Alex Bolis - Head, IR Marco Patuano - CEO Piergiorgio Peluso - CFO Rodrigo Abreu - TIM Brazil, CEO

Micaela Ferruta - Intermonte Nick Brown - Goldman Sachs Madeleine King - Credit Suisse Mathieu Robilliard - Exane BNP Paribas Georgios Ierodiaconou - Citi Robin Bienenstock - Bernstein Stefano Lustig - Equitasim Luigi Minerva - HSBC Justin Funnell - Credit Suisse Hannes Wittig - JPMorgan

Good evening, ladies and gentlemen, and welcome to the Telecom Italia Group Nine Months 2013 Financial Results and 2014-2016 Plan Outline Conference Call. I would like to remind you that this presentation contains forward-looking statements within the meaning of the Private Securities Litigations 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. Bolis.

': I'd like to pass it now over to Mr. Marco.

Thank you, God. Thank you, Alex. Thank you, guys. What a day. We had a very meaningful agenda today besides covering our third quarter Group performance we will introduce to you our new 2014-16 plan and the list of extraordinary transactions that will strengthen our Group, allowing us to strongly accelerate our ultra-broadband investment and the related business strategy, while allowing for increased overall financial flexibility, with a name to be compliant with investment grade metrics within the planned timeframe. It's a time when the whole markets is recognizing that TI has various interesting options on hand. Let me tell you, which is the most important one for us. Accelerating and fully exploiting our ultra-broadband strategy both in Italy and Brazil. I would even further emphasize this statement. This is an opportunity that Telecom Italia and TIM Brazil can't afford to miss or to postpone. So this is why today, together with our quarterly update, we are presenting to you a new 2014-16 plan, which introduces some rather strong discontinuities versus the previous one, including a number of financial strengthening steps, which altogether will provide a contribution of more than €4 million cash. These steps are the disposal of Telecom Argentina and mandatory convertible bond issues for more than €1million, an asset valorization plan, which includes towers in Italy and in Brazil and of our broadcasting network containing TI Media, for an aggregate planned cashing exceeding €2 million. This overall exercise will provide ample additional resources to fully deliver our industrial objectives, while in fact derisking the company through a material increase of its financial flexibility and proving important support to our value creation standalone plan. Then, you know what our attitude towards consolidating options in our various markets has always been, a favorable one. So we should look at these options as a potential upside case, a view that I know Rodrigo Abreu, who is next to me today shares. These consolidation options are to a large extent beyond our control as we've learned from our experience in the Italian mobile market, so none of them is included in our plan. As we're talking of our new plan I think that many of you will want to know where we stand with our access network separation plans. The answer is the voluntary separation process confirmed we will start focusing on equivalence of input through a functional separation. This approach is compliant with gross recommendation, and represents a European best practice. As an effect of this improvement and equivalence, we expect to reduce both regulatory constraint and litigations with our competitors. On these very important regulatory item, we expect the National Regulatory to act consistently with the recent European recommendation therefore guaranteeing price stability and predictability together with adequate incentive for investments, in particular, in the form of an adequate return on capital employed and to submit current remedies to a full review. But let us move forward with the presentation, and review the Group third quarter results. Slide 3, on this chart we give an update on our main Group results for both the third quarter and the nine months. Let's start with the latter. Group top line performance decreased year-on-year by 7.6% on a reported basis, while in organic terms it was down 2.1%. We do have an improving top line outlook for the last quarter, which will cause it to trend towards our stable guidance we gave you on a full year basis. The first nine months of 2013 they generate at Group level about €8 billion of EBITDA, which was down year-on-year by 10.5% reported wise and by 6.9% in organic terms. Regulation of course impacted this measure in particular, which on a stable basis would have cleared at minus 5.7% year-on-year. Continuing down the nine month column, Group net income still suffered for the second quarters about €2.2 billion goodwill write-down. Without this extraordinary measure, Telecom Italia would have posted a profit of about €1.3 billion for the first nine months of 2013. Let me underline in this respect that after the second quarter impairment our net capital reserves as of September 30, 2013, stood at €2.8 billion. On the last line of the slide, you can see how our Group net financial position was reduced to €28.2 billion, down year-on-year by €1.3 billion. While planned leverage for the year continues, we confirm our Group net financial position target of below €27 billion for end 2013. On Slide 4, we summarized our Group main results in our different markets. Domestic operation continued to play a key role in terms of EBITDA generation with a rate of about 75% within the Group. Even more so domestic EBITDA less CapEx spent out in terms of relative importance reaching more than 85%. On the other hand, LATAM top line growth has continued to be an important stabilizing factor. On Slide 5, we summarize what we said about the context that is playing out for our domestic operations in the second half of 2013, and what TI has done and delivered in this quarter, obtaining better overall performance. On the left hand, you will find that the key elements of our domestic second half expectation, which we shared with you in our August call. Without going through all of them we expect an evolution pointing to a more rational competition in Mobile, a supported performance in Fixed, both in consumer and business, continued pressure in domestic wholesale due to new corporates and further cash cost deficiencies combined with the increased ultra-broadband investments. On the right hand, you will find evidence of positive results scored by TI as we made our way in this evolving scenario, including visible success of our dual play offer Tutto, which in just two months build up a quarter of a million subscribers, while bringing on a flat tariff 30% of our fixed mobile calls and offering new protection to our traditional fixed business. Sudden halt of price aggression, after our successful TIM special summer campaign, for the advancement in our NGN deployment program as our fibers offer were launched in 33 CDs and LTE coverage approached 40%. Slide 6. The first nine months of 2013 closed with domestic revenues at €12.1billion down 10% year-on-year, with the third quarter at minus 9.1% performing better with respect to the first half due to supportive results from business and a lower MTR drag. Full year domestic top line targets of negative mid single digit undoubtedly creates a challenge, but in working towards this goal, we will be supported by an improving operating and economic environment. Nine month EBITDA posted a €6 billion results, as the quarterly year-on-year trend was confirmed at an outstanding margin of 49.6%. Pace of innovative CapEx increased, inevitably impacting short-term cash generation, clearing a nine month figure of €2 million up 2% year-on-year, ensuring that past households by the year-end will reach around €4 million. Slide 7. Now looking closer to our mobile domestic competitive environment, we wish to highlight how after very intense summer the pressure has cooled down, and we're pleased to see how there is now materially less content in our entry-level €10 per month bundle, notably on data, where for this price, after September 8, you can now buy 1 giga against previous two. With TIM special, which by September has built up 1.1 million clients, our aggressive pricing strategy played most definitely, this is a dampening factor on irrational competitive behavior. We continue to keep a high guard but are currently back towards a sustainable premium positioning, while our mobile network quality is judged as the best-in-class in customer pools. As you know, in the initial parts of the year, we had remained on Core to a price level that was -- that as we entered in the second quarter was no longer sustainable while other players kept on cutting and cutting their base offers. At that point we introduced the Convergence (Foreign Language) offers that served us increasingly well, as our sales force adjusted to a more complex sales proposition with the total amount of clients approaching 900,000 in just a few months. The result of our overall reaction was a normalization of the mobile number portability trend that pointed to a decrease in volumes down to 1.3 million in September from 1.76 million in July high. This is precisely the direction we were working for, aiming to take volume out from this churn machine. Slide 8. Moving now to KPIs. At the end of September our total SIM card base did show some contraction versus the previous quarters due to our stringent cancelation policy, while active customer base was up by 200,000 units from the end of June. This is another indicator of our successful commercial strategy. Net MNP acquisition in the quarter scored plus 50K an important result in the context, but not one that we have wished to repeat in the forthcoming quarters, as our view, it that MNP unbalances our equivalent to cash burners. On Slide 9, we take a closer look at revenues. The third quarter scored a visible improvement in service revenue, which improved from previous quarter minus 18.3% to minus 14.8%, driven by a lower MTR drag, which shows in the less 28.1 incoming component for the quarter, up from the less 47.7% in the second quarter, as you can see in the upper right quadrant of the slide. Business generated was substantially stable versus last quarter as the current figure of minus 13.1% compares with previous minus 12.8%. We can breakdown this performance into two main components. One, is outgoing voice, which weaker trends in the third quarter and a sharply improving VAS contribution, which moves up from minus 6% year-on-year in the second quarter to minus 0.5% year on year in the third quarter, driven by browsing, which moves up to 11.5% from second quarter plus 2.4%. This is an interesting showcase for innovative services fully compensating for declining trend on traditional VAS. The enabling factor was increased Smartphone penetration, which reached 30% of our client base and the growing attached rate of data offers, which are showing 80% as of the end of September. All in all today total mobile top line was minus 13.6% year-on-year up from minus 17.8% in the last quarter as handset sale pickup to plus 8.2% from a previous negative quarter. With Slide 10 we move to fixed. While disconnections remains an issue for the whole market, I would like to highlight our Telecom Italia still retains more than 63% of total market of 20.5 million lines. We have therefore an important perimeter to work upon. With a goal to different lines that have further earning potential on traditional by attaching on to it a good basic ADSL connection. This is a story of our very successful new Tutto dual play proposition launched in September that promotes for €29 amount on limited fixed-to-fixed and fixed-to-mobile calls with a 7 mega speed broadband flat offer inclusive a monthly rental fee. We will push further on