WIND TRE GROUP

Consolidated interim financial statements as of and for the nine-month period ended

September 30, 2017

REVIEW REPORT ON CONSOLIDATED INTERIM FINANCIAL STATEMENTS

To the Board of Directors of SpA

Foreword

We have reviewed the accompanying consolidated interim financial statements of Wind Tre SpA and its subsidiaries (the Wind Tre Group) as of 30 September 2017, comprising the consolidated income statement, consolidated statement of comprehensive income, consolidated statement of financial position, consolidated statement of cash flows, consolidated statement of changes in equity and related notes. The directors of Wind Tre SpA are responsible for the preparation of the consolidated interim financial statements in accordance with International Accounting Standard 34 applicable to interim financial reporting (IAS 34) as adopted by the . Our responsibility is to express a conclusion on these consolidated interim financial statements based on our review.

Scope of review

We conducted our work in accordance with the International Standard on Review Engagement 2410 “Review of Interim Financial Information Performed by the Independent Auditor of the entity”. A review of consolidated interim financial statements consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than a full-scope audit conducted in accordance with International Standards on Auditing and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion on the consolidated interim financial statements.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying consolidated interim financial statements of the Wind Tre Group as of 30 September 2017 are not prepared, in all material respects, in accordance with International Accounting Standard 34 applicable to interim financial reporting (IAS 34) as adopted by the European Union.

Emphasis of matter

As an emphasis of matter, we draw your attention to the following:

• as described in the introductions to the Notes (note 1), the effects of the transaction which led to the combination of the businesses of the former Wind and H3G operators in the Italian market have been reflected in the consolidated financial statements of the previous period since 31 October 2016 (the transaction date); as a result the comparative income statement data as of and for the period ended 30 September 2016 cannot be immediately compared with the correspondent income statement data as of and for the period ended 30 September 2017;

• transactions exist with the parent company and with other entities belonging to the CK Hutchison Holdings Ltd. and Vimpelcom Ltd groups, the most significant of which are disclosed in the Note 27 – Related party transactions.

In our opinion the above emphasis of matters do not lead to a qualified review report.

Other aspects

The consolidated interim financial statements for the period ended 30 September 2016 have not been subject to audit or review.

Milan, 8 November 2017

PricewaterhouseCoopers SpA

Signed by

Andrea Alessandri (Partner)

This report has been translated into English from the Italian original solely for the convenience of international readers

2 of 2

WIND TRE GROUP

Report on operations

at September 30, 2017

CONTENTS

THE WIND TRE GROUP ...... 3

COMPOSITION OF THE CORPORATE BODIES (BOARD OF DIRECTORS AND BOARD OF STATUTORY AUDITORS)

OF WIND TRE SPA ...... 5

WIND TRE GROUP HIGHLIGHTS AT SEPTEMBER 30, 2017 ...... 6

THE ITALIAN SERVICES MARKET ...... 8

COMMERCIAL AND OPERATING PERFORMANCE ...... 11

NETWORK ...... 33

HUMAN RESOURCES...... 36

REGULATORY FRAMEWORK AT SEPTEMBER 30, 2017 ...... 39

OUTLOOK ...... 50

Report on operations 2 at September 30, 2017 THE WIND TRE GROUP

Wind Tre SpA (hereafter referred to as Wind Tre or the Company and together with its subsidiaries the Group or the Wind Tre Group) is a joint stock company having registered office in Via Leonardo da Vinci, 1, Trezzano sul Naviglio, , . Wind Tre is a leading operator in the fixed and mobile telecommunications and data services sector in Italy and is strongly oriented towards providing in-mobility data communication services and mobile access services in broadband and wireless mode. In addition, it accompanies its offer with a wide range of content, applications and multimedia support.

