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Telecom Italia – Domestic Market FY 2011 Preliminary Results and 2012‐14 Plan Outline (Patuano)
 

Telecom Italia – Domestic Market FY 2011 Preliminary Results and 2012‐14 Plan Outline (Patuano)

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Full‐Year 2011 Preliminary Results and 2012‐14 Plan Outline

Full‐Year 2011 Preliminary Results and 2012‐14 Plan Outline

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    Telecom Italia – Domestic Market FY 2011 Preliminary Results and 2012‐14 Plan Outline (Patuano) Telecom Italia – Domestic Market FY 2011 Preliminary Results and 2012‐14 Plan Outline (Patuano) Presentation Transcript

    • Telecom Italia Conference CallFull‐Year 2011 Preliminary Results and 2012‐14 Plan Outline Telecom Italia – Domestic Market Full‐Year 2011 Preliminary Results and 2012‐14  Plan Outline MARCO PATUANO
    • Telecom Italia Conference CallFull‐Year 2011 Preliminary Results and 2012‐14 Plan OutlineSafe HarbourThese presentations contain statements that constitute forward‐looking statements within the meaning of the PrivateSecurities Litigation Reform Act of 1995. These statements appear in a number of places in this presentation and includestatements regarding the intent, belief or current expectations of the customer base, estimates regarding future growthin the different business lines and the global business, market share, financial results and other aspects of the activitiesand situation relating to the Company and the Group.Such forward looking statements are not guarantees of future performance and involve risks and uncertainties, andactual results may differ materially from those projected or implied in the forward looking statements as a result ofvarious factors. As a result thereof, Telecom Italia S.p.A. makes no representation, whether express or implied, as to theconformity 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 datehereof, but forward looking information by its nature involves risks and uncertainties, which are outside our control, andcould significantly affect expected results.Analysts are cautioned not to place undue reliance on those forward looking statements, which speak only as of thedate of this presentation. Telecom Italia S.p.A. undertakes no obligation to release publicly the results of any revisions tothese forward looking statements which may be made to reflect events and circumstances after the date of thispresentation, including, without limitation, changes in Telecom Italia S.p.A. business or acquisition strategy or plannedcapital expenditures or to reflect the occurrence of unanticipated events. Analysts and investors are encouraged toconsult the Companys Annual Report on Form 20‐F as well as periodic filings made on Form 6‐K, which are on file withthe United States Securities and Exchange Commission.It should also be noted that starting from the year 2010, Telecom Italia reclassified some taxes paid in Brazil of non‐material amount, previously included in “Other operating expenses”, in reduction of “Revenues” and “Other income” inorder to ensure a better comparability and intelligibility of the financial information. MARCO PATUANO 2
    • Telecom Italia Conference CallFull‐Year 2011 Preliminary Results and 2012‐14 Plan OutlineAgenda  Telecom Italia Domestic 2011 Results  Telecom Italia Domestic Plan  Fixed Business  Mobile Business  Innovation  Focus on Costs  Capex Allocation  Take-Aways MARCO PATUANO 3