Convergence expanding to triple play offers by the end of the year. On fixed broadband the picture is different. Our market share of 50% is holding out well featuring about 7 million clients, with a constantly growing ARPU currently in €19.2 per month. This part of our domestic business is overtime the enabling market base for our fiber offers starting our 800,000 plus fast ADSL customers. Slide 11 tells you about a better fixed top line for the quarter, which improved to minus 7.5% year-on-year from previous quarters minus 8.1%. Core domestic service was a touch weaker due to regulation and a lower contribution from voice, while international wholesale is gaining traction on the back of new contracts. Slide 12. On Fixed Domestic ultra-broadband plan, we are gaining a strong momentum. As by the end of the year we would have brought fiber to about 40 cities, yielding more than 15% of the population coverage. At the same time we have strongly increased our 4G network expansion covering 300 cities thus obtaining more than 37% coverage of the population. This unique track record highlights TI as the leader in mobile ultra-broadband technology across the country. As you will see shortly as we move on to our plan section, TI will further accelerate on these areas, aiming to further capitalize on its unsurpassed technological position. Let's now take a look at the important contribution to the quarter, which came from our LATAM operation. Brazil, rapidly through Slide 13, in Brazil we maintained our leadership in customer net ads, summing up 2.5 million clients in the first nine months of the year. In Argentina new successful offer such as personal weekly data package, supported the revenue trend. In both countries focus on net profit development sharpened further, while 38 main cities in Brazil are being targeted by year-end for full mobile broadband deployment and fiber rollout is accelerating in Argentina. In this evolving environment postpaid contracts increased in Brazil, while our low SAC approach was confirmed, and in Argentina fixed broadband net growth was confirmed. I don't wish to take too much time for Slide 13 and 14, which refer to third quarter results which have been well commented already by our companies. On Brazil, I just want to remind that the first nine months, revenue stood at €5.3 billion, up 7.3% year-on-year and EBITDA grossed €1.3 billion in the same time period, posting a 25.1 margin. Lower EBITDA performance was explained essentially by higher commercial costs related to increase in own shops and to increased provisions for regulatory and fiscal contingencies. Moving fast Argentina, how the nine month mid-20s growth in revenue posted a total result of €2.85 billion for the period while €796 million were scored EBITDA. So this is all for the Group operation in the quarter. We now move on to presenting the new 2014-16 Group plan outline, on which I will cover the domestic contribution to it, and Rodrigo Abreu will take care of the Brazilian part. Piergiorgio then will summarize current and perspective financial profile, as well as detail to you all the new financial strengthening measures we are going to adopt. Slide 17, Macro and the Industry context. Let's start now looking at the macro and business framework. Italy is finally showing a better outlook; consumer confidence index did rise continuously from June to September. In October, a temporary fall due to VAT increase and political uncertainty is expected to be fully recovered by the year-end. On the enterprise segment we have had six consecutive month of confident growth. Italian sovereign risk is on its way down as indicated by the average refinancing cost of the Italian treasury, which is expected to be 2.2% for 2013 down 80 basis points from 2012's 3%. Expected Italian GDP growth acceleration in our new plan scenario is supported by Germany plus 1.8% and France more or less 1% in 2014, both strong trading partners of our country. On the back of expected growing exports, Brazil GDP growth is expected to trend up in the plan reaching in excess of plus 3.5% in 2016. And in both our markets data is expected to gain a considerably stronger role, with Brazil really picking up momentum as moving from about 20% to about 40% penetration of innovative services in our plan. On Slide 18, I wish to leave you a bullet point representation of the current regulatory framework both in Italy and Brazil, while I don't wish to comment on every single point, let me highlight two main points. In Italy, the most discussed topic is still voluntary network separation, which as already mentioned, is moving ahead full steam with the objective to achieve equivalence of input through a functional separation approach, which as we know is well tested model in the UK, and in Brazil, an area of general interest in network sharing where we have already done our part with 4G sharing agreement with Oi. Rodrigo will further elaborate on this area. Slide 19. Telecom Italia is a strong industrial story that does not forget our financial priorities. As you can see investment across our two markets of reference are ahead of everything else, confirming that TI is today first of all an industrial story. Following along this line, basis of growth and priorities on our markets including an important transformational part of our business into the new TLC business model, need to develop in consistence with our efficient and financially disciplined approach in order to deliver long-term free cash flow sustainability. So investment comes first. In Italy, we are stepping up in a big way our innovative CapEx to move into a structurally superior service quality on both fixed and mobile ultra-broadband, which will play an anchor role to stabilize our domestic results, allowing us to expand onto ideation markets and into new revenues. In Brazil, we are relentlessly increasing quality of service through network upgrades with a goal to both support further growth of traditional and reinforce our portion in the data market. Slide 20 and 21 is a representation of the three driver of our domestic strategy. Speeding up on our ultra-broadband is our main action plan. In 2016, we cover with fiber more than 15% of the population with a sharp increase versus the previous targets. At the same time, we will allow no one to challenge our mobile ultra-broadband leadership, while we double our two days 40% coverage during our planned scenario. Let's now translate this into plain numbers. Our new plan envisages about €9 billion worth of domestic CapEx in 2004-16 period within which we are strongly increasing the innovative portion from the old plan €1.3 billion to €3.4 billion. These works along constant efficiencies in non-high tech spending. In order to deliver our revenue stabilization, we need to push forward on Convergence. The agenda here is stabilize the trend in traditional services, defending our leading market share to a non-commoditized price approach and the sharper focus on loyalty, new carrying model, and multichannel. Sustain innovative component implementing a multi device, and multi screen strategy, aiming to further broadband expansion. Third, generate new revenue streams coming from video content, entertainment, and advertising for the consumer and from the Cloud, machine to machine, digital public administration for the business. Slide 24. On consumer the good results we already scored on fixed and mobile convergent offers will further benefit from moving on to triple play schemes and supported by the developments of the new deal that we signed with Sky this afternoon to strongly content-based four play offers. In doing so, we will introduced a single brand commercial approach. TI and Sky, Slide 25. The thinking behind our new agreement with Sky is that ultra-broadband expansion needs to be supported with a strong content strategy. This new partnership that we intended to further develop, we are starting now by enriching our mobile service with TV content, which includes forthcoming Winter Olympic Games and other forthcoming major sports events. Slide 26, 27 I'll skip commenting both slides leaving them for you to further zoom in on the single components of our strategy and our mainstreams of our consumer segment. So move to Slide 28. Convergence will play a very significant role also in the business segment together with ICT development through increased penetration of cloud services and opening to new partnerships with leading players in the software as a service and system integration arenas. Among other things, let me highlight for you, in the innovative fixed/mobile component our distinctiveness levels on bundle propositions involving premium services and full infrastructure outsourcing. Slide 29. In Brazil we continue to push on fixed mobile substitution and the positive results of the strategy are evident from our continued leadership in net adds in the last nine months. Since the beginning of the year we have been enjoying a very solid take up for postpaid users, which has now reached 16.7% of our total customer base. On the data side, we are preparing our platform to absorb the remarkable growth, which is building up on mobile broadband. It's worth to mention how systematic our approach is on the network side, as we further strengthen our fiber-to-the-site project well beyond 38 cities target for 2013. Rodrigo will discuss on the plan out for Brazil in more details. Slide 30. When we talk about efficiency we feel at home and now a plan we continue to resolve -- to reserve an important role to OpEx optimization involving industrial and commercial fronts both in Italy and in Brazil. Respectively, we're making some new important inroads on these main following fronts, industrial, lower network cost agreement by form of sharing agreements and the layering, ultra-broadband infrastructure and expansion open to new synergy on energy. Commercial, multichannel approach will lever particularly on web, which offers strong opportunity for reduction in commissioning and in carrying costs. New push on SAC control, tightening the perimeter to the highest spending clusters, and G&A zero based budget approach would be fully implemented. On Slide 31, at a domestic level we have a €1 billion OpEx selling project on the three year period, which will be supported in addition to the tradition of fronts by new areas such as our forthcoming single brand strategy impacting advertising expenses, BYOD strategy on business segment would be another area of strong leverage and many more. As you have seen, while we are maintaining a strong financial discipline in running our company, today we're introducing a set of extraordinary measures that will ensure significant improvement in our financial flexibility, ensuring that we do not have to depend from external events or circumstances in a timely delivery of our plan. The Board of Directors has received an offer for its direct and indirect stake in Telecom Argentina. The Board of Director has given the management the mandate to finalize the transaction at terms which management believes are in the best interests of the company. A more than €1 billion mandatory convertible bond has been launched after market close. Tower and Multiplex valorization are in excess of €2 billion. Let's now move to the guidance for the plan. Group revenues and EBITDA will post 2013-2016 stable CAGR. Group cumulated CapEx will be inside €14 billion. Group net debt EBITDA target for year-end 2016 is 2.1. Thank you, ladies and gentlemen, I just give you the very final targets for domestic revenues and EBITDA expected with 2013-2016 negative low single digit CAGR, CapEx on revenues will follow an average of 18% for the period. For Brazil, revenues and EBITDA will follow a 2013-2016 positive mid single digit CAGR with CapEx on revenues around 17%. Alex, the floor is yours.

