Franco Bernabè – Chairman and CEO Marco Patuano – Managing Director and COO

JP Davids – Barclays Capital Georgios Ierodiaconou – Citigroup Micaela Ferruta – Intermonte SIM Frederic Boulan – Morgan Stanley Ottavio Adorisio – Société Générale Tim Boddy – Goldman Sachs Nick Lyall – UBS Giovanni Montalti – Crédit Agricole Cheuvreux Franco Bernabè: Thank you. Good morning, ladies and gentlemen. Thanks for attending Telecom Italia’s First Quarter 2011 Results Conference Call. Before analyzing our first quarter key financial achievements, let me stress three very important steps we took in Latin America. First, our Brazilian subsidiary, TIM Participações, announced the intention to migrate to Novo Mercado, a decision that we discussed at the Board yesterday and that we fully support. The so-called Novo Mercado is a segment of the Brazilian Stock Exchange, listing companies with a share capital made ordinary shares only and the highest possible standards of corporate governance. As of today, the market cap of the companies listed on the Novo Mercado accounts for 26% of the total market capitalization of the Bovespa. TIM Participações will be the first telecommunications company to be listed on the segment. This decision is driven by the desire to align TIM Part corporate governance to the best practices in the market, to increases TIM Part shares liquidity both in Brazil and in the U.S. and to align the rights of all shareholders. Having completed the deep operational turnaround of TIM Brazil, we strongly believe that by simplifying the capital structure and aligning the governance to best practices, the true value of the company will rapidly surface. On top of that, a single liquid class of shares will give us the flexibility to use it as a currency for future strategic opportunities aimed at strengthening the company’s infrastructure so as to replicate the successful of the Intelig acquisition. Second, on Mach 10, we finalized the acquisition of a 10% stake of Sofora’s capital, the holding company which controls Telecom Argentina from the Werthein family. In this way, Telecom Italia Group economic interest in Telecom Argentina increased from 18.3% to 21.1%. And third, on January 31st, we completed the sale of our 27% stake in Etecsa Cuba for approximately $700 million of which $511 million have been already cashed in. In Italy, where our main focus is to protect and increase the value of the axis and to restore after more than a decade of our symmetrical regulatory measures, a fair playing field in terms of competition, we simplified the fixed tariff structure and increased the retail monthly fee from €16.08 a month to €16.50 a month. This will happen from the month of July. Being the number one partner for the public administration, we confirmed ourselves as the leader in the development of the ICT market in Italy. Thanks to the superior technical expertise, we won the most important contracts for the next three to five years. In April, the appointment of the new Board of Directors (inaudible) in a new era for this company, a new phase in which the Latin contribution to the Group would be become increasingly prominent and the relentless work done in the field of financial discipline will deliver the expected results. I’m pleased with the fact that the new Board confirms that people who have an in-depth knowledge of the company and who are fully committed to its success, confirms a highly professional management team, introducing a new organization that identifies clear accountability for the domestic business headed by Marco Patuano and at the same time, allows me to better focus on our Group’s strategic evolution. Now let’s move on to the overview of the results for the period. If you move to slide three. In the first three months of 2011, we improved our operating free cash flow generation by over €300 million year-on-year, reaching €1.1 billion. Group revenues increased by 10.3% year-on-year in reported terms, thanks to the consolidation of the positive results of Telecom Argentina and to the sound performance of our Brazilian subsidiary, revenues are stable in organic terms. Group organic EBITDA is sustained by the growth of TIM Brazil and Telecom Argentina profitability and by the cash cost reduction program that keeps delivering as expected. All the above partially compensate for the performance of the domestic market. Focus on financial discipline remains strong and we decreased our adjusted net debt by €2.6 billion year-on-year to €30.6 billion, a reduction of more than €800 million in the quarter. As anticipated, operating free cash flow generation was quite strong in the first quarter of the year, with an increase of 42.7% versus the same period of last year. Please note that of the €322 million increase, Argentina’s contribution only accounts for €87 million. Net cash flow grew by 23% vis-à-vis the same period of last year, amounting to €846 million. The increase would have been much more relevant €475 million, if we had normalized for the main non-recurring items in the periods, namely the cash in for the HanseNet sale, net of the Sparkle case in 2010 and for the Etecsa sale and the cash out for the increase in Sofora stake in 2011. Reported revenues are clearly benefiting from the inclusion of Telecom Argentina results and from the appreciation of the Brazilian Real that is providing a further boost to TIM Brazil accelerated topline growth. These positive effects are also manifest at reported EBITDA level that posted an increase of 3.6% year-on-year. On an organic basis, Group revenues were stable, where EBITDA declined by 3% -- 3.6% year-on-year, with the good performance of Argentina and Brazil, partly offsetting the decline in the profitability of the Italian market. Reported EBITDA growth translated into 6.5% increases in reported EBIT that reached €1.5 billion in the period. Despite the increase in taxes do in Argentina and Brazil, net income ante minorities reached €648 million, up 6.9% year-on-year, also due to the difference in which we accounted participation in Argentina in the two periods. Moving now to analyzing debt, the net cash flow of €846 million has allowed for a reduction in the adjusted net financial position to €30.6 billion on March 31, 2011 versus €31.5 billion at the end of last year. Our achievement of the year-on-year reduction of €2.6 billion makes us confident that we are on track to reach the full year target. Coming to the domestic business, the overall revenue performance was affected by the results of the mobile business, while the fixed business improved its year-on-year trend vis-à-vis the fourth quarter of 2010, thanks to ICT services that posted a double-digit growth 13.3% year-on-year and notwithstanding the increasingly selective approach we are taking in the international wholesale contracts. In mobile what we have witnessed in the first half of the year is a slowdown of the top and business segments, the wake of a sluggish Italian domestic demand. On the other hand, positive signs are coming from the consumer segment that is currently showing our results achieved in operating KPIs are ultimately starting to translate into an improvement of financials. As far as profitability is concerned, we reached an EBITDA of around €2.3 billion, keeping the EBITDA margin stable at 49.5%, efforts on cash cost reduction continued on track with our yearly plan. In this quarter too we have never stopped protecting the value of our customers, responding to the aggressiveness of our competitors, in particular in the fixed broadband business, with a stronger CRM approach that has led to an increase in the number of broaden customers in the period. Looking at client losses, our satisfactory results could have improved even further had we achieved symmetry in the win back procedures related to daily maximum numbers of customers able to churn in from the olds. We will take on -- I will take on a personal commitment on this point to reach a solution that will reduce if not eliminate altogether, also this asymmetry Telecom Italia is currently still subject to. In mobile, we have confirmed the validity of our strategy of price repositioning in order to regain competitiveness. In the last 12 months TIM added 600,000 lines and we are now above 31 million total lines. Topline is still suffering from the year-on-year comparison and from some one-off events on which Marco Patuano will probably elaborate in a while. Let’s now move on to the extremely sound performance of TIM Brazil in terms of both financials and KPIs. Revenues grew in organic terms by 13.8% year-on-year, accelerating the performance of the fourth quarter of last year, it was 9.9%. This growth was achieved thanks to the double-digit growth in ARPU in voice revenues, the boost in that revenues and the sharp increase in handsets revenues that more than doubled year-on-year. EBITDA reached €452 million, 8.6% plus year-on-year. The consolidation of the no subsidy approach penalizing the EBITDA year-on-year comparison is clearly showing its positive effects on the EBITDA minus CapEx performance, which posted an outstanding plus 182% year-on-year. In the first three months of the year, TIM Brazil’s customer base continued to outperform the market. The increase in the customer base a long side the higher usage up 26% year-on-year, translated into a plus 9% year-on-year service revenues growth in the first quarter versus plus 5.6% in the fourth quarter of 2010. The great success of Infinity Web plan continues to drive demand for smart and web phones, with the best available user experience for handset-based data services. In the first quarter, over 40% of the 2.3 million handsets sold were web phones or smartphones. Despite the constant and sharp traffic increase that has characterized the past quarters, TIM Brazil kept its leadership position on (inaudible) network quality indicators, being the only player to score 100% of the goals in 11 out of the 12 past months. TIM Brazil’s strategy based on being a pure mobile challenger to ride the fixed to mobile substitution wave proved to be very strong going forward. But going forward, we will know that in Brazil, the challenge that held -- ahead will be data development. To be leaders also in this new wave of development, TIM Brazil must strengthen its infrastructure. The acquisition of Intelig has been key in this success and it might consider all their similar deals together with the acceleration of the network rollout. Also Telecom Argentina boasted a strong performance in the first quarter. Revenues grew by 27.2% year-on-year, reaching €753 million, mainly underpinned by the performance of the mobile business, which is up by more than 30% year-on-year. Topline growth translated into an EBITDA increase of 22.5% year-on-year with a minor margin dilution of 1.3 percentage points due to the increase of commercial efforts. Free cash flow, EBITDA minus CapEx improved by 41% year-on-year, also benefiting from a lower level of capital expenditure. The positive financial performance has been the result of strong operating results in the Argentine market both in the fixed and in the mobile businesses. Leadership over the last two years in mobile margin on market share was once again confirmed this quarter with 2 million net adds leading to an increase of 200 basis points in the market share that reached 32.7%. Telecom Argentina is the second mobile operator in the country both in terms of market and revenue shares. Voice revenues grew, thanks to the strong performance in the SMS business and to the leadership position of Telecom Argentina in the smartphone market. In the fixed segment, broadband acquisitions were up by 14% year-on-year, reaching 1.4 million customers. All the above ultimately translates into a strong 1.7 billion pesos cash position at the end of the quarter almost double year-on-year. Wrapping up, macroeconomic pressures can be felt in this quarter in many European countries. In Italy, this has been particularly penalizing and has been coupled with the concerns for the Mediterranean Basin crisis. This scenario, while not impacting our fixed business is certainly not helping a turnaround in the mobile business, making our domestic targets challenging but yet achievable, based on an acceleration of the topline recovery expected for the second part of the year. Contribution of Latin America is key. Our subsidiaries are over delivering on all metrics and this makes us confident that we are on the right track to reach all our yearly Group targets. Thanks for the attention. And now, I will turn the floor to Marco Patuano that will focus on the domestic -- up to you.

