Alex Bolis – Head, IR Franco Bernabè – Chairman and CEO Piergiorgio Peluso – CFO Marco Patuano – Managing Director and COO

Georgios Ierodiaconou – Citi Giovanni Montalti – UBS Mathieu Robilliard – BNP Paribas Justin Funnell – Credit Suisse Wilton Fry – Merrill Lynch Tim Boddy – Goldman Sachs Paul Marsch – Berenberg James Ratzer – New Street Research Micaela Ferruta – Intermonte Sim Ottavio Adorisio – Société Générale Hannes Wittig – JP Morgan

Good afternoon, ladies and gentlemen, and welcome to the Telecom Italia Group’s First Quarter 2013 Conference Call. I would like to remind you that this presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. 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 and are encouraged to consult the company’s periodic filing which are on file with the United States Securities and Exchange Commission. I now hand over to Mr. Alex Bolis.

Thank you very much. Good afternoon, ladies and gentlemen. Alex Bolis speaking, Head of TI Investor Relations. Today we have with us as speakers, Mr. Franco Bernabè, Chairman and Chief Executive Officer; Mr. Marco Patuano, Managing Director and Chief Operating Officer; and Mr. Piergiorgio Peluso, Chief Financial Officer. As usual, this event is being recorded and all participants will be placed in a listen-only mode during the company’s presentation. After TI’s remarks are completed, we will be pleased to take your questions. There is a simultaneous webcast that may be accessed through the company website, www.telecomitalia.com. The slide presentation may be downloaded from that website as well. Please feel free to view the slideshow during the conference call. I’ll turn it now over to Mr. Franco Bernabè. Franco Bernabè: Good afternoon, ladies and gentlemen, and thanks for attending today’s Telecom Italia conference call. I will start by giving you a summary of the Telecom Italia Group results for the first quarter of 2013. After which, Marco Patuano will take you through the specific results of our domestic operations. From last week’s results of TIM Participações and Telecom Argentina, we can take away that overall Latin American performance is catching up with the pace we indicated in our 2013-2015 plan. Brazil is building up shape again after a period of turbulence in management changes. And TIM, under the effective management of Rodrigo Abreu is again delivering the distinctive features of commercial innovation and quality of service that made our operations successful there. Let me also express my satisfaction regarding last week’s ANATEL opinion about the dropped calls connected with TIM’s Infinity plan, doing away with previous misplaced allegations and asserting that the correct behavior, full cooperation and transparency of TIM Participações with the agency. At the same time, it’s an area of slower economic growth is unfolding, just where we face important next-generation network investment plans. So, we will need to proactively resort to strict capital management and increased efficiency in order to accelerate sound operating and financial performance in line with our plan. In Argentina, we are meeting the challenge of a very difficult moment for the economy, but we keep on believing that the country, with the help of its resources and its people, will fare through these complex circumstances. Our business is still benefiting from a healthy demand. But here too, we need to ensure appropriate efficiency in our cost bases to preserve the needed quantum of marginality without sacrificing vital capital expenditures on networks and technologies. The same sort of careful balance among economic growing investments and efficiency need to be struck in Italy, where as Marco will detail to you shortly, we are facing adverse external factors with our relentless push towards innovation and convergence, drawing essential flexibilities, also to import new projects that I will outline to you later in my presentation. Now, let’s move on to the review of our main results for the first quarter. On the top right-hand side of slide 3, you can see that first quarter group revenues decreased organically year-on-year by 3.2 percentage at €6.796 billion, while organic EBITDA reached €2.699 billion, down 6.4% year-on-year. The first quarter performance was impacted by an expected slower pace of the economy and a fiercely competitive environment, particularly in Italy in the mobile business. Nevertheless, the group boasted solid profitability of 39.7%. And I will further comment on this element in a minute. As you can see on the far right side of the slide, group CapEx expenses stood at €878 million in the first quarter, 3.1% less than the comparable quarter of last year. This small decline did not impact at all the substantial progress we made in deploying next-generation networks. EBITDA less CapEx decreased organically year-on-year by 8%, standing however at a remarkable level of €1.821 billion. Let me draw your attention to the contribution to year-on-year change, details for the revenues and EBITDA from which it clearly appears that domestic has been impacted by the crisis, regulation, and competition, and therefore our efforts shall target this area particularly, albeit not exclusively. This quarter group EBITDA performance deserves further comments. I want to reassure you that the main focus at group level will remain on profitability and cash generation, as reaching our 2013 debt targets is of paramount importance to us. In this respect, I would like to remind you that in our domestic operations, a number of efficiency project will start showing their effects from the second quarter onwards. For example, the recently signed solidarity agreement which will lead to important savings over the next two years will be enforced in April and will involve 43,000 employees, contributing for 2013 about €18 million to the labor cost-savings objectives of our plan. At the same time, from April onwards, our announced re-pricing for fixed consumer monthly rental fee of €0.76 will also become effective, yielding in combination with the overall fixed tariff simplification maneuver we launched, more than €50 million on EBITDA uplift through 2013. Furthermore, still in connection with domestic operations, the adverse comparison effect stemming from the introduction of the cap on data roaming enforced by the EC in July 2012 will be totally reversed starting from the second half of 2013. Given specific efficiency plans to be implemented at the group level including Brazil and Argentina, we’re aiming at confirming our main operating and financial group targets for the year. Slide number 4 gives you an update of our main results by core markets, but let’s move on straight to the slide 5 for our domestic review. In Italy, as you know, the macroeconomic framework has been deteriorating in the last three years. Also, the first quarter of 2013 was very tough due to regulatory aspects which combined with harsh mobile competition in the low-end side of the market and a stable core fixed business performance. Domestic revenues stood at €4.024 billion, down 10.1% year-on-year, suffering from a sharp cut in mobile termination rate, price cap in EU roaming, and negative comparison with last year due to leap year and bad weather effects. Organic EBITDA reached €2 billion, down 9.8% year-on-year, while margins remained among the highest by industry standards, slightly increasing to 49.7%. Let’s now take a quick look at our Latin American operations’ performance which was reported last week. While the macroeconomic situation in Brazil remains broadly stable, our net mobile service revenues improved there from plus 3.2% in the last quarter of 2012 to plus 4% in this quarter. TIM has persistently improved customer satisfaction in all segments serving more than 71 million customers at the end of the quarter. In the month of March, TIM was the leader in total net adds, 536,000 or 50% of the market. Moving on to our infrastructure evolution, the RAN Sharing Project on LTE in cooperation with Oi, approved on April 18, is a milestone in the Brazilian telecommunications market. Our strategy is to compete on the service quality and not on dummy infrastructures. The resulting CapEx optimization will be reinvested in other network projects. Revenues stood at €1.786 billion, up 5.4% year-on-year. EBITDA reached €463 million with an increase of 4.4% year-on-year. In our Argentinean mobile business we consolidated our leading position in revenues, mainly thanks to a better postpaid and prepaid mix and a better value-added services penetration in the postpaid segment. In the fixed business, the data services evolution recorded a strong year-on-year growth rate, given the services provided to our corporate clients. Telecom Argentina delivered the top line at €917 million, up 18.3% year-on-year. And EBITDA stood at €271 million with an increase of 9.2 percentage year-on-year. Now, I’ll turn the floor to Piergiorgio Peluso that will update us on the financial performance of the group. Piergiorgio?