Thank you, Marco. I actually think that it's appropriate to pass it on now to Piergiorgio Peluso although we had initially forecasted Rodrigo because may be many of you want to know a little more about the mandatory convertible features that Piergiorgio will be also announcing.

Thank you, Alex, and good afternoon for you all. I will spend a few minutes to update you on Telecom Italia and its financial position as of September 2013, and then I will move on to provide you with all the main financial details of the new three year plan. On Slide #3 we can see how in the first nine months of 2013 the net financial position decreased by €45 million versus year-end 2012 and by about €1.3 billion year-on-year reaching about €28.2 billion compared with a decrease of €129 million last year. Again, on a year on year basis cash financial expenses and financial accruals decreased by more than €80 million. Let me remind you that the first half of this year has been affected by about €500 million working capital one-off dynamics coming from the deferred payments to suppliers and from the payment for frequency licenses in Brazil. Our net debt position improved significantly quarter-on-quarter around €600 million. Meanwhile, dividend, cash taxes, and others, for a total consideration of about €530 million were paid out. Let's now look at the expected evolution for the end of the year. On Slide #4, we take a closer look at the below €27 billion net debt target for the year, which we are confirming today. As you will know, the last quarter will be entirely dedicated to deleveraging and the approximately €1.2 billion needed to achieve the guidelines will be ensured by robust net cash flow generation for the period recurring in the last quarter of previous years. Additional debt reduction actions, which encompass less cash taxes, working capital optimization, and higher expected free cash flow generation from Latin America. After 2013 it is our intention to confirm once again that we will continue to pursue a Group level debt rightsizing as clearly shown by our 2016 2.1 net debt EBITDA target described in detail in the slides about our strategic plan. Moving now to our 2014-2016 plan on Slide #6 you can see the one-off measures approved today by the Board of Directors. Let me spend a few words on how those measures aim at restoring necessary financial flexibility in order to ensure that TI will be able to increase its broadband investment while preserving the above-mentioned the gearing approach. The measures entail a mandatory convertible bond issuance of more than €1 billion and in addition, as already said, the Board of Directors have received today an offer for its direct and indirect stake in Telecom Argentina. The other extraordinary transaction expected by 2014 include Towers in Italy and in Brazil and MUX disposal worth in aggregate more than €2 billion. Next slide please. As you already know, today after the Italian market closed, we launched the three-year issuance of over €1 billion subordinated, unsecured mandatorily convertible securities into ordinary and saving shares of Telecom Italia S.p.A. The coupon will be in the range of 5.75%, 6.5% and the minimum conversional reference price will be determined tomorrow. At maturity the final conversion price will be fixed as the current price within the range of 120% 125% of the minimum conversion price. So I would like to highlight that through this issuance coming at premium after one year high market prices we will be able to bid an additional buffer of financial flexibility to support increasing financial requirements. The market context is very supportive and there is currently strong investor appetite for the telecommunication sector. On the following slide I would like to provide you some background on the assets that we are considering to sell in 2014. As to the mobile towers the goal is to announce and unlock value for the Tower portfolio, more than 10,000 owned in Italy and 7,000 owned towers in Brazil with objective to also reduce focus on non-core passive elements of the two networks. We are aiming at creating two companies dedicated to the tower business acting as a responsibility center and exploiting all value creation and efficiency opportunities for mobile passive infrastructure. We are not considering to assign any active network component to the dedicated companies. Starting with TI Media on the 7th of October, the company signed a non-binding agreement with Gruppo Editoriale L'Espresso to integrate team TI Media Broadcasting and Rete A entitled to use to national MUX which would allow it to become the leading independent network operator in Italy. Given the potential synergies, efficiencies, broadening of the offer portfolio, better allocation of bandwidth capacity such integration will bring significant benefits. Once the deal will be finalized Telecom Italia Media will retain the control of the integrated entity and we will be able to initiate the value creation process for it. The sound cash generation of our Group plus the above-mentioned actions aimed at strengthening our financial profile will allow us to reach a comfortable 2.1 reported net debt/EBITDA ratio by 2016. On Slide #12, finally, in this Group financial position update we provide you with our Group debt profile as of September 30, 2015, which is composed by our well distributed debt maturities as well as the substantial liquidity margin of €13.55 billion. That leaves us considerable time to refinance the forthcoming maturities. With this, I would like to thank you very much for listening and pass it on to Alex.

Thank you, Piergiorgio. It's now time to listen to Rodrigo Abreu.