Thank you, Franco. Let us review the main dynamics that characterized this quarter. In the fixed, the fixed business held well by constantly focus on CRM activities that drove down the churn rate in spite of all those aggressive promotions. Our focus on customer satisfaction and high quality offering allowed us to achieve positive net additions in the broadband business, plus 19,000. ARPU dilution has been minimized by deleveraging unbundled offers that increased the percentage of flat contracts on the total, 87% now versus 84% in the first quarter 2010. Lately, our commitment to increase customer satisfaction and retention also translated into a tariff streamlining, through which Telecom Italia will offer its customers more transparent and easy to remember prices for landline calls with no time constraints. These were also associated with an increase in the retail monthly fee that I shall briefly describe later on. Finally, I wish to mention the important result achieved by winning back the Consip contract, amounting to a total of €1.28 billion in three years, which allowed us to regain the leadership in the public administration fixed business. Mobile, in any environment where demand is weak for both goods and services negatively affecting Italian companies and urging them to rationalize their expenditures, we are convinced that our strategy to rebuild our customer base, grow volumes and stabilize outgoing prices is the correct one. On the mobile broadband front, we reconfirm our leadership in the large screen business, while the acceleration in the small screen penetration is taking more time, mainly due to a delay in the delivery of low-end smartphones. Financial discipline, top line weakness is offset by a cash cost control program, minus €0.3 billion, totally in line with the full year 2011 target. Despite increased efforts to strengthen our competitive position, CapEx efficiencies enabled us to compensate for the EBITDA reduction and to curb the contraction of the operating free cash flow. EBITDA minus CapEx stand at €1.6 billion, partially offsetting the EBITDA reduction from minus 7.6% to minus 5.7%. Let’s focus on the domestic organic result. The overall performance of the domestic was affected by the mobile business trend I’m about to describe shortly whereas the fixed business records an improvement, minus 4.5% year-on-year versus minus 4.6% in fourth quarter 2010, despite the fiercely competitive environment in broadband. The year-on-year figure becomes even more attractive considering that we adopted a selective approach to some international wholesale low margin contracts which caused a reduction of approximately €60 million with no impact on EBITDA. This sole event accounts for 38% of the year-on-year Wireline revenue declines. KPIs of the mobile consumer are improving, reconfirming that the strategy implemented in this segment is correct and that top line recovery is gradually taking place. The overall mobile business performance suffered in addition to the macroeconomic pressure in the business and Top segment I already mentioned, also the unfavorable comparison with 2010. I will expand on this later on. Fixed, moving to the details in order to better understand the dynamics that characterized the fixed business performance in the first quarter ‘11, we should review the wholesale and the retail performance separately. In the Wholesale business, the performance of the domestic wholesale is improving compared with fourth quarter 2010, plus 5.3% versus plus 2.6% fourth quarter 2010, mainly due to the ULL monthly fee uplift. The performance of revenues in international wholesale, minus 21% year-on-year, was still affected by a further rationalization process aimed at supporting the business profitability. The trend in the retail business records an improvement compared with the previous quarter and is supported by the double-digit growth of ICT, plus 13.3% year-on-year, offsetting the reduction of revenues from content services. In fact, we decided to exit from the Soccer Rights business. Net of the reselling of those rights, Internet service revenues recorded a year-on-year flat performance. Let’s review the dynamics characterizing the access market, where we went back to recording an improvement of the trend. In spite of the persistent aggressiveness of OLOs, we kept their discounted offers. We maintained the churn rate under control through an accurate CRM management. Net of backlog, line losses improved versus one -- the first quarter 2010, 187,000 versus 196,000 in first quarter 2010. In fact, Telecom Italia win-back increased in first quarter by approximately 50% year-on-year, consumer 147,000 versus 109,000 in the year 2010, also due to the opt-out regulation introduced in February 2011 that allowed us to use the telesales outbound channel. Unfortunately, as Franco mentioned earlier, these regulations shall have to be revised to increase the exceedingly low daily cap to the win-backs from OLOs, just 1,700 per day for the largest OLOs compared with the potential that the opt-out regulation could create. Indeed, the first quarter closed with a backlog of over 30,000 win-backs requested and unfulfilled, generating customer dissatisfaction and competitive asymmetry against us. Let us turn now on fixed tariffs. With effect from July 1, 2011, Telecom Italia will introduce a single basic tariff for fixed telephony. At the same time, retained monthly fee, that remain unchanged since February 2009 will increased from €16.08 a month to €16.50 a month, still one of the lowest in Europe. Indeed, experience both in the mobile and fixed business shows that offering streamlining drives elasticity and translates into higher usage and greater appreciation of the service by customers. We estimate a total positive effect of around €70 million on a yearly basis. Focusing on broadband and ICT. In first quarter, we recorded positive net adds in the broadband business, 19,000 versus minus 11,000 in fourth quarter 2010. As you know, we decided not to respond to our competitor aggressiveness in order to preserve the market value. We decided to bet on quality and to enhance our offers with additional services like parental control, antivirus, anti-spam. Furthermore, our focus on bundled allows us to keep the upward trend basically steady, €18.4 versus €18.5. Moving to ICT performance in first quarter ‘11, we protected our position and posted a market share increase in an essentially stable market, using the Cloud computing platform. Nuvola Italiana drove a 39% value growth in ICT portfolio. Personally, I think we have an advantage of at least six to nine months on our competitors. And we’re working hard to maximize this benefit. Slide number nine shows the Wireline revenues by type of services, voice, Internet, data and wholesale. So let’s move to slide 11 and focus on mobile business. First quarter 2011 mobile business trends, net of the Wholesale business that declined by 32% year-on-year. To better understand retail