    • Telecom Italia Conference CallFull‐Year 2011 Preliminary Results and 2012‐14 Plan Outline2011: Continued Recovery in a worsened context %, Euro mln, Organic data Revenues EBITDA 1Q11 2Q11 3Q11 4Q11 1Q11 2Q11 3Q11 4Q11 -0.3% YoY -2.0% YoY -2.5% Including effect of: -3.8% - Credit provisions: -41 €Mln -4.8% - VAT increase: -12 €Mln -6.0% - IAS19: +43 € Mln -7.4% -7.6% 19,033 9,351 FY11 -4.8% FY11 -3.9% Abs 4,596 4,760 4,742 4,935 Abs 2,273 2,318 2,478 2,282 Ebitda-Capex Highlights 1Q11 2Q11 3Q11 4Q11 Tough external macro-economic -1.3% conditions, regulatory evolution and YoY -2.9% -4.5% LTE excluded competitive environment -5.7% FY11 Strong Cash Generation, critical for TI 6,374 Abs 1,610 1,623 1,821 1,320 Group strategic achievement MARCO PATUANO 4
    • Telecom Italia Conference CallFull‐Year 2011 Preliminary Results and 2012‐14 Plan OutlineDomestic Fixed: Paving the Way to Access Valorisation Telecom Italia Access TI Lines Evolution ‘000 Access TI -206 ‘000 OLO +181 TI -183 +1,221Total TI 22,122 OLO +51 Wholesale TI -135 OLO -42 TI -175 -25 OLO+98 +612 Wholesale -133 +289 6,771 -176 -77 21,712 7,060 2009 2010 2011 -410 Retail Retail 15,351 14,652 -746 -699 1Q -1,255 2010 2Q Q Q 2011 Wireline Services Revenues Trend Highlights Euro mln, Organic data, % -3.5% Better performance on Line Losses in a 13,466 13,001 worse market and economic environment 4Q 3,360 -1.9% 3,297 Infra-OLO churn increased 3Q 3,318 -2.1% 3,247 Wireline Service Revenues trend 2Q -4.9% 3,392 3,227 improvement confirmed 1Q -4.9% 3,397 3,230 Important evidence of TI’s ability to 2010 2011 monetize its premium value proposition MARCO PATUANO 5
    • Telecom Italia Conference CallFull‐Year 2011 Preliminary Results and 2012‐14 Plan OutlineDomestic Fixed: Adding Value to Broadband TI Retail Broadband Accesses Highlights ‘000 Total Italian 13,082 13,455 Lower market growth. BB accesses 12,294 +788 +373 7,000 7,175 7,125 OLO’s price war not followed by TI: BB Free Customer Base successfully defended. Success on Value Approach: growth in 86% 87% Flat 83% Revenues and in consumer ARPU, Total 2009 2010 2011 supported by SuperInternet results. Market Share 56.9% 54.8% 53.0% Broadband ARPU Broadband Services Revenues Euro/month/line -1.3% % yoy growth +0.5% 18.6 18.4 4Q11 consumer ARPU +2.1%YoY -0.3% 2010 2011 1H11 2H11 MARCO PATUANO 6
    • Telecom Italia Conference CallFull‐Year 2011 Preliminary Results and 2012‐14 Plan OutlineDomestic Mobile: Customer Base Trend Total SIM cards Net Adds ‘000 ‘000 32,227 31,679 +1,209 vs YE10 31,018 31,038 31,260 >7x FY 2010 performance 548 419 +3.9% 222 20 4Q10 1Q11 2Q11 3Q11 4Q11 1Q11 2Q11 3Q11 4Q11 Gross Adds Churned SIM cards ‘000 ‘000 +13.6% 7,181 7,135 8,344 7,343 22.0% 21.9% Churn Rate % FY 10 FY 11 FY 10 FY 11 MARCO PATUANO 7
    • Telecom Italia Conference CallFull‐Year 2011 Preliminary Results and 2012‐14 Plan OutlineDomestic Mobile: 2011 Key Revenues Trends Total Revenues % YoY, Organic data 1Q 2Q 3Q 4Q -2.2% -6.5% -7.6% -12.0% FY11 -7.1% FY10 -10.5% Services Revenues Handsets Revenues Browsing Revenues% YoY % YoY % YoY +21.0% 1Q 2Q 3Q 4Q +96.5% +18.7% -4.7% -5.1% +34.0% +26.2% +2.8% -6.7% -7.1% -7.5% -22.4% 1Q 2Q 3Q 4QExcl. -8.7% -6.9%MTR -9.6% FY11 Oct-Nov ~- 6% +40.2% % Browsing Revenues on Service Revenues -11.7% 1Q 2Q 3Q 4Q 12% 13% 14% 15% MARCO PATUANO 8
    • Telecom Italia Conference Call Full‐Year 2011 Preliminary Results and 2012‐14 Plan Outline Mobile Consumer: FY11 Highlights Customer Base Growth Loyalty Increase Mobile BroadBand Strong increase in acquisitions MNP Churn Rate Small Screen Handsets Gross Adds Net Adds 8.4% 8.8% % Smartphone on Handsets sold >1 Mln Total H/S* Smartphones +19%YoY ~3.4 mln +210% YoY TIM Total Market ~56% FY11 TIM MNP Churn lower than Market Average ~56% FY11 *Source GFK Survey FY10 FY11 Sound Growth in CB Calling Push on flat offers Small Screen Users(mln) Flat offers (TIMx, Tutto Compreso) mln +49% >1 mln 2.29 2011 1.54 2010 20.3 5.8 4.6 FY10 FY11 +3% 1Q 2Q 3Q 4Q 4Q10 1Q11 2Q11 3Q11 4Q11 ARPU (€/month) 6.9 7.1 In 2011 TIM became Best in Class in Customer satisfaction on: Point of Sales, Customer Care & Web-Site MARCO PATUANO 9
