the Telecom Italia Group's results for the first nine months of 2009.

1. TELECOM ITALIA GROUP
9M 2009 Results
Milan, November 5th, 2009
Telecom Italia
9M 2009 Results
FRANCO BERNABE’

2. TELECOM ITALIA GROUP
9M 2009 Results
Safe Harbour
These presentations contain statements that constitute forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. These statements appear in a number of places in this
presentation and include statements regarding the intent, belief or current expectations of the customer base,
estimates regarding future growth in the different business lines and the global business, market share,
financial results and other aspects of the activities and situation relating to the Company.
Such forward looking statements are not guarantees of future performance and involve risks and uncertainties,
and 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. Telecom Italia Spa 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 Spa business or acquisition
strategy 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.
1
FRANCO BERNABE’

3. TELECOM ITALIA GROUP
9M 2009 Results
Agenda
TI Group Main Achievements
Focus on Domestic Business
Focus on TIM Brasil
Focus on HanseNet
Wrap Up
Appendix
2
FRANCO BERNABE’

4. TELECOM ITALIA GROUP
9M 2009 Results
TI Group 9M 09 Progress Report
Improved Cash Flow Generation
Restated with HanseNet
+515M€, +15% YoY
+581 M€, +18% YoY
Focus on Improved Operating Profitability:
Restated with HanseNet
Ebitda 8.6BN€ - Stable YoY (Ebitda Margin +1.8 p.p. YoY)
Core Ebitda 8.8BN€ - Stable YoY
(Ebitda %+1.8 p.p. YoY)
Markets: Strong Cash Cost Control:
Domestic Cash Cost -1,146M€, -7.3% YoY
&
Improved Domestic Ebitda trend:
Brazil -0.4% 3Q; -0.7% 2Q; -4.4% 1Q
Brazil Defending Profitability:
Ebitda 880M€ - Ebitda Margin 24.3% (+2.3 p.p. YoY)
Disposal of non-core assets:
HanseNet expected cash in ~900M€
Financial
Discipline
Reduced Average Cost of Debt: 5.5% vs. 6% at YE08
Figures considering HanseNet classified as Discontinued Operations
Restated Figures include HanseNet consolidated line by line
3
FRANCO BERNABE’

5. TELECOM ITALIA GROUP
9M 2009 Results
Improved Operating Free Cash Flow
Euro mln, Reported data
Operating FCF % OFCF on Revenues
+515
3,932
3,417 19.5%
Restated
+3.6 p.p.
3,872
Restated
3,291 15.9%
9M 08 9M 09 9M 08 9M 09
Figures considering HanseNet classified as Discontinued Operations; Restated Figures include HanseNet consolidated line by line
4
FRANCO BERNABE’

6. TELECOM ITALIA GROUP
9M 2009 Results
TI Group Improved Profitability: Organic Results vs. 2008
Revenues Revenues – Restated with HanseNet
Euro mln, % -972M€
-925M€
21,963 -4.4%
21,119 -4.4% 20,991
20,194
IIIQ -418, -5.6%
IIIQ -404, -5.6%
IIQ -284, -3.8%
IIQ -268, -3.7%
IQ -253, -3.7% IQ -270, -3.8%
9M 08 9M 09 9M 08 9M 09
EBITDA EBITDA – Restated with HanseNet
+1.8 p.p. 42.7% 42.0%
% on 40.9% +1.8 p.p.
Revenues
% on
Revenues
40.2%
-32M€ -21M€
8,646 -0.4% 8,614 8,831 -0.2% 8,810
IIIQ -12, -0.4% IIIQ -9, -0.3%
IIQ +49, +1.8% IIQ +58, +2.0%
IQ -69, -2.4% IQ -70, -2.4%
9M 08 9M 09 9M 08 9M 09
Figures considering HanseNet classified as Discontinued Operations; Restated Figures include HanseNet consolidated line by line
5
FRANCO BERNABE’

