CONNECTED FUTURE TO THE COMPANY PROFILE

Transcription

1 CONNECTED TO THE FUTURE COMPANY PROFILE

2

3 CONNECTED TO THE FUTURE COMPANY PROFILE

4 CONTENTS 19 READ MORE THROUGH THE AUGMENTED REALITY The document is enhanced with special interactive contents. Download Telecom Italia L Editoria+ App (from Android Play Store and ios itunes) and you can access videos and other materials. To access the augmented contents, just switch the app on and, keeping the smartphone about cm away, point with the camera at the paper image you re interested in, as long as it has the image of the smartphone with an eye.

5 LOOKING TO THE FUTURE THE FUTURE IS INNOVATION THE FUTURE IS FOR EVERYONE THE FUTURE IS YOUNG Find out more online: telecomitalia.com/company-profile/eng

6 LOOKING TO THE FUTURE LOOKING TO THE FUTURE INNOVATION, PROFITABILITY AND SUSTAINABILITY ARE THE KEYS TO THE VISION OF THE GROUP S FUTURE, AS TELECOM ITALIA MOVES TO CONSOLIDATE ITS PRODUCTS AND SERVICES UNDER A SINGLE BRAND: TIM. Giuseppe Recchi Chairman Giuseppe_Recchi Invest and grow: this is the Group s strategy for becoming Italy s digital partner, continuing to drive relentless technological progress and developing infrastructures and innovative services. As doing so, Telecom Italia shall be proud in the knowledge that it is acting as an engine for growth in the national economy. The Company s plan will unfold against a background characterized by changes in the telecoms sector and the commitments of the European Digital Agenda, helping people and businesses toward an increasingly interconnected digital life. Digitalization presents a huge growth opportunity for the people of Italy and Italian businesses, all of which is rooted in future-proof network infrastructures and technologies - the focus of Telecom Italia s Strategic Plan Technology, innovation and skills are the cornerstones of the Group s business strategy in Italy and Brazil, but that is not enough saw confirmation of the Company s evolution toward a more sustainable and inclusive vision of the future, allowing Telecom Italia to contribute to the creation of shared value, delivered through economic value that in turn brings benefits for society. TOWARD A NEW VISION: THE SHIFT TO A DATA CENTRIC MODEL FROM A VOICE CENTRIC MODEL: Leading-edge infrastructure and a broad range of services to assure web connection and data transmission at all times and in any place, opening a world of opportunities for business and individuals. For example: services for the smart city, remote healthcare and smart mobility. CONVERGENCE BETWEEN TELECOMS AND DIGITAL CONTENT: The data centric model has contributed to the success of Over The Top companies like Google, Facebook and Amazon, and of content providers that do not have their own network but use the web to distribute content. Telecom Italia is building alliances with these enterprises to expand its range of services. For example: the agreement with Sky to distribute highquality content. 4

7 THE NEW STRATEGIC PLAN The goal set out in Telecom Italia s new industrial plan is to create shared value through a long-term sustainable business model resting on several pillars: cutting-edge infrastructure, innovative digital services, brand unification and renewal, and personal development. This forms the Group s strategy for the next three years, backed by objective and measurable targets: in Italy, stabilizing EBITDA by 2016 and returning to growth in 2017, partly through an ambitious efficiency improvement program worth more than 1 billion euros; in Brazil, launching a targeted plan to strengthen TIM s strategic and competitive positioning as a pure mobile operator. Marco Patuano Chief Executive Officer MarcoPatuano By taking these steps, Telecom Italia will maintain its leadership in a world undergoing profound change, where the key words will increasingly be proximity (knowing the customer), quality (at every stage of the service experience), and security (of online personal data). The plan builds on the approach taken in 2014, which enabled the Group to achieve major goals including continued recovery in Italy s mobile and fixed segments, full achievement of domestic efficiency targets, and a return to profit. TELECOM ITALIA S BUSINESS MODEL CREATING VALUE FOR THE BUSINESS AND FOR SOCIETY BUSINESS TRANSFORMATION Innovation Customer proximity Enabler of digital life Better customer experience CUTTING-EDGE INFRASTRUCTURE BRAND RENEWAL PERSONAL DEVELOPMENT PROCESS EFFICIENCY NEW CHALLENGES AND BUSINESS SUSTAINABILITY KEY POINTS OF THE PLAN 5