    • Telecom Italia Conference CallFull‐Year 2011 Preliminary Results and 2012‐14 Plan OutlineDomestic Wireline RevenuesEuro mln, Organic Data, % 3Q11 vs 10 Q410 Q411 YoY %  % YoY Total 3,602 3,502 (2.8) (2.8) Sparkle Group 362 382 5.5 (4.9) Domestic Core Services 3,082 2,985 (3.1) (2.1) Voice & Access 1,485 1,396 (6.0) (6.0) Internet 420 413 (1.7) (0.5) Business Data 316 302 (4.4) 1.7 National Wholesale 799 791 (1.0) 3.0 Other  63 83 n.m. n.m. Products 242 205 (15.3) (19.0) Elimination (84) (70) 16.7 15.0 MARCO PATUANO 10
    • Telecom Italia Conference CallFull‐Year 2011 Preliminary Results and 2012‐14 Plan OutlineDomestic Mobile RevenuesEuro mln, Organic Data, % 3Q11 vs 10 Q410 Q411  % YoY  % YoY Total 1,870 1,828 (2.2) (6.5 ) Wholesale 65 47 (27.7) (21.4) Retail 1,805 1,781 (1.3) (5.9) o/w Services 1,719 1,612 (6.2) (6.9 ) o/w Business Generated  (*) 1,498 1,434 (4.3) (5.2) o/w Outgoing Voice (**) 990 899 (9.1) (8.6) o/w VAS 508 534 5.1 2.1 o/w Incoming 221 178 (19.5) (19.3) Handsets 86 169 96.5 34 Total Retail Services Revenues net of Incoming (*) (**) Including Roaming & Visitors MARCO PATUANO 11
    • Telecom Italia Conference CallFull‐Year 2011 Preliminary Results and 2012‐14 Plan OutlineAgenda  Telecom Italia Domestic 2011 Results  Telecom Italia Domestic Plan  Fixed Business  Mobile Business  Innovation  Focus on Costs  Capex Allocation  Take-Aways MARCO PATUANO 12
    • Telecom Italia Conference CallFull‐Year 2011 Preliminary Results and 2012‐14 Plan Outline2012 Italian Economic Outlook GDP ∆% Consumer Spending ∆% 1.4 0.9 1.1 1.2 0.4 0.2 0.4 0.0 -1.0 -1.5 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 Unemployment rate %  Consumers refrain from non-essential spending in 2012 9.3  Near-term outlook for households consumption is 9.1 9.1 poor 8.4 8.3  Unemployment rate expected to grow further  Rationalization on Corporate and PA spending 2010 2011 2012 2013 2014 partially offset by Government driven investments in innovation Source: Global Insight Feb. 2012 MARCO PATUANO 13
    • Telecom Italia Conference CallFull‐Year 2011 Preliminary Results and 2012‐14 Plan OutlineItalian TLC Market Evolution & Regulatory Framework Domestic Market by Technology Regulatory Scenario Bln €  New MTR glide path €cent 6.3 41.9 Total 5.3 3.5 ICT1 9.1 Increase 1.7 0.98 2.5 TLC 1.5 32.8 current 07/2012 01/2013 07/2013 Products H3G TI/Vod/Wind 3.6 Stable TLC Services 29.2 CAGR ‘11-’14 -2.1% -3/4% in 2012 International roaming prices on EU’s agenda Mobile Service 16.6 FTR: full symmetry already reached , IP interconnection transition in progress Fixed 12.6 Regulatory guideline on NGNA framework Services under definition. Geographical segmentation 2011 2014 of fiber bitstream confirmed. No constraints on TI’s NGAN architecture. 1 addressable Source: Sirmi MARCO PATUANO 14
    • Telecom Italia Conference Call Full‐Year 2011 Preliminary Results and 2012‐14 Plan Outline Domestic Strategic Pillars: Aiming at Cash Generation Sustaining Top Line Consumer Fixed Consumer Mobile Business Top Client & PA  Increase Access Value  New Segment growth  Improve Convergent  Increase Cloud adoption Customer  Extend All Inclusive (ethnic and youth) approach/offer leveraging on “the only Base penetration  Further improvement on  Focus on win-backs, cloud with its own network  Sustain Premium value acquisition mix combining value for money inside” Positioning with premium price defense  New business approach to  Proactive caring  Strengthen CRM activities  Leverage on Fixed-Mobile better care for Top Clients approach on voice and data for synergy  Proactive support to Govt. Loyallty  Lock-in differentiated enhancing value  