 1.500
0
0
1,282 Apr May Jun
0
0
1.000
Net
Adds 500
2400%
Clean-up:
2350%
~1mln lines
0
2Q08 2Q09 2300%
Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
2008 2009
MNP Post Paid Customer Base TIM
% MNP-in/out Mln Lines
145%
145% Consumer
113% 120% Post paid
+
125%
105%
107%
“Zero Balance” Corporate
85%
78%
69%
65%
- 56%
55%
44% 62%
45% 40%
24% 26% 46%
25%
23% 2008 2009
22% 25%
14%
Jan Feb Mar Apr May Jun Pre-paid 27.0 28.4 29.8 29.9 31.6
Post-paid 6.8 6.8 6.6 6.2 6.2
FRANCO BERNABE’ 20

22. TELECOM ITALIA GROUP
1H 2009 Results
TIM Brasil: Organic Main Results Brazil: FY09 EBITDA Guidance
R$ bln, %
Euro mln, %
+10%
Revenues
3.3 ~3.6
+47M€
2,252 +2.1% 2,299
FY08A FY09E
IIQ +40, +3.4%
EBITDA
+3.7 p.p. 24.2%
% on 20.5%
IQ +7, +0.7% Revenues
+94M€
+20.4%
1H08 1H09
556
Opex 462
-47M€ IIQ +50, 20.1%
1.790 -2.6% 1.743
IIQ -10, -1.1%
IQ +44, +20.7%
IQ -37, -4.4% 1H08 1H09
1H08 1H09
FRANCO BERNABE’ 21

23. TELECOM ITALIA GROUP
1H 2009 Results
TIM Brasil: The Path Ahead Always Focusing on Profitability
1Q09 2Q09 3Q09 4Q09
New offer portfolio: Fostering usage: Commercial Push
Strategy: Pure Mobile “recarga imperdível” Commercial on new offers
April (Infinity prepaid. LD Infinity
Organization: new Da Vinci) Dubling Node-B in 3G
management team June (Infinity postpaid. Increase in market share: coverage
Unico)
Advertising: new format Postpaid voice(BU/CO)
Push on sale channels: Push on prepaid Infinity Closing Intelig and first
and higher advertising
“Back-to” postpaid synergies captured
presence
Focus on MNP Offer (July)
4 in 1 Back to Top of Mind and
Network quality Improving customer Customer Preference
satisfaction New“Imperdível”
“Network and Brand
“Back to Sales” “Back to Talking” “Back to Growth”
Recovery”
Restructuring the company, recovering strong
positioning, sustaining profitability and cash flow
FRANCO BERNABE’ 22

24. TELECOM ITALIA GROUP
1H 2009 Results
Agenda
TI Group Main Achievements
Focus on Domestic Business
Focus on TIM Brasil
Wrap up
FRANCO BERNABE’ 23

25. TELECOM ITALIA GROUP
1H 2009 Results
TI Group 1H 09 Progress Report
Enhanced Regulatory Dialogue
Improved Customer Satisfaction
Domestic Reshaped Revenue Mix
Recovered in Fixed Business
Focus on Late on Consumer Mobile Performance
Core Stabilize
Continued Cash Cost Rationalization
Markets Ebitda and
Reversed Commercial Kpis Improve
Free Cash
Brazil
Safeguarded Profitability Flow
Generation
Refinancing Completed
Financial
Discipline
Reduced Average Cost of Debt
FRANCO BERNABE’ 24

26. TELECOM ITALIA GROUP
1H 2009 Results
Back-up
FRANCO BERNABE’ 25

27. TELECOM ITALIA GROUP
1H 2009 Results
Domestic: Revenues by Customer Segment and technology
Euro million, %; Organic data
Domestic Revenues* Domestic Revenues
by Technology by Customer Segment
11,428 -4.7%
10,891 Total Domestic 11,428 -4.7% 10,891
TI Sparkle & 1,755
Nat. wholesale 1,851
Mobile 4,641 -7.1% 1,872
4,312 Top --3.0% 1,816
Business 2,092 --8.7% 1,911
Wireline 7,522 -1.6% 7,401 5,947 --6.8%
Consumer 5,544
Elim, adj & -238 -231
I Half 08 I Half 09 others I Half 08 I Half 09
* Domestic= Core domestic + TI Sparkle Group
FRANCO BERNABE’ 26