Thank you, Franco. Good morning to you all. I will spend a couple of minutes to update you on Telecom Italia financial position as of March 2013. Starting to look at net debt evolution on slide 9, we can see how it increased by €493 million to reach €28.8 billion, compared with a decrease of €102 million last year. While operating free cash flow was impacted by seasonal working capital absorption and from the one-off effect coming from the deferred payment to suppliers, as better detailed in the next slide. Interest expenses were rather stable. Cash taxes and other impacts for a total of €249 million, included LatAm income cash taxes for €100 million and financial charges mainly due to debt refinancing for €50 million. Let’s now take a closer look at the group operating free cash flow generation, which as you can see on slide number 10, stands at €137 million, down by €489 million from the first quarter of 2012, essentially impacted by the payment of suppliers that was postponed at year-end 2012 to this quarter, as I anticipated during our last conference call. Due to this effect, the first quarter 2013 working capital absorption was higher by around €260 million than the comparable figure for 2012. The CapEx first quarter figure is €878 million, encompassing an increased weight of its innovative component. This area would be managed carefully in 2013 as we confirm our continued commitment to invest in both mobile and fixed technologies. Of course, we need to properly calibrate the timing and future deployment also as a function of the take-up of new related services. Moving now to the right side of the slide, let me clearly indicate how, from now on, we will benefit from a progressively growing net free cash flow generation, which will allow us to reach our year-end 2013 debt target. The total net cash generation in the last nine months of 2013 will be around €1.9 billion, just €100 million less the corresponding period for 2012. On the bottom right box, we highlight differences of certain main items which are likely to impact net cash flow for the rest of the year. Moving down along the list, we expect operating free cash flow to decrease by €0.2 billion, a €0.2 billion negative one-off impact coming from the spectrum payments in Brazil. Further, €0.2 billion originating from the combination of 2012 Matrix disposal for about €100 million and another approximately €100 million negative impact from the disposal of La7. A positive contribution of €0.4 billion coming from overall delivered dividends paid out by the group, a further support of €0.2 billion coming from the lower taxes at TI SpA level. And a forecasted €0.1 billion absorption from the adverse forex variation and other. Summing up, we get to the net cash flow difference of about €100 million which is highlighted on the slide. With the financial position profile pictured on slide 11, you can see how the group features a comfortable liquidity margin that stands at almost €14 billion and evenly distributed debt maturities. This will guarantee maximum flexibility and access in the capital market as a recurrent and diversified borrower. Let me remind you that in line with the plan presented last February, we issued in March our debut issue of €750 million hybrid Eurobond, as part of our new €3 billion program. This is part of a comprehensive set of measures to build up a potential additional quantum of financial flexibility in order to cushion against adverse contingencies, protecting the group financial ratios, sticking to the commitment to support and maintain investment grade ratings. Furthermore, in the first quarter of the year, we signed a €3 billion union credit facility, which will act as a back stop to our debt refinancing until its maturity in 2017. Our average cost of debt remains stable at 5.3% at the end of first quarter of 2013. The average debt maturity as of March 2013 was 7.1 years, while about 75% of our gross debt is a fixed rate profile protecting us from future interest volatility. As you know, on April 13, 2013, Telecom Italia Media completed the sale of La7 Srl to Cairo Communication Group. Let me give a few details on this transaction. In September 2012, TI Media spun off its TV business. Based on data of the last four months of that year, La7 TV channel estimated loss was above €100 million. Furthermore, in the first four months of 2013, the additional loss was equal to minus €24 million. On this basis, it’s easy to understand how in the new planned three-year horizon, the total losses would have been quite important. Thus, the third quarter 2013 provision related to the disposal of La7 Srl of about €105 million is more than a reasonable stop loss. The overall economic effect of the disposal on Telecom Italia figures at the end of April 2013 totaled €130 million, which is €100 million net of minority for Telecom Italia, while its cash out for the disposal amounted to €114 million. The residual TI Media broadcasting business is, as you can see on the slide, at clearly positive EBIT territory. At this point, we should thank you very much for your attention. I’ll turn it back to Franco for a strategic update. Franco Bernabè: Before commenting on the progress of the two strategic projects we are working on, let me set the scene for you. The significant increase we are witnessing in high-speed data demand across the boundaries of fixed and mobile technologies is calling for a rapid development of adequate, enabling and expansive infrastructures, thus throwing in the question the current structure of the European regulation which needs to be re-adapted to a different phase of the market. The present institutional setting has favored an excessive fragmentation which now needs to be reversed into a wage of strategic agreements and consolidation among European operators, starting from the domestic markets where the number of existing players is too high, particularly in the mobile segment. I strongly believe that the European telecommunications industry needs to break the austerity spell that is trapping its formidable potential. This would allow TI to cease, among others, the great opportunities of growth and integration offered by ultra-broadband infrastructures, managed with different technologies but with homogenous quality and security standards. It is the reason why we are looking with great interest at consolidation options in our domestic market. With reference to 3 Italia, we are continuing our in-depth analysis of a potential transaction with Hutchison Whampoa concerning the possible integration between our Italian mobile operations. I’m not in the position to add much more on the process, given the strict confidentiality agreements that we have signed with Hutchison Whampoa. Let me only add that in general, deals of this type are expected to deliver important commercial and industrial synergies. With regard to the access network spinoff project, we have now entered into the final assessment phase which will be discussed in a special board meeting that will take place on May 23 and that will focus on the operational feasibility, the regulatory framework evolution, the perimeter of the spinoff, the separation procedures, the financials and timing of any possible transaction. On slide 14, you can find certain main elements which according to our current thinking could be included in the separate entity. The reason why we are engaging in such a complex endeavor is that given the particular position of fixed assets network, which is not confronted by cable competition, we have been overburdened with regulations and measures that restrict our ability to compete. We need much more flexibility in the current marketplace and to improve our time to market which is presently hindered by the main measures that we have to comply with. In order to achieve this, a brand new regulatory deal must take place where the give and takes need to be beneficial for the marketplace and for Telecom Italia. The project is not changing only the order of factors. It is totally redefining the level playing field. This, in turn, will allow us to achieve a comprehensive revision of the current regulatory framework, including the following expected changes: the elimination of cost-oriented pricing on wholesale NGA – NGAN access, the introduction of long-term revenue stability for the copper access network at 2012 level, and improved flexibility for our retail operations. Furthermore, the implementation of this new structure would create a greater capacity to attract public funding for further investments in wide NGAN areas and to further contribute to the elimination of the digital divide. The first quarter of 2013 has seen our Latin American operations progressively building up in speed and our Italian business dealing with the combination of regulatory, macroeconomic and competitive factors in a proactive way. In general, first quarter is also in line with our expectation. Although in this environment, our main targets for the year contain some additional challenges, given the many areas of efficiencies we are resorting to and the uplift we have already secured with recent actions, we are confirming our main group guidance for 2013. More will come, of course, from the strategic options that I have discussed with you. And we will continue to update you on all the related future steps. At this point, I’d like to give the floor back to Alex, and to introduce you to the next section that will be on the domestic market.