These consolidated financial statements for the half year ended September 30, 2017 were approved by the Company’s Board of Directors on November 7, 2017. At the date of approval of these consolidated financial statements Wind Tre is controlled by Wind Tre Italia SpA (hereafter referred to as Wind Tre Italia) which in turn is controlled by the based entity VIP-CKH Luxembourg Sàrl (hereafter referred to as VIP-CKH or the Joint Venture). VIP-CKH is a joint venture whose share capital is owned as to 50% by CK Hutchison Holdings Limited (hereafter referred to as CK Hutchison) and by Veon Ltd. (formerly VimpelCom Ltd. and hereafter referred to as Veon), which jointly own and operate their respective telecommunications businesses in Italy. CK Hutchison is a limited liability company incorporated in the Cayman Islands and registered in the Register of Companies of the Cayman Islands (no. MC-294.571) whose shares are listed on the Hong Kong stock exchange and whose principal place of business is located at 12th Floor, Cheung Kong Center, 2 Queen’s Road Central, Hong Kong. Veon is incorporated under Bermuda law, domiciled in Claude Debussylaan 88, 1082 MD Amsterdam, and listed on NASDAQ.

The economic data for the first nine months of 2017 are not immediately comparable with those of the same period of the previous year because they refer only to the financial statements of the former H3G Group, which did not previously draw up interim financial statements under IAS 34; accordingly, the comparative figures have not been subject to review by the audit firm.

A proforma income statement is included in this Report on operations to simulate the effects of the merger from January 1, 2016 and allow the comparative commentary of some data.

On the formation of the Joint Venture at the end of last year the respective holding and operating companies of the telecommunications businesses in Italy of CK Hutchison and Veon, namely Wind Tre Italia and WIND Acquisition Holdings Finance SpA, and Wind Tre and WIND Telecomunicazioni SpA, and all their subsidiaries became subsidiaries of the Joint Venture, and the Joint Venture became the new parent company of the Group holding the telecommunications businesses in Italy of CK Hutchison and Veon. WIND Acquisition Holdings Finance SpA and WIND Telecomunicazioni SpA have been merged.

Report on operations 3 at September 30, 2017 The following diagram sets out the structure of the Wind Tre Group at September 30, 2017.

The entry into the market of Iliad, the fourth infrastructure mobile operator, required by the European Commission as a mandatory condition for approving the merger between WIND Telecomunicazioni SpA and H3G SpA which took place at the end of last year, is planned for the end of 2017 or the beginning of 2018. For more information on the above transaction please refer to the Wind Tre Group Notes to the Consolidated Financial Statements as of December 31, 2016.

Report on operations 4 at September 30, 2017 COMPOSITION OF THE CORPORATE BODIES (BOARD OF DIRECTORS AND BOARD OF

STATUTORY AUDITORS) OF WIND TRE SPA

Board of Directors (1)

Chairman Christian Nicolas Roger Salbaing

Directors Jeffrey Alan Hedberg, Managing Director

Kjell Morten Johnsen

Board of Statutory Auditors (2)

Chairman Giancarlo Russo Corvace

Standing auditor Marcello Romano

Standing auditor Luca Occhetta

Substitute auditor Roberto Colussi

Substitute auditor Maurizio Paternò di Montecupo

(1) The shareholders’ meeting of the Company (formerly H3G SpA) convened on November 5, 2016 appointed the Board of Directors until the date of the shareholders’ meeting that approves the Company’s financial statements for the year ending December 31, 2018. On June 22, 2017 the shareholders’ meeting of the Company appointed Mr. Jeffrey Alan Hedberg as a board member to replace the Managing Director, Mr. Maximo Ibarra, who had resigned. At same date the Board of Directors of the Company appointed Mr. Hedberg as Managing Director of the Company and granted him powers to manage the Company. The Managing Director will hold office until the expiry of the mandate of the current Board of Directors.

(2) The shareholders’ meeting of the Company (formerly H3G SpA) convened on November 5, 2016 appointed the Board of Statutory Auditors until the date of the shareholders’ meeting that approves the Company’s financial statements for the year ending December 31, 2018.