service revenue performance, minus 10.9%, we should review the consumer and the business & top segment separately. The consumer segment improved its performance quarter-on-quarter -- minus 10.7% versus minus 11.6% in the fourth quarter 2010, in spite of the extra Bank Holiday celebrating the unification of Italy, with outgoing revenues still affected by price comparison with first quarter 2010, the period when the repositioning process had just started. The Business and Top segment performance, minus 11.5% year-on-year, was negatively affected by a tough comparison with first quarter 2010, coming from a very positive seasonality we experienced in commercial results in the first month of the last year. Data revenues in the Business and Top segment dropped compared with the first quarter 2010, due to shock billing effect, which I’ll touch upon later. Customer base trend. Moving to the mobile business operating performance, in first quarter 2011, it was characterized by a very good KPIs, with gross additions increasing double-digit also this quarter, thanks to the attractiveness of our portfolio. At the same time, the number of churned SIM cards decreased significantly, proving that we are on the right track to make our customers more loyal. CSI improved once again, posting a plus 2.2 percentage point year-on-year. Total customer base increased year-on-year, plus 645,000. And thanks to its good quality, the customer base calling grew to plus 522,000 lines year-on-year. Mobile consumer KPIs performance strongly improved, in particular in terms of customer base recovery, almost filling the gap versus 2010 already in February. We keep on focusing on bundles with a higher weight of high value offers. In first quarter 2011, Tutto Compreso amounted to 47% of total bundle offer and customer base cannibalization remained at physiological levels, almost 17% in first quarter 2011. In the consumer segment, we are resorting less and less to the promotional lever, especially for TIM Part and Tutto Compreso’s offer, with clear benefits in terms of ARPU, which is particularly relevant for the cluster involved. Despite the year-on-year strong price decline, minus 31% year-on-year, outgoing voice prices in first quarter 2010 -- 2011 are basically stable compared with late 2010 and even more relevant, thanks to the continued growth of outgoing volumes. The price volume delta is gradually decreasing though most of it has to come in the next quarters. Focusing on Business and Top. We have slightly increased the human customer base, keeping churn and number portability under control, successfully protecting our leading market share. In the large accounts segment, the Consip contract, very positive for several forthcoming impacts, determined an immediate pressure on the fees of the public administration lines already in our customer base and became the benchmark for other very large accounts. In the second half of the year, we will reap the benefits of the incremental lines and additional revenues envisaged in the contract. As I said earlier, the Business and Top revenue trend was also affected by some non-recurrent events, like shock billing. In first quarter 2010, the spreading of smartphones and Blackberrys with pay-per-use contracts caused a peak of data traffic due to the unaware use of this device. To guarantee the telephone services offer are transparent in terms of economic condition and tariffs, AGCom issued Decision 326, stating a set of rules, ensuring final users the full transparency of voice and data tariffs and providing for the introduction by operators of alert system and expense limits for data traffic. With the view to keep our customers satisfied, even before such AGCom deliberations enters into force, late last year, we decided to adopt measures aiming at preventing any possible sharp deals on data through an offer repositioning. Net of such items, which produce revenue spikes in first quarter 2010 and to a lower extent in second quarter 2010, business revenues are more in line with the trend of the second half 2010, minus 4.9% year-on-year normalized. I’m reporting those normalizations just for the sake of a better understanding, fully aware that what really matters at the end are the reported results. Mobile broadband, our leadership in the large screen segment is reconfirmed, with a consumer user growth of 25.8% year-on-year, supported by the success of our lock-in Internet bundle offer which, in first quarter 2011, accounted for 70% of the gross adds. In the small screen segment, we were late in raising our competitiveness due to a delay in launching low-end smartphones, we focused on that bundle offers. That penetration in voice customer base is still very low, less than 10% and shows a huge growth potential we intend to size. Since after KPN results, the recent market hot topic referred to the potential substitution of traditional VAS coming from the adoption of smartphones. I just want to highlight that the quarterly trend from team SMS is improving, posting only a minus 1% year-on-year and we are not witnessing any cannibalization. Next slide shows the mobile revenue by type of service. So let’s move to the EBITDA. The main drivers of the performance are, first the interconnection costs. The positive impact of €124 million is mainly related to termination rate reduction and to the decline of wholesale traffic. Second, the selective growth of the smartphone and ICT products is not impacting profitability. Italian market is still not a heavily subsidized market. Third, the increase in customer acquisition costs resulting from mobile customer base expansion has been fully financed by efficiencies accomplished in other commercial costs, like customer operation, where the improved quality of our service led to more efficient customer care. Efficiency program, four. Cutting fixed and personnel costs contributed to a €32 million increase in EBITDA. At the end, what are the takeaways? Results on the fixed business are in line with our expectation and shows some points of strength we should leverage on. The decision of not reacting to competitors’ aggressiveness is the right one. Price reshaping will positively contribute in the second half. ICT is becoming sizeable and shows a positive momentum. In the mobile, the tough results need to be put in the right perspective in order to properly evaluate our strategy. Price repositioning was unavoidable and it allows us today to rebuild the customer base, its loyalty and its satisfaction. Push and bundle is and will be even more important in light of the lower than expected MTR glide path. Market share protection in Business and Top segment is mandatory, since the economic climate is not yet revamping as we expected. Lastly, we are paving the way to the new mobile broadband business model, balancing penetration and profitability. In the light of this, we can tell that if the challenge is still there, we confirm the full year targets. Thank you for your attention. Let’s now…