Good morning, good evening, everyone. And today, I would like to give you in this quick brief about TIM Brazil. To recall where we are with the year-to-date results very quickly given that Marco already mentioned many of the results we had and also given that we already announced our results late last month, then talk quickly about the scenario we are moving in and how it changes and what we are doing to cope with it. And finally, give you a view of our plan actions and guidance on the plan. Let's go Slide #2 first to tell you about where we are. Well recalling the results for the first nine months of the year we would like to call the attention to both consistent results on the financial as well as operational arena even amidst the very different macro scenario. If we can call the attention to some metrics, on the financial results we show a total revenue growth in the first nine months of the year of 7.3% a vast data service growth of almost 24%, 23.7%, reported EBITDA growth of 3.4%, and a handset sales growth, which is helping us increase our vast penetration 45.2%, so very interesting metrics on the financial front. : : So all in all, we can see that we have good results on the offer fronts, on the financial fronts, and also on the network and the cost fronts, which are the two last items I will like to call the attention to. First, on the network fronts; very solid improvement on all of the network and quality indicators and the ANATEL plans, and also on the execution of the fiber-to-the-site project, which we're going to talk a little bit more about in detail in the next slides. And finally, on the cost sides, very strong efficiency, so even with the growth that we have shown on the postpaid and the total revenues, the SAC, the subscriber acquisition cost has managed to stay very low being an industry benchmark. And the same is hold true for the bad debts. And we also had strong savings on the lease line costs even with the double-digit traffic growth. So we are growing but with an eye on efficiency. If we can move to the next slide, we can talk a little bit about the macro scenario and where is it that we are heading into. And I'd like to call your attention to a different outlook from the previous plan that we executed starting last year. And even though we can see that there are minor differences in terms of a slightly smaller growth on the GDP forecast, slightly higher inflation in interest rates, and slightly higher FX rate forecasts, obviously this means a different scenario with a market consensus, with a softer growth. But I'd like to call the attention that this scenario still presents growth and the growth here is helped by the fixed mobile substitution in our case and the specific growth of data. In order to deal with this scenario, the company is working very diligently on cost, offers, and infrastructure deployment to reduce the impact on the expected results and our new plan. If we can move on to the next slides, we can talk a little bit about what's going on with the Internet penetration and data market growth in Brazil. And we can see that even though the growth has been accelerating, we still see a very large part of the population, which does not have access to an internet, to a fast internet connection. 60-plus-percent of the households still do not possess an internet connection. And when we look at the mode as for why this happens, we can see that price; lack of coverage and then other factors come into play. If we look at the willingness to pay, we can clearly see that's even though we already have a fast growth on the mobile fronts, we can see that there is space for more, given that the mobile broadband offers play very nicely on the price tiers that most people say they are willing to pay. If we consider the market, the revenue growth, market data revenue growth, we see that the data revenue growth has accelerated and we will see 13 billion reais has been added to this market until 2016 versus 7 billion reais on fixed. So it's still a very large opportunity and Brazil seems to be a natural country for mobile expansion. Moving on to the next page, we can talk about where we are in Brazil with TIM's strategic positioning. And we will base our plan on three pillars. The first one is to continue to explore the voice, fixed mobile substitution. As Marco had mentioned already, voice was good for TIM and will continue to be so while we will still capture value from the substitution of fixed to mobile. Second, we believe everything we did for voice, including a very large number of subscriber and bringing innovative offers to the markets, which disrupted the way business was done, we believe we can repeat it on the data front. Even though again data has been growing, there is still much more to come, given that the user base is still relatively small. We believe, we can repeat the voice inclusion on data and this will be done on the basis of both innovative offers, innovative plans, and a much better -- much more increased infrastructure and network infrastructure. Finally, we believe that with the very large customer base that we already have, we have all that it takes to manage our existing customer base with a continuation of innovative offers and with the continuation of actions that will increase our outgoing ARPU and our positioning in the markets. Moving on to the next page, let me talk a little bit about what we're going to do in terms of our infrastructure evolution. And in this case, the infrastructure evaluation means both a catch-up, as well as a preparation for the next three years of growth, which will be significantly geared towards data. First of all, we have been investing very significantly on the backhauling evolution and this will continue to be so for the next three years. Our most strategic project to-date and which will continue for the next three years has been our backhaul evolution in our fiber-to-the-site mobile broadband project. This is key to data growth. And we initially were targeting 14 cities in 2013; this was expanded to 38 cities in 2013 then, moving on to a 100 plus cities until 2016. This means that we're going to have in excess of 50% of the Brazilian population, would access to very high speed mobile broadband, which focus not only on the backhaul but also on a fine tuning of the macro coverage and on all of the IP infrastructure that supports the growth. We have already seen the first results in some of the cities in Brazil and the first results position TIM's network at the top of the marketing in terms of network performance and we expect this to continue as we move on our rollouts not only this year but in the years to come. : So all in all, we can see that we have good results on the offer fronts, on the financial fronts, and also on the network and the cost fronts, which are the two last items I will like to call the attention to. First, on the network fronts; very solid improvement on all of the network and quality indicators and the ANATEL plans, and also on the execution of the fiber-to-the-site project, which we're going to talk a little bit more about in detail in the next slides. And finally, on the cost sides, very strong efficiency, so even with the growth that we have shown on the postpaid and the total revenues, the SAC, the subscriber acquisition cost has managed to stay very low being an industry benchmark. And the same is hold true for the bad debts. And we also had strong savings on the lease line costs even with the double-digit traffic growth. So we are growing but with an eye on efficiency. If we can move to the next slide, we can talk a little bit about the macro scenario and where is it that we are heading into. And I'd like to call your attention to a different outlook from the previous plan that we executed starting last year. And even though we can see that there are minor differences in terms of a slightly smaller growth on the GDP forecast, slightly higher inflation in interest rates, and slightly higher FX rate forecasts, obviously this means a different scenario with a market consensus, with a softer growth. But I'd like to call the attention that this scenario still presents growth and the growth here is helped by the fixed mobile substitution in our case and the specific growth of data. In order to deal with this scenario, the company is working very diligently on cost, offers, and infrastructure deployment to reduce the impact on the expected results and our new plan. If we can move on to the next slides, we can talk a little bit about what's going on with the Internet penetration and data market growth in Brazil. And we can see that even though the growth has been accelerating, we still see a very large part of the population, which does not have access to an internet, to a fast internet connection. 60-plus-percent of the households still do not possess an internet connection. And when we look at the mode as for why this happens, we can see that price; lack of coverage and then other factors come into play. If we look at the willingness to pay, we can clearly see that's even though we already have a fast growth on the mobile fronts, we can see that there is space for more, given that the mobile broadband offers play very nicely on the price tiers that most people say they are willing to pay. If we consider the market, the revenue growth, market data revenue growth, we see that the data revenue growth has accelerated and we will see 13 billion reais has been added to this market until 2016 versus 7 billion reais on fixed. So it's still a very large opportunity and Brazil seems to be a natural country for mobile expansion. Moving on to the next page, we can talk about where we are in Brazil with TIM's strategic positioning. And we will base our plan on three pillars. The first one is to continue to explore the voice, fixed mobile substitution. As Marco had mentioned already, voice was good for TIM and will continue to be so while we will still capture value from the substitution of fixed to mobile. Second, we believe everything we did for voice, including a very large number of subscriber and bringing innovative offers to the markets, which disrupted the way business was done, we believe we can repeat it on the data front. Even though again data has been growing, there is still much more to come, given that the user base is still relatively small. We believe, we can repeat the voice inclusion on data and this will be done on the basis of both innovative offers, innovative plans, and a much better -- much more increased infrastructure and network infrastructure. Finally, we believe that with the very large customer base that we already have, we have all that it takes to manage our existing customer base with a continuation of innovative offers and with the continuation of actions that will increase our outgoing ARPU and our positioning in the markets. Moving on to the next page, let me talk a little bit about what we're going to do in terms of our infrastructure evolution. And in this case, the infrastructure evaluation means both a catch-up, as well as a preparation for the next three years of growth, which will be significantly geared towards data. First of all, we have been investing very significantly on the backhauling evolution and this will continue to be so for the next three years. Our most strategic project to-date and which will continue for the next three years has been our backhaul evolution in our fiber-to-the-site mobile broadband project. This is key to data growth. And we initially were targeting 14 cities in 2013; this was expanded to 38 cities in 2013 then, moving on to a 100 plus cities until 2016. This means that we're going to have in excess of 50% of the Brazilian population, would access to very high speed mobile broadband, which focus not only on the backhaul but also on a fine tuning of the macro coverage and on all of the IP infrastructure that supports the growth. We have already seen the first results in some of the cities in Brazil and the first results position TIM's network at the top of the marketing in terms of network performance and we expect this to continue as we move on our rollouts not only this year but in the years to come. : So all in all, we can see that we have good results on the offer fronts, on the financial fronts, and also on the network and the cost fronts, which are the two last items I will like to call the attention to. First, on the network fronts; very solid improvement on all of the network and quality indicators and the ANATEL plans, and also on the execution of the fiber-to-the-site project, which we're going to talk a little bit more about in detail in the next slides. And finally, on the cost sides, very strong efficiency, so even with the growth that we have shown on the postpaid and the total revenues, the SAC, the subscriber acquisition cost has managed to stay very low being an industry benchmark. And the same is hold true for the bad debts. And we also had strong savings on the lease line costs even with the double-digit traffic growth. So we are growing but with an eye on efficiency. If we can move to the next slide, we can talk a little bit about the macro scenario and where is it that we are heading into. And I'd like to call your attention to a different outlook from the previous plan that we executed starting last year. And even though we can see that there are minor differences in terms of a slightly smaller growth on the GDP forecast, slightly higher inflation in interest rates, and slightly higher FX rate forecasts, obviously this means a different scenario with a market consensus, with a softer growth. But I'd like to call the attention that this scenario still presents growth and the growth here is helped by the fixed mobile substitution in our case and the specific growth of data. In order to deal with this scenario, the company is working very diligently on cost, offers, and infrastructure deployment to reduce the impact on the expected results and our new plan. If we can move on to the next slides, we can talk a little bit about what's going on with the Internet penetration and data market growth in Brazil. And we can see that even though the growth has been accelerating, we still see a very large part of the population, which does not have access to an internet, to a fast internet connection. 