Report on operations 5 at September 30, 2017 WIND TRE GROUP HIGHLIGHTS AT SEPTEMBER 30, 2017

The operating and financial data reported below are taken from the Group’s consolidated financial statements as of September 30, 2017, prepared in accordance with the IFRS endorsed by the European Union.

Below are the main indicators of the Wind Tre Group on September 30, 2017, with a comparison with the corresponding proforma figures for 2016.

At September 30, At June 30, 2017 2016 Operational data (proforma)

Mobile customers (millions of SIM Cards) 29.8 31.4 Mobile ARPU (/month) 11.3 11.4 Fixed-line customers (millions of lines) 2.7 2.7 Fixed-line ARPU (euro/month) 28.0 27.2 Mobile network coverage(1) 99.9% 99.9% Employees (headcount) 7,525 9,567 (1) As a percentage of the Italian population.

Income statement figures (millions of euro) 2017 2016 9 months 9 months (proforma) Revenue 4,626 4,726 EBITDA(1) 1,419 1,573 Operating income (1,078) 396 Net finance expense (420) (75) (Loss)/Profit for the period attributable to the owners of the parent (1,554) 185 (1) Operating income before depreciation and amortization, reversal of impairment losses/impairment losses on non-current assets and gains/losses on disposal of non-current assets

Statement of financial position figures At September 30, At December 31, (millions of euro) 2017 2016

Total assets 18,708 20,887 Equity attributable to owners of the parent 2,646 4,204 non-controlling interests - - Total liabilities 16,062 16,683 Net debt 10,138 9,904 Total revenue in the nine months ended September 30, 2017 reached €4,626 million, representing a decrease of 2.1% over the same period of the previous year.

Telephone services contracted slightly, with a decrease of around 2.2% in the first nine months of 2017 compared to 2016, due to persistent competitive pressure in the mobile segment, not completely offset by fixed-line service revenue growth.

EBITDA amounted to €1,419 million in the first nine months of 2017, a decrease of €154 million compared to the corresponding period of 2016, while there was an operating loss of €1,078 million, higher by €1,474 million over the first nine months of 2016.

Report on operations 6 at September 30, 2017 Net finance expense for the first nine months of 2017 amounted to €420 million, an increase of €345 million over the first nine months of 2017.

There was a loss for the period of €1,554 million for the first nine months of 2017 compared to a profit of €185 million for the first nine months of 2016.

Net debt totaled €10,138 million at September 30, 2017, an increase of €234 million over December 31, 2016. The following table sets out the components of net debt at September 30, 2017 and the changes which have occurred since December 31, 2016.

At September 30, At December 31, (millions of euro) 2017 2016 Change

FINANCIAL LIABILITIES

Non -current financial liabilities 12,340 12,838 (498) Bonds 9,757 10,293 (536) Loans from parent companies 1,752 1,717 35 Financing from banks 683 677 6 Financing from other lenders 127 128 (1) Derivative financial instruments 21 23 (2)

Current financial liabilities 191 176 15 Bonds 190 160 30 Financing from banks - 8 (8) Financing from other lenders 1 1 - Derivative financial instruments - 7 (7)

TOTAL GROSS DEBT (A) 12,531 13,014 (483)

FINANCIAL ASSETS

Non -current financial assets (1,947) (2,486) 539 Derivative financial instruments (870) (1,460) 590 Financial receivables (1,077) (1,026) (51)

Current financial assets (41) (21) (20) Financial receivables (41) (21) (20)

Cash and cash equivalents (405) (603) 198

TOTAL FINANCIAL ASSETS (B) (2,393) (3,110) 717 NET DEBT (A-B) 10,138 9,904 234

Report on operations 7 at September 30, 2017 THE ITALIAN TELECOMMUNICATIONS SERVICES MARKET

