Slides Telecom Argentina Full Year 2011 Preliminary Results & 2012-14 Plan Outline - F. Bertone

1. Telecom Italia Conference Call
Full‐Year 2011 Preliminary Results and 2012‐14 Plan Outline
Telecom Italia – Telecom Argentina
Full‐Year 2011 Preliminary Results and 2012‐14
Plan Outline
FRANCO BERTONE

2. Telecom Italia Conference Call
Full‐Year 2011 Preliminary Results and 2012‐14 Plan Outline
Safe Harbour
These presentations contain statements that constitute forward‐looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements appear in a number of places in this presentation and include
statements regarding the intent, belief or current expectations of the customer base, estimates regarding future growth
in the different business lines and the global business, market share, financial results and other aspects of the activities
and situation relating to the Company and the Group.
Such forward looking statements are not guarantees of future performance and involve risks and uncertainties, and
actual results may differ materially from those projected or implied in the forward looking statements as a result of
various factors. As a result thereof, Telecom Italia S.p.A. makes no representation, whether express or implied, as to the
conformity of the actual results with those projected in the forward looking statement.
Forward‐looking information is based on certain key assumptions which we believe to be reasonable as of the date
hereof, but forward looking information by its nature involves risks and uncertainties, which are outside our control, and
could significantly affect expected results.
Analysts are cautioned not to place undue reliance on those forward looking statements, which speak only as of the date
of this presentation. Telecom Italia S.p.A. undertakes no obligation to release publicly the results of any revisions to
these forward looking statements which may be made to reflect events and circumstances after the date of this
presentation, including, without limitation, changes in Telecom Italia S.p.A. business or acquisition strategy or planned
capital expenditures or to reflect the occurrence of unanticipated events. Analysts and investors are encouraged to
consult the Company's Annual Report on Form 20‐F as well as periodic filings made on Form 6‐K, which are on file with
the United States Securities and Exchange Commission.
FRANCO BERTONE 1

3. Telecom Italia Conference Call
Full‐Year 2011 Preliminary Results and 2012‐14 Plan Outline
Agenda
 BU Argentina 2011 Results (IFRS)
 Telecom Argentina Plan
 Take-Aways
FRANCO BERTONE 2

4. Telecom Italia Conference Call
Full‐Year 2011 Preliminary Results and 2012‐14 Plan Outline
2011 Main Results
Revenues EBITDA
Organic € mln Organic € mln
+674M€
+26.5% 3,220 +201M€ 1,035
2,546 834 +24.1%
896 276
4Q 722 +24.1% 4Q 221 +24.8%
+19.2%
excl. PPA
9M 2,324 9M +23.8% 759
1,824 +27.4% 613
0
FY10 FY11 FY10 FY11
Key Highlights OFCF-CAPEX-NFP (FY10 vs. FY11)
Reported € mln
 Strong operating performance in 2011 fostered revenues 582
578
and profits 556
493
 #1 Revenue share & #2 Market share in Mobile 417
 Bundling fixed voice +ADSL +mobile internet
 Flat pricing & bundling add value to fixed clients
86
 Paraguayan unit back on a growth track
 Solid financial position OFCF CAPEX NFP OFCF CAPEX NFP
(cash) (cash)
FY10 FY11
FRANCO BERTONE 3

5. Telecom Italia Conference Call
Full‐Year 2011 Preliminary Results and 2012‐14 Plan Outline
Mobile Business
Mobile Customers(1) 2011 Highlights
mln, %  Outstanding performance in postpaid segment
17.8 18.2  ~ 2/3 net adds where post-paid in 4Q11
16.9 17.4
Market 16.3
Share(2)  Smartphone leadership retained
14.5
 ~57% share of YoY net adds
12.6 33.5% 33.6%
32.1% 32.9% 33.2%  16% ARPU growth YoY
30.6%
29.4%  3G devices represent 17% of base
 VAS reached 50% of service revenues in 4Q11
2008 2009 2010 1Q11 2Q11 3Q11 4Q11e  Brand restyling timed to introduction MNP
KPI’s Service Revenues & VAS(1)(3)
51 Bln, ARS 11.0
+30%
+24% 8.5
44 +17% 6.8
5.7
41 5.8
41 5.1 +13%
4.5 +13%
322 4.1 +10%
222 299
125 +55% 5.3
103 101 102 99 +34% 2.3 +46% 3.4
1.7
2008 2009 2010 2011 2008 2009 2010 2011
MOU SMS ARPU (pesos) VAS revenues Non-VAS revenues
(1) Argentinean Operation only (2) Estimated data not available for 4Q2011 (3) Net of VAS includes: SMS, MMS, SMS revenue sharing, Contents, Mobile internet & others
Intercompany Figures are in Argentina GAAP, with no material difference in terms of growth under IFRS for
2009, 2010 and 2011.
FRANCO BERTONE 4

6. Telecom Italia Conference Call
Full‐Year 2011 Preliminary Results and 2012‐14 Plan Outline
Fixed Business
Fixed & BB Access 2011 Highlights
Total Lines in market
(In millions) Launch of Video Streaming services
47% 47% 47% 47% 47%
47% Bundling & new serviced reduces churn to a record low
Market 47%
Share (1) Regulated services down 3 p.p. to 41% of fixed revenues
4.01 4.06 4.11 4.11 4.12 4.13 4.14
Fixed Fixed ARBU up 7% despite frozen tariffs
Voice Internet & Data revenues rose 28% & 23% YoY respectively
(Arg GAAP)
1.46 1.51 1.55
1.21
1.38 1.41 Customers value flat pricing offers
Fixed 1.03
BB Increasing residential bandwidth offers to improve customer
2008 2009 2010 1Q11 2Q11 3Q11 4Q11e experience and provide new services
BB ARPU & Churn BB/Fixed Lines
87x
76
67
57
37%
34%
30%
2.0% 1.8% 1.4% 1.2% 26%
2008 2009 2010 2011 2008 2009 2010 2011
CHURN (monthly) ARPU (in Pesos)
(1) Estimated, data not available for 4Q11
FRANCO BERTONE 5

7. Telecom Italia Conference Call
Full‐Year 2011 Preliminary Results and 2012‐14 Plan Outline
Agenda
 BU Argentina 2011 Results (IFRS)
 Telecom Argentina Plan
 Take-Aways
FRANCO BERTONE 6

8. Telecom Italia Conference Call
Full‐Year 2011 Preliminary Results and 2012‐14 Plan Outline
Business Environment
Macroeconomic Context Competitive & Regulatory Framework
Regulatory topics:
9.2% 8.9%  Implementing MNP next March
6.8%  Upcoming Spectrum auction for 850&1.900 Mhz
GDP Growth
(constant prices)
frequencies
 Expecting 1.700&2.100Mhz announcement
 Launch of Video Streaming services due to legal
0.9% restrictions to offer Pay TV
Competitive landscape:
2008 2009 2010 2011e Business Market Share Penetration
Source: INDEC
MOBILE 34% 135%
Among the fastest growing economy in 2011
 Private consumption driver of growth  Leaders in post-paid & Smartphone sales
 High commodity prices sustained exports  Brand Restyling timed to MNP schedule
 Public spending fostered household income but
FIXED
35%* 45%
reduced fiscal surplus BROADBAND
Growth expected to be lower but still positive  Bundling and new products reduce churn
 Tight fiscal and monetary policies could slowdown the  Increasing speed for new services and quality
economy FIXED
47% 67%
 These measures shall probably deliver a healthier VOICE
economic environment  Lines in service maintain growth
 Customers value Flat Pricing
* M/S on top 3 operators
FRANCO BERTONE 7

9. Telecom Italia Conference Call
Full‐Year 2011 Preliminary Results and 2012‐14 Plan Outline
Mobile Business: Main Goals and Action Plan
Goals Outlook (1)
Mobile Lines
Consolidate Revenue Share (Millions)
Cagr ‘11-’14
~+4%
Promote Mobile Data and Social Networking 18.2
16.3
Improve Customer Experience
2010 2011 2014
Consolidate Leadership of Youth Segment
ARPU
(ARS per month)
Action Plan Cagr ‘11’14
>+10%
Upgrade 3G network, capacity, quality and coverage 51
Mobile internet massification through convenient pre-paid 44
packaging offers
Bundled data + social network plans
2010 2011 2014
Loyalty targeted customer care programs ahead of mobile
number portability
(1) Argentinean Operations only
FRANCO BERTONE 8

10. Telecom Italia Conference Call
Full‐Year 2011 Preliminary Results and 2012‐14 Plan Outline
Fixed Business: Main Goals and Action Plan
Goals Outlook (1)
Improve Value of the Household Consumer Fixed BB Lines
(Millions)
Cagr ‘11-’14
>+5%
Develop ICT market
1.6
1.4
Reduce Service Provisioning Time
2010 2011 2014
Upgrade Bandwidth Delivery Capability
ARPU
(ARS per month)
Action Plan Cagr ‘11-’14
>+12%
Focus on Bundled Voice, BB+Mobile Internet, Streaming
87
76
Integrate Connectivity with Hosting and Cloud Computing
Promote Migration to Flat Pricing
2010 2011 2014
Optimize Interconnection with Third Parties (1) Argentina Operation only
FRANCO BERTONE 9

11. Telecom Italia Conference Call
Full‐Year 2011 Preliminary Results and 2012‐14 Plan Outline
CAPEX Plan
Capex (ARS, in billions) Key Drivers
Manage E2E Service Delivery and Quality
Standards
Capex as 17% 18%
% of Improve Network Capacity and Fault
Revenues Tolerance to enhance user experience
Deploy FTTC to upgrade Access Bandwidth
Deploy low visual impact radiobase sites to
4.0 facilitate extension of mobile access
coverage and capacity
3.2
Extend own network reach to reduce costs of
domestic roaming
2011 2012
Deploy content delivery capabilities in the
core network.
FRANCO BERTONE 10

12. Telecom Italia Conference Call
Full‐Year 2011 Preliminary Results and 2012‐14 Plan Outline
 BU Argentina 2011 Results (IFRS)
 Telecom Argentina Plan
 Take-Aways
FRANCO BERTONE 11

13. Telecom Italia Conference Call
Full‐Year 2011 Preliminary Results and 2012‐14 Plan Outline
Take-aways on main Telecom Argentina Trends
Organic
 Upselling to the existing Customer Base is a major growth factor. Positive
double digit
Revenues  Customer Base growth rate shall contract to single digit. yoy trend
 Mobile Data and Social Networking are growth key drivers.
2011 2012
 Focus on cost efficiencies to mitigate cost inflation effects. Positive
double digit
Ebitda  Reduce Interconnection and Domestic Roaming costs. yoy trend
 Improve Churn Rate to control SAC/SCR
2011 2012
Spending up,
 Focus on E2E Quality of Service. Capex on Sales down
 Deploy FTTC and Content Delivery Network to upgrade access and
Capex core network bandwidth.
 SAC/SRC capex impacted by MNP
2011 2014
FRANCO BERTONE 12