(Operator Instructions) The first question comes from Mr. JP Davids from Barclays Capital. Mr. Davids, please? JP Davids – Barclays Capital: Good morning and thank you for taking my questions. The first question on TIM Brazil, the listing and then a question on the domestic mobile business. Firstly, on TIM Brazil, the listing on the Novo Mercado and as the major shareholder, I would have thought you would be in control of corporate governance already, so what are the primary advantages or benefits for you as the major shareholder in moving this listing? Does it reflect your commitment to the ongoing -- an ongoing holding in the company? And then on the domestic side of the business, if we could just have a look at Mr. Bertone’s slides and in particular, his slide on consumer mobile, which is slide 13, talk about outgoing prices up -- sorry, outgoing prices down 31%, outgoing traffic up 29% would seem to suggest that outgoing revenues are pretty much flat, yet Consumer is down 10%. Does that mean the rest of the revenue’s data, etc., is down 20%? Is that sort of reconciliation correct? Thank you. Franco Bernabè: Thank you Mr. Davids for your question. On the first point that you raised, that is why have we decided to migrate the Participações shares to Novo Mercado? I think listing on Nova Mercado will provide all TIM Participações’ shareholders the best conditions in terms of liquidity of the stock in terms of transparency and accountability. What we want to do is that we want to accompany the economic commercial and financial development of the company and as in general terms with an appropriate upgrade in our presence on the local financial market. I think that our move will be followed by other major players. I think that having the first move or advantage will put us in a better position in terms of providing necessary boost in terms of commitment to the local market to participate in the consolidation process. What we really want to testify with this is that we are in Brazil to stay. We think that the potential for growth of the Brazilian market is strong. We want to have all the potential for improving our presence and participating in this consolidation process of the Brazilian market long-term. And now I turn it to Marco for the -- answering the domestic market.