Increase flat offer digitalization process offers  Customer view (vs sim) penetration  End2End service management  Widen content offer  Maximize Mobile Ultra  Light ICT  Enlarge ICT portfolio New Broadband wave standardized  Enrich smartphone and Preserve  Address new targets  Personal Cloud and solutions Business Innovative service  Develop M2M tablet application portfolio Free Cash  “Beyond connectivity” enhancement application market Flow Generation Efficiency Processes Re-engineering Commercial Costs Industrial Costs Personnel Efficiencies on Customer Ops (Credit &  Unitary Cost reduction vs Volumes  Focus on Right-sizing and Total Cost Caring Activities) increase Control Sales Force Model Rationalization Nurturing our Future Network IT & CloudMaintenance and Development Innovative Broadband Services  Internal Customer Driven  Cloud Infrastructure for Efficiency  LTERoll out Platforms Market Development Premium Performance  Market-driven NGAN MARCO PATUANO 15
    • Telecom Italia Conference CallFull‐Year 2011 Preliminary Results and 2012‐14 Plan OutlineAgenda  Telecom Italia Domestic 2011 Results  Telecom Italia Domestic Plan  Fixed Business  Mobile Business  Innovation  Focus on Costs  Capex Allocation  Take-Aways MARCO PATUANO 16
    • Telecom Italia Conference CallFull‐Year 2011 Preliminary Results and 2012‐14 Plan OutlineFixed Business: Safeguarding the Value Access Value Increase Enhance Broadband Experience Sustain Premium Positioning Increase flat/bundle offers  Widen bolt-on offers portfolio.  Portfolio enhancement penetration  Proactive Caring approach  Widening portfolio for content, Increase focus on prospect  Engage TIM Shops to increase applications bundled services customers to improve win-back. BB sales.  Quality and Service Level Refining Segmentation to Address new Targets Agreement differentiation CB lock-in through innovative according to Customer Value products and new offerings Wireline Access trend BB penetration on TI CB BB Services Revenues mln Euro bln 14.7 ‘11‐’14 CAGR ‘11-’14 CAGR >2%  -4% 48.6% >5pp 1.6 2011 2014 2011 2014 2011 2014 MARCO PATUANO 17
    • Telecom Italia Conference CallFull‐Year 2011 Preliminary Results and 2012‐14 Plan OutlineAgenda  Telecom Italia Domestic 2011 Results  Telecom Italia Domestic Plan  Fixed Business  Mobile Business  Innovation  Focus on Costs  Capex Allocation  Take-Aways MARCO PATUANO 18
    • Telecom Italia Conference Call Full‐Year 2011 Preliminary Results and 2012‐14 Plan Outline Mobile Business: Surfing Data Opportunities Customer Base Growth Loyalty Increase Mobile BroadBand Technological Distinctiveness  Continue to push on bundle smartphone/service and  CRM campaign Maintaining leadership on pack offering for mass optimization through  Leveraging on network acquisitions keeping focus market deeper customer leadership to deliver on quality&value knowledge (profiling and innovation to Mass-Market  CRM activities extended to social network analysis) More focus on segmented data services  Exploit recognized TIM offers with limited and  Increase focus on bundle brand attribute of reliability targeted use of pricing  PREMIUM offers introduction and lock-in offers tailored to lead LTE evolution lever with higher speed, better by segment network quality and radio priorityWireless CB trend Mobile BB penetration on TIM CB Mobile BB Revenues trend mln ‘11‐’14 CAGR ‘11‐’14 CAGR 32.2 >3% 22% 10% 10pp 2011 2014 2011 2014 2011 2014 MARCO PATUANO 19
