The Telecom Italia Group's first quarter 2010 financial results

1. TELECOM ITALIA GROUP
1Q 2010 Results
Milan, May 6th, 2010
Telecom Italia
1Q 2010 Results
MARCO PATUANO

2. TELECOM ITALIA GROUP
1Q 2010 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 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.
MARCO PATUANO 1

3. TELECOM ITALIA GROUP
1Q 2010 Results
Agenda
The Transformation Journey:
1Q 2010 Main Achievements
Reverse Revenues Trend:
Mobile Business
Fixed Business
Integrated Approach Opportunities
Excellence in Customer Satisfaction
Cash Cost Rationalization & Operating Model
MARCO PATUANO 2

4. TELECOM ITALIA GROUP
1Q 2010 Results
Domestic Market: The Transformation Journey - 1Q 2010 Main
Achievements
2008 2009 2010-2012 1Q2010 Key Highlights
Gross adds rebound
“Value for
Money” Market
Mobile
Outgoing traffic growth
Proposition Repositioning Share
impaired by Recovery
Consolidation of Mobile
Repricing
Broadband Leadership
Positive Line Losses Trend
Restore Market Push on ULL win-backs
Fixed
Leverage on
Regulatory Positioning
Flexibility
Dialogue Consolidation Growth of BB Customers
with flat offers
MARCO PATUANO 3

5. TELECOM ITALIA GROUP
1Q 2010 Results
Domestic Revenues: On the Right Track
Euro mln, Organic Data
Domestic Revenues by Technology Domestic Revenues by Customer Segment
Domestic 5,354 -7.1%
4,974
TI Sparkle & Nat.
Wholesale 910 -0.5%
-7.1% 905
Domestic 5,354 Top 893
4,974 -7.2% 829
-7.4%
Mobile 2,059 Services Revenues 1,907 Business 967 -8.0% 890
-7.2%
-4.8%
Wireline 3,674 Services Revenues 3,498 Consumer 2,697 -9.5% 2,440
-3.9%
Elim & Adj Elim, Adj & Others
1Q09 1Q10 1Q09 1Q10
% yoy change
2009 2010
1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10
-5% -5%
-7% -7%
-11%
FY09 FY10
-7% -4% / -5%
MARCO PATUANO 4

6. TELECOM ITALIA GROUP
1Q 2010 Results
Agenda
The Transformation Journey:
1Q 2010 Main Achievements
Reverse Revenues Trend:
Mobile Business
Fixed Business
Integrated Approach Opportunities
Excellence in Customer Satisfaction
Cash Cost Rationalization & Operating Model
MARCO PATUANO 5

7. TELECOM ITALIA GROUP
1Q 2010 Results
Reverse Revenues Trend - Domestic Mobile Revenues
Change vs.
Δ% 4Q
4Q09
1Q09 1Q10 Δ % YoY 09/08
Total 2,059 1,907 (7.4) (19.3) +12 p.p.
Services 1,993 1,850 (7.2) (12.9) +6 p.p.
Stabilized:
o/w
Outgoing Voice 1,154 991 (14.1) (14.6) flat price reduction;
volumes rebound
Reversed:
o/w
VAS 471 510 +8.3 (10.6) +19 p.p. strong success of
Internet Key bundle
Stabilized:
o/w MTR impact, benefiting
Incoming 304 287 (5.6) (5.6) flat from ITX cost reduction
Resized:
strong focus on Internet
Handsets 66 58 (12.1) (59.4) key and 3G handsets
MARCO PATUANO 6

8. TELECOM ITALIA GROUP
1Q 2010 Results
Reverse Revenues Trend - Domestic Mobile: Main Evidences
Objectives KPI’s
Customer Base Calling - Change yoy (‘000) TIMX Users
1Q09 2Q09 3Q09 4Q09 1Q10
1.5 mln
CB Value Stabilized
protection -401
-537
-544
-762
Sept09 Apr10
“Tutto Compreso” Gross Adds (‘000)* Outgoing traffic Trend – Change yoy
2.3X
Market Share 1Q09 2Q09 3Q09 4Q09 Feb10 April10
& Usage ~2%
flat
increase
Jan10 Mar10 -4.6%
(*) pre-paid & post-paid
Interactive Revenues (Mln €) Browsing Revenues (Mln €)
Mobile BB +29.3% +38.2%
leadership 232 300 157 217
consolidation 1Q09 1Q10 1Q09 1Q10
BB Users +32.7%
3,809 5,054
(‘000)
MARCO PATUANO 7