Yeah. Thank you. Well, first of all, we are focusing on the consumer and let just me say that there is a little math trick in what you were saying, because if price go down 30% and volumes goes up 30%, the net of the two effects is not zero. You start from 100%, you cut 30% in your prices and you go down to 70%, you increase your volumes 30% and you go up to 90%, not to 100%. Now what is happening on the other lines, this is of course the major element of which is the outgoing voice, what is going on the other parts of the revenues? Value added services are mostly flattish, given the fact that SMS is minus 1, broadband is -- mobile broadband is growing and mobile content, wallpaper and ring tones and so forth are going down and they will go down even more with a further introduction of Smartphones. The received, the business received, so the entrant -- the come-in calls are going down the same path of the MTR. So there is no elasticity effect on this. And as I told, now the customer base is almost in line with one year ago, so let me say that 100% of the effect is MTR. And what is missing is visiting and visitors. There is, there is -- so let me call it wholesale. The visitors are going down almost 4% and there is a wholesale agreement with Hutchinson 3 that is causing further a reduction in the wholesale revenues. I hope I gave you all the details. JP Davids – Barclays Capital: Thank you. That’s very clear. Franco Bernabè: Next question, please.

Next question comes from Mr. Georgios Ierodiaconou from Citigroup. Mr. Ierodiaconou, please? Georgios Ierodiaconou – Citigroup: Sorry. Good morning. Thanks very much. Just two questions, please, the first one is on data. You already passed on the fact that you had some exceptional performers, but even without it, over the last couple of years, data revenues, interactive value-added services have been flat, while for your major competitor, they’ve been up roughly 40% over the last two years. Is it something you expect to see an improvement in the second half of the year or is it a case that because of some problems in the business segment, it’s more a case of Vodafone’s growth coming down rather than your’s accelerating? And then in the second -- my second question is on KPI and fixed. You appear to be running below your target for line losses and for broadband net out. Is it a case that the public administration contract is going to kick in the second half of the year, will help you meet the targets or do you think they may be a bit ambitious right now? Thank you. Franco Bernabè: Marco Patuano will respond to this.

Okay. Let me start from the second, so the KPIs on the fixed. Yeah, the answer is yeah, we are late, as I started saying at the -- commenting the results of the fourth quarter. It was a decision. We had to decide if we wanted to defend the value of the market, even having in mind that we have to think the forthcoming business model of the ultra broadband. If we accept to enter in a price war on the Internet, it will be extremely dangerous in the future when we will have to sell ultra broadband connectivity at the proper price. So, I think that this is extremely important and of course, we -- what we are doing and what we are experiencing is that if we are a little bit short on this, we are doing very well on ICT, so not necessarily on the public administration, but on the ICT in general. Of course, the public administration will help in the second half and also in terms of line loss, win-back cap removal. So, I think that there are more than one element. Today, if I can tell you something that is positively impacting and positively giving us good signs and good results, is ICT. Then you asked me about data. So data revenues. I was wondering to understand if you were referring to mobile data or to the fixed business data. Can you just give me this --? Georgios Ierodiaconou – Citigroup: I was referring to mobile, non-SMS data.