7. TELECOM ITALIA GROUP
9M 2009 Results
Cash Cost Control: a Group-Wide Commitment
Organic OPEX 9 Months 09 EBITDA Margin
Euro mln, Organic data, %
Δ abs. vs. Δ %. vs. Δ %. 1H09 vs
9M ‘08 9M ‘08 1H08 9M08 9M09
47.8%
46.1%
Domestic 8,471 -775 -8.4% -6.5% +1.7 p.p.
24.3%
TIM 2,742 -56 -2.0% -2.6%
22.0%
+2.3 p.p.
Brasil
-3.7%
TI Media 168 -20 -10.6% -10.4% -17.5% +13.8 p.p.
Other BU &
Eliminations 199 -42
42.7%
40.9%
TI Group 11,580 -893 -7.2% -6.0% +1.8 p.p.
Figures considering HanseNet classified as Discontinued Operations
6
FRANCO BERNABE’

8. TELECOM ITALIA GROUP
9M 2009 Results
Agenda
TI Group Main Achievements
Focus on Domestic Business
Focus on TIM Brasil
Focus on HanseNet
Wrap Up
Appendix
7
FRANCO BERNABE’

9. TELECOM ITALIA GROUP
9M 2009 Results
Domestic – Steady Cost Control Offsetting Revenue Decline
Euro mln, Organic data, %
Revenues Key Highlights
-920M€ Fixed business:
17,159 -5.4% 16,239 stable retail service revs* (down 5% in 3Q09, in line
with 2Q09) with strong growth from BB and ICT
Mobile -589, -8.3% services.
small decline of total revenues performance vs. 2Q09
due to lower equipment sales in the business segment
Wireline -198, -1.8% and lower contribution of wholesale
Mobile business:
Elim & Decline of service revenues trend reflecting impact of
adj 9M 08 9M 09 repricing in 3Q08
Strong push on mobile BB reflected into strong pick-
EBITDA up of browsing revs
% on
+1.7 p.p. 47.8% 9M 09 EBITDA trend confirms outperforming EBITDA
Revenues
46.1% guidance for 2009 (9.9-10 bln euro, down YoY -3/4%)
-145M€ EBITDA margin reached 50% in 3Q09 confirms TI as the
7,913 -1.8% 7,768 industry benchmark for profitability.
-11, -0.4% Effective & selective action on OPEX base
IIIQ
IIQ -18, -0.7%
Ebitda 2009 Target confirmed
IQ -116, -4.4%
9.9 – 10.0 BN€
9M 08 9M 09
* Wireline service revenues net of wholesale revs (both national & intl)
8
FRANCO BERNABE’

10. TELECOM ITALIA GROUP
9M 2009 Results
Domestic Fixed – TI Access Performance
‘000 access
Telecom Italia Retail Access Evolution & Line Losses Key Highlights
‘000
17,776 17,352 16,972 16,621 16,358
Lowest line losses level since third quarter
TI Access
2007 through successful retention activities
3Q08 4Q08 1Q09 2Q09 3Q09
‘000
3Q08 4Q08 1Q09 2Q09 3Q09
Competitors increasingly relying on
wholesale product such as Wholesale Line
Line losses -355 -380 -351 -263 Rental and Naked
-424
OLO Access Growth (TI Wholesale)
‘000 ‘000 ‘000
ULL Naked WLR
3Q08 4Q08 1Q09 2Q09 3Q09 3Q08 4Q08 1Q09 2Q09 3Q09 3Q08 4Q08 1Q09 2Q09 3Q09
+211
9
FRANCO BERNABE’

11. TELECOM ITALIA GROUP
9M 2009 Results
Domestic Fixed: Focus on BB
Broadband Market Market Share on Net Adds
‘000
Total Italian
BB accesses 10,834 11,775 11,968
+62
TI retail
6,754 6,843 6,859 6,921 43.6%
accesses 6,610
26.5% 24.5% 31.9%
Free
79% 81% 82% 6.7%
Flat (%) 76% 77%
3Q08 4Q08 1Q09 2Q09 3Q09 3Q08 4Q08 1Q09 2Q09 3Q09
Broadband Service Revenues Key Highlights
Euro million, Euro/month
18.2 Strong commercial push with the continued uptake
ARPU BB 18.0 of Alice Casa (around 490K customers) and the
+ 8.0% launch of Alice Day, the new pay-as-you go offer
BB Serv Revs 1,100 1,188
Successful advertising campaign with a high
IIIQ +8.1%
popularity rating
IIQ +8.2%
Confirm high single digit BB service revenues
IQ +7.4% growth
9M 08 9M 09
10
FRANCO BERNABE’