9. TELECOM ITALIA GROUP
1Q 2010 Results
Agenda
The Transformation Journey:
1Q 2010 Main Achievements
Reverse Revenues Trend:
Mobile Business
Fixed Business
Integrated Approach Opportunities
Excellence in Customer Satisfaction
Cash Cost Rationalization & Operating Model
MARCO PATUANO 8

10. TELECOM ITALIA GROUP
1Q 2010 Results
Reverse Revenues Trend - Domestic Wireline Revenues
Euro mln, Organic Data, %
1Q09 1Q10 Δ% YoY
Total 3,674 3,498 (4.8)
Services 3,543 3,406 (3.9)
Voice 1,744 1,551 (11.1)
BB Services
Internet 402 432 +7.5 +8.9%
Business Data ICT Services
320 294 (8.1) +0.8%
Wholesale 1,007 1,035 +2.8
National 689 749 +8.7
International 318 286 (10.1)
Other 70 94 n.m.
Handsets 131 92 (29.8)
MARCO PATUANO 9

11. TELECOM ITALIA GROUP
1Q 2010 Results
Reverse Revenues Trend - Domestic Fixed: Retail and
Wholesale Dynamics Euro mln, Organic Data, %
Total Fixed Revenues
-4.8%
3,674 3,498
1Q09 1Q10
TI Wholesale TI Retail
Lower OLO growth/Reduced Push on Low Margin Itz Revenues Stabilizing Loss on Access
National Wholesale Revenues % Change YoY Retail Services Revenues
19.8
17.2 16.3 -6.9%
14.4
8.7 2,494 2,321
1Q09 2Q09 3Q09 4Q09 1Q10 1Q09 1Q10
International Wholesale Revenues % Change YoY Retail Fixed Revenues
1Q09 2Q09 3Q09 4Q09 1Q10 -8.1%
-0,3
2,625 2,413
-5.2
-8.4
-10.1
-12.6 1Q09 1Q10
MARCO PATUANO 10

12. TELECOM ITALIA GROUP
1Q 2010 Results
Reverse Revenues Trend - Domestic Fixed: TI Access
Performance
Telecom Italia Retail Access Evolution & Line Losses Key Highlights
‘000
16,972 16,621 16,358 16,097 15,901
TI Access Lowest line losses level since first quarter
2009 through successful retention activities
1Q09 2Q09 3Q09 4Q09 1Q10
‘000 1Q09 2Q09 3Q09 4Q09 1Q10
Decreasing Trend on wholesale products
Line losses -196 such as Wholesale Line Rental and Naked
-263 -260
-380 -351
OLO Access Growth (TI Wholesale)
‘000 ‘000 ‘000
ULL Naked WLR
162 133 145 122 108
87 93 112 105 81 56
68 57 42 25
1Q09 2Q09 3Q09 4Q09 1Q10 1Q09 2Q09 3Q09 4Q09 1Q10 1Q09 2Q09 3Q09 4Q09 1Q10
+175
MARCO PATUANO 11

13. TELECOM ITALIA GROUP
1Q 2010 Results
Reverse Revenues Trend - Domestic Fixed: Focus on
Broadband
TI Retail Broadband Accesses Broadband ARPU
‘000 Euro/month/line
+3.3% +0.4
+71 18.7
18.3
TI retail
accesses 6,843 6,859 6,921 7,000 7,071
Free
Flat (%) 79% 81% 81% 83% 84%
1Q09 2Q09 3Q09 4Q09 1Q10 1Q09 1Q10
Market Share Broadband Broadband Services Revenues
Euro mln, %
+8.9%
59.4% 56.9% 392 427
56.4%
30.1%
Market share
24.5% 24.2%
on Net Adds
1Q09 4Q09 1Q10 1Q09 1Q10
MARCO PATUANO 12

14. TELECOM ITALIA GROUP
1Q 2010 Results
Agenda
The Transformation Journey:
1Q 2010 Main Achievements
Reverse Revenues Trend:
Mobile Business
Fixed Business
Integrated Approach Opportunities
Excellence in Customer Satisfaction
Cash Cost Rationalization & Operating Model
MARCO PATUANO 13