8 LOOKING TO THE FUTURE INCREASING INVESTMENT The investments set out in the plan will create the conditions for revenue growth generated by the spread of innovative digital services. The idea is to build on the foundations laid under the previous plan, which already saw connectivity and infrastructure at the heart of Group strategy. Telecom Italia is going to invest around 10 billion euros in Italy, of which 5 billion will be dedicated entirely to innovation, including 2.9 billion euros for the development of fiber (some 1.1 billion euros more than in the last plan). In Brazil, the Group will invest more than 14.5 billion reais (over 4 billion euros), extending 4G coverage to over 15,000 sites and 3G coverage to over 14,000 sites by We will stabilize domestic EBITDA in 2016 and restore it to growth in Meanwhile, greater profitability from innovative services, increased cash flow and a strong focus on costs and efficiencies will help to reduce the net debt/ebitda ratio to 2.5x in MORE INVESTMENTS IN INNOVATION IN ITALY COMPARED TO THE LAST PLAN PLAN PLAN OTHER INVESTMENTS INVESTMENTS ON INNOVATION OTHER INVESTMENTS INVESTMENTS ON INNOVATION RESULTS ,3% REVENUES EBITDA PROFIT ADJUSTED NET FINANCIAL DEBT 29% 71% Domestic Brazil Other activities (including cost of licences in LatAm) HIGHLIGHTS FIRST NINE MONTHS 2015 The results of the Group at 30 September 2015 showed total revenues for 14.9 billion euros, 6.1 billion euros of EBITDA and profit for the period attributable to Shareholders of the Parent company were 362 million euros. The figure would have exceeded 1 billion euros without counting non-recurring items and income and those connected with the bond buyback, as well as by the dynamics of the valuation of the Mandatory Convertible Bond issued late 2013 with a maturity at three years. 6

9 FINANCIAL MANAGEMENT The new industrial plan is complemented by sound financial management to support investments in the period Generating operating cash flow is an important aspect of the Group s financial structure; it will remain positive and continue to rise throughout the life of the plan. Piergiorgio Peluso Chief Financial Officer Significant efficiency improvements will also be made, with expected total savings of 1.7 billion euros in the period , including more than 1 billion in operating expenses and around 700 million in capital expenses. Debt is forecast to fall an average of 700 million euros in each year of the plan, aided by an influx of 1.3 billion euros from conversion of the convertible bond in November This will bring down the net debt to EBITDA ratio from 3x at the end of 2014 to around 2.5x by the end of The financial community and rating agencies have welcomed the plan, highlighting the positive correlation between the additional planned investments and the prospective stabilization of the business, which in turn will make the Group s financial position more sustainable. This is borne out by the fact that bonds issued in the first quarter of 2015 were particularly well received by the financial community, allowing the Group to issue a note with a yield of 3.25% - the lowest ever for Telecom Italia, taking full advantage of more favorable market conditions. OBJECTIVES OF THE PLAN ORGANIC DATA GROUP DOMESTIC BRAZIL EBITDA Growth year on year CAPEX (1) Cum ADJUSTED NET FINANCIAL DEBT EBITDA ) Including the extension of the GSM license in Italy 2) On reported EBITDA Overall, while still taking care to cut debt - assisted by the benign situation on the markets - the aim for the three-year period is to stay focused on supporting investments and cash generation, with a view to ensuring sustainability and stability. Positive share performance from January 2014 onwards - with ordinary shares up 61.2% and savings shares up 52.8% at 30st September is testament to the financial community s appreciation of the Group s results and future plans. MktCap TI 30 Dec billion euros MktCap TI 30 Sept billion euros TI Sav. +52,8% TI Ord. +61,2% Index FTSEMIB +12,3% Index TLC Europe +11,7% 31 ST Dec ST Mar TH Jun TH Sep ST Dec ST Mar TH Jun TH Sep December March June September December March June September

10 LOOKING TO THE FUTURE THE ROLE OF TIM BRASIL The Group s presence in Brazil allows it to develop its business in a country with high growth prospects. Thanks to its strong identity as a pure mobile operator, the TIM Brasil brand has always had a reputation in Brazil for quality and innovation. The company offers its customers mobile and convergent services and is the second largest operator in the country, with 72.6 million mobile subscribers at the end of September 2015 and a 26% market share. Rodrigo Abreu Chief Executive Officer TIM Brasil rmabreu M 2015 The Group is going to invest more than 4 billion euros in Brazil between 2015 and 2017, including a significant rise in spending on innovation. The country presents important growth opportunities, with broadband penetration in Brazil at 32% in the fixed segment and 63% in mobile. The goal is to reach around 80% 4G mobile broadband coverage among the urban population by the end of Operations in Brazil will be driven by commercial development, with the launch of new services, the optimization of the network costs and the determination to continue to pursue efficiencies. INVESTMENT PLAN GREATER INVESTMENTS IN INNOVATION INCREASED COVERAGE OF BRAZIL S URBAN POPULATION 100% 100% 35% 48% 50% 50% 65% 52% 95% 95% 86% 78% 75% 27% 0% 0% e e Traditional Innovative 2G 3G 4G 8

11 A NEW BRAND STRATEGY Connectivity and services - for people, households and businesses - all under a single name: TIM. By 2016, TIM will be the Group s only trading name - a change that will unite the company s various identities in a single brand, without distinctions between fixed, mobile or Internet services, and rooting TIM s modern, dynamic spirit in the dependability of Telecom Italia. Carlotta Ventura Director Brand Strategy & Media carlottaventura This simplification of the brand architecture will mean that employees will all be working under a single shared identity; for TIM s customers it means all-round easier relations with the company: from products and services to the various contact points - online, in store and billing. The Group will move into the future with respect for its tradition. Since its foundation 20 years ago, TIM has been synonymous with innovation, sharing and freedom. Its ethos: Freedom to communicate, because communication is freedom. Accordingly, TIM is entrusted with the task of enabling of all of our digital lives, because a culture of widespread access means a future that benefits more and more people. TIM means being connected to life - always, anywhere and better. THE NUMBERS OF THE GROUP September 2015 TIM S MANIFESTO TIM S NEW POSITIONING Communication is freedom. Freedom to communicate. In the 21 st century only those who can share ideas and experience are really free to pursue their aspirations. And to think big. And only a group who think big can actually promote progress and prosperity, ensuring the full freedom to communicate. Always. Anywhere. Better. Connected to life. Always. Anywhere. Better. We put the best fixed and mobile networks at the service of the needs of anyone, ensuring the best quality and safety in the experience of content, supported by a competent and qualified service, accessible across all channels, online and offline. 9