60-plus-percent of the households still do not possess an internet connection. And when we look at the mode as for why this happens, we can see that price; lack of coverage and then other factors come into play. If we look at the willingness to pay, we can clearly see that's even though we already have a fast growth on the mobile fronts, we can see that there is space for more, given that the mobile broadband offers play very nicely on the price tiers that most people say they are willing to pay. If we consider the market, the revenue growth, market data revenue growth, we see that the data revenue growth has accelerated and we will see 13 billion reais has been added to this market until 2016 versus 7 billion reais on fixed. So it's still a very large opportunity and Brazil seems to be a natural country for mobile expansion. Moving on to the next page, we can talk about where we are in Brazil with TIM's strategic positioning. And we will base our plan on three pillars. The first one is to continue to explore the voice, fixed mobile substitution. As Marco had mentioned already, voice was good for TIM and will continue to be so while we will still capture value from the substitution of fixed to mobile. Second, we believe everything we did for voice, including a very large number of subscriber and bringing innovative offers to the markets, which disrupted the way business was done, we believe we can repeat it on the data front. Even though again data has been growing, there is still much more to come, given that the user base is still relatively small. We believe, we can repeat the voice inclusion on data and this will be done on the basis of both innovative offers, innovative plans, and a much better -- much more increased infrastructure and network infrastructure. Finally, we believe that with the very large customer base that we already have, we have all that it takes to manage our existing customer base with a continuation of innovative offers and with the continuation of actions that will increase our outgoing ARPU and our positioning in the markets. Moving on to the next page, let me talk a little bit about what we're going to do in terms of our infrastructure evolution. And in this case, the infrastructure evaluation means both a catch-up, as well as a preparation for the next three years of growth, which will be significantly geared towards data. First of all, we have been investing very significantly on the backhauling evolution and this will continue to be so for the next three years. Our most strategic project to-date and which will continue for the next three years has been our backhaul evolution in our fiber-to-the-site mobile broadband project. This is key to data growth. And we initially were targeting 14 cities in 2013; this was expanded to 38 cities in 2013 then, moving on to a 100 plus cities until 2016. This means that we're going to have in excess of 50% of the Brazilian population, would access to very high speed mobile broadband, which focus not only on the backhaul but also on a fine tuning of the macro coverage and on all of the IP infrastructure that supports the growth. We have already seen the first results in some of the cities in Brazil and the first results position TIM's network at the top of the marketing in terms of network performance and we expect this to continue as we move on our rollouts not only this year but in the years to come. : So all in all, we can see that we have good results on the offer fronts, on the financial fronts, and also on the network and the cost fronts, which are the two last items I will like to call the attention to. First, on the network fronts; very solid improvement on all of the network and quality indicators and the ANATEL plans, and also on the execution of the fiber-to-the-site project, which we're going to talk a little bit more about in detail in the next slides. And finally, on the cost sides, very strong efficiency, so even with the growth that we have shown on the postpaid and the total revenues, the SAC, the subscriber acquisition cost has managed to stay very low being an industry benchmark. And the same is hold true for the bad debts. And we also had strong savings on the lease line costs even with the double-digit traffic growth. So we are growing but with an eye on efficiency. If we can move to the next slide, we can talk a little bit about the macro scenario and where is it that we are heading into. And I'd like to call your attention to a different outlook from the previous plan that we executed starting last year. And even though we can see that there are minor differences in terms of a slightly smaller growth on the GDP forecast, slightly higher inflation in interest rates, and slightly higher FX rate forecasts, obviously this means a different scenario with a market consensus, with a softer growth. But I'd like to call the attention that this scenario still presents growth and the growth here is helped by the fixed mobile substitution in our case and the specific growth of data. In order to deal with this scenario, the company is working very diligently on cost, offers, and infrastructure deployment to reduce the impact on the expected results and our new plan. If we can move on to the next slides, we can talk a little bit about what's going on with the Internet penetration and data market growth in Brazil. And we can see that even though the growth has been accelerating, we still see a very large part of the population, which does not have access to an internet, to a fast internet connection. 60-plus-percent of the households still do not possess an internet connection. And when we look at the mode as for why this happens, we can see that price; lack of coverage and then other factors come into play. If we look at the willingness to pay, we can clearly see that's even though we already have a fast growth on the mobile fronts, we can see that there is space for more, given that the mobile broadband offers play very nicely on the price tiers that most people say they are willing to pay. If we consider the market, the revenue growth, market data revenue growth, we see that the data revenue growth has accelerated and we will see 13 billion reais has been added to this market until 2016 versus 7 billion reais on fixed. So it's still a very large opportunity and Brazil seems to be a natural country for mobile expansion. Moving on to the next page, we can talk about where we are in Brazil with TIM's strategic positioning. And we will base our plan on three pillars. The first one is to continue to explore the voice, fixed mobile substitution. As Marco had mentioned already, voice was good for TIM and will continue to be so while we will still capture value from the substitution of fixed to mobile. Second, we believe everything we did for voice, including a very large number of subscriber and bringing innovative offers to the markets, which disrupted the way business was done, we believe we can repeat it on the data front. Even though again data has been growing, there is still much more to come, given that the user base is still relatively small. We believe, we can repeat the voice inclusion on data and this will be done on the basis of both innovative offers, innovative plans, and a much better -- much more increased infrastructure and network infrastructure. Finally, we believe that with the very large customer base that we already have, we have all that it takes to manage our existing customer base with a continuation of innovative offers and with the continuation of actions that will increase our outgoing ARPU and our positioning in the markets. Moving on to the next page, let me talk a little bit about what we're going to do in terms of our infrastructure evolution. And in this case, the infrastructure evaluation means both a catch-up, as well as a preparation for the next three years of growth, which will be significantly geared towards data. First of all, we have been investing very significantly on the backhauling evolution and this will continue to be so for the next three years. Our most strategic project to-date and which will continue for the next three years has been our backhaul evolution in our fiber-to-the-site mobile broadband project. This is key to data growth. And we initially were targeting 14 cities in 2013; this was expanded to 38 cities in 2013 then, moving on to a 100 plus cities until 2016. This means that we're going to have in excess of 50% of the Brazilian population, would access to very high speed mobile broadband, which focus not only on the backhaul but also on a fine tuning of the macro coverage and on all of the IP infrastructure that supports the growth. We have already seen the first results in some of the cities in Brazil and the first results position TIM's network at the top of the marketing in terms of network performance and we expect this to continue as we move on our rollouts not only this year but in the years to come. : So all in all, we can see that we have good results on the offer fronts, on the financial fronts, and also on the network and the cost fronts, which are the two last items I will like to call the attention to. First, on the network fronts; very solid improvement on all of the network and quality indicators and the ANATEL plans, and also on the execution of the fiber-to-the-site project, which we're going to talk a little bit more about in detail in the next slides. And finally, on the cost sides, very strong efficiency, so even with the growth that we have shown on the postpaid and the total revenues, the SAC, the subscriber acquisition cost has managed to stay very low being an industry benchmark. And the same is hold true for the bad debts. And we also had strong savings on the lease line costs even with the double-digit traffic growth. So we are growing but with an eye on efficiency. If we can move to the next slide, we can talk a little bit about the macro scenario and where is it that we are heading into. And I'd like to call your attention to a different outlook from the previous plan that we executed starting last year. And even though we can see that there are minor differences in terms of a slightly smaller growth on the GDP forecast, slightly higher inflation in interest rates, and slightly higher FX rate forecasts, obviously this means a different scenario with a market consensus, with a softer growth. But I'd like to call the attention that this scenario still presents growth and the growth here is helped by the fixed mobile substitution in our case and the specific growth of data. In order to deal with this scenario, the company is working very diligently on cost, offers, and infrastructure deployment to reduce the impact on the expected results and our new plan. If we can move on to the next slides, we can talk a little bit about what's going on with the Internet penetration and data market growth in Brazil. And we can see that even though the growth has been accelerating, we still see a very large part of the population, which does not have access to an internet, to a fast internet connection. 60-plus-percent of the households still do not possess an internet connection. And when we look at the mode as for why this happens, we can see that price; lack of coverage and then other factors come into play. If we look at the willingness to pay, we can clearly see that's even though we already have a fast growth on the mobile fronts, we can see that there is space for more, given that the mobile broadband offers play very nicely on the price tiers that most people say they are willing to pay. If we consider the market, the revenue growth, market data revenue growth, we see that the data revenue growth has accelerated and we will see 13 billion reais has been added to this market until 2016 versus 7 billion reais on fixed. So it's still a very large opportunity and Brazil seems to be a natural country for mobile expansion. Moving on to the next page, we can talk about where we are in Brazil with TIM's strategic positioning. And we will base our plan on three pillars. The first one is to continue to explore the voice, fixed mobile substitution. As Marco had mentioned already, voice was good for TIM and will continue to be so while we will still capture value from the substitution of fixed to mobile. Second, we believe everything we did for voice, including a very large number of subscriber and bringing innovative offers to the markets, which disrupted the way business was done, we believe we can repeat it on the data front. Even though again data has been growing, there is still much more to come, given that the user base is still relatively small. We believe, we can repeat the voice inclusion on data and this will be done on the basis of both innovative offers, innovative plans, and a much better -- much more increased infrastructure and network infrastructure. Finally, we believe that with the very large customer base that we already have, we have all that it takes to manage our existing customer base with a continuation of innovative offers and with the continuation of actions that will increase our outgoing ARPU and our positioning in the markets. Moving on to the next page, let me talk a little bit about what we're going to do in terms of our infrastructure evolution. And in this case, the infrastructure evaluation means both a catch-up, as well as a preparation for the next three years of growth, which will be significantly geared towards data. First of all, we have been investing very significantly on the backhauling evolution and this will continue to be so for the next three years. Our most strategic project to-date and which will continue for the next three years has been our backhaul evolution in our fiber-to-the-site mobile broadband project. This is key to data growth. And we initially were targeting 14 cities in 2013; this was expanded to 38 cities in 2013 then, moving on to a 100 plus cities until 2016. This means that we're going to have in excess of 50% of the Brazilian population, would access to very high speed mobile broadband, which focus not only on the backhaul but also on a fine tuning of the macro coverage and on all of the IP infrastructure that supports the growth. We have already seen the first results in some of the cities in Brazil and the first results position TIM's network at the top of the marketing in terms of network performance and we expect this to continue as we move on our rollouts not only this year but in the years to come. : Finally, in terms of our access strategy. 2013 has seen the beginning of the deployment of our small cell approach and much more new sites will come in the years 2014 to 2016, marking our growth of the infrastructure in the large cities. This will be the key to data offer evolution and this will be key to maintaining quality and access at our most important cities. And lastly, in the case of the infrastructure, I'd like to call the attention to the growth of our fiber base. We have managed to grow our fiber base considerably both at the local level, as well as the long distance level since the acquisition of Intelig. We just launched one of the largest fiber backbones in Brazil covering the Amazon, which was not covered before and are already benefiting from swaps and capacity increases in the region. And by 2016 we expect to end the year with over 65,000 kilometers of fiber. This was vital to our evolution because it's the significant cost component in our infrastructure today, which will be substituted by our own fiber. Moving on to the next slide. We can talk a little bit about our offer evolution. And here, we can see that the offer evolution will continue not only for voice but primarily for data. One of the key features that we have been implementing as part of our strategy is our Smartphone sales focus. And as we know, as you know, we have already announced a while ago that we have managed to switch our Smartphone sales strategy to a strategy that doesn't call for any subsidy, so it doesn't put any strain on OpEx. What we have been achieving by doing that with a very carefully selected portfolio and a lot of efficiency in the procurement process is to reach the market leadership in terms of Smartphone sales. The more Smartphone sales we sell the more data equipped our user base becomes. We can see the impact of that in the evolution until July this year, where we have close to 52% of the base with the smart or web phone in hands, which are capable of consuming data. We expect this number to be able to reach over 75% by 2016. And out of those handphones sold into third quarter this year, we are already reaching close to 70% of them being true smartphones with an operating -- an upgradeable operating system, which are the phones that consume a lot more data. If we look at the impact of this in terms of the data users and the VAS revenue growth, we see that this continues to accelerate. We are reaching end of third quarter, 34% of our data user base as a percentage of the total base and we expect this percentage to move beyond 50% by 2016. : And finally, the TIM Beta, which is focusing on the young population and will continue to grow significantly in the years to come. Some of those offers were just recently launched and we expect that the impact in 2014 to 2016 will be significant and will help us contribute the growth of data to maintain this growth in the 20-percent plus. : On the TIM Fiber fronts, we know we have invested in TIM Fiber to make use of a fiber asset that came to support the infrastructure on the mobile fronts but we have managed to implement the TIM Fiber business plan strictly according to plan. And we are going to see in 2016 as significant number of households passed up from the 800 -- more than 800,000 that we reached last quarter. And we expect to continue to see the very significant results in terms of market share for speeds above 34 megabytes per second. We have seen that we can not only leverage our fiber assets in Sao Paulo and Rio with a reduced investment but also with an efficient approach. And we are now entering the SME segment, which we will add further components to the ARPU potential of TIM Fiber. All of this, while strongly supporting the mobile business as well with a capability of doing backhauling for our smaller more sales. So all and all, the fixed business evolution is under control and we will be a positive contributor to the results in the next three years. Now to the guidance. And if you look at the guidance, we can see that the three main components are being called in growth positive growth in the middle single-digit ranges. And we expect to be able to do that with a significant potential for acceleration given everything we are doing and giving the very positive contribution that we expect data to bring to our results. All in all, we believe we have a solid scenario, a solid company, we are executing on the priorities and we see good reason to believe that the guidance here is very attainable with a very successful scenario of data growth and continuation of our presence in the fixed mobile substitution space in Brazil. Thank you.