    • Telecom Italia Conference CallFull‐Year 2011 Preliminary Results and 2012‐14 Plan OutlineMobile Technological Evolution while Protecting Profitability Strengthening Roadmap 42MB coverage HSDPA and LTE Increasing speed introduction 100 84 availability 42 3,6 7,2 14,4 Maximum speed 2009 2010 2011 2012 January June (kbps) 2013 2014 2012 2012 With PREMIUM offers Customers have The advantages Network Fiber Bakhauling Dual Carrier an effective perception of Higher of 42MB Priority Speed Network Speed Priority  Quality Up to (everywhere/every Offer based on Mass Market HSDPA 14,4 NO time) Mbps the Value of the  Pricing Customer Up to 42  Speed Premium HSDPA/LTE Mbps  YES  Quality Customers  Priority 100 Mbps MARCO PATUANO 20
    • Telecom Italia Conference CallFull‐Year 2011 Preliminary Results and 2012‐14 Plan OutlineAgenda  Telecom Italia Domestic 2011 Results  Telecom Italia Domestic Plan  Fixed Business  Mobile Business  Innovation  Focus on Costs  Capex Allocation  Take-Aways MARCO PATUANO 21
    • Telecom Italia Conference CallFull‐Year 2011 Preliminary Results and 2012‐14 Plan OutlineInnovation: «Beyond Connectivity» CONSUMER ENTERPRISE & PUBLIC SECTOR  Spread innovation and digital life in the  Exploit Digital Agenda opportunities mass market (simplification, digitalization)  Provide saving opportunities  Selective Development of a  Deeply revise Enterprise new positioning in music, Customer go2market through: video and apps markets needs-driven - New ICT-dedicated sales channels innovation CLOUD TI DIFFERENTIATION FULLY MANAGED SERVICES APPROACH Leveraging on recognized network expertise, quality and capillary presence (E2E caring and technical assistance) Allow OTT to sell their apps to TI customers through ad hoc APIs MARCO PATUANO 22
    • Telecom Italia Conference CallFull‐Year 2011 Preliminary Results and 2012‐14 Plan OutlineAgenda  Telecom Italia Domestic 2011 Results  Telecom Italia Domestic Plan  Fixed Business  Mobile Business  Innovation  Focus on Costs  Capex Allocation  Take-Aways MARCO PATUANO 23
    • Telecom Italia Conference CallFull‐Year 2011 Preliminary Results and 2012‐14 Plan OutlineEfficiency Processes Re-engineering Commercial Costs Industrial Costs Personnel Caring & Sales Force Unitary Cost reduction Right-sizing & Model Rationalization vs Volumes increase Total Cost Control Slighly Reduction Stable Reduction 2011 2014 2011 2014 2011 * 2014 * TFR IAS adjustment excluded Domestic Opex Efficiency on Opex Bln € 0.1 0.2 0.3 9.7 -0.6 2012 2013 2014 New Plan: -0.5 Bln € in 2012-2013 > -1 Bln € Old Plan: -0.2 Bln € in 2012-2013 Total Efficiency on Cash Cost ‘12-’14 2011 ITX Volume Driven Efficiency 2014 1.0 Bln € MARCO PATUANO 24
    • Telecom Italia Conference CallFull‐Year 2011 Preliminary Results and 2012‐14 Plan OutlineAgenda  Telecom Italia Domestic 2011 Results  Telecom Italia Domestic Plan  Fixed Business  Mobile Business  Innovation  Focus on Costs  Capex Allocation  Take-Aways MARCO PATUANO 25
    • Telecom Italia Conference Call Full‐Year 2011 Preliminary Results and 2012‐14 Plan OutlineBalance between Traditional Network and Innovative Enablers Maintenance and Development Innovation Enhance quality of voice and data Staying on top for a UltraBB trasmission through network - Experience: optimization - Best-in-class in LTE launch and coverage Fixed Steady increase in the ratio Fiber/Copper on Access Network - First-rate in fixed Network: NGAN roll- & out through FTT-x Mobile Excel in 2G & 3G network coverage Turning the Network into an All-IP Continue the efficiency programs to technology finance Innovation Capex (0.4 Bln € in 12-14) Cloud Infrastructures enhancement Policy Management Content Delivering Network Service Platform Profiling Autentication SIM QoS Differentiation Based MARCO PATUANO 26