12 LOOKING TO THE FUTURE TIM - THE ENABLER OF DIGITAL ITALY TIM has a responsibility to guide Italy toward the goal of full digitalization. As such, the repositioning affects all its stakeholders, whether internal - TIM staff - or external - institutions and the public. TIM aims to be more than just a name on a product, but to represent a distinctive set of values, approaches and responsibilities to customers and society. A range of initiatives has been launched in order to make this a reality: projects to teach young people about responsible Internet use are reaching thousands of children and families through sport and school. Security and Support are the pillars of TIM s strategy. Accordingly, TIM is investing to stop cyberbullying and phone use while driving, and to promote awareness of coding as a career opportunity. The third pillar is service quality. TIM publicizes the hard work of its engineers laying thousands of miles of fiber, using adverts in major newspapers and the #KMDIFUTURO campaign to engage more sophisticated online users. The EXPO, meanwhile, offers an extraordinary opportunity to showcase the smart city of the future. liveontim.tim.it/kmdifuturo Lastly, TIM also provides support for startups through dedicated programs, in partnership with TIM #Wcap, accelerators and TIM Ventures. The aim is to seize every opportunity to satisfy customers requirements - both now and in the future - firm in the belief that TIM is the future of Telecom Italia. THE NEW TIM Health Digital Identity The new TIM combines the dynamism and forward-looking approach of TIM, with the security and reliability of Telecom Italia. Education Payment Government Car A single brand responds to a single value system and a single need (to be connected to life). A single brand simplifies customer experience and responds better to the need for services any time, anywhere, and through every channel. Home City 10

13 THE FUTURE IS INNOVATION INNOVATION IS THE REAL DRIVING FORCE BEHIND TELECOM ITALIA S GROWTH, AND THE GROUP HAS ALWAYS INVESTED TIME AND RESOURCES IN IT. Mario Di Mauro Director of Strategy and Innovation Telecom Italia has been a consistent leader in technological development, and while 2014 saw celebrations for 50 years of research at the Group, with the 2015 Expo the conversation has already shifted to new scenarios. Telecom Italia undertakes research and supports new ideas not only in its own laboratories, but also at universities where the Company has agreements for Joint Open Labs and through initiatives to help startups (TIM Ventures and TIM #Wcap). The Group faces a constant challenge, stemming not only from the digital revolution, but from the entire international industry s shift toward new business areas and new technologies. Nevertheless, Telecom Italia is in the front line, investing more than 5 billion euro in innovation alone in the next three years. TIM FOR EXPO TIM IS THE OFFICIAL GLOBAL PARTNER OF EXPO2015 WITH A SERIES OF PROJECTS INITIATIVES ON CONNECTIVITY SERVING VISITORS AND THE DAY-TO-DAY LIFE OF THE CITY telecomitalia.com/expo2015 EXPO THE NUMBERS 11

14 THE FUTURE IS INNOVATION 50 YEARS OF INNOVATION CSELT performed initial tests with optical fibers The first fiber optic connections were made between two urban exchanges MPEG, the essential audio/video standard which would lead to mp3, is created Facial animation driven by speech synthesis gave rise to Joe Mail, anticipating the avatar concept The CSELT was set up The first fiber optic cables were laid in the CSELT yard Musa is the first speaking calculator with an artificial voice The CSELT and CNR made the first video conference connection on Mount Everest Ecosirio is the prototype of low environmental impact terminal NETWORK INNOVATION Roberto Opilio Director of Operations Telecom Italia s commitment to constant technological renewal is well established, with investments of nearly 3 billion euros in Italy alone in Now, with a further acceleration under the plan, the Group is aiming for rapid development of next-generation infrastructure, to ensure rising levels of quality, speed and security. NGAN (NEXT GENERATION ACCESS NETWORK): THE DEVELOPMENT OF FIBER High-speed networks built on fiber-optic cables. This first step is to take the fiber to the cabinet (FTTCab), and then to connect it to the home. Telecom Italia is also investing in fiber to the home (FTTH), for an even faster network. FIXED NETWORK ADSL FTTCab FTTH* FIBER BUSINESS/TOP MAX. DOWN-LOAD SPEED (DL) MAX. UPLOAD SPEED (UL) G LTE (LONG TERM EVOLUTION): THE MOBILE EVOLUTION 4G LTE is the evolution of mobile Internet access toward ultrabroadband or ultra-internet. It is the most advanced evolution of the UMTS network. VoLTE (Voice Over LTE), a next-generation technology, will enable super high-quality calls and a wide range of mobile services. MOBILE NETWORK EDGE HSPA LTE LTE ADVANCED * available in Milan By 2017, Telecom Italia aims to cover 75% of homes with the ultra-broadband NGN, with an increase in FTTH technology, and to reach 97% of the population with 4G LTE network services, laying the foundations for the development of VoLTE (Voice Over LTE). IIIQ 12