Thank you, Franco. Mr. Marco Patuano will present now to you, first quarter 2013 domestic operations.

Thank you. Thank you, Alex, and good afternoon to all of you. Domestic first quarter 2013 has featured the fixed business moving on once again with resilience, while the mobile was affected by an unprecedented aggressiveness hitting traditional mobile services for the low-end consumer and SoHo, SME segments. This happened while the economy performed slower than many as expected. The unemployment rate reached in March, 11.5%, up by 2 percentage points in just five quarters and consumer spending and business confidence touched historically lows. In our new plan we presented to you, we had bid some headroom for macroeconomics, regulation and competition, but the consumer and SME mobile business was the area where the market overheated beyond any expectation. This presentation will deal with how Telecom Italia is going to clear one more storm, how our overall operating profile and strategy is the winning one, and how we are acting on all levels we need to in order to deliver our 2013 domestic targets. Let me now outline some important elements of the current context and how we’re addressing them. Starting with the economy, you can see how confidence indices have been deteriorating over the last three years. The business segment has been trending downwards year-on-year following a rather consistent pace, while the consumer business has started more recently. While there is obviously relatively little room Telecom Italia can do alone to help curbing this situation, there are many fronts where we can adapt to the way we do business as well as the ways to implement our efficiency plan in a context-friendly way, just few examples. As to our commercial strategy, we have been focusing and will keep doing so in the future on areas of our business where our customers, even in an adverse economic environment, have shown a remarkable willingness to pay. In the consumer segment, fast ADSL is one of them, but the same can be said for small-screen browsing. For our corporate business, ICT stands out as countercyclical, where cloud services have continued to expand at a rate of growth of about 50%. As to efficiency, we have singled out for implementation a plan that respects our workforce in adverse external times. This is the Solidarity Plan which was introduced in April, and that will bring savings of about €100 million on a full year basis. For the second quarter of 2013 to the second quarter of 2015, the new related agreement will apply to our full domestic workforce of 43,000 FTE and will generate savings of 2,500 full-time equivalent. On top of this, another 500 head count reduction has been agreed with the unions. Let’s now move to see how we can respond to evolving regulation which has continued to impact on our business quite significantly. As you very well know in this area, we weren’t just hit by the extremely sharp and time-wise concentrated fall MTRs but also by a cap on roaming data which was introduced last July. At the same time last year, the National Regulatory Authority has adjusted downwards certain regulated price like wholesale line rental and naked bitstream. All these, together with the possible downward revision of copper LLU and fiber VULA for the period of 2013-2016, as suggested by the AGCOM proposals currently under public consultation, does not appear to be the optimal context for a multi-billion euro investment on next generation networks. The takeaway is that we need to quickly evolve our wholesale model to an equivalence of input. The most important element we are continuously confronting ourselves with is operating performance. Given the external factors previously mentioned and having to face fierce competition, we trended in line with our expectation on innovative service which we can decline in fixed and mobile Internet, business data and ICT and on the fixed portion of traditional services; while mobile voice and SMS were impacted by the current unusual combination of market, macro and regulation. Availing ourselves of the operating and financial support coming from the planned and contingent actions, we confirm our 2013 domestic key targets. We knew that the first quarter of this year would not have been an easy start, given the circumstances. In the next slides, I’ll give you some color on how, with the notable exception of mobile consumer and small mid-sized business, TI Domestic has delivered the planned resilient performance. On slide number 4, we point out our main reported figures. Minus 10.1% on total domestic revenues including a managed reduction in Telecom Italia low-margin transit Sparkle contracts and a slowdown in overall core domestic versus the previous quarter, showing a minus 9.7% year-on-year against minus 8.9% in the fourth quarter 2012. But the only way to appropriately assess our operating performance is to normalize it for regulatory and calendar discontinuities which were introduced by MTRs, EU data roaming cap on one side, by the leap year effect and the exceptional 2012 bad weather on the other; which in combination, carried a weight of about 3 percentage points. Our normalized core domestic operation are all in all slightly improving moving from minus 7.5% in fourth quarter 2012 to minus 6.7% in first quarter, with mobile competition and macroeconomics taking their heavy toll. This last measure is key to assess our true domestic operating trend. On slide 5, you can see domestic EBITDA close in the quarter at €2 billion, decreased by 9.8% year-on-year. Profitability remains at the highest industry standards, slightly increasing to 49.7%. Total CapEx stands at €578 million, roughly unchanged year-on-year but strongly increasing in its innovative component. Domestic operating free cash flow was close to €700 million, impacted by the reversal effect of the fourth quarter deferred payment to supplier described by Piergiorgio and by a slow EBITDA performance. As already shown in the financial section, the accretive part of the cash generation which is needed to deliver our debt reduction target for 2013 will occur, as it always been, in the second half. Slide number 6, we now move to take a look at the revenues trend, broken into consumer and business, and we must again refer to the economic situation and to this lower Italian GDP forecasted for 2013 with the respect to February estimates. These external factors, obviously, had an impact on performances. As far as the business segment, two-thirds of it, the revenue drop, depend on regulatory and economic factor. Still, this segment is showing a recovery in first quarter 2013 compared to the last quarter of 2012. Slide 8 takes you to the heated environment of mobile service revenues. Typically, the beginning of the year has been a relatively quiet period for competition after the usually intense Christmas campaigns. This has not been the case for the start of 2013 and we will see that shortly. The consequence of this is that business generated in reported terms closed at minus 12% year-on-year or minus 1 – 11% was normalized. Of course, also the MTR cuts had its visible impact as expected. As you can see from business received, which was down by 68.2% in the quarter. Among the many lines you see in the right side of the slide, I would like to direct you to the mobile service revenue trend normalized from regulation and calendar effect, which stands at minus 9.4% year-on-year against the 17.9% reported, as highlighted in the lower right quadrant. Total normalized mobile revenues stood at less – minus 8.4% year-on-year, after accounting for plus 12.2% increase in handset sales. Let’s now take a closer look to what happened in this first part of the year, in our domestic mobile market and what TIM is doing to contrast its short term but visible effects. Slide 9, you know that our targets were guided by positioning based on value, innovation and quality. The new wave of price pressure experienced in the first quarter is essentially due to the duel between two of our competitors for the lowest entry level on bundles. This generated a strong increase in the market, mobile number portability volumes and finally called for an answer, which from April is being delivered as follows: For our entry-level client base, we have accelerated our local attack strategy with new intensity commensurate to specific competition, utilizing where necessary, a promo bundle introduced in April. For our medium-high spenders, we follow a more strategic approach through loyalty and reward promos, which are being offered to clients who have been loyal to TIM for at least one year. Subscriber acquisition cost will be kept in any case, under control. We remain deeply convinced that the push we saw in the first quarter coming from some competitors towards excessively discounted prices is not sustainable in the mid-term. In any case, while in the short-term TIM is playing ball also in the pure price, pure mobile league, we intend to bring the match on full convergence and multiple-play strategy. Moving now to slide 10. The consequence for TIM of this new spike in mobile number portability was a loss of about 300,000 lines. We stand now at 31.9 million clients, but still remain the best-in-class in churn rate. After having taken action with our new offers introduced in April, our negative MNP balance has been reducing rapidly, offering a better outlook for the second quarter. We can now spend some time on value-added service revenue in the consumer segment where we continue to perform in line with our budget. In the first quarter of 2013, the performance of browsing registered a growth in the mid-single digit area, confirming the positive evidence related to the progressive penetration of option and data bundles in our customer base. Focusing on browsing users, at the end of first quarter 2013, TIM posted approximately 6.3 million customers, a 1.3 million growth compared to the same period last year. This is driven by the small-screen segment, where users and also revenues increased both at double-digit base. In first quarter 2013, the percentage of smartphones sold by TIM over total handset sales was 78.4%, almost 10 percentage points more than the previous year. Moving to the large screen segment, the total Italian market is facing progressive reduction, but TIM confirmed once again its leading position in terms of volume and value, also due to a progressive penetration of high-speed devices. At the end of first quarter 2013, we reached a 40.3% market share in volume, compared to the 38.1% one year ago. While looking at value, we saw a year-on-year growth of 6.5 percentage point touching the share of more than 60%. On messaging, we took the decision to defend this service from over-the-top messaging application, including more and more SMS in our bundle. The result, as expected, has been more volumes and lower prices, driving a soft landing for our revenues. Slide 13, domestic fixed. While the mobile fight goes on, TI’s fixed has shown a resilient performance in the first quarter, posting a minus 6.3% year-on-year top line net of Sparkle transits. In first quarter 2013, reported figures of our core fixed performance were equal to the last quarter 2012, was normalized and operating improvement has been scored with the first quarter at minus 5.9%. Taking into account that wholesale decrease was driven by regulatory price changes in bitstream tariffs and fixed termination rates, the result of the retail segment is even better. Performance on consumer has been stable and the business segment scored signs of improvement. Let me now point out some good news. Innovative service on fixed are up. On slide 14, we highlight how the consumer segment is showing a plus 3.2% year-on-year performance on broadband services, which supports our value positioning and our perceived superior quality. Business data services are enjoying a strong rebound which limit their top line erosion at minus 1.9% year-on-year. This positive quadrant is closed by ICT services at plus 9.4% year-on-year which has become the main enabling factor in the new top line business. In this area, we have recently won very important bids including the ones for the data network service of the European Central Bank. Taking now a look at the total market of fixed and access lines, at the end of first quarter 2013, it stood at €21 million, €137,000 less than in fourth quarter. TI registered a trend in line loss similar to the one we scored at the previous year. OLO slightly improved their line acquisition and ULL reached the best OLO performance of the last five quarters. This proves that competition is well alive and that current €9.28 ULL rate is well priced for the market unlike some recent comments coming from competition were suggesting. Starting from April 1, monthly fee increased and tariff simplification are in place. It’s too early to say if volumes will be stimulated by more easy to read tariff plans. All in all, we expect a positive contribution on revenues and EBITDA in excess of €50 million in 2013. Wrapping up on fixed, TI broadband retail access whose overall number stands at nearly 7 million in the first quarter at only a slight diversion of 36,000 caused by the cancellation of free contracts. Market share is at 50.7%. The OLO slowed down their broadband acquisition to 66,000 compared with the first quarter 2012. The overall Italian fixed broadband market closed the first quarter at about 13.8 million lines following a slightly growing trend. Our fixed broadband ARPUs stands at €18.9 per month, stable versus the last quarter but growing at 3.5% year-on-year, benefiting from premiums offers which, at the end of March, stood around 720,000 customers. Takeaways, the first quarter points out areas of strength and certain intervention priorities. Fixed fully held out our expectation, in particular innovative services gained further traction and confirm that our great access to use for compensating erosion on traditional and for developing our new end play model. Our mobile has needed to open tactically its competitive front to contrast line erosion coming from entry level battle, without changing our long-term strategic position of value, innovation and quality leader. As we are facing additional challenges on the economic and regulatory fronts, we need to increase cash cost efficiency measures that the ones we are successfully pursuing in industrial and energy areas and the very important labor cluster. To this effect, you will find it in the appendix section of this presentation, a slide of our new customer care division that shows that in the first quarter 2013, 35% outperformance of the full-year target of an expenditure has been reached. And then, engage new option on our strategic front. As Franco has pointed out to you earlier, it’s now time to pursue a structural evolution of our networks that will allow us to fully grasp the opportunity the technology or regulation are offering has, and that will free new power for our retail and wholesale operation, allowing us to crystallize important value for all our stakeholders. Ladies and gentlemen, thank you for all the time you dedicated to me. And please, back to Alex.