15. TELECOM ITALIA GROUP
1Q 2010 Results
Reverse Revenues Trend - Business Main Achievements
in 1Q10
Key Activities Key Evidence
Net adds (‘000 lines)
1Q09 4Q09 1Q10
Improved TI positioning based on -44 -25
Impresa Semplice brand and higher Fixed -78 -24
-50 April10
Quality of Service Mobile* -52 Fixed –9
Mob. – 3
* Human
Boost Mobile Increased commercial effort to
Broadband Net adds (‘000 lines)
Customer improve share of BB services on
April10
Base & Stop Win-back and new customers +9
Losses of Fixed 27
BB Churn reduction due to higher 12 10
Fixed 1Q09 4Q09 1Q10
Customers Quality of Service
Customer Satisfaction Index (out of 100)
Launch of new convergent offer (17k
63.8
acquisitions in the first four months)
60.9
1Q09 1Q10
MARCO PATUANO 14

16. TELECOM ITALIA GROUP
1Q 2010 Results
Agenda
The Transformation Journey:
1Q 2010 Main Achievements
Reverse Revenues Trend:
Mobile Business
Fixed Business
Integrated Approach Opportunities
Excellence in Customer Satisfaction
Cash Cost Rationalization & Operating Model
MARCO PATUANO 15

17. TELECOM ITALIA GROUP
1Q 2010 Results
Excellence in Customer Satisfaction and Advertising
Awareness
Key Activities Key Evidence
40
Spontaneous Advertising Awareness
TIM ramps up to the top in
30
Spontaneous Advertising 20
Awareness
Reach
10
Vodafone Wind H3G
Excellence in 0
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
Customer
Source: STP GFK Eurisko 2007 2008 2009 2010
Customer Satisfaction Index – Fixed
Service Relevant increase in Fixed Consumer and Business Customers
increasing Customer Satisfaction Index,
perceived thanks to growing offering appeal,
65.6
quality through improvement in caring, customer 63.2
the most relationship management and
important technical quality 1Q09 1Q10
“Touch Point”
to the Mobile Broadband Throughput
Customer 4.0
HSPA - Main Cities 4Q09
TIM +35%
TIM outperforms each competitor Downlink
Uplink
TIM +45%
in terms of both broadband 2.0
coverage and throughput
0.0
Best
Competitor
MARCO PATUANO 16

18. TELECOM ITALIA GROUP
1Q 2010 Results
Agenda
The Transformation Journey:
1Q 2010 Main Achievements
Reverse Revenues Trend:
Mobile Business
Fixed Business
Integrated Approach Opportunities
Excellence in Customer Satisfaction
Cash Cost Rationalization & Operating Model
MARCO PATUANO 17

19. TELECOM ITALIA GROUP
1Q 2010 Results
Domestic: EBITDA Analysis
Euro mln, Organic Data, %
1 2 3 4
2,538
-380 +38 +22 -21
+100 +164 2,461
-77M€, -3.0%
1Q09 Revenues Intercon Handset* Cust. Care Advertising Fixed 1Q10
-nection & Other Comm.* & Acq. Costs* Costs**
1 3
Boost on Advertising and Acquisition offset
Focusing on on-net traffic and MTR impact
by efficiency on other Commercial Cost
2 4
Completing revenues mix re-engineering Progressing on efficiency programs
(*) Marketing & Sales (**) Includes Industrial+Personnel+G&A+Other
MARCO PATUANO 18

20. TELECOM ITALIA GROUP
1Q 2010 Results
Progress on Domestic Efficiency Plan
Euro mln, Organic Data, %
Delta Cash Cost Δ Δ Δ Netwk Mktg & Org. & Delivery Building
Vol. IT COP &
1Q10 vs 1Q09 ITX Driven Efficiency Ops Distrib. Support & Assur.
Energy
Δ Abs
1Q10 ’10 vs ‘09
Total Opex 2,513 -303 -100 -62 -141 -2 -9 -63 +3 -26 -14 -30
ITX 703 -100 -100 - -
Mktg &
Sales 583 -38 - -18 -20
Industrial 243 -13 - -10 -3
Personnel 834 -40 - -4 -36
G&A &
Other 151 -112 - -30 -82
Total Capex 752 -81 - +14 -95 -75 +27 -38 -9
26% of FY10
Target
- - - - - - -
Total Cash Cost -384 -100 -48 -236 -77
0.2
-9
0.4
-63
0.2
+30
0.5
-26
0.1
-52
0.2
-39
0.1
MARCO PATUANO 19