15 The first prototypes for modems and domestic set-top boxes, introduction of Access Gateways LTE technology allowed the Turin Marathon to be broadcast live on HD TV Telecom Italia enters the board for the definition of the new NFV (Network Function Virtualization) standard Virgil was created, the robot that interacts with the surroundings environment and people The first video call via the European 3G network took place in Turin The CSELT labs developed the 4G network with field testing of the first high-definition video call The spread of LTE Advanced technology started on TIM network Service Robotics: in Turin, the application of robotics to guarantee more livable and safe cities. LivLab, Livorno Coop members experience services dedicated to consumer habits based on Big Data ONLINE DATA SECURITY: CYBERSECURITY The security of personal data and communications is one of the key themes of the digital revolution: Telecom Italia s Cybersecurity department is one of the biggest in Europe, working to protect data and stop hacking. Nuvola IT Urban Security is a cloud solution used by local police in Milan and Rome to gather information on the ground and to map out and manage worsening situations. TIMProtect offers complete device protection from typical online threats, thanks to advanced and innovative technology. The service includes parental control, online transaction protection and privacy, and anti-virus protection. CYBERSECURITY - THE NUMBERS Participation in international initiatives ACDC is the first Advanced Center for the Defense of Cyberspace. Established in 2013, the project involves 28 partners in 14 European countries and depends on the principle of knowledge sharing. Nemesys involves six European countries and was set up in It focuses on protecting mobile devices, creating a detailed database of smartphone vulnerabilities and an innovative security framework. TELECOM ITALIA CENTERS OF EXCELLENCE: SECURITY LAB Studies cybersecurity threats, analyzes new risk scenarios, looks for innovative tools, tests them and holds lab trials to identify the best solutions. SECURITY OPERATION CENTER Security Operation Center (SOC) is a monitoring center that manages security alarms from telecoms networks and data centers that host Telecom Italia and client applications. telecomitalia.com/cybersecurity 13

16 THE FUTURE IS INNOVATION CONNECTIVITY FOR EVERYONE New technologies lead to new services. This is such a close relationship that it influences all aspects of what Telecom Italia offers: both content and how to access it. Widespread access and enhanced connectivity are, in simpler terms, Telecom Italia s goal of offering more and more people services that are smarter, more fun, more useful, from different places and different devices. It means being able to choose among offers ranging from traditional and fixed broadband services - now increasingly with voice and connectivity bundled together - to convergent fixed and mobile services. TV video content is another particularly vibrant area. DAILY LIFE AND FREE TIME Solutions that are useful to everyone, exploiting the potential of fixed and mobile ultra broadband, are an increasing part of our daily life. In schools, for example, TIM College is the first offering on the Italian market providing a tablet containing all school books. Free time is also undergoing a digital revolution, thanks to platforms accessible everywhere, through different devices. People now stream music on their phones and play it at home using a tablet or PC; films are watched using home broadband on the household TV, PC and tablet, even simultaneously on several devices, deciding how and when to continue their own private screening. TIM Music currently offers 13 million tracks. In 2014, over 2 million customers listened to around 200 songs a month. TIM Vision, with 6,000 films, TV series and children s programming was used more than 11 million times - double last year s figure, proving the growing interest in the service. TIM Reading is a bookshop of 75,000 Italian-language e-books, as well as newspapers and magazines. Finally, the TIM Games platform offers a catalog of 1,700 games, which is constantly being updated. Stefano De Angelis Consumer Director TV GOES FIBER OPTIC Fiber-optic TV is here, thanks to the partnership between Telecom Italia and Sky launched last year. This is further confirmation of the natural convergence between media and telecoms, which through quadruple play offerings are bringing fixed and mobile phone services together with broadband and ultra-broadband connectivity, as well as premium television content accessible anytime, anywhere, on all web-connected devices. TIM Sky 14