Industry overview

Italy is ’s fourth largest telecommunications services market by revenue. The value of the Italian mobile market for 2017 is approximately €14 billion, confirming the pick-up already noted in 2016 due to growth in internet services and contents services. The Italian fixed-line market (voice and VAS) for 2017 is estimated to be worth approximately €5 billion, a decrease over 2016 mainly as the result of a drop in voice traffic revenues. The value of the fixed internet access industry for 2017 is estimated to be approximately €5.0 billion with the broadband segment accounting for the whole market. In the first nine months of 2017 mobile network operators continued to develop their voice and data services, aiming at traffic volumes included in bundles, multimedia streaming services and convergence with the fixed network. From June all the network and virtual operators adhered to European regulations eliminating roaming charges. Offers tended to be differentiated by type of user, with tariffs including unlimited traffic, large data packages for ultra- broadband networks and value added services and offers for a less demanding population of users, with charges concentrated on voice traffic or internet. In the third quarter operators additionally concentrated on launching specific offers (underground) to win over customers from rival operators and the price war shifted onto triple and quadruple play bundles. The competitive arena continues to evolve: following the merger of WIND and 3 Italia, Kena Mobile made its entry, a virtual operator owned by the Telecom Italia group, while the fourth operator, the Iliad network, is scheduled to arrive by the end of 2017 or at the beginning of 2018. In addition, in the MVNO segment in the second quarter certain operators revised their offer structure, increasing traffic ceilings by means of various promotion formulae. Mobile navigation on the network is the cornerstone of operators’ offers and strategies for development. Quality, navigation speed and LTE network coverage continue to be at the heart of market players’ communications and towards the end of the first half year several operators launched offers with navigation on 4G+ / 4.5G networks and, in the summer months, they took part in public entity projects for beginning to test 5G in specific areas. In certain cases options were launched that permit unlimited data traffic for certain types of application (e.g. video or audio). At the beginning of April operators announced the availability of new smartphone models in their product portfolios, and the devices remained an integral part of the offer bundles and tariff promotions with discounts and reductions given. There were no particular changes in the business market during the nine months although new offers of Machine 2 Machine services were launched and business support solutions were introduced that exploit the 4G and mobile payment services. The offers addressed by leading operators to the consumer market developed with the aim of acquiring new customers, providing tariffs including bundles increasingly enhanced with voice-data traffic, triple and quadruple play services (for the fixed-line network and with streamed contents) and initiatives designed to win back old customers. Considerable attention was also given to top-range devices that combine bundles at convenient prices and reduced monthly charges as an acquisition and loyalty tool. A great deal of importance was also placed on creating loyalty in the customer base, in particular by means of discounts and services for access to digital contents (also by way of carrier billing). Innovative services are always present in the offers made by leading operators to encourage the use of the large volumes of data included in the packages. In particular, in the consumer world the focus remained on audio and

Report on operations 8 at September 30, 2017 video streaming and social apps, while in the business sector the attention was concentrated on business digitalization services and the Internet of Things as a basic element for grasping the opportunities created by 5G.

The most important operator partnerships seen in the first quarter of 2017 regarded 5G testing, which will begin by the end of the year, while in the second quarter new initiatives were announced for high quality audio streaming on 4G networks and agreements for the broadcasting of the 2018 and 2020 Olympic Games. In the first nine months of 2017 the fixed network telecommunications services market continued to develop with quadruple play offers, where to convergent voice and internet services video streaming digital contents were added for consumer profiles and solutions to support process digitalization for businesses. Operators shifted the price war from single offers for the fixed network to convergent offers for the whole family, with mobile network services, digital contents and products included. All operators continued to propose optic fiber connections, continuing with the extension of the ultra-broadband network by way of direct investments and partnerships. The nine months were characterized by several promotional initiatives for the consumer market with bundles distinguished by discounted monthly charges and activation fees and which include increasing speed connectivity, TV contents and convergence with mobile services, to which were added smartphones, television sets and (in one case) also fridges, payable on an instalment basis by credit card or bank transfer. In certain cases discounts on monthly charges were given for several years on a sliding scale basis. Promotions of offers for business customers were essentially directed at sole traders and SMEs, with convergent fixed and mobile network offers, assistance services, video-surveillance systems and Wi-Fi services made available to customers. In addition a number of partnerships were entered into to develop new projects in conjunction with the public administration (PA).