    • Telecom Italia Conference Call Full‐Year 2011 Preliminary Results and 2012‐14 Plan OutlineStrengthen the Network for a Technological Leadership Capex Allocation UltraBB Roadmap Network Capex NGAN Roll-out 2014 Customer 100 Cities (including all Service 52% Optimization & Traffic main ones) covered through Driven FTTH&Cab Technology ~¼ of Housing units Network Develpment 13% Acceleration passed with >30 Mb/s Speed Network 35% Mobile Coverage Decrease Maintainance 2011 2014 2014 Optimize Network Investment to maintain excellent More than 40% of quality in TLC services 11% population covered by LTE Increase the effort in Network Development and 2011 2014 Innovation to confirm Technological Leadership HSPDA and grant the Best Experience on the Net 42 Mbps LTE MARCO PATUANO 27
    • Telecom Italia Conference CallFull‐Year 2011 Preliminary Results and 2012‐14 Plan OutlineAgenda  Telecom Italia Domestic 2011 Results  Telecom Italia Domestic Plan  Fixed Business  Mobile Business  Innovation  Focus on Costs  Capex Allocation  Take-Aways MARCO PATUANO 28
    • Telecom Italia Conference CallFull‐Year 2011 Preliminary Results and 2012‐14 Plan OutlineTake-aways on main TI Domestic trends Euro bln, Organic data  Macro-economic pressure, traditional services comoditization and MTR new glide path suggest a challenging scenario on consumer and Negative corporate spending and revenues trend, partially offset by browsing and middle Revenues innovative services increase. 19.03 single digit yoy trend  For 2012, we expect a mid single digit decrease on Top Line yoy trend. 2011 2012  Cost control: efficiency measures and operational business model Negative optimization on caring and go to market will counter margin erosion middle Ebitda 9.35 single digit  For 2012, we expect an Ebitida trend similar to Revenues one, with a yoy trend broadly stable Ebitda margin 2011 2012  Strengthen the Network infrastructure with a strong focus on new technologies and services, to support data wave of growth, mantaining Almost 3.0 Stable vs Capex quality and performance excellence as distinctive asset 2011  Domestic 2012 Capex : Almost Stable vs 2011 2011 2012 MARCO PATUANO 29
    • Telecom Italia Conference CallFull‐Year 2011 Preliminary Results and 2012‐14 Plan OutlineAgenda Back Up MARCO PATUANO 30
    • Telecom Italia Conference CallFull‐Year 2011 Preliminary Results and 2012‐14 Plan OutlineDomestic Wireline Revenues Euro mln, Organic Data, % FY10 FY11 YoY % Total 14,077 13,542 (3.8) Sparkle Group 1,528 1,393 (8.8) Domestic Core Services 12,260 11,884 (3.1) Voice & Access 6,036 5,607 (7.1) Internet 1,688 1,641 (2.8) Business Data 1,204 1,197 (0.6) National Wholesale 3,093 3,176 2.7 Other  240 262 n.m. Products 611 541 (11.5) Elimination (322) (276) 14.3 MARCO PATUANO 31
    • Telecom Italia Conference CallFull‐Year 2011 Preliminary Results and 2012‐14 Plan OutlineDomestic Mobile Revenues Euro mln, Organic Data, % FY10 FY11  % YoY Total 7,657 7,114 (7.1) Wholesale 285 203 (28.7) Retail 7,372 6,911 (6.3) o/w Services 7,116 6,552 (7.9) o/w Business Generated  (*) 6,165 5,766 (6.5) o/w Outgoing Voice (**) 4,123 3,731 (9.5) o/w VAS 2,042 2,034 (0.4) o/w Incoming 951 786 (17.4) Handsets 256 359 40.2 Total Retail Services Revenues net of Incoming (*) (**) Including Roaming & Visitors MARCO PATUANO 32
    • Telecom Italia Conference Call Full‐Year 2011 Preliminary Results and 2012‐14 Plan OutlineDomestic Efficiency : Delta Cash Cost by Quarter Delta Cash Cost FY 11 vs FY 10  Abs by Quarter  Abs FY ‘11 ’11 vs ‘10 1Q 2Q 3Q 4Q Total Opex* 9.682 -585 -182 -187 -121 -95 ITX 2.332 -356 -124 -123 -84 -25 Handset 997 +112 -3 +15 +17 +82 Mktg & Comm. 1.976 -82 -3 -51 -27 - Industrial 945 +10 -7 -7 +14 +9 Personnel 2.975 -243 -54 -38 -46 -105 G&A & Other ** 457 -26 +7 +22 -1 -2 Total 2.977 -130 -89 -40 -9 +8 Capex Total -715 -271 -227 -130 -87 Cash Cost 12.659 * Costs related to credit management are reclassified from G&A & Other to Mktg & Sales **Includes Other Operating cost/Income and Capitalized Costs MARCO PATUANO 33