17 FOR BUSINESS Simone Battiferri Business Director SimonBattiferri Alongside a functioning administrative system, the driving force behind development and quality of life is an ecosystem of businesses that generate value for employees and society. Telecom Italia s business solutions are based on technological innovation, enabling increased productivity and efficiency. From the Nuvola Italiana - a platform that provides Hosting, Cloud Storage, Disaster Recovery, IT security services and communication - it is a short step to the NuvolaStore. NuvolaStore is a marketplace for small and medium-sized enterprises to find, buy and manage the most advanced IT solutions quickly and easily. Services include Digital Invoicing, a reality that both government and business must now embrace, as well as secure digital signatures, providing a new way to sign documents using a smartphone instead of the usual devices like smart cards or tokens. Now, the Extended Expo project offers the chance to get to know the advanced digital solutions that Telecom Italia is developing, either alone or with partners. Thanks to the development of mobile platforms with technologies such as NFC, Augmented Reality, Visual Search, new solutions are close at hand: integrated solutions for tourism, info-mobility, geolocation services, e-commerce, digital signing and much more. Companies and institutions that sign up to this initiative benefit from high visibility in the digital showcase of the Smart City Expo 2015, with the chance to organize and take part in conventions, workshops and meetings, and to screen their own videos in Expo locations. extended.expo2015.org COMMITMENT TO THE GOVERNMENT Telecom Italia is working to cut the costs and improve the efficiency of government, with a series of initiatives involving local organizations and a diversified range of solutions to simplify citizens relationships with institutions. WORKING WITH LOCAL AND REGIONAL AUTHORITIES FOR DIGITAL DEVELOPMENT The Italia Connessa contest is part of the project of the same name, which includes a range of initiatives with Italian regions and municipalities for the development of services and digital infrastructure in Italy. The contest, now in its second edition, is for Italian municipalities with between 15,000 and 50,000 residents, calling for them to put forward a digital development plan to streamline administrative procedures and provide digital services for citizens, businesses and local authorities. The winning municipality with the best plan is awarded priority installation of fixed and mobile ultra-broadband networks. italiaconnessa.telecomitalia.com FOR DIGITAL GOVERNMENT DIGITAL IDENTITY DIGITAL GOVERNMENT SOLUTIONS FOR HEALTH Trusted Identity and Mobile Identity services to allow user identities to be transmitted completely securely, using dedicated apps or latest generation SIM cards Paperless services based on cloud technology, e-invoicing and advanced digital signatures to optimize resources in complete security Apps to check ambulance equipment and access customer details or clinical files on the move or using a tablet. 15

18 THE FUTURE IS INNOVATION NEWS FOR OUR CLIENTS 17 TH MARCH 2014 Tlivetti presents its new system of Electronic Invoicing for companies. 2 ND APRIL 2014 Telecom Italia launches TIMProtect, a new service for the protection of tablet, smartphone, PC and Mac. 10 TH APRIL 2014 Telecom Italia and Sky: a strategic agreement for Pay TV contents on the new generation network infrastructure. 15 TH APRIL 2014 Tim Wallet: the first virtual wallet for TIM clients, which will replace in time the supports we are used to: credit cards, subscriptions, fidelity cards, personal documents, everything will be at our smartphones. 24 TH MAY 2014 New free App for ipad and iphone 187 Assistenza. 21 ST JULY 2014 Telecom Italia releases TIM College, an offer dedicated to students: a 3G connected tablet and a series of educational content in digital format. 31 ST JULY 2014 TIM 4G leader in Italy: already covering 1,138 municipalities equal to 60.5% of the population. 13 TH AUGUST 2014 Cubogiochi becomes TIMgames, the new, up-to-date catalog of games to download on tablets or smartphone. 22 ND OCTOBER 2014 Telecom Italia presents Nuvola Store at Smau 2014, the cloud marketplace for small companies to let them choose, buy and manage on their own the best ICT solutions for their business. 24 TH OCTOBER 2014 Telecom Italia launches the first call center accessible to deaf people, with the new app Pedius. 28 TH OCTOBER 2014 TIM presents TIM SmartPAY, the first pre-paid card for mobile payment for TIM clients. 5 TH NOVEMBER 2014 Telecom Italia is the first in Italy to launch 4G+ on the TIM network. 13 TH DECEMBER 2014 IoRiciclo by TIM is the first commercial initiative related to environment protection for the recycling of the old smartphones. 25 TH FEBRUARY 2015 Telecom Italia introduces Digital Invoicing on Nuvolastore for professionals and small companies. 9 TH MARCH 2015 Green light to Superfibra, the new solution to browse from home at a speed of 50 Mb/s for downloads and 10 Mb/s for uploads 31 ST MARCH 2015 TIM launches TIM2go, first initiative of tablet-sharing for EXPO2015, in collaboration with Samsung. 16 TH APRIL 2015 TIM and Sky launch fiber-optic TV. 30 TH APRIL 2015 TIM introduces the first Italian Smart City at Expo TH MAY 2015 Free home insurance with phone bill for TIM clients. 18 TH JUNE 2015 TIM holds its second Energy Day to share company s results related to its energy saving and environmental protection policies as well as its green projects. 29 TH JUNE 2015 TIM Italia Connessa: the contest for the digital development of Italian towns starts its third edition. 29 TH JULY 2015 Telecom Italia brings Netflix to TIMvision. 2 ND SEPTEMBER 2015 TIM Smart is the quadruple-play offer including fixed and mobile telephony services, Internet connectivity and TV. 30 TH SEPTEMBER 2015 Premium Online TV programming is on TIM s broadband and ultrabroadband networks thanks to the agreement with Mediaset. 16