Mobile? Browsing, so browsing -- mobile browsing, correct? Georgios Ierodiaconou – Citigroup: Yeah.

No. We are not flat. We have a plus 5.5% year-on-year on the consumer. In the business, as I tried to explain, it’s a little bit more complicated because we voluntarily decided to protect our positioning on the customer base and we voluntarily adopted the measures correcting the shock bill phenomena. So, especially small and medium companies were having significant problems coming from unexpected bills in order of magnitude of €2000, €3000 per line coming from data, given the fact that there was an exception of use of data. Now we completely changed our offer. We decided not to apply and to recognize to those customers the satisfaction of having their bill correct. So I think it’s important today it’s a decision aimed to defend the market share. So, if I focus on the -- at the end, if I focus on the consumer broadband, mobile broadband, it’s almost plus 6%. Franco Bernabè: Next question, please.

Next question comes from Mr. Micaela Ferruta from Intermonte. Mr. Ferruta, please? Micaela Ferruta – Intermonte SIM: Yeah. Good morning. Micaela Ferruta from Intermonte SIM. I have one question on the Consip contract. Could you tell us the discount that you offered on Consip and the yearly incremental impact of the new contract versus the share of the contract that you still held in the past? The second, regards the mobile termination glide path proposed yesterday by the regulator. It actually calls for quite a harsh reduction and I know that you would say that it’s neutral on your EBITDA. So I guess you’ll confirm this? I would like to understand how you think this will impact the retail pricing environment and competition and if I can ask a general question on domestic trends for Q2? Actually, aggressive DSL pricing is still there and I guess with weak macro, will still have an impact on mobile. So I was just -- I’d just like to hear whether you expect -- we should expect an improvement of domestic trends in Q2 already or we’ll have to wait for the second half of the year to see an improvement versus what we saw this quarter? Thank you very much.

Okay. Marco Patuano speaking. First Consip. The Consip, first of all what is in terms of number of lines? Number of lines, there is a delta, an increase of around -- a little bit less than 200,000 new lines coming from -- starting from Q3. So this is when the Consip contract will apply. On voice, so on prices, the correction in terms of voice has been marginal. I think that the most effective part of our proposal was on data. We have been very aggressive on data, mobile data, I mean. Since we consider that the public administration have to jump into the future also in the mobile business and they are using the mobile telephony as a phone and we are giving them the possibility of using it as data, an internet product. Second MTR, well, first of all, let me say that definitely the size of the decrease is higher than expected. I would say much higher than expected. Second, last quarter, if you remember, I spent sometime in order to explain that the effect on our profitability of this -- of a potential cut in the mobile termination rate is extremely low in our accounts and this is quite different from the situation of our competitors that I don’t know in details but I think it should be different. Third, it is evident that this light path determine to change in the revenue model, so we started one year ago with a fierce reduction in our prices and today if this light path will be confirmed, I would say thanks, God because this will impact quite significantly the way we will sell the mobile business and the fact that we are pushing on bundled offers is extremely important. And last, a brief comment, if it is confirmed, I consider a possibility of an acceleration in the consolidation of the Italian market. Q2, what you should expect in Q2. Yeah, an improvement in the revenues even if there is very specific one off event, which is the IFRIC impact on 2010 but if you take the presentation of one year ago, you can find probably the details. Micaela Ferruta – Intermonte SIM: If I can interrupt. I’m sorry, I was actually referring to the Consip contract for fixed telephony, I’m sorry, I didn’t specify that rather than mobile, if you can elaborate?

Yeah. So fixed the situation is completely different. In the fixed, we won a contract. The main difference is that in the mobile, we were already the winner of the previous contract wasn’t in the fixed we were not. So the impact in terms of new lines is significantly more important. We are talking about an estimation of 0.5 million lines. And of course, there is -- in this case there is an impact in terms of average price. The average price we offered, it is not that relevant how lower than the bid demand was, but it was lower than our previous price. So I would say that the net impact on the existing lines shall be in the range of $100 million. Micaela Ferruta – Intermonte SIM: Thank you.

You’re welcome.

Next question comes from Mr. Frederic Boulan from Morgan Stanley. Mr. Boulan, please. Frederic Boulan – Morgan Stanley: Hi. Good morning. I just wanted to clarify a bit further on those deal contract, so on the fixed side, Swisscom-Fastweb two days ago were saying that they were not expecting any meaningful change in revenues from this revenue stream. So do you expect the PA administration to increase spending or are you taking share from a third operator, can you clarify a little bit? And again, so you’re talking about 1.3 billion incremental revenue. Can you tell us roughly how much that it is in fixed on an annual run rate basis? Thank you very much. Franco Bernabè: Marco?

Well, I think that the comment of Fastweb depends on the fact that they had 75% of the total lines of the public administration and we previously had 25% of the total lines and now the situation is exactly the contrary. We won the largest part, so we will have 75% and they will have 25%. So we have – we will expand our number of lines and this is very beneficial. Second, on the public administration there were several other contracts that we are participating and we are winning, starting from maintenance of the switching, starting from outsourcing of some ICT infrastructure. So there are several other contracts that going on, on which we are not, I won’t say the leader, we are -- let me say something more than the leader, we are the partner of -- the reference partner of the public administration. Frederic Boulan – Morgan Stanley: Okay. So what kind of incremental revenue should we expect on an annual basis?

