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TELECOM ITALIA CAPITAL (Incorporated with Limited Liability Under the Laws of the Grand-Duchy of Luxembourg)

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TELECOM ITALIA CAPITAL (Incorporated with Limited Liability Under the Laws of the Grand-Duchy of Luxembourg) PROSPECTUS OFFER TO EXCHANGE ALL OUTSTANDING $1,250,000,000 4% GUARANTEED SENIOR NOTES DUE 2010, ALL OUTSTANDING $1,250,000,000 4.95% GUARANTEED SENIOR NOTES DUE 2014, AND ALL OUTSTANDING $1,000,000,000 6% GUARANTEED SENIOR NOTES DUE 2034 FOR SEC REGISTERED $1,250,000,000 4% GUARANTEED SENIOR NOTES DUE 2010, SEC REGISTERED $1,250,000,000 4.95% GUARANTEED SENIOR NOTES DUE 2014, AND SEC REGISTERED $1,000,000,000 6% GUARANTEED SENIOR NOTES DUE 2034 TELECOM ITALIA CAPITAL (Incorporated with limited liability under the laws of the Grand-Duchy of Luxembourg) Unconditionally Guaranteed By TELECOM ITALIA S.p.A. (Incorporated with limited liability under the laws of the Republic of Italy) THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 midnight, NEW YORK CITY TIME, ON SEPTEMBER 30, 2005, UNLESS EXTENDED Material Terms of the Exchange Offer: • Telecom Italia Capital is offering to exchange the initial notes that it sold in a private offering which closed on October 6, 2004 for new SEC registered exchange notes. • Based on interpretations by the staff of the U.S. Securities and Exchange Commission, we believe that, subject to some exceptions, the exchange notes may be offered for resale, resold and otherwise transferred by you without compliance with the registration and prospectus delivery provisions of the Securities Act of 1933, as amended. • Application has been made to the Luxembourg Stock Exchange for notes described in the Prospectus to be listed and traded on the market of the Luxembourg Stock Exchange appearing on the list of regulated markets issued by the European Commission. Application has been made to the Commission de Surveillance de Secteur Financier (the ‘‘CSSF’’) for approval of this Prospectus. • The exchange offer expires at 12:00 midnight, New York City time, September 30, 2005, unless extended. • Tenders of outstanding initial notes may be withdrawn any time prior to the expiration of the exchange offer. • All outstanding initial notes that are validly tendered and not validly withdrawn will be exchanged. • You may tender your outstanding initial notes in integral multiples of U.S.$1,000. • We believe that the exchange of initial notes for registered exchange notes will not be a taxable exchange for U.S. federal income tax purposes. Participation in the exchange offer may result in certain adverse tax consequences for non-U.S. residents as discussed in the section of this prospectus entitled “Tax Considerations - Italian Tax Considerations” on page 81. • We will not receive any proceeds from the exchange offer. • The exchange offer is subject to customary conditions, including that the exchange offer does not violate applicable law or any applicable interpretation of law of the staff of, or rule or regulation of, the U.S. Securities and Exchange Commission. • The terms of the registered exchange notes to be issued are identical to the outstanding initial notes, except for the transfer restrictions and registration rights relating to the outstanding notes. We are not making an offer to exchange new registered exchange notes for outstanding initial notes in the Republic of Italy or in any jurisdiction where the offer is not permitted. The exchange notes are subject to the same business and financial risks as the initial notes. Please refer to “Risk Factors” beginning on page 9 of this prospectus for a description of the risks you should consider when evaluating this investment. Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of the registered exchange notes to be distributed in the exchange offer, nor have any of these organizations determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. The date of this prospectus is September 1, 2005. CERTAIN DEFINED TERMS In this prospectus, references to the “Issuer” and “TI Capital” refer to Telecom Italia Capital, société anonyme. References to the “Guarantor” and “Telecom Italia” refer to Telecom Italia S.p.A. References to “we”, “us” and “our” refer to Telecom Italia Capital or, if the context so requires, also to Telecom Italia S.p.A. and, if the context so requires, its consolidated subsidiaries (including TI Capital). References to “Telecom Italia Group” refer to Telecom Italia S.p.A. and its consolidated subsidiaries (including TI Capital). References to “Old Telecom Italia” and “Old Telecom Italia Group” and “New Telecom Italia” and “New Telecom Italia Group” refer to Telecom Italia S.p.A. and its consolidated subsidiaries as they existed immediately prior to, and immediately after, respectively, August 4, 2003, the effective date of the merger between Olivetti S.p.A. (“Olivetti”) and Old Telecom Italia. PERSONS RESPONSIBLE TI Capital and Telecom Italia accept responsibility for the information contained in this Prospectus. To the best of the knowledge and belief of the Issuer and the Guarantor (each having taken all reasonable care to ensure that such is the case) the information contained in this prospectus is in accordance with the facts and does not omit anything likely to affect the import of such information. NOTICE TO INVESTORS You understand that it is the intention of TI Capital that the exchange notes will be offered to investors, and trade in the secondary market between investors, and will be held by investors who are resident for income tax purposes in countries listed in the Decree of the Ministry of Finance of Italy of September 4, 1996 as amended. A copy of the decree can be obtained from the website of the Ministry of Finance of Italy at www.finanze.it. See “Description of the Exchange Notes and Guarantees—Transfer Restrictions”. You also understand that, to the extent that Telecom Italia will become the obligor under the exchange notes due to substitution or otherwise (see “Description of Exchange Notes and Guarantees—Mergers and Similar Events”) and Telecom Italia will be required to withhold on any payments made on the exchange notes, there would be no obligation to gross up such payments to investors resident in the countries identified in the above Decree (including investors resident in the United States) who do not furnish the required certifications under applicable Italian tax requirements. See “Description of Exchange Notes and Guarantees—Payment of Additional Amounts”. ADDITIONAL INVESTOR RESTRICTIONS Substantial additional restrictions exist with respect to the offering and resale of the Exchange Notes. See page 19 for further information. i TABLE OF CONTENTS Page PROSPECTUS SUMMARY ......................................................................................................................................................... 1 RISK FACTORS............................................................................................................................................................................ 9 ADDITIONAL INVESTOR RESTRICTIONS ............................................................................................................................. 18 WHERE YOU CAN FIND MORE INFORMATION................................................................................................................... 19 ENFORCEABILITY OF CIVIL LIABILITIES UNDER THE UNITED STATES SECURITIES LAWS.................................. 23 CAUTIONARY STATEMENT RELATING TO FORWARD LOOKING STATEMENTS....................................................... 24 PRESENTATION OF CERTAIN FINANCIAL AND OTHER INFORMATION....................................................................... 25 DESCRIPTION OF TELECOM ITALIA...................................................................................................................................... 26 TERMS OF THE EXCHANGE OFFER ....................................................................................................................................... 46 USE OF PROCEEDS..................................................................................................................................................................... 56 DESCRIPTION OF EXCHANGE NOTES AND GUARANTEES.............................................................................................. 57 DESCRIPTION OF TI CAPITAL ................................................................................................................................................. 76 TAX CONSIDERATIONS............................................................................................................................................................ 78 PLAN OF DISTRIBUTION .......................................................................................................................................................... 84 GENERAL INFORMATION ........................................................................................................................................................ 84 LEGAL MATTERS....................................................................................................................................................................... 85 EXPERTS ...................................................................................................................................................................................... 85 INDEX TO TI CAPITAL FINANCIAL STATEMENTS ............................................................................................................. F-1 _______________________ This prospectus incorporates
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