19 THE FUTURE IS FOR EVERYONE A NEW IDEA OF SUSTAINABILITY, IN WHICH BENEFITS FOR THE COMPANY ARE COMBINED WITH BENEFITS FOR SOCIETY. Marcella Logli Head of Corporate Social Responsibility and General Secretary of the Telecom Italia Foundation marcellalogli We aim to create shared value, which means generating both value for the company and social value - an approach that provides an innovative framework for our strategic business decisions. By crossing global trends and the country s social needs with the goals of the Italian digital agenda, and matching them with the Group s areas of expertise, we have identified three key areas for the creation of shared value: Digitalization, connectivity and social innovation Digital culture Environmental protection Each of these categories can be split into specific action areas, where we develop projects to create value for the business and for society. #wesharethefuture COMMITMENT REWARDED For 11 consecutive years, Telecom Italia has been included in the Dow Jones Sustainability Indices - the most important and selective in existence. CARBON DISCLOSURE PROJECT In 2014, the company was also included for the first time in the Carbon Disclosure Project s Climate Disclosure Leadership Index (CDLI). FOR SCHOOLS EducaTI, Telecom Italia s digital education project, aims to help implement the Italian Government s plan to digitize education. It accompanies efforts to improve digital infrastructure in schools and to test technological platforms for digital teaching. Working together with Italy s Ministry of Education, the EducaTI program is developing three initiatives: PROGRAMMA IL FUTURO DIGITAL TUTORS YOU TEACH Coding the Future Coding lessons in primary schools to teach children the value of computational thinking and improve their knowledge of the digital world. Within three years, the project will have visited 40% of Italy s primary schools. Digital training for primary school teachers, with the aim of creating an internal digital tutor at all of Italy s 15,000 primary schools within three years. A creative contest asking youngsters to make a video lesson for their teachers on how to use social networks. The project reached all secondary schools in its first year. Telecom Italia also runs WithYouWeDo, a crowdfunding platform for projects associated with three action areas: Digital Culture, Social Innovation and Environment. So far, 100 projects have been put forward, with 15 being added to the platform. 17

20 THE FUTURE IS FOR EVERYONE FOR THE ENVIRONMENT In 2014 Telecom Italia organized the first Energy Day, one of the events backed by the European Commission as part of Sustainable Energy Week. During the Energy Day, a two-year deal with the Milan-based utility A2A was launched to cover all the Group s energy requirements in Italy from renewable sources. This will further help to reduce the environmental impact of Telecom Italia s activities, cutting CO 2 emissions by more than 70% in 2014 and REDUCTION IN CO 2 EMISSIONS in 2014 and 2015 thanks to the use of renewable energy FOR CULTURE PappanoinWeb, a multi-award winning initiative developed with the Accademia Nazionale di Santa Cecilia, brings together the Internet and classical music, expert musicologists and young people, concerts and chat forums. Telecom Italia FOUNDATION Telecom Italia Foundation restarts in 2014 with a new mission built around promoting a culture of change and digital innovation, whose main goal is to foster integration, communication, and economic and social growth in Italy. This marks a radical change in approach, enabling the Foundation to do more than just provide funding and instead to develop and deliver truly valuable projects in Italy and abroad. Its commitment to a more sustainable society centers around three new areas of action: Education For a more modern and digital school system. Culture of Innovation To be the leading presence in the industry, providing support for scientific and technological development. Social Empowerment To continue supporting social enterprises, helping them to be good at doing good. In 2014, Telecom Italia Foundation achieved major new objectives related to its commitment on social innovation and education. Working with the Fondazione Umberto Veronesi the Well Up app was created, which helps people to manage their health through a daily nutrition and healthy living program. Moreover, the Foundation has worked together with the Banco Farmaceutico Foundation to streamline the pharmaceutical donation process through a platform called DOLINE, which speeds up the virtuous buy-donate-distribute cycle for donors, pharmacists and charities. In the education sector, alongside Oxfam Italia, Telecom Italia Foundation has developed an international project to educate the new global citizens, involving 500 students and their teachers in Italy and Brazil. The Italy-Brazil partnership has led to the creation of an educational social network, giving pupils the chance to consider and discuss - in class and remotely with each other - issues surrounding active citizenship, the protection of environmental resources and access to technology. fondazionetelecomitalia.it 18

21 THE FUTURE IS YOUNG FOR TELECOM ITALIA, THE KEY TO SUCCESS IS PEOPLE, AND THEIR SKILLS AND ABILITY TO INNOVATE. THE GROUP PLACES ITS TRUST IN YOUNG PEOPLE, NOT ONLY BY RECRUITING THEM AS DRIVERS OF CHANGE WITHIN THE COMPANY, BUT ALSO BY HELPING THEM TO DEVELOP THEIR ENTREPRENEURIAL INITIATIVES. Mario Di Loreto Value Director New business challenges, closer relationships with customers and Telecom Italia s growing role as an enabler of Italian digital life mean that it must develop new skills and abilities within the company. The Group solution comes in two parts: investing in developing in-house expertise, and recruiting young people to inject fresh knowledge and energy into the company. A certified Top Employer for the third consecutive year The new industrial plan maps out a blueprint for Telecom Italia to overhaul internal skillset and secure a generational shift over the next four years. Starting back in 2013, the Group hired 200 people to undergo a two-year training program. It all comes down to rethinking how Telecom Italia sees its business: a business that believes in the future and intends to contribute to the cultural, social and economic transformation of Italy. This role underscores Telecom Italia s impact on the economy, where its business currently generates around 0.7% of Italy s GDP (Gross Domestic Product). FIND OUT ABOUT THE OPPORTUNITIES WITHIN THE GROUP telecomitalia.com/carriera linkedin.com/company/telecom-italia IN % 20% 63.3% 36.7% 51.8% 16.1% 32.1% Abroad Italy Women Men < 32 year old > 45 19