Well, you have to consider that in year one, there are two affects that tend to compensate each other, so we apply lower prices and the lower prices will apply to all the customer base we already had. And second, we will enlarge the customer base, so we will -- we consider that in the first year, it is one digit -- high one digit. Franco Bernabè: Okay. Next question, please.

Next question comes from Mr. Ottavio Adorisio from Société Générale. Mr. Adorisio, please. Ottavio Adorisio – Société Générale: Hi. Good morning. A couple of questions, the first on domestic fixed and the second free cash flow generations. Going to the fixed, looking at domestic broadband, it looks like pricing pressure from your competitor has continued and they were financed by big increases on their own customer bases. Now considered that most of your competitors and bundlers and therefore use your network, I was wondering if you could give us some color on trends in customer churn among those in bundlers and any change you might have experienced in your backlog for win backs. Moving to free cash flow, it looks that part of your improvement that recorded this quarter was due to the disappearance of cash payments that were labeled in first quarter last year as other items. Those payments amounted to a negative 25 million negative. Now could you please give us some color on the nature of that cash outflow and possibly confirm if the improvement you recorded this quarter would be structural? Thanks.

Okay. Marco Patuano, I answer the first question. I think that in the domestic broadband, what we see right now is that Wind-Infostrada has reduced the price pressure almost half of what they were doing before. So if you remember, I was mentioned that I consider that their extra strong promotion is something that should not continue in the medium-term and this is happening. I think that this is the reason why I’m still convinced that it was correct to avoid the price war, so not reacting. Of course, we suffered a little bit in terms of market share on the acquisition but I think that this is correct. At the end, also Fastweb did exactly the same and it was correct. If you talk about trends, we have to consider that now we are starting introducing the first ultra broadband offers. So introducing the ultra broadband offers gives us a possibility of differentiating the quality of service. So not only having the basic broadband and the ultra broadband, but also to introduce some premium broadband in order to better differentiate the service we give to the customers. On the basic internet, we have one of the cheapest in Europe and I don’t think that prices can increase in any possible way. We will introduce a premium ADSL that will offer a differential quality both in terms of downstream and upstream and these will be premium priced, something in the between the basic internet and the ultra broadband. I think that this is something that if I look at European level, this is something that we are not the only big player who is willing to do this. Of course, you were talking also about other services and this is something very important. Now I leave it to Franco for the second part of the question. Franco Bernabè: Yeah. On the free cash flow generation, you are asking whether it’s structural. If you look at the table that we presented, you will of course note that apart from exceptional items, we have substantially increased our free cash flow generation, which you remember is one of the key features of our plan and the targets we have given ourselves over the next three year period. This structural improvement that we have registered this quarter is coming from, of course, as you have seen from the EBITDA minus CapEx that we have achieved this quarter. And basically, what we are doing is to optimize this in terms of the more efficient use of fixed investments, in terms of pricing, in terms of platforms, in terms of solutions and improvement also in the management of working capital, where you see that we have again achieved an improvement. So I would say that the EBITDA minus CapEx relation, although it has been particularly strong this quarter, is on a structurally improving term on the long-term. On the point, on the specific point that you raise, that is the €256 million that you see there, they are coming mostly from -- they are coming totally from the fees -- the tax that we are paying in Brazil. And I think that given the complexity of the problem from a technical point of view, I would ask you to refer to the Investor Relations that will explain you exactly what is the impact of that which, of course, is a recurring item in our yearly accounts in Brazil. Thank you. Ottavio Adorisio – Société Générale: Okay. Great. Thanks.

Next question comes from Mr. Tim Boddy from Goldman Sachs. Mr. Boddy, please? Tim Boddy – Goldman Sachs: Yeah. Thanks. I just had a couple of questions. The level of detail you’re showing us on the mobile business is very helpful, but I feel like I’m still missing the sort of big picture and then your strategy last year, obviously was around the community offers and lowering prices in ways that kept customers more captive. What’s your strategy in mobile now to stabilize and hopefully return the business to growth over the next, say, 12 to 18 months? And then on the Consip thing, I don’t want to keep going on this, but I have to admit I’m quite confused as to exactly what the impact is. My understanding is that the net effect of everything of more lines but lower prices is slightly dilutive to near-term revenue but then accretive over time as more customers come on. Have I understood that correctly? Thank you. Franco Bernabè: Marco?