Thanks, Marco. At this point, we welcome your questions.

Ladies and gentlemen, the Q&A session is now open. (Operator Instructions). This question comes from Georgios Ierodiaconou from Citi. Mr. Ierodiaconou, please? Georgios Ierodiaconou – Citi: Yes, hello. I have a few questions. The first one is around OpAc. As you pointed out in the presentation, you are seeing around 140,000 access line erosion a quarter. There’s also a very slow broadband growth right now in the market. And at the same time, unbundled wholesale line rental and bitstream pricing is either flat or down. Can you help us understand that will be the requirements before the operating access business can be a growth business and therefore attract investment? And what are the key decisions we should monitor from AGCOM that will allow for not just the spin-off but also subsequent deals that could happen? My second question is very briefly on Italian, on the domestic line losses. Have you seen any acceleration driven by the Vodafone Red offers over the past few months? And has that accelerated after you increased the capital line rental in April? And finally, I was wondering whether you could share with us your plan B, I gathered from some of the rating agency reports that without any deals either with Hutchison or with Cassa Depositi e Prestiti, there could be downward pressure on your rating. What will be the options that you could evaluate in that scenario and would a sale of TIM Brasil come ahead of any capital increase? Thank you.

Marco Patuano will take your first part of the question and Mr. Piergiorgio Peluso will take the last one on the rating agencies.