Thank you very much Rodrigo. We are now open to the Q&A session.

Ladies and gentlemen, the Q&A session is now open. (Operator Instructions) The question comes from Micaela Ferruta from Intermonte. Ms. Ferruta, please. Micaela Ferruta - Intermonte: Yes, good evening. Three questions, if I may. One, can you comment on the dividend policies throughout the plan? And then, on consolidation, Marco, can you elaborate what your view on consolidation is now, both as far as domestic and Brazil are concerned? And finally, in the past you mentioned the possibility of selling some real estate Klepierre assets. Is there anything new on this area? Thank you

Thank you, Micaela. Piergiorgio will take your first question and Marco will take the last two?

The Board of Directors today has not discussed the dividend policy. So I'm not in a position today to comment the dividend policy.

Good evening Micaela. What I mean with consolidation, I mean that I still believe that the Italian market is not big enough for four players. So soon or late we will become three players. But that many times we tried to be the accelerator of this process and honestly, what we learn is that we are not the right one in order to do this. The better combination is the one that ends with a more symmetric position among the remaining three players. It's natural that if this move materialize we could be available to help the deal to happen. In Brazil, I heard many times that we could be split. Honestly, I told very clearly Brazil is a core asset. My plan today is a plan in which we announce huge investments. Then I said always the same story since the very beginning of my being back in Italy. Also core asset could have a price but a core asset is a core asset and the non-core asset is a non-core asset, so Brazil is core.

Thank you very much. We get ready to move on to the next one. Sorry, one of Micaela Ferruta under real estate Marco.

Sorry, Micaela I forgot real estate. Yes, we started selling buildings for instance we sold a very important building in Milan. We agreed with a buyer a price that is around €75 million and it will be payable within the end of January. We will do our best in order to cash in even before. There are other real estate that could be available for sale. Of course, we will evaluate and we are evaluating the possibility with the cherry picking approach or we're starting to evaluate also a bigger deal.

Next question please?

Next question comes from Mr. Nick Brown from Goldman Sachs. Mr. Brown, please. Nick Brown - Goldman Sachs: Thanks. Two questions, please. When you talk about potential upside takes, which is not in the plan you've outlined, do you mean you would be willing to explore a potential sales of a core asset such as Brazil if you were offered a good price, or are you just referring to something else you mentioned, like potential network sharing? And secondly, why did you decide not to raise more capital, to be able to raise the absolute level of investment in Italy? Why should we believe you could stabilize the network business with the same amount of CapEx, when you've not been able to do this in the past, please?

Both questions well I think it's appropriate to address them to Marco.

I think I already answered to the first question. Brazil, never say never. I don't consider series and approach on which somebody says there is no price for something, there is always a price for everything. But the price for a core asset is really price that can convince me and the board to change the strategy in which today we clearly decided that Brazil is an important component of our strategy. Then, if you ask me if there are other pieces that can be evaluated, yes of course. So there are other pieces that can be evaluated. I was referring few seconds ago to real estate. There are -- we still have a book value of about €1 billion of real estate and we started selling €75 million, so it's something that give us further flexibility. Sorry, I didn't catch well your second question. It was -- if I can raise more --

Yeah, the question was why didn't you raise more capital to further accelerate investment in Italy?

Well, I think that we have to evaluate a full financial fact that we are serving on the table. So we are serving more than 4 billions and or the region of 4 billions with deals that -- of course, every deal has an execution risk, but when we say towers, towers has a fairly limited execution risk. We received a binding offer for Argentina. The Board of Directors decided to consider it very seriously. So it gave me and to Piergiorgio the mandate to find a way to finalize the deal. So I think that if I have to consider the amount of recourses I needed to boost in my CapEx, I'm more than fine.

Thank you, Nick. Next question please?

Next question comes from Ms. Madeleine King from Credit Suisse. Ms. King, please. Madeleine King - Credit Suisse: Oh, hi. My question is regarding the rating agencies, and I was wondering if you think you've announced enough today CreditWatch, S&P and Fitch, and how confident you feel that you can retain an investment grade rated now. And if you could also talk about your hybrid plans, there is the fact that you are high yield with Moody's, and naturally, you're not getting any equity credit I mean that's off the table now.

Thank you very much. Piergiorgio Peluso will take both of them.

Thank you. And just to remind, as of today, our ratings is the following. We have a BA1 negative outlook for Moody's, BBB minus CreditWatch Negative formation piece to be resolved by the end of November and BBB minus negative outlook for Fitch. We have of course met the rating agencies presenting our plan. I'm not in a position today to comment what will be the outcome of the committee. And I may just remind you that with respect with the rating and CreditWatch situation with S&P, I invite you to take due note of the agency press release, dated October 7. And with respect to the rating and negative outlook situation with Moody's, I invite you to take due note of the agency press release, dated October 8. And for future, I invite you to take note of the agency press release, dated October 4. As of today, I cannot comment any more on this.

:

Thank you, Marco, and thanks for your question. Madeleine King - Credit Suisse: And, on your hybrid plan?

With -- back to Piergiorgio Peluso. Question was what are you going to do now with the hybrid plan?

I would say that the hybrid plan is suspend, given the position for directing agencies in terms of the new change with directing agencies, for the moment is suspended. Madeleine King - Credit Suisse: Okay, fine.

Thank you. Next question please?

Next question comes from Mr. Mathieu Robilliard from Exane BNP Paribas. Mr. Robilliard, please. Mathieu Robilliard - Exane BNP Paribas: I have a few questions. The first one is on the rest of the asset sales that you mentioned today. Maybe I missed it, but could you give us a sense of what is the expected timing for this? I mean, is this in the next 12 months, or in the next 24 months? Kind of a similar question with regard to the network spinoff, which you said is on track. The previous set of results, you disclosed quite a detailed timetable in terms of all that's needed to get that done. Can you confirm on that timing table is still valid or not? And then finally, on CapEx, I think you mentioned in one of your slides that the CapEx you guide for Italy includes some public funding. Could you be a little bit more precise in terms of what that means, exactly? Thank you.

:

Yes. Thanks. On the asset sale, let's start from deal also on Argentina. As Marco said, the Board has give use the mandate to finalize a transaction at terms that we believe having the best interest of the company. So should we decide to accept the timetable that we envisage is a bit, let's say in the mid 2014 -- the closing could be mid 2014. As far as the other asset sale are considered, on MUX and towers. On MUX, we are in the process of discussing; I said the agreement with Gruppo Editoriale L'Espresso. We are currently doing the due diligence and elaborating the new industrial plan source in this case. If we would proceed with the transaction as I think we will be able to sign a binding agreement potentially by year-end and also in this case a subsequent valorization could be -- could take place in 2015. For the towers, we are a little bit -- we are working inside in order to let's say working on the perimeter and working on the industrial aspect of the transaction. And in this case the objective is also to try to define an agreement in 2014. So all in all, we've seen that we could do our best in order to complete the transaction in 2014.

Over to Marco.

Marco speaking. Network separation. Well, we said always that network separation has a component, a first component which is exactly what we will be engaged fairly soon, which is the equivalence of the input project. And the equivalence of the input is a project that requires activities in the IT space and changing several processes inside the company. We estimate something around 15 months from the month -- from the day we start and exactly this is what we confirm now we will -- the real issue is we needed to present in the appropriate moment all the file to come, which is exactly what we will start analyzing from tomorrow morning and so this is basically the timeframe. CapEx with public funds. As you probably are aware there are areas in which the European Community has dedicated some public funds in order to accelerate the natural deployment in the so-called white areas. And I'm referring basically to the south of Italy where the ratio is that 70% 7-0 of the passive CapEx, so the fiber without the electronics is paid with public funds. We are referring to a total amount of around €400 million in total. And then there are other areas with regional funds, so funds not of the Central Government of Italy but region by region that are dedicated to the anti-digital divide program. In this case, the rule is that not only the passive but only the active is funded. The ratio is another time 70% public and 30% private. So the total amount is sizable. It depends that the possibility to participate to both the projects is linked to the payback of each single program. We consider feasible to participate to project with some payback. Unfortunately, there are projects with no payback or with a payback that is more than 10, 12 years, which becomes quite a bizarre allocation of our capital. So we are going to participate case by case. Mathieu Robilliard - Exane BNP Paribas: Just to follow up, if I may, on the network functional separation. You used the term, in fact, functional separation earlier. There was some kind of discussions of you letting another investor going through -- into the network. Is that something that is still a possibility? Are you changing your mind?