Mobile telecommunications

The Italian mobile telephone market is the fourth largest European market by revenue after the United Kingdom, and . There are three infrastructure operators in Italy which offer mobile telephone services to the approximately 83 million SIMs registered at September 30, 2017, equal to a penetration rate of approximately 137% of the Italian population. The penetration figure is distorted by the widespread use of more than one SIM card by many customers. It is estimated that about 85% of the customer base (SIM Human) uses prepaid cards.1 Excluding MVNOs, at September 30, 2017 Wind Tre had an estimated market share of 36.0% while Telecom Italia and Vodafone had 36.6% and 27.3%.

Fixed telephone services market

Voice The Italian fixed-line telephone services market is the fourth largest by value in Europe after the United Kingdom, Germany and France. Telecom Italia dominates this market even though it was liberalized in 1988. In addition to Telecom Italia and Wind Tre, the main players are Fastweb, Vodafone, and BT Italia.

1 Data from AGCOM (Osservatorio sulle Comunicazioni – 2Q 2017)

Report on operations 9 at September 30, 2017 Internet By September 2017 access to broadband internet had reached a penetration of 79% of all fixed lines in Italy. Broadband services have grown rapidly in the country over the past few years to reach approximately 15.5 million connections, equal to 26% of the Italian population. Despite the recent considerable rise in broadband, Italy still lags behind the other European countries. In September 2017, coverage of the ultra broadband networks (above 30 Mbps) in Italy had reached 70% of the population with around 2,300 urban centers enabled for the new services. In addition, at the end of September 2017 the first Open Fiber worksites were opened for the construction of the BUL public network. This first phase will involve 50 municipalities and this will then be extended to all the municipalities involved in the first Infratel tender (3,043 municipalities). As of today Open Fiber has signed wholesale service supply agreements with 7 operators and the FTTH network is currently available in 12 cities (Bari, , , Catania, , , Milan, Padua, , Perugia, and Venice). Cabling work is currently in progress so that commercialization may also begin in other cities including . The overall program for ultra-broadband envisages the development of the network in six years in over 270 Italian cities for approximately nine and a half million property units served.

Report on operations 10 at September 30, 2017

COMMERCIAL AND OPERATING PERFORMANCE

Mobile Telephony

At September 30, 2017, Wind Tre had 29.8 million mobile telephone customers a decrease over September 30, 2016, and a market share (calculated by excluding MVNO operators) of 36%.

The following table shows the main indicators in the mobile telephone market.

Mobile telephony 2017 2016 9 M 9 M (proforma) Change Customer base (millions of SIM Cards) (1) 29.8 31.4 (5.1%) Revenue (millions of euro) (2) 3,694.6 3,798.2 (2.7%) Voice traffic (billions of minutes) (3) 73.7 78.2 (5.7%) ARPU (euro/month) 11.3 11.4 (0.9%) % ARPU Data/Total ARPU 52.4% 49.0% (1) Total Customer Base: Voice+Data; Not included the M2M (2) Include TLC Revenues + CPE Revenues (3) Voice Traffic Outgoing + Incoming off net + Incoming from ITZ