Well, fixed market is still in terms of total number of lines showing a decrease, and of course, part of this decrease comes also from the strong competition and the very convenient prices we see on the mobile. So, every time the customer have just a voice need, it’s relatively thinkable, it’s relatively logic that a pure mobile solution can be appropriate. Now, it’s evident that the way to preserve the value of the fixed market is broadband. But how to increase the penetration of broadband, that’s the question. I think that the answer comes from different angles. In the consumer market, if a further combination of the entertainment industry with the telco. This is the reason why we are actively working on solutions where we add content. It can be video content, it can be music content. It is also the reason why we are building more performing networks, both fixed and mobile. And the second answer is that entertainment have to be portable, have to be portable between fixed and mobile networks and new devices which are convergent devices are the right one. Of course, this is important, the speed of deployment of next-generation network coverage and the speed of migration of customer to the new network. It’s not just building the new networks, it’s also migrating customers on new networks. Sorry, if I’ve been long, but the question is a little bit complicated. Line losses coming from the Red offer of Vodafone, or if you prefer, Relax, as it is branded in Italy. Well, this is targeting the high-end part of the customer base where we see a more loyal attitude of our customers. It’s true that some customers consider interesting the price positioning of Voda, but most of those customers consider the total service, so the quality – the overall quality. And you lose the customer not for some euros, you lose the customer and this is the reason why we are extremely committed in pre-retention actions in order to avoid that the customer starts thinking to the pure price of those offers. All in all, let me say that the effect has been modest for the time being. Piergiorgio, I think, will answer the third question.

Thank you. On the rating, we have an ongoing and positive discussion with the rating agencies and we believe, of course, that our current rating reflects our business risk underlying Telecom Italia. Of course, as you know, our rating reflects also external factors. But as of today, we do not expect external factors to have additional impact on our ratings. But in terms of plan B, our plan B is very simple, we have to deliver our targets. Georgios Ierodiaconou – Citi: Thank you.

Next question come from Mr. Montalti, Giovanni from UBS. Mr. Montalti, please. Giovanni Montalti – UBS: Good morning. Could you provide us a broad timing for the potential finalization of the spin-off of the access network, if possible? And also, have you been discussing with rating agencies about the implication of these projects? Thank you.

First part to Mr. Franco Bernabè, second part to Piergiorgio Peluso again. Franco Bernabè: As we have communicated yesterday, we will have a new board session in a matter of two weeks where we will analyze all the other details that we have not been able to cover during the meeting which took place yesterday. Yesterday, we discussed quite at length all the problems concerning the spin-off of the access network. And of course, the discussion was very positive, was very fruitful. We are analyzing this in great detail and we’ll come to a decision on the 23rd of May. Then, if the board will decide to take a positive decision on this, it will take some time to get all the bits and pieces in place. So, this is not an easy process. It is a very complicated process because it cuts into the details of a very complex organization. But the fact that it is a complex process and it will require a long time to get implemented will allow also to have all these discussions that I described at the beginning that are aimed at changing the level playing field of competition in Italy. We think that this is not simply an organizational decision. This is a transformational deal, not only for Telecom Italia but also for the Italian market. And we think that while we’ll be working on the details of the organization and the procedures in order to get this process to completion, we will discuss and we will negotiate with the regulators, with the government, and with all the stakeholders the necessary steps in order to make this transformation a very positive step forward for all the stakeholders of our company. Giovanni Montalti – UBS: Sorry.

As far as the rating agencies is concerned, of course, until today, we have not discussed with the rating agencies the network separation, seems this has been a discussion that’s internal, but given yesterday’s outcome of the board and given that we will have to present for the 23rd – we have to take in the 23rd a decision, we will, in the next days, approach the rating agencies for discuss with them the potential outcome of the network separation.

Next question, please. Giovanni Montalti – UBS: Sorry, if I may follow up. Sorry – would it be sensible to say that it is not foreseeable to have a finalization of the spin-off, let’s say, before the end of the year? Franco Bernabè: Well, I think it’s – now is premature, also because we have one more discussion at the board level. But I think, of course, that once we have decided and once we are – we have engaged all the stakeholders in this process, including the regulatory agencies, then we will accelerate at the maximum speed the implementation of the process, because what I said during the presentation is that what we really want to achieve with this is a different level playing field, much more flexibility. We need to have more flexible offerings. We have to have a quicker time to market. And all this is of the essence for our competitive position. So, it’s not only a problem of implementation of this process. It’s also a objective, the objective that we are pursuing is to have a much, much better performance in the market, thanks to the elimination of all the hurdles that we have now.

Thank you, Giovanni. We can now move on to the next one.

Next question comes from Mr. Mathieu Robilliard from BNP Paribas. Mr. Robilliard, please. Mathieu Robilliard – BNP Paribas: Yes. Good morning and thank you. First, a question with regards to cost. You mentioned Marco, that you reached an agreement that could reduce the level of FTEs by around 3,000 to 2,500 plus 500. When should we expect that to happen? I mean, is that something that would be achieved by the end of the year? Is it a two to three year target – or implementation rather? Also, something about one of your slides where you show OpEx cuts targets of €1.3 billion between now and 2015. I think that’s a number that you had already shown at the full year results. I just wanted to make sure that this does not include interconnection cost reductions. And is that a net saving? That is, is that saving after possibly increased spending on marketing or is that just gross savings? So I think a clarification there would be helpful. Finally, in terms of the strategic deals, I fully understand it with regards to network spinoff that this is quite a complex and transformational deal and it’s reassuring to see that a lot of thought is given to it, but I’m just curious about the way this has been communicated in terms of the steps, because I think it was almost a year ago that you started mentioning that you were thinking about it. And so I wanted to understand how the thought process has evolved from a year to now because it’s still in this thinking process and really what are the next steps internally? And with regards to H3g, you mentioned that you and Mr. Bernabè that you entered into a confidentiality agreement, yet on the press release yesterday, I think what was written was that the management could now contact H3g to see if there’s real interest to merge. So what I’m not getting is, if they’re interested, why they haven’t – if they wouldn’t be interested, they wouldn’t have entered in a confidentiality agreement, I suppose. Maybe you can clarify that point. Thank you.

The first two for Mr. Marco Patuano, second two for Mr. Franco Bernabè.