12. TELECOM ITALIA GROUP
9M 2009 Results
Domestic Fixed: Focus on ICT
Italian ICT Market Revenues Trend (*) Key Highlights
Euro Bln
Continuously improving TI scale in a highly
-22%
fragmented ICT Market with an unique end-to-end
proposition
6.6
5.1 Top / Large Account segment
TI Market
Public Administration
Share on ICT 7% 11% Fully maximize the value of CNIPA contract won
Revenues +4 p.p. in 2007, through
Successful Web hosting, data center and
application/desktop management for big
9M 08 9M 09 Customers such as INPS, INAIL and Ministry
of Justice
Focus Telecom Italia ICT Revenues Private sector
Euro Mln Continuous up-take of an Infrastructure as a
+11.2% Service Revenues
service business model based on monthly fee
+17.5% pricing structure
565
508
370 Business segment
315 Strong push on segment-specific offerings under
the “Impresa Semplice” brand
Standardizing off-the-shelf solutions for SME
customers, by creating bundles of products, to
9M 08 9M 09 9M 08 9M 09 simplify the marketing process /adoption of
solutions
(*) Source SIRMI
11
FRANCO BERNABE’

13. TELECOM ITALIA GROUP
9M 2009 Results
Domestic Mobile Revenues
Euro mln Δ%
9M’09 YoY
Total 6,496 (8.3) =
Mobile Handsets (mln)
4.8 3.3
44%
Handsets 339 (33.3) (2.4) 2G
3G+Laptops & 56% 63%
Internet keys
+ 9M 08 9M 09
€cent/minute Mln minutes
Outgoing +0% -3.7%
Voice 3,508 (5.5) (2.9) 12.2 12.2 26,649 25,655
o/w Roaming 177 (16.9)
9M 08 9M 09 9M 08 9M 09
+
€cent/minute Euro mln
Visiting (foreign)
-11.5%
Business -10%
Incoming
9.6
Traffic
Received * 1,152 (10.1) (1.8) 8.5 150 135
9M 08 9M 09 9M 08 9M 09
+ Euro mln Messaging Content Browsing
-7%
774 717 +13%
-27%
VAS 1,497 (5.6) (1.2) 343 469 530
250
9M 08 9M 09 9M 08 9M 09 9M 08 9M 09
(*) Incoming, Visiting and Other Revenues
12
FRANCO BERNABE’

14. TELECOM ITALIA GROUP
9M 2009 Results
Focus on Consumer Main Achievements in 3Q09
Key Activities Key Evidence
TIM market share on TIM x 2 ARPU
Internet Keys* uplift
45% >70%
Increased push on mobile BB 40%
Offer
39%
Enriching TIM community products
Dec’08 Jun ‘09 Sep ‘09 Consumer TIM x 2
Further push to improve fixed BB penetration Pre-paid AVG
Continuous reduction of BB churn rate
Strong improvement of spontaneous awareness
A new format with very popular testimonials
Advertising
for both fixed and mobile 25 TIM
Vod
Highly commercial communication style to Wind
15
maximize acquisitions H3G
Continued on air presence until year-end 5
Fastweb
Week 1 Week 2 Week 3 Week 4 Week 1 Week 2 Week 3
September October
Push of multi-brand channels to improve Continuous increase in multi-brand targeting 200
Distribution
win-back capabilities PoS by YE
Sales &
New geomarketing approach in segmenting Launch of a specific sales channel fully focused
points of sale on Ethnic segment
Strong push on BB acquisition trough
Around 60% of BB September activation through
Telemarketing channel
187 channel
(*) Source GFK
13
FRANCO BERNABE’

15. TELECOM ITALIA GROUP
9M 2009 Results
Main Actions for 4Q09 – Consumer Segment
Increase ADSL acquisition
Launch of a new Tutto Compreso offer for RTG customers
Push ADSL penetration bundling PC & BB connectivity (46% of households do not
own a PC)
Improve
market Raise the game on Internet Mobile
Increase up-selling push of mobile BB on existing BB customers with billing on TI
positioning monthly fee
First and only to launch14.4 Mbps speed
all across
the board
Continue the turnaround of the mobile business
Further enrich friend & family offers adding TIMx4, with no activation fee for new
TIM customers
Launch tailor made tariffs for further ethnic segment leveraging with TI Sparkle – a
key TI advantage
Fewer handsets but more TIM exclusivity
14
FRANCO BERNABE’