22 THE FUTURE IS YOUNG AGE CURVE EVOLUTION Age TODAY % % % % % % % % % % Age Figures refer to Telecom Italia S.p.A. FOCUSING ON PEOPLE: ENSURING WELL-BEING AND DEVELOPING SKILLS Telecom Italia s people want opportunities for growth, new services to help achieve work-life balance, the option to move department and the chance to express their potential. The Group has translated these needs into new personnel policies and a well-being at work program that covers six key areas. FACTS AND FIGURES ON PERSONAL WELL-BEING INITIATIVES 21 nurseries 4,000 staff members enrolled with our online university partner 740 loans granted 2 dedicated pension funds 38 sites providing laundry services, newsagents and assistance with bureaucratic paperwork 16,000 people transported daily by shuttle bus or other mobility services Personal support Work-life balance Family Services PEOPLE CARING Social engagement Fostering diversity Well-being and health 35 members of staff dedicated to promoting diversity (Diversity Board) 3 associations to support diversity More than 380 staff members have used the People Caring center Dedicated health insurance 70 blood donation days 900 children sponsored by staff through long-distance adoption CHANGING HOW WE WORK THROUGH TECHNOLOGY Telecom Italia makes smart working a reality. The Group s technologies are enabling Italian business to organize their work efficiently and innovatively, while also adopting a modern approach to looking after people. SMART WORKING = TELEWORKING ITALY IS READY * Italian businesses that have launched smart working initiatives Smart working goes well beyond the old concept of teleworking; it means rethinking how the business is organized, using new technologies to allow greater flexibility in the use of space, time and resources. Technological innovation is an essential component in the success of these plans: from mobile applications to virtual receptionist services, services for intelligent mobility, cloud computing, secure document sharing, and even intelligent, connectible and flexible office furniture. Telecom Italia has been working on these projects and services for a long time. Italian companies that have truly adopted smart working (led by the food sector, services and ICT) Estimated productivity increase in Italy thanks to smart working * Smart Working Observatory, Politecnico di Milano 20

23 TIM S NEW VALUES: WE ARE RESPONSIBLE LEADERS WE AIM TO GROW We understand that being a leader means to look beyond the horizons of our daily activities, to share knowledge, to serve as a good example, to know how to be role models. We share the commitment of being personally responsible; this goes for every level and for every profession in our company. We choose the culture of inclusion because each person s contribution, both individually and as part of a team, is a part of our heritage. We consider confrontation as an opportunity for mutual growth and we pledge to encourage continuous and constructive dialogue with everyone. We are proud of what we have achieved in spearheading the development of telecommunications in our country. We keep our passion alive and continue to feed on our curiosity, being open to what the world offers to us. We always aim to improve: for this reason we undertake new projects and initiatives with courage and conviction, willing to dedicate our commitment and our expertise in the foundation of tomorrow. We work every day for a financially sustainable future for our company. WE STRIVE FOR EXCELLENCE WE LIVE BY AND FOR OUR CUSTOMERS We believe that doing things well is a source of satisfaction. Through creativity we aim to make our work excellent, pushing ourselves towards innovation and concrete realization. We put the needs of our customers, Individuals and Organizations, at the forefront of our decisions. We regularly improve our processes to ensure the quality and safety of the country digital experience, offering a competent service, accessible across all channels. We believe that each individual s contribution should serve the company ethos by sharing best practices and information. We work to enable people to communicate, making life richer, easier and full of opportunities. As women and men working for Telecom Italia, we will evolve and develop, alongside our customers, leading to mutual enrichment. The value of our expertise and our capability of innovation is expressed through our technologies improving the lives of our customers. We aim to empathize with our customers expectations and aspirations, embracing their needs, desires, dreams and creating a valuable experience and relationship with Telecom Italia. 21

24 THE FUTURE IS YOUNG TIM #WCAP: TRANSFORMING TALENT AND IDEAS INTO INNOVATIVE BUSINESSES AND ENTREPRENEURS Putting faith in young people means helping them to conceive and develop projects inspired by new ways of doing business. Since 2009, TIM #Wcap Accelerator has been selecting, funding and supporting the growth of digital startups aiming to become marketready enterprises. It launched a new Call for Ideas in March 2015, which led to the selection of 40 projects that were granted a total of 1 million euros in funding. The projects will also take part in an accelerator program designed to drive them forward in technological and business terms, hosted at one of the four TIM #Wcap Accelerators in Milan, Bologna, Rome and Catania. Thanks to Albo Veloce (our fast-track registration process), the startups will also become certified Telecom Italia suppliers. wcap.tim.it WorkingCapital workingcapital Last year, Telecom Italia launched another tool to support TIM #Wcap: TIM #Wcap Crowdfunding, a platform for ideas, projects and businesses to attract funding. And rounding off the process of open innovation that begins with TIM #Wcap, TIM Ventures financial vehicle invests in the best startups and brings them to market. FACTS AND FIGURES ON TIM #WCAP ( ) THE STORY OF TIM #WCAP 2009 TIM - through #Wcap - is one of the first organizations to talk about startups and innovation business and research projects supported 2011 The new edition attracts over 2,000 projects 2012 TIM #Wcap awards 20 grants 2013 Three accelerators opened in Milan, Rome and Catania. 30 teams are awarded a grant and 15 join the accelerator program teams received grants and a place on the accelerator program. For the first time, the Call for Ideas was also open to international teams. 22