Consumer offer The WIND brand The WIND brand is present on the telecommunications market with a positioning that takes care to provide a response to the needs of the whole family through a wide range of offers that propose the historical values of clarity, transparency and simplicity. WIND looks after its customers, following changes in their habits, with an average usage of mobile gigabytes that continues to increase. Solutions are therefore always available for navigating in mobility with the data-alone offers with enriched contents, which are even more competitive in the new 4 gigabyte denominations from 5 to 30 starting from 8. Particular attention is given to video with the Giga Max Now TV offer that combines the data component (20 gigabytes available), the best TV series and the great shows on Sky. In addition a new annual proposal (Wind Cube) is available for €99 with 50 gigabytes and the web Cube included; the ideal solution for remaining always connected through the Wi-Fi network (with several devices simultaneously – up to 10). The whole of the current portfolio continues to transmit the orange brand’s essential values, which are also expressed through the hashtags #thewindunlimited and #no extracosti. The key offer is still the All Inclusive ‘Unlimited’ with unlimited minutes towards everyone, 500 SMSs and 5 gigabytes full speed for €12. The distinction of WIND’s offer that is characterized by ‘Internet Illimitato’ continues: customers can navigate on all the main social networks at a speed of 128 kbps when the gigabytes in their offer are used up. No halts in navigation and unlimited internet. For anyone looking for a solely voice offer there are also unlimited minutes with NOI Unlimited, the offer which for only €9 provides unlimited calls to everyone. Specific offers are available for the under 30 and over 60 age groups. The #noextracosti hashtag embodies the value of WIND, whose aim is the transparency of its offer: All Inclusive Unlimited and Noi Tutti Unlimited are renewed every month and have the SMS MY WIND service and hotspots

Report on operations 11 at September 30, 2017 included. Customers may access the notification service to see who has been looking for them and can connect to other Wi-Fi devices with the gigabytes in their offer at no extra cost. In addition all WIND stores have the best smartphones/tablets available starting from €1 with the possibility of paying in easy instalments. Through its e-commerce site WIND provides customers with the possibility of buying rechargeable SIM cards with exclusive offers having the convenience of receiving everything at home. Exclusive offers are also available on Amazon.

In the third quarter of 2017 WIND continued to strengthen its ‘Più Vicini’ offer positioning for non-Italians living in the country. The Call Your Country offer portfolio was renewed and enhanced with the new Call Your Country Super which for the same price increases the basket of gigabytes and international minutes. The new Call Your Country Super provides customers with 8 full speed gigabytes, 150 minutes for calling abroad (49 destinations) and in Italy unlimited calls towards WIND and 500 minutes towards everyone at a total price of €10 every 4 weeks. In addition, with a view to “community marketing” the most important feast days have been identified for each community and for each of these ad hoc offers have been launched. The “community marketing” instrument has enabled value to be added to the segment of the “Call Your Country” segment, easily recognizable to non-Italians. Running alongside “community marketing” is a strategy that is targeted to dedicated offer proposals (Call Your Country Gold – 600 minutes towards everyone, 300 minutes towards abroad, in Italy unlimited calls to WIND and 10 GB at a price of €9 every 4 weeks) depending on the specific area of the country. With the aim of satisfying the growing need for data traffic arriving from non-Italian users WIND has renewed its Giga International offer, reducing the cost to only €9 for 4 weeks for 20 gigabytes of internet. Customer loyalty continues to be increasingly at the heart of the Company’s objectives and to reward this WIND provides the Giga Bonus option free of charge; for customers spending at least €10 in international traffic in 30 days, 1 gigabyte is given as a bonus to be used in the following 30 days. In addition, customers with the Call Your Country offer can subscribe to the “telephone included” offer to purchase a smartphone by paying small monthly instalments or dedicated models at extremely beneficial prices. After the June canvas the positive trend in activations has confirmed the market’s appreciation of the Wind Magnum offer in its consumer customer and professional versions, acknowledging the value of an offer which is simple but complete and makes data sharing its distinctive factor. Given the successes of Wind Magnum and Magnum Pro their cornerstones have been confirmed: 2 SIMs to satisfy multi-device use (one to be used in smartphones and a data-only SIM for internet devices such as tablets or mobile Wi-Fi routers); the possibility of being able to add up to 3 SIMs for the family or co-workers at a reduced price to control the spending of the whole family or co-workers (the offer, in the “Family” and “Company” versions, provides 500 minutes, 500 SMSs and 2 gigabytes for only €5 every 4 weeks, plus value added tax for VAT-registered customers); a device from the Home and Life always Included range, with no down payments and without instalments (such as the wearable Home&Life Fit and the ebook reader Amazon Kindle); the benefit of exclusive discounts on the top smartphones of the moment. As confirmation of the attention it places on its customers’ gigabyte and spending needs, for consumer customers and professionals WIND has added the new denomination Internet 5 Giga to its internet portfolio at a price of €8 every 4 weeks (plus value added tax for VAT-registered customers). In common with the other 10, 20 and 30 gigabyte internet plans, the new internet plan inherits the “Night Unlimited” feature, meaning the possibility to navigate from midnight to 7.59 am without using up the gigabytes in the offer.