No, no, in a functional separation there are no third-party involved.

Thank you, Mathieu, and let's move on to the next question now.

Next question comes from Mr. Georgios Ierodiaconou from Citi. Mr. Ierodiaconou, please. Georgios Ierodiaconou - Citi: Firstly, can you please talk a bit about the disposals you are planning, and whether there are any costs associated with the sales of real estate and tower assets. And if you can give us an indication if you are to raise the full €2 billion, what would be a reasonable OpEx to assume on an recurring basis. And secondly, I understand that as part of your plan, you look more into the normal CapEx, and you don't include extraordinary items. Could you perhaps briefly comment on three specific extraordinary items? Firstly, there are several hundred megahertz spectrum auction in Brazil. When do you expect it to happen? Secondly, I believe there is 900 megahertz spectrum renewal in Italy in 2015, if you could comment on that. And finally, I think there's a tax dispute in Brazil. I believe it's around 1.2 billion reais, 1.3 billion reais involved. When do we get the final decision on that? Thank you.

Thank you, Georgios. So Piergiorgio will take care of the first one, the follow-on on the asset disposals.

Yes, hi. To be honest, I'm not in a position here to answer to your question because of course we are doing many analysis internally in order to define the perimeter of the tower business both in Italy and in Brazil. And we are already of course defined very clearly the EBITDA less CapEx impact, and so on. But I don't think is today given the preliminary status of our discussion or that it is something that we could disclose to the market. So what I can tell you is that we have created a group dedicated to the structuring of the transaction and we will carefully monitoring and updating on these. But I cannot disclose as of today the various options that we are discussing internally.

Okay. Then there were a couple of questions on Brazil, one was the forthcoming possible auction and the tax issues. May be both of them Rodrigo could answer to.

Okay, thank you, Alex. Well, on the 7 megahertz auction, as we know, this is still not yet defined even though there is the expectation that the auction could occur next year. There are still many uncertainties especially towards which are the obligations that we will be attached to it, which are the blocks of frequency that are being auctioned, that the vision of the blocks still not defined, and finally the cleanup costs. The key discussion on Brazil in terms of the 700 is the cleanup costs and how soon the blocks would be available because indeed for this to occur all of the cleanup costs of broadcast TV would have to be done in order for the spectrum to be useable. Initially, there was an expectation that this could occur in 2015. Now there are talks that this may take a little bit longer than expected and we're only talking about '16/'17. So if this is the case depending on how the RFP comes out at the beginning of next year we're going to see probably a split in the requirements first is the license itself and then obviously all of the CapEx associated with it in terms of equipment and deployment, but this would most likely occur further away from where we are today and most likely '15/'16. In terms of the tax impacts, we have been discussing this in the courts. And at this stage we have a focus of success in the case. Obviously, as you know, all of the legal cases especially on the tax front are very lengthy in Brazil, but we have been achieving a very good position in the case. So this is not considered as we speak.

Marco will take the one on the renewal of Italian frequencies.

Yes, as you said, it's in a renewal, it's not new frequencies. It was already planned, it's planned for 2015. The rule of this renewal are going to be defined but we are not talking about big money or big difference versus what we paid out.

Thank you, Georgois. Next question please.

Next question come from Mr. Robin Bienenstock from Bernstein. Mr. Bienenstock, please. Robin Bienenstock - Bernstein: Yes, it's not Mister. Thanks very much.

Beg your pardon, madam. Robin Bienenstock - Bernstein: No, that's all right. A couple of questions, if I may. First, can you tell me whether or not you've assurances for your major shareholders that they'll participate in the convertible vehicle? Second, can you tell us when you might -- when you expect to be able to announce a new Chairman, and whether there's any progress on that process? And lastly, you've always had very, very high CapEx to sales versus peers. So, I guess I'm wondering, what do you think is a reasonable long-term CapEx to sales in Italy? And is there more that you can do on that front? Thanks.

Yes, so Piergiorgio Peluso -- thank you, Robin will take the first one. And Marco will take the other ones.

Sorry, I didn't really understand the question. What do you mean in terms of insurance to give to the shareholders? Robin, actually can you?

I think Robin was asking whether the shareholders have indicated any desire to take any position in the issue.

To be honest, we are right now closing the books. So I really do not have similar access to the books. I don't know whether the current shareholder have decided to participate in the transaction or not. This is something really happening right now. This is a transaction, which exclude the right option. So of course this is something that is now in the market and I really don't know as of today because the banks are working right now.

Yes, Marco speaking. Well, as Piergiorgio was saying we're just at work. What I personally expect, so consider it as personal expectation. I expect Telefonica but this is my personal expectation. You asked about Chairman and CEO. So allow me to tell you that I'm the CEO. Honestly, I'm a little bit tired but I'm the CEO for the time being. And the Chairman, we are in the -- the Board is in the process of choosing the new CEO -- the new Chairman, sorry, of course, the new Chairman. And the process is really ongoing. The head hunter has presented today a shortlist and now there will be the final round within this shortlist. So we will keep you really very much informed. CapEx long-term in Italy it's of course it's different. If you refer to the period from now to 2020 or after 2020 what I do expect is that the order or magnitude can't be much lower than what you see in our plan right now. We are working hard in order to have the best possible mix. So to reduce the CapEx dedicated to non-technological staffs or to known normative CapEx and to dedicate everything to projects, one is a normative CapEx and the other is delay hearing. The networks are full of old staff that soon or later have to be taken away and of course it's a project with a fairly long payback because those staffs are working and you don't really massive benefit but you generate a massive simplification of the network. So it's something that we should do. If you look after 2020, I think that the copper switch off will start to be the real core of our investments so. And soon or late we have to take into consideration that three different layers in the mobile are really too much. So 2G, 3G, 4G, we have to also to face which one is the one that have to be optimized and we're really working very hard on those. So no big changes for the coming years.

Thank you, Robin. Robin Bienenstock - Bernstein: So to be clear, I was asking about the Chairman, not the CEO. So that wasn't a bad question. Thank you.

So the CEO kept on coming and going but the question was the Chairman. Thank you. Next question please.

Next question come from Mr. Stefano Lustig from Equitasim. Mr. Lustig please. Stefano Lustig - Equitasim: I was doing some calculation on the target of 2.1 net debt to EBITDA, 2016. Also by deconsolidating Telecom Argentina. And so my first question is, it seems to me that more or less, you're looking at a net debt at the end of the period of around €19 billion, more or less. And this is my first question, to check if it's a reasonable number? And the second, if this number is right it means that more or less we're looking at €8 billion deleverage €4 billion through disposals and €4 billion through well free cash flow generation. And if so, it means that the €4 billion in free cash generation in three years' time is €1.3 billion per year more or less. And so I go back to our previous question. I wonder if in this €1.3 billion deleverage per year more you also took into consideration some greater room for dividend or not because it is the same deleverage we are doing in 2013 after having paid the dues.

Thank you, Stefano. I will pass it on to Piergiorgio Peluso.

First, yes, maybe I will ask you to repeat some question because I didn't get all. Just to give you the first answer, the 2.1 includes the consolidation of Argentina. So on this point you are right. On the number, as you know, we do not comment the absolute number. So I just can confirm you the 2.1 ratio excluding Argentina. On the deleverage of €1.3 billion that you are now referring of course we are in our model, our calculations having different assumption in terms of dividend but since the Board today has not discussed the dividend, I'm not able to comment this numbers. And then, Alex, can you please remind me the other question because I didn't. I was --

Yes, Stefano, could you please rephrase? I think it was like --

I think we got all the questions. Just one -- Stefano Lustig - Equitasim: Exactly, you are right.

Just one comment. I think that if a company wants to be considered normal has to remunerate also the equity. So we can't be considered a good Telco company without including equity remuneration. So it's through that -- that's just what is my position. And my position, what would be my position in the board which is not an indication of what we will decide, it's not in my - it has not been discussed today. We had really a terrific agenda, and so it has not been discussed. But I think that we have to start thinking to Telecom Italia as a company that wants to bring back to normality.

Thank you, Stefano. Next question please.

Next question come from Mr. Luigi Minerva from HSBC. Mr. Minerva, please. Luigi Minerva - HSBC: It's two questions on regulation. The first one is actually on Brazil, and I was wondering if, from your discussions, do you have a view that the Brazilian government and the relevant authorities are happy with the current market structure in Brazilian mobile? Or, whether they would compromise with a lower number of players in order to attract more investments from the operators? And the second is on the Italian regulation, and I'm wondering what's your expectations for the 2013 ULL decisions, of the state of debate between the AGCOM and the European Commission. And also, maybe your views on whether the regulator would allow a stronger push from your side on fixed and mobile convergence products, or whether they would put some limitation commercially.

Marco will take all of them.