Thank you. The labor cost platform agreement is of particular interest because the 2,500 people are, all in one day, so 1st April the new contract applies and the way the agreement works is the following: all the 43,000 reduce at different level, a portion of their work in time. And so we reduce a portion of the wage. So, the combinated effect of all these reductions is equivalent to 2,500 people and the workers will receive a net salary that is partially compensated by the state, thanks to a sweetener that is provided by the law. So, the net effect for the worker in his pocket is really few, few thousand – sorry, few tens of euros. This is the order of magnitude, but we save really the 2,500. The remaining 500 people are our colleagues that already have matured the right of retiring, but given the fact that they have not reached the limit age, they should remain inside the company. So the agreement we reached with the unions is to help them to be convinced, let’s put in this way. And this is something that we are absolutely targeting this year. So, 2,500 day one, 1st of April. The second question, the answer is obviously, yes. The €1.3 billion does not include any interconnection cost. Franco Bernabè: On the other two questions that you’ve asked, the first on the timing of the communication for the spin-off of the network. I think the answer is quite simple here. This process is really a transformational deal for Telecom Italia and it needs to take place in the context of a regulatory framework which is favorable to the process. As you may remember, we started discussing about this, say, mid last year, when Mrs. Kroes gave the first indication that you have changed her mind about the regulatory framework that was necessary in order to preserve the profitability, long-term profitability of investments in next-generation networks. As you may remember two years ago, Mrs. Kroes was arguing for a reduction in the copper prices in order to stimulate investment which sounds very odd. Then in July last year, she changed her mind and she opened a way to a more positive thinking about this when she declared in the new framework, she was considering stability in copper prices, non-cost orientation in next-generation network prices and overall stability in the regulatory framework from now to 2020. So this gave a boost to our work. But at the same time, these were simply political indications. It was nothing concrete. Then the recommendation was – the draft recommendation was written and the draft recommendation went through the discussion at the team level and at the management level. So, we are still really in the process of defining the framework. At the same time, we had changes in the regulatory body because the previous regulatory body term expired and the new regulatory body – new members of the regulatory board were elected in the last few months. So, I mean, the environment was changing. And of course, we needed to have all the pieces in place in order to understand what kind of risks and what kind of opportunities we were facing. So, we took more concrete action because we took this project to the board in a very formal way yesterday, only when we had a much clearer vision of what was happening. So, I mean, of course, it may sound as a long time, but given the fact that we need really to make this a great success for the company, for its shareholders and for everybody involved, I think, all the time which is needed was taken. And of course now, we are much more confident that the process we are engaging in is a process that will give very positive result for the company. Of course, more needs to be done, not only in terms of decisions, but also in terms of discussions with the regulators about how to – the kind of framework that will be creating through this. On the second point, the discussion with H3g, as I said, we have a confidentiality agreement. We need to understand the – of course, again, this is another complex agreement. It has all sorts of implications, antitrust implications and a number of other hurdles that need to be overcome. So we are in the processing of understanding if given all these hurdles, it is feasible or not and of course this needs to have all the elements for the proper decision, but we are in the process of collecting all these elements. Thank you.

The next question, please, now.

Next question comes from Mr. Justin Funnell from Credit Suisse. Mr. Funnell, please. Justin Funnell – Credit Suisse: Thank you. Yes, just a follow-up on the network spinoff concepts. Do you have, at this stage, any idea of what proportion of your staff, the 43,000, would go into the spinoff, please? And are there any issues with regard to employment contracts and union discussions with regard to that? Secondly, it’s obviously disappointing to see AGCOM proposing a cut to the copper ULL rates. This, however, may be against the recommendation that the EC is about to complete. Do you see a potential to either persuade AGCOM to change their mind or even to challenge the decision by AGCOM? Franco Bernabè: On the staffing, I think that we will be contributing to the company, the staff that is really needed. And when we will have a decision taken and a formal presentation of the project, then we will say – we will give all the figures. I think that the preliminary indications that we have give us very comfortable ideas on how to move on this. On the decision by AGCOM on the ULL pricing, of course, this is undergoing. We are not expecting major changes that will affect the process in a negative way but we will see in the next weeks. I think that we will have no major impact from the market analysis that is taking place. Justin Funnell – Credit Suisse: Okay. Thank you.

Thank you, Justin. Next question, please?

Next question comes from Mr. Wilton Fry from Merrill Lynch. Mr. Fry, please? Wilton Fry – Merrill Lynch: Yes, hi. You made a good case for fixed line growth opportunities if you invest in fiber. Can I ask you why you need to dispose of a network to do that? Is it because you prefer to raise money that way rather than issuing debt or equity or is it more because it’s driven by a formal split, enforcing an equivalence of input? And just on that point, what has the regulator indicated to you in private, would that be – would that work? Thanks.

Yes. So, Wilton your question essentially is directed on what we intend to do with the access network? Wilton Fry – Merrill Lynch: Correct.

You actually referred to a potential disposal of the network. So I think Franco Bernabè will take this question. Franco Bernabè: Yes. We’re not disposing the network. We are simply reorganizing the company, so that – no question about disposing the network. Wilton Fry – Merrill Lynch: Okay. But a formal separation would enable equivalence of input?

Yes, it would. Wilton Fry – Merrill Lynch: Okay. Thanks.

The question is – the formal separation would entice equivalence of input? Franco Bernabè: Yes, yes. Wilton Fry – Merrill Lynch: Great. Thank you.

Okay, Wilton, we’re happy to follow-on later. Next question, please?

Next question comes from the Mr. Tim Boddy from Goldman Sachs. Mr. Boddy, please? Tim Boddy – Goldman Sachs: Yes, thanks. A couple of questions, I guess on operational side. I guess, if you think about KPN and the experience that they’ve had in having to turn around their operating metrics, because you can’t keep losing copper lines and keep losing broadband market share and keep losing mobile customers indefinitely. You’ll reach some sort of tipping point where that doesn’t make economic sense because maybe it’s compromising your ability to get a long-term return on investment, et cetera. When KPN had to turn around the tide on their operating metrics, it was hugely expensive in EBITDA. So I guess I’m just concerned that your current very strong cost-cutting performance is reflective of a business with long-term declining operating metrics. And I wonder what your margins would look like if those operating metrics were all positive. And I appreciate that that would structurally be obviously a good situation for the company. But how much do you think EBITDA could come down in that scenario? Secondly, just in terms of convergence, I wonder how you can make convergence work without a TV offering or without a successful TV offering. Do you think there’s just demand for broadband and mobile bundling, because I think where convergence seems to be getting traction is, it’s partly around anchoring a TV experience across both fixed and mobile networks? Thanks so much.

Okay. So, the first part of the question is – if I understood properly, the line losses or if we don’t stop the line losses, losing market share on broadband, et cetera can affect our capability of getting margins. Is it okay? Tim Boddy – Goldman Sachs: No, I just said, what would it cost if you had to say, we’re going to have more stable line loss and positive broadband adds and positive mobile adds, how much would your EBITDA go down because of the additional customer acquisition cost and other factors? Thanks very much.