Report on operations 12 at September 30, 2017 Wind Magnum also responds to the needs of customers who for business or personal reasons often travel to , the Principality of Monaco or the United States thanks to the new “Wind Magnum Travel” option: 1,000 minutes for calling and 1,000 minutes for receiving, to and from abroad, 500 SMSs towards abroad and 2 gigabytes at a price of €13 every 4 weeks (plus value added tax for VAT-registered customers).

The “3” brand In 2017 “3” pursued a strategy designed to confirm itself on the market as a leading operator in satisfying the needs of technological customers characterized by a high level of data traffic usage and constant emphasis on value for money, while at the same time geared to strengthening its loyalty relationship with its customers and fostering increasing transparency of its offers. With a view to this on the Prepaid Untied offer front “3” launched a promo for St. Valentine’s Day (from 30 January to 19 February) that for the same price provided an increase in the gigabytes offered (+4GB) on All-In 400 (8 GB for €10) and on All-In Unlimited (12 GB for €20). Subsequently, as a means of giving a new image to the brand in accordance with the values of the new strategy for 2017, on February 20 “3” renamed the All-In family with the Start, Prime and Master offers replacing the previous 400, Unlimited and VIP offers. To promote this renaming operation, “3” launched an important promo dedicated solely to the untied segment: an increase in data contents for Start at the same price (6 GB instead of 4 GB for €10) and a discount of 30% on the monthly charge for Prime and Master (Prime: 8 GB for €14 instead of €20; Master: 30 GB for €21 instead of €30). This initiative was further enhanced in the middle of March with the Gold Edition promotion that added the Grand Cinema 3 Gold card to the untied offers, as ever to stress the close ties between the Company and the cinema. The All-In Tied offer continued in line with 2016 with Start providing 4 GB for €5 (instead of €10), Prime providing 8 GB for €10 (instead of €20) and Master providing 30 GB for €15 (instead of €30). As regards offers with telephones at the end of February “3” launched the “Giga Days” promotion with the aim of attracting “Internet driven” customers, which activated automatically for all new customers at a one-off price of €10 included 10 GB to be used within two months in addition to the number already included in the selected tariff. At the same time in order to support the activations with the iPhone 7, a key product for the Company, “3” launched a promotion thanks to a partnership with Apple that gave a discount of €50 on the down payment for the telephone, with the All-In offers with smartphone and Free. To promote fixed-mobile convergence at the end of February “3” introduced the possibility for Infostrada customers and Casa3 customers to adhere to the untied All-In offer at a reduced price compared to the corresponding tied offer; in the same way “3” customers can also adhere to the Infostrada offers at a reduced price. In addition, as part of the project to improve the customer experience, “3” has introduced two important changes: the immediate renewal of the options with the alignment of the renewal and the ceilings of the option with the “customized week”, and the “Top-up Always On” offer (only for the tied segment) that enables customers to set an automatic top-up to avoid remaining without telephone credit. As far as mobile broadband is concerned, “3” has extended its portfolio of services to cover various different segments of the market and has continued to improve its offers to ensure greater freedom of navigation. “3” has modified its main offer (Casa3) taking the ceiling from daily to weekly, keeping the same amount of monthly gigabytes (30 GB) for €15. A Wi-