Well, let me start from Brazil. We simply did not discuss the topic with the authority because I'm not managing the case. So, it's a known case and of course it's difficult to discuss a know case. Italy ULL decision. Well, I think that it's never a good way to unnecessary fight. So honestly I was really very surprised in July when the decision of AGCOM comes out. And the company decided to ask to the European Union the judgment but what is really important for me is to have to some certainty. I'm going to invest €1 billion in fiber, I'm going to -- I need to put in my business model, which is the payback of my investments. And very honestly the regulation is an extraordinary driver of the value creation. So if the regulator wants more investments, it's fairly easy if they decide to use the price lever. It's not that difficult. In other industry, let's take energy, let's take highways. When new investments were necessary the regulator tries, have included in the calculation model some return on investment. And I think that this is really what we need in order to boost a new investment season. Of course, I presented to the board and I obtained a full green light to accelerate investments, but I really don't believe that making investment in a regulatory framework that is not at least midterm is a good way to proceed. It can be an exception of course everybody can work in an exceptional phase but it cannot be normality. And once again, my goal number one is to have a back to normality and back to rationality. Sorry, I really didn't catch well your question on fixed mobile situation or fixed mobile. Luigi Minerva - HSBC: No, it's -- sorry, it's fixed and mobile convergence.

Convergence, no, I don't think -- I don't expect any limitation on fixed mobile convergent offer. At the end it's fully replicable so there is no, no problem really.

Thank you. Next question please.

Next question come from Mr. Justin Funnell from Credit Suisse. Mr. Funnell, please. Justin Funnell - Credit Suisse: It's three questions, please. Have you seen any change in the mentality of the Italian political system as regarding extremes of TI in regulation? You had a pretty adverse -- rugged treatments over the years. It's pretty tough, compared to other incumbents. Sometimes it takes big headlines in the press to get politicians to wake up. Are you sensing potential change coming that what else that needs to change an approach by, by AGCOM as well, or is that just too optimistic a view? Secondly, your domestic revenue guidance -- obviously, just minus 9%. Your guidance for the next three years is low single digit. Presumably that sort of fades towards that number. I mean, can you give us a feel as to what your figure would be for 2014 for that domestic revenue number? And then, just thirdly, on your credit rating. Obviously, if you look at your stepladder of debt maturities, presumably you're pretty much covering that with cash flow plus these asset realizations over the next two to three years. Does that mean you're pretty relaxed about what your credit rating is? You know, you're pretty agnostic, or you're going to be working pretty hard to maintain a split rating?

So Marco will take the first and second one, and Piergiorgio the third one.

Hi, Justin, I'm so pleased to listen to you. First of all, let me answer your question from a political standpoint because anything that's everything get starts from a political view of what we were, what we were doing. I think that in the first part of let me say from 2009, 2012, 2011 we did a terrific job with the regulator because it was plenty of filings that were needed to be solved, and we solved them one by one with a lot of patience and with a lot of cooperation from the authority. Then when I give these reading, when it was clear that the country and so the regulator wanted more investments and that the company was showing an attitude on next generation investments a little bit prudent, let me put in this way, I think that it was a sort of a role game in which the two part were trying to convince the other I need your support in order to invest, I need your investment in order to give my support. So it was a bit of role game. And I think that it created a mood that was much less supportive than in the recent past. And this explains some frictions some attrition we had with the regulators in general, not only AGCOM but also anti-trust commission and in general. So our plan starts with a very strong commitment in making investments. Let me be crystal clear. In Italy, we are the only one who invest on fiber. We are the only one who invest outside the 12, 13, 15 richest cities in the country. It's very easy to invest in Milan; it's very easy to invest in Rome or Florence. It's much less easy to invest in all the rest of the country. And now what I'm saying is we're going to invest, we're going to make the right quantity of investments fiber, datacenters, 4G, even 3G, we still have some 3G to invest. So when I was having talks with some relevant people inside the political environment or some authorities the fact that I was telling them, guys, I'm going to do investments, I'm going to invest. What I ask you is fairness. I want fairness. European Community told us that the best way to have a pro-competitive environment is the quality of input. I'm going to be the European champion because I will start voluntarily to build a quality of input. So we are really and I am really in good faith when I say I'm doing my part, I'm doing much of my part. So and honestly, I'm not here to ask anything. What I do expect is to be fairly treated. Only fairness, it's the only thing I want. And I don't want any holiday, I don't want any favor, I don't want any special treatment. I just want fairness. Your second question was on guidance and --

Was more on, if I recall well, what your 2014 idea was on the top line and EBITDA. Justin Funnell - Credit Suisse: Well, in particular, yes.

.:

Thanks, Marco. On the rating as I have discussed that we are not in a position to take you to comment since we have presented our plan to the ratings agencies. We do not know when the committee will take place. So this is something it is now difficult -- for us difficult to comment. We can just remind, as I told you that in terms of S&P the CreditWatch should be resolved by the end of November. This of course is a formal answer. The unformal answer if our objective of the plan is to try to study larger features for generation over the planned timeframe in order to have -- to be compliant with investment grade metrics within the timeframe. The 2.1 ratio is for 2016 as I told before excluding Argentina and after conversion of the mandatory convertible it's a stable ratio, and now our objective is to reach this objective. In terms of liquidity margin we have a €13 billion liquidity margin, which is very sound and this is a liquidity margin, which excludes the potential extraordinary actions, and the mandatory convertible, asset sale and/or Argentina. So in terms of liquidity we are very, very, very -- we are in a position, which is very, very sound.

Thank you very much Justin. So the next one would be the last question.

Last question comes from Mr. Hannes Wittig from JPMorgan. Mr. Witting, please. Hannes Wittig - JPMorgan: I have a question related to the cost saving targets that you have outlined. I can see that you want to address on from despite about €2.8 billion of costs, as of --

Excuse me, Hannes, you're cracking up. So maybe you can speak a little closer to the handset or -- Hannes Wittig - JPMorgan: If you detail that, and also clarify whether the €1 billion efficiency-related savings are meant to be gross or net. And again, a bit of detail on how you get that would be much appreciated. Thank you.

So we didn't understand very clearly, but I did understand the word efficiency. So may be Marco can elaborate on that area.

Yes, yes, really I catched up on the efficiency. So I try out. I imagine you want more color on efficiency. So I try to work on this. Well the efficiency is coming from two major areas one is -- well three major areas. One is commercial side. The commercial side we're working on several initiatives keeping the SAC under control, and even more reducing the SAC. Number two, is we still have internal carrying, which is quite expensive especially compared with outsourced carrying forces. I -- what I consider is that it will be possible to reduce the cost of the internal carrying in quite significant order of magnitude. Number three, we are going to optimize our advertising and communication expenses, telecommunications are the investor number one is advertising with big efficiencies that can be realized. And sales channels. I think that the sales channel is costing too much. And once we are able to reduce the aggressiveness of the different offers it will be possible to reduce the number of gross acquisitions and reducing the gross acquisition the cost, the commercial cost goes down. Number two, is industrial areas. Industrial areas there are at least three or four big items. One is rental surf for sites. We are pushing hard with the other players in Italy for site sharing. So having a much more aggressive site sharing strategy supported by some changes in the electromagnetic limit, so the limit didn't change but what changed the way those limits are measured and so the threshold now allow a higher co-tenancy ratio. The second area is energy. You know that in Italy energy is I think the most expensive in Europe. So we launched a massive energy saving program and this is also good for my sustainability. So I think that this is good. Third, is that we are working on some, as I was mentioning, we are working on some investments both in network and then in IT fully dedicated to replace all the platforms that are very expensive in terms of maintenance, and in terms of running costs and this is extremely important because with some CapEx you can have a very interesting return in terms of reduced OpEx. And the other area is G&A. G&A have be to approached with a zero base budget because really there is no G&A that can't be reduced. There is another area that is dramatically important, which is real estate rental of space. Technology becomes everyday smaller. So equipments are smaller. So we are fairly inefficient in the way we use the space. We have now reestimated that we have something around 30% of the space we rent that is used inefficiently. Now it's very difficult to say that from the one day to another I can become 100% efficient but there is numbers in this area are big. There is one area that I didn't cover, which the human capital. The human capital accounts for more or less one third of my total costs. I think that we have to be extremely respectful of our people, I want to be extremely respectful of our people but we need to streamline the company. And streamlining the company make us more efficient. That probably does not mean that we need to renounce to the collaboration of some persons but probably we can internalize activities that today we also suggest because we are convinced that we are using 100% of our people. So I think that we can gain in turn of productivity and productivity would be name of the game with the human capital from now on. Productivity, productivity, productivity. So it's really a big transformation. What we have to put in place and starting from Monday we will have in place a new important office directly reporting to me, that is the transformation office. And the transformation office is not just a job title, it's not just another box in my organization, it's really a cultural change and really a way to make the €1 billion happen. So thank you everybody. It's very late. I know we have asked to you to be really, really patient. And so I really appreciate and believe me it has been a very long day also for me and Piergiorgio. So thank you everybody and really thank you for being with us. Alex please.

Thank you, Marco, and Piergiorgio, and Rodrigo, for your fine presentations. Of course IR will be available tomorrow to take any follow-on question you may have. Thanks again for your interest and have a good afternoon and evening depending on the various time zones to everybody. Bye-bye.

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