28. TELECOM ITALIA GROUP
1H 2009 Results
Consumer: Offering Roadmap
Mobile 3Q Broadband 3Q
Offering Portfolio Offering Portfolio
Cross Selling
-
homeTV con Alice Mobile
sul conto Telecom
630k
Target Activations Pro Pro Pro
Massivo From launch Novità m m m
Maxxi Internet
o o o
Cartavacanze
MaxxiRicarica
Novità
Messaggi
Target
TIMin2
Elite 2.0 7Mb Alice Casa Alice Casa
ADSL Internet Voce& QuickStart
20€ Internet
66k ALICE Tutto
+
Target 7Mb
Young 2.0 Activations 20Mb 20€ 7Mb
10 €/mese 30h
(con chiavetta)
From launch DAY 25€ Incluso
Target
35€ 20 €/mese 30h
Etnico 23€ 20Mb (con pc)
Voce 35€ 20 €
€/mese 100h
Voce (solo traffico)
Con Canone Senza Canone
Acquisitions BB Fixed + Voice
MNP Alice Day
New promotion “Ti rimborso il telefono”:
handset value returned in traffic Increase penetration of occasional ADSL users. Entry level offering
New exclusive concept for value acquisitions monthly cost of 3 € (including basic modem basic) and daily 2€ token
with a focus on Large Distribution
Anti Digital Divide
Strengthening of cross MNP promotion
TIM Welcome Home BB in areas not covered by ADSL. Wi-fi routermobile + traffic
Aggressive tariffs for international calls Voice
Traffico
Voce no limits: without monthly fee of 25 € rtg line + limitless F-F
Carta Vacanze develop voice and sms traffic
Opzione chiama Mobile in Retention e Win Back
TIM in2 for on-net volume development
Loyalty and retention Mobile BB
Launch of new Club Premium for top clients Alice Mobile Quickstart: increase mobile BB penetration among ADSL
Strengthening of “competitive like” retention offerings and customers, 3 €/month (for 24 months), including 3 h of traffic, key and soft
Lock in plan for top clients tariff (2€/h). On credit cards and TI account
FRANCO BERNABE’ 27

29. TELECOM ITALIA GROUP
1H 2009 Results
Business: Offering Roadmap
Marketing Strategy II Half
Voice Widening of most successful range of offerings:
One Business (bulk of usable minutes on all customers’ lines with an extension to SMS)
FLEX (highly modular offer with profile enrichment)
MOBILE
BB Widening of target market with semi-flat and consumption offerings for Browsing and Mail
Strong push on the use of enabling handsets with mail and browsing services (full qwerty).
Voice Release of new bundle offerings for voice-only customers
Offering differentitation through SLA improvement
FIXED
BB Widening of 2play range of offerings and improvement of broadband performance (upload increase)
Relaunch of BroadBand entry level offerings
Repositioning of Flat packages
RETENTION Revision of pre-retention and churn management rational, based on new predictive algorithms
Completion of standard solutions and launch of vertical solutions
ICT Bundling of off the shelf ICT services with broadband services and PCs
CONVERGENT One customer service
FRANCO BERNABE’ 28

30. TELECOM ITALIA GROUP
1H 2009 Results
TIM Brasil: 2009 Action Plan: 1H09 Achievements
Share of communication investment
1 Repositioning 30%
32%
31% 30%
Brand Increase in the share of voice First Player
17%
29%
New format to increase recall e brand linkage TIM 24% 19%
2006 2007 2008 2009
TIM Network Quality
2 Focus on 2G network quality 99.5% 100.0%
Network 2G: Excellence in voice quality
3G: right on spot 84.1%
Dic 08 Mar 09 Jun 09
Customer Satisfaction
3 Selectivity and multi -channel approach
= = - + + -
Caring Service improvement : decongestion and multi-channel approach
Caring model evolution: service level vs. customer value
TIM First Player
Distinctivity and innovation “Infinity” Success ~2500
4 Infinity pre/ post
Prepaid Infinity Base
(000 lines) ~1600
New offers “Azul” (long distance = local) ~650
Recarga Imperdivel 5
TIM Unico Mar 09 Apr 09 May 09 Jun 09
“Voltamos a vender”
“Back to selling”
5 Go back to growth in post-paid
Gross adds
Sales Channel Distribution channel rationalization Churn
Commissioning based on value 1Q Apr 09 May 09 Jun 09
Bad Debt Evolution
Structural re-thinking 9.6%
6 Revision of go-to-market models and supplier renegotiation
6.8%
Efficiency Financing the growth and defending profitability
4.7% 4.1% 4.8%
3.6%
Improving acquisition quality
1Q08 2Q08 3Q08 4Q08 1Q09 2Q09
FRANCO BERNABE’ 29