16. TELECOM ITALIA GROUP
9M 2009 Results
Focus on Business Main Achievements in 3Q09
Key Activities Key Evidence
Improved TI positioning based on Impresa
Semplice brand and higher Quality of Net adds (‘000 lines)
1Q09 2Q09 3Q09
Service
Fixed
Increased commercial effort to improve Mobile*
percentage of BB services on Win-back and * Human
new customers
Offer
BB Churn reduction due to higher Quality of Mobile BB Access Net Adds (‘000 lines)
Services
Launch of new bundle offers: device + 1Q09 2Q09 3Q09
browsing / mailing services (to be continued
in 4Q)
Improved competitiveness and simplicity of
Satisfaction
both Fixed and Mobile offering Customer Satisfaction Index (out of 100)
Customer
New go-to-market approach, with fixed-
mobile sales force integration and customer 1Q09 2Q09 3Q09
portfolio management
15
FRANCO BERNABE’

17. TELECOM ITALIA GROUP
9M 2009 Results
Main Actions for 4Q09 - Business Segment
Fixed: sustain price premium positioning & improve QoS
Line repair within next business day, free of charge: at least
3 times faster than average competitors SLAs
Double upload rate on 20Mbit/s connection free of charge
Defend
our core ICT: letting every Italian company experience TI’s superior infrastructure
Bundling PC and ICT services to broaden certified @mail and remote backup
strength, penetration
attack New “Tutto Compreso”offer: a turn key solution including minimum guaranteed
speed connectivity, scalable Cisco router and customer service assistance on the
adjacent following working day
businesses
Mobile: improve acquisition and VAS penetration
Voice minutes basket shared among company employees for SMEs
Tailor made bundle for SoHo including voice, handsets and bolt-on SMS & Data
features.
Enriching mail and browsing portfolio offering, adding Flat solutions for light users
and heavy users
16
FRANCO BERNABE’

18. TELECOM ITALIA GROUP
9M 2009 Results
Agenda
TI Group Main Achievements
Focus on Domestic Business
Focus on TIM Brasil
Focus on HanseNet
Wrap Up
Appendix
17
FRANCO BERNABE’

19. TELECOM ITALIA GROUP
9M 2009 Results
TIM Brasil: Improving Market Share & Quality Service
Market Share Evolution
Prepaid
Net 33.3
29.1% mln lines
Share (%) 26.5% 27.3%
29.8 29,.
25.4% 25.0%
24.2%
Market 23.5% 25.2
+ 3.4
Share (%) 25.9%
23.7% 23.8% Jan 08 Dec 08 Mar 09 Sep 09
Postpaid
18.3% 12.1% mln lines
17.4% 6.8
-0.6 + 0.1
-10.1%
6.3
6.2
1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09
Jan 08 Dec 08 Mar 09 Sep 09
Overall Quality Service –YTD 2009 Customer Satisfaction
% of target reached on overall service quality, TIM vs. competitors CRC Average satisfaction, consumer segment
YoY - 0.2 + 5.2 + 2.1 -1.2 - 5.1 -7.8 - 0.9
7.5 7.5
(p.p.) Pre-paid 7.4
99.3% -0.5 7.1 +0.5
7.0
96.8% 95.5%
93.9% 92.6%
90.2% 6.6 6.7
Post-paid 6.3
83.0% 6.1 +0.7
6.0
3Q08 4Q08 1Q09 2Q09 3Q09*
Player 1 TIM Player 6 Player 5 Player 4 Player 2 Player 3 * Jul/09 e Aug/09
Sources: TIM Brasil - 12nd Customer Satisfaction Monitoring - may-jun/09;
Source: Anatel CRC Monthly Satisfaction Research
18
FRANCO BERNABE’