25 TIM VENTURES HELPING INNOVATIVE DIGITAL BUSINESSES TO GROW The early stages of a digital company are extremely important. TIM Ventures was formed to help them to consolidate their business (which must operate within the Internet, digital life, e-learning, mobile evolution, e-health and green solutions) and provide capital for growth. Formed in 2014, TIM Ventures is looking to invest 4.5 million euros over three years - and to stimulate domestic and international investors to add a further 4.5 million euros - in order to seek out innovative solutions and the best Italian startups, providing support for the next generation of great founders. From the end of 2014 to March 2015, TIM Ventures invested a total of 850,000 euros in four startups: Pedius, which is developing an app to allow deaf people to use the telephone; Wiman, which is creating a service for wifi-sharing in commercial premises; Eco4Cloud, a software solution to bring down the energy costs of data centers; and Oilproject, a digital learning platform, providing a wide range of lessons every month to a million students. timventures.tim.it TIM_Ventures TIM BRASIL FOR YOUNG PEOPLE Among other initiatives, Tim Brasil s Instituto TIM supports the Brazilian government s commitment to broaden the reach of professional and technical training courses, including the development of a distance-learning platform called TIM Tec. Anyone can access courses on the TIM Tec platform, whose source code is available to teaching institutions wishing to use it for free. TIM Tec uses the concept of Massive Open Online Courses (MOOC) - training courses delivered online to a high number of users. The courses are free and intended for students at secondary schools and technical institutes. timtec.com.br TIMTec_oficial 23

26 21 MONTHS OF TELECOM ITALIA (JANUARY SEPTEMBER 2015) 20 TH FEBRUARY 2014 Telecom Italia makes its seed investment debut to support digital start-ups announcing a 4.5 million euros investment in 3 years. 27 TH FEBRUARY 2014 Recommendations for Corporate Governance in Telecom Italia: the Board of Directors invites the shareholders to consider skills, professionalism and independence of the new Council. 16 TH APRIL 2014 Giuseppe Recchi is the new Chairman of Telecom Italia. 23 RD JUNE 2014 Telecom Italia closes deal with A2A to buy energy only from renewable sources. 30 TH JUNE 2014 The agreement between Telecom Italia Media and Gruppo Espresso establishes Persidera, the leading independent network operator in Italy. 28 TH AUGUST 2014 Telecom Italia and Vivendi in Brazil to develop ICT, Media & Entertainment markets. 11 TH SEPTEMBER 2014 Telecom Italia is best in class in Dow Jones Sustainability Indexes World and Europe TLC. 5 TH NOVEMBER 2014 Telecom Italia enters the Climate Disclosure Leadership Index Italy. 12 ND JANUARY 2015 Telecom Italia issues an 8-year bond for 1 billion euro, funding below its average cost of debt. 20 TH FEBRUARY 2015 Telecom Italia presents 2014 yearly results and 2015/2017 new strategic plan. 20 TH MARCH 2015 Telecom Italia places a 2 billion euros unsecured equity-linked bond. 27 TH MARCH 2015 INWIT (Infrastrutture Wireless Italiane S.p.A.), part of Telecom Italia Group, is given the management of the business unit including the 11,500 towers with mobile telephony equipment of Telecom Italia and other operators. 27 TH MARCH 2015 After the break-up of Telco, Telefónica s administrative rights on Telecom Italia are suspended. 14 TH APRIL 2015 Telecom Italia announces tender offers. 29 TH APRIL 2015 TIM #Wcap Accelerator introduces Call for Ideas 2015 to select 40 digital economy startups. 21 TH MAY 2015 Telecom Italia announces Initial Public Offering of up to 40% of INWIT. 22 ND JUNE 2015 INWIT s first day of trading. 14 TH JULY 2015 TIM turns 20 years old and the brand becomes the Group s only trading name. 10 TH AUGUST projects receive funding for over 50 thousand euros thanks to Withyyuowedo, TIM s crowdfounding platform. 10 TH SEPTEMBER 2015 For the twelfth consecutive year Telecom Italia has been confirmed in the Dow Jones Sustainability Indexes World and Europe. 21 ST SEPTEMBER 2015 TIM Ventures invests in Crowdway, a startup focused on big data analysis for financial markets. 29 TH SEPTEMBER 2015 Merger of Telecom Italia Media S.p.A. into Telecom Italia S.p.A. Registration of the deed of merger. 24

27

28 telecomitalia.com/company-profile/eng