Okay. You’re right that the excessive detail sometimes takes, create problem in looking at the big picture. So one year ago, it was mandatory to review the price scheme. We were playing with an ultra price differential versus our competitors. We did it. Now, I’m happy with the offer I have and we -- the rule of the game is in the consumer, stabilization of the prices, avoid any further price war and the fact that the current offer we have in the market is feeling, is given by the fact that we are experiencing good gross acquisitions, mobile number portability balance is, sorry, is more balanced. And I think that what we have to do in the consumer is we need to work consistently and to keep focused on the sales more than being creative on the marketing. Quality is a must. The expansion of the smartphones is important because it allows us to further expand the mobile broadband revenues that we expect in the second half of the year to be very supportive. In the top and so these accounts are most for 65% of my mobile revenues and this is the strategy. In the top and the Business segment, we decided to defend the market share. We decided to have happy customers and now, what is important is to keep under control the price dilution and to increase the mobile broadband penetration, not only through smartphones but also introducing the tablets and introducing more machine-to-machine opportunities. So Consip, you’re right. The effect is at the beginning lower prices and after, the lower prices will start to increase the number of lines. Of course, it applies from September, so we are already preparing our sales forces in order to be ready to go in the market. The contract is good because it is long, so it’s 3 plus 1 plus 1. So at the end it’s five years long. This is the reason why it’s very good. We have a good portion of our business customers with number of lines and prices fixed for the next five years. This is extremely beneficial in a business that should be on the other hand with some price pressure. Franco Bernabè: Thank you. Next question, please.

Next question comes from Mr. Nick Lyall from UBS. Mr. Lyall, please? Nick Lyall – UBS: Good morning. It’s Nick from UBS. Could I ask two questions, please. You’ve given guidance firstly on costs for the domestic business of €9.8 billion. Can you tell us if revenue proves more difficult in the second half, where’s your greatest flexibility on domestic costs, please? And then secondly, on the bill shock numbers, what do you expect for future quarters, is this a one-off pitch you’ve taken or do you expect an effect also in Q2 and possibly a bit in Q3 as well? Thanks.

In order to properly answer to your first question, I would like to drive you to the first page of the appendix. So, I ask your pardon if I put this slide in the appendix but I think it could be helpful to give a look at it. And if you see revenues, EBITDA and OpEx, you see that it was intended an acceleration in the second half of the year also in our original plan. Why, because in the second part of the year, we had the re-pricing of the wireline that will help in terms of revenues. And in the second half of 2010, we had the acceleration in the price reduction in the mobile outgoing traffic. And this, as I told before, our strategy is to keep the price in 2011 as more stable as possible. So this is, then there is the ICT and the ICT we performed very well in the first quarter and believing that the first quarter for ICT is the toughest one. And the EBITDA, we are working harder in order to reduce costs with just one exception, which are acquisition costs. On the acquisition costs this year we are spending more than one year ago, but I don’t consider any other cost out of the scope of efficiency. So acquisition costs are the ones we will focus and we have good space for working on other lines. Carrying is one, fixed costs is one. Then of course, I tell something that it is almost obvious, if the revenues are lower, some direct costs will not appear like interconnection for example. And this was the first two questions. Sorry, the shock bill was the second. In the second quarter, there is still something less, I would say half of it. But something is still in the second quarter. We decide – we took the decision just after summer last year and so starting from Q3, the effect is zero or almost zero. Nick Lyall – UBS: That’s great. Thank you. Franco Bernabè: I’ll be taking the last question now.

The last question comes from Mr. Giovanni Montalti from Crédit Agricole Cheuvreux. Mr. Montalti, please? Giovanni Montalti – Crédit Agricole Cheuvreux: Good morning. Two questions if I may. If we can have a bit more color on the M&A strategy you were talking about, Mr. Bernabè in Brazil. I was understanding, should be, let’s say minor one like the Intelig deal, but I don’t know if you were thinking also about potential, let’s say, measured deal in the consolation process in Brazil. If you can give us more color on that? Thank you. Franco Bernabè: Well, thank you for this question. What I said before was that we are preparing ourselves. We want to -- we think that we see few markets growing now in the world. I mean, if you look at the figures that all our costs around Europe are coming out with, you will see very clearly that Europe is suffering a very bad period of time at least for telecommunications, I think for other sectors as well. So the macroeconomic environment in Europe is not very exciting. So what we have decided to do is to focus on our Latin American activities in terms of the potential that they have for expansion. But mostly, we are focusing on Brazil. Brazil has shown that a good management team, a focused strategy can turn around a company very well and we think that in Brazil, there are lots of opportunities because it’s a large market, the market that has great potential, a market that of course needs a lot of infrastructure. We think that time to market is of the essence and therefore, we have -- we want to have all the panoply of arms in our disposal to go ahead and move whenever the opportunity comes. So, I think that this is what we really intend to do and this is the reason why we moved down to the Novo Mercado. I think it will give a great boost to our operations there and I think that it will create great value for the shareholders at large. Thank you very much. Giovanni Montalti – Crédit Agricole Cheuvreux: Sorry, may I follow up? Franco Bernabè: Excuse me? Giovanni Montalti – Crédit Agricole Cheuvreux: May I follow up -- just a quick one? Franco Bernabè: Yeah. Please. Giovanni Montalti – Crédit Agricole Cheuvreux: So if I understand well, let’s say we can rollout a major deal, I mean, probably not tomorrow but I mean, on -- in the medium-term we can rollout a major deal. You would rollout that? And lastly, on the domestic business, whichever the impact and I wanted just to know if you are considering the Consip contract both the fixed and mobile and the, let’s say, re-shape of your fixed offer as included in the guidelines or it’s something we should consider on top of that? Thank you.

It is in the guidance. Giovanni Montalti – Crédit Agricole Cheuvreux: Thank you. Franco Bernabè: Okay. I think that we finished the conference call. Thank you.