Okay. Well, of course, we are doing – reducing the number of line losses in the fixed is definitely crucial, even if what is happening is that the lines that today are being transformed in pure mobile customers are the ones who have – that have no broadband. So it’s slightly incorrect, if you make a reference of losing market share. We are not losing market share. We are increasing revenues in broadband and we are increasing revenues in all the innovative services we are putting on the market. So, the real question is, customers that still have the fixed line and have no broadband, how can then they be moved to broadband and how at that point they will remain? Of course, part of the answer is in the convergence and not necessarily through an important effort based on costs. So, the cost for retaining those people is, at least in the fixed, is fairly limited. The problem is how to move them on the broadband. So what we are doing is we are much more segregating. We are much more differentiating the services in order to fit much better the needs. When we say that people don’t buy broadband, it does not mean that they don’t need broadband at all. So, probably they want a sub-segment of the services. Of course, if we start working in a different way on our customer base, we can also be selective on the way we manage the network and in particular the way we manage the passive network. Now, services and convergent services are mostly referred to the active network. Active and electronics, and active and electronics will remain in Telecom Italia. Passive network will be moved to this company and moving to the separated unit. If it will be approved by the board, will allow us to be more focused and more efficient. So, this is the first part. The second part is how to do convergence without a classic TV offer. This is a huge debate that is going across all our industry. I think that you have to be careful when you consider Italy. Italy premium TV or pay-TV is fairly little penetrated. So, the business model of the entertainment in Italy is the free-to-air. This is the dominant business model in Italy. We have reached an agreement with RAI, with Mediaset and with La7 in order to have the free-to-air in our over-the-network solutions. Of course, the following question is premium content, are those premium content available for Internet delivery? Well, it starts from soccer, we have – we bought the soccer rights for the mobile first in order to move the soccer also on the mobile. So to make a long answer short, the way Italy is used to have entertainment is different from the countries in which the cable operator is present and dominant. We are convinced that agreements for traditional TV services have to be performed. But those agreements are much easier than in other countries where the business model of the TV is completely cable-based. Thank you.

Next question, please.

Next question comes from Mr. Paul Marsch from Berenberg. Mr. Marsch, please. Paul Marsch – Berenberg: Yes, thank you. I have three questions. It sounds from your comments like the regulatory attitude to your plans on the fixed network spin-out are still unclear. So, my question is have you actually had any meaningful discussions with AGCOM and with the EC with regard to your plans for the network spin-out? And if so, was there a positive response? Are they amenable to the kind of plans that you’re considering? My second question is with respect to mobile consolidation in Italy. We should expect that it will be the European Competition Commission that will have jurisdiction over the antitrust issues on consolidation in Italy. Is that right? And thirdly, on consolidation remedies. Do you think the risk of significant remedies being imposed is high and what kind of remedies would actually deter you from pursuing consolidation in the mobile market in Italy? Thanks.

Mr. Franco Bernabè will take your questions. Franco Bernabè: On the first question on the regulatory framework, you said it’s still unclear. Well, I can tell you that I had lengthy discussions with all the regulators involved including the AGCOM, the regulator of telecommunications, the antitrust authority and the government on the necessity that a deal of this importance and of a transformation deal like this is rewarded in terms that will make it acceptable and positive for the company and for all the shareholders. Consider, however, that there is – the decision will be followed by a market analysis that will prove that the market has effectively changed as a consequence of this and we will have the final assessment of the implications only after the market analysis. But given the fact that the market analysis will be adamant in proving that the conditions have already changed and – the conditions, the competitive landscape has changed, we are expecting as an outcome of the market analysis, a much more freedom of action than we enjoy now in the market in terms of bundling, in terms of triple, quadruple play, in terms of speed to market considered. Now, we have to analyze – we have to present all the wholesale offer for any retail offer that we make and we are expecting all this to be changed very substantially. So if you tell me, do you have already the framework in place, I can’t – the answer is no. But, the process will inevitably bring and the discussions we are having with the regulators so far indicate very clearly that our thinking is correct, will definitely bring to a much more open and much more positive environment for us. Paul Marsch – Berenberg: Okay. Franco Bernabè: As for the second question, the remedies. Well, I think that – well, first of all on the kind of response – who will be responsible for taking the antitrust decision? If it is a consolidation only between the mobile sector of Telecom Italia and H3g, the decision will be taken by the National Antitrust Authority. I mean, our assessment is that it will not have an impact at the European level. But of course, this is something that needs to be assessed more deeply. And on the remedies, of course, there will be remedies, but I don’t think that the remedies will be so invasive and so important that the benefits that we are estimating from a possible consolidation will be taken away. Of course, in assessing the viability of this deal, we of course, are making all the assessment also of the impact that there will be on the market and on the possible remedies that will be imposed on us by the antitrust authorities. And the reason why we are engaging is that so far, assessment, our assessment is positive, but of course, it needs to be further analyzed and this is what we will be doing in the next 30 days. Paul Marsch – Berenberg: Thank you very much.

Next question, please?

Next question comes from Mr. Ratzer, James from New Street Research. Mr. Ratzer, please. James Ratzer – New Street Research: Yes, good morning. Trying to come back again, please, to the question of the network separation. Mr. Bernabè, I think during your talk, you mentioned that one of the criteria you were looking for was the elimination of cost-based wholesale pricing. I was wondering if you could let us know what the alternative is to that that you are looking for and just how the mechanics of the alternative might work. And the second question was, it’s a bit more open-ended, I don’t think there was any discussion during your presentations on LTE, so I was just wondering if you could talk to us a bit about what’s happening with LTE at the moment, I mean, in particular, what take-up you’re seeing, what coverage have you got at the moment of people using it as a substitute for fixed line, are you seeing people increase ARPU as they move to LTE? If you can just talk in general about what’s happening in that market at the moment, that’ll be great. Thank you.

And the second question for Marco Patuano. The question was the – overcoming the cost-based orientation on wholesale pricing. Franco Bernabè: Oh, excuse me. Cost-based orientation is – the overcoming of cost-based orientation of wholesale prices is the consequence of equality of input. You know that in 2009, the overall regulatory framework was changed and the equality of input was introduced as an indicator of the competitive environment. So, equality of input can be achieved in different ways. And at present, there is a big discussion between the DigiComp and between the – and the DigiConnect on whether equality of input can be achieved through an organizational separation or through a structural separation. So, what is happening, what that means is that what we are expecting is that we will go from an ex-ante way of setting prices according to the cost base orientation to an ex-post analysis, and this will be achieved through the structural separation in our opinion. James Ratzer – New Street Research: Will all of the authority for setting wholesale prices still lie with AGCOM or will you start to have – or the network business start to have a more direct input in the setting of those prices? Franco Bernabè: Say it again. I didn’t get you. James Ratzer – New Street Research: Would all of the responsibility for setting wholesale prices in future lie with AGCOM or would more autonomy and flexibility be given to the spin-off business? Franco Bernabè: We are expecting that most of the wholesale prices will be simply monitored ex-post by the antitrust authorities. James Ratzer – New Street Research: Okay. Thank you.

Okay. Marco speaking. I’ll answer to your question on LTE. First of all, let me start with the coverage. Today the coverage is more or less 20% of the Italian population. We are targeting between 40% and 45% within the end of the year. Now, we have – we are going to cover 57 major cities. Most of them are already started. A good part of them are already considered completed. We consider completed a city when 75% of the urban population can use LTE services. On top of this, we are covering touristic places and industrial districts. We’re referring to another 32 places that are going to be covered within summer. Of course, we are referring to areas in which we want to have the possibility of getting the use in the summer vacations. Then let’s move on to devices. Today, almost 20% of the phones that are in our portfolio are LTE enabled. More or less 80% of the tablets that are in our portfolio are LTE enabled. And we have, for the time being only one model of dongle LTE. We’re going to have two but I don’t think it’s necessary to have too many because it’s simply inefficient for logistic purposes. Last, I think the most interesting thing for you, prices and customers, we are premium pricing LTE in a region of plus 50%. So, ultra-fast mobile Internet is priced around 50% premium versus mobile Internet. And today, including all kind of devices you can have in your mind, the number of early adopters is in the range of 300,000.

May I go ahead with the next question, please?

Yes, please.

Next question comes from Ms. Micaela Ferruta from Intermonte Sim. Ms. Ferruta, please. Micaela Ferruta – Intermonte Sim: Yes, hi. Micaela Ferruta from Intermonte. Three questions. On the network separation, if I understand correctly, on May 23, the board will decide whether or not to go forth with the separation and this is independent from a potential IPO or sale of a stake of the collaboration to Cassa Depositi e Prestiti. Assuming you decide for the network separation, are you in favor of an IPO or of a sale of a stake to Cassa Depositi and what use would you make of the cash in? The second question is when you expect the final EU decision on NGAN and copper. And finally on mobile, I’d like to have a bit more color on why is the outgoing voice traffic going down and whether or not we should expect an improvement or a worsening in trends in Q2 apart from MNP which you actually mentioned. Thank you.

On the first question, the decision will be taken on May 23 will concern only the spin-off of the network. We will not be discussing about a potential sale of a stake. On the decision on the EU, we are expecting the EU to decide in the next two months, probably at the beginning of the summer.

The last question is on mobile-generated traffic. It comes from two different reasons, quite different if we refer to consumer and if you refer to small, medium enterprises or large enterprises. Consumer is a volume effect, given the fact that, as I told during my presentation, we decided not to react – too early react. Honestly, I hope until the very last minute that some ultra unnecessary aggressiveness should have been taken out of the market. Once the customer base started suffering, we decided to react and lock in or getting again customers. And this is – on the consumer side, the effect comes from volumes. There is also an effect coming from prices, but prices when you compare year-on-year, of course, there is still an effect on prices, but I think you’re referring the delta versus previous quarters. SME is something, to be honest, we had already in our planning, because small, medium enterprises have a very high ARPU coming from very high bundles and very high prices. And when you are a small SME or even a single professional, you tend to compare the offer you have in your hands with the offer that the consumer are selling. So, it was planned to drive a little bit down the size and the price of some packs. So it was already in our plans. There is no customer base effect. There is just a competitive-intended price repositioning for the 2013. So what you should expect to consumer? We’re working in order to recover the customer base, of course, as usual, you will see a trend. And SME is something that we are piloting, so it’s something that we would decide how to manage.

Thank you, Micaela. Next question, please.

Next question comes from Mr. Ottavio Adorisio from Société Générale. Mr. Adorisio, please. Ottavio Adorisio – Société Générale: Hi, good afternoon, gentlemen. A couple of questions on cost savings and network spin-off. On cost savings, it’s pretty straightforward. Reading from slide 18, is it possible to know how much of the €600 million you earmarked for 2013 were achieved already in the first quarter and how much of these savings would be underpinned by the recent labor agreements? Moving to the inevitable question on network spin-off, I appreciate that it’s difficult to access future stage in a process given all the different counterparts including regulatory authority involved. My question is therefore, on your approach. You clearly stressed that at this stage, we’re talking about separation not disposal. However, I would be grateful if you could share with us if at a later stage, there could be a possibility to sell equity in the network or would the bolt-ins to be an adequate valuation? And would the retention of an absolute majority a precondition to any negotiation? Thanks.

So the first one was on cost, therefore Marco Patuano. The second one for Mr. Bernabè.

Yes. On costs, we are – in Q1, we already reached almost 25%, so we are in line with the progression of the €600 million. And you have to keep in mind that, for example, the labor agreement entered into force April 1, that we are performing better than expected on carrying division, that we are starting now a big real estate project that – so, I’m really extremely confident that the €600 million is something more than achievable. I would say, definitely more than achievable and my CFO agrees completely. Franco Bernabè: On the network separation, of course, as I said before, we are only talking now about the spin-off in the network separation. We’re not talking about a disposal, but it’s no secret that we have been discussing with – by the way, we have signed a confidentiality agreement with Cassa Depositi e Prestiti to analyze also this option. So, we don’t rule out anything except the fact that we will be, in any case, maintaining majority of the network.

Next question, please.

Next question – I’m sorry, next question comes from Mr. Hannes Wittig from JP Morgan. Mr. Wittig, please. Hannes Wittig – JP Morgan: Yes. Good morning. I have a question related to page 10 of the first presentation, where you have talked about the remaining operating cash flow for 2013 being about €200 million lower than the comparable amount in 2012. I wondered if that €200 million number was based constant CapEx and whether it was in absolute terms and whether it was secondly based on any specific assumptions for the working capital in the remainder of the year. Thank you.

Piergiorgio Peluso will take this question.

Okay, thank you. In this slide, we have highlighted the difference between last year and this year for the last nine months. And we have tried to normalize the difference. So the difference between €1.9 billion and €2 billion is, I would say, is almost the same, which means that in general, the net cash flow generation for this year will be in line with last year, excluding the extraordinary factor that has been highlighted in the last part of the table, which have a total impact of €0.1 billion. In terms of CapEx on – the total CapEx for 2013, including in this assumption will be for all the year, €5.1 billion, which is exactly in line with 2012, which were €5.2 billion for all the group. So the CapEx expenditures underlined in this assumption are almost in line with last year. Hannes Wittig – JP Morgan: And that number does not assume any differences in working capital movements relative to 2012 for the remaining three months of the year. Is that correct or is that – is there any assumption that working capital will be better or worse than in the previous year?

No. The direct working capital will be – and will be a sum of all the various items. So we will have a reduction of operating free cash flow for €0.2 billion. CapEx will be in line and net working capital will be the difference between the operating free cash flow and the expenditures. So we’re more or less in line, I would say. Hannes Wittig – JP Morgan: Thank you.

Thank you. Franco Bernabè: So I think that since there are no more questions, I want to thank everybody for their participation to this conference call. I’d like to thank you for your attention and our Investor Relations will follow up on any other questions you might have. Thank you very much and have a good afternoon.

Ladies and gentlemen, the conference is over. Thank you for calling Telecom Italia.