20. TELECOM ITALIA GROUP
9M 2009 Results
TIM Brasil: Organic Main Results
Revenues Key Highlights
Euro mln, %
+34M€
3,588 +1.0% 3,622 Top line limited growth affected by long tail effects from
2008 loss in post-paid customer base
IIIQ -13, -1.2% (*)
Good performance of Value Added Services fuelled by
microbrowsing stimulated through exclusive and
distinctive offers of smartphones
IIQ +40, +3.4%
Lower push on 2G handset sales in order to stimulate a
“Chip-only” approach
IQ +7, +0.7%
9M 08 9M 09
EBITDA Ebitda margin increase driven by:
+2.3 p.p. 24.3% Lower bad debt
% on 22.0%
Revenues Continued cash cost efficiencies
+90M€ 880
790 +11.5% Improved revenue mix
IIIQ -4, -2.0%
Ebitda 2009 Target confirmed
IIQ +50, +20.1%
~3.6 BNR$
IQ +44, +20.7% (*) 80 million reais (approx. 28 million euro) reclassified from “Other Operating
Income” to “Other Service Revenues”
9M 08 9M 09 No EBITDA impact. No reclassification of previous year needed at TI Group level
19
FRANCO BERNABE’

21. TELECOM ITALIA GROUP
9M 2009 Results
Agenda
TI Group Main Achievements
Focus on Domestic Business
Focus on TIM Brasil
Focus on HanseNet
Wrap Up
Appendix
20
FRANCO BERNABE’

22. TELECOM ITALIA GROUP
9M 2009 Results
Focus on HanseNet: the Rationale behind the Disposal
Regulatory framework very
REGULATORY AND TECH
HanseNet OpFCF Trend
VDSL CapEx
unfriendly towards alternative Scenario
FRAMEWORK
operators
Capital intensive investments
needed to match incumbent’s “High
Speed” offering (VDSL/Fiber) 2007 2008 1H09 M/L Term
compromising OpFCF generation Ebitda Capex
~900M€
expected cash
BB market is growing at a slower consideration
German Broadband Market Share
pace… Implied value per
MARKET SHARE
50,0%
… with incumbent and cable sub at significant
EVOLUTION
operators reinforcing their position… 30,0%
premium vs.
… and alternative operators lagging 10,0% comparable
behind 2007 2008 1H 09 transactions in
Incumbent + cables Other Altnets HanseNet
the last twelve
months
HanseNet ARPU Trend
PRICING TREND
Continued pricing pressure with very
aggressive promotions by alternative
operators trying to catch up with not
replicable “High Speed” offers
1H07 1H08 1H09
21
FRANCO BERNABE’

23. TELECOM ITALIA GROUP
9M 2009 Results
Agenda
TI Group Main Achievements
Focus on Domestic Business
Focus on TIM Brasil
Focus on HanseNet
Wrap Up
Appendix
22
FRANCO BERNABE’

24. TELECOM ITALIA GROUP
9M 2009 Results
TI Group 9M 09 Progress Report
Improved Cash Flow Generation
+515M€, +15% YoY
Focus on Improved Operating Profitability:
Ebitda 8.6BN€ - Stable YoY (Ebitda Margin +1.8 p.p. YoY)
Core
Markets: Strong Cash Cost Control:
Domestic Cash Cost -1,146M€, -7.3% YoY
Stabilise
& Ebitda and
Improved Domestic Ebitda trend:
Brazil -0.4% 3Q; -0.7% 2Q; -4.4% 1Q Free Cash
Brazil Defending Profitability:
Flow
Ebitda 880M€ - Ebitda Margin 24.3% (+2.3 p.p. YoY) Generation
Disposal of non-core assets:
HanseNet expected cash in ~900M€
Financial
Discipline
Reduced Average Cost of Debt: 5.5% vs. 6% at YE08
Figures considering HanseNet classified as Discontinued Operations
23
FRANCO BERNABE’

25. TELECOM ITALIA GROUP
9M 2009 Results
Agenda
TI Group Main Achievements
Focus on Domestic Business
Focus on TIM Brasil
Focus on HanseNet
Wrap Up
Appendix
24
FRANCO BERNABE’

26. TELECOM ITALIA GROUP
9M 2009 Results
Domestic – Revenues by Customer Segment and Technology
Euro million, %, Organic data
Domestic Revenues Domestic Revenues
by Technology by Customer Segment
-5.4% -5.4%
Total Domestic 17,159
17,159 TI Sparkle &
16,239
16,239 2,639
Nat. wholesale 2,784
-4.0%
Mobile -8.3% Top
Business -9.3%
Wireline -1.8% -7.5%
Consumer
Elim, adj & -352 -342
9M 08 9M 09 others 9M 08 9M 09
1Q09 2Q09 3Q09
Domestic 5,357 5,534 5,348
Mobile 2,059 2,253 2,184
Wireline 3,677 3,724 3,569
25
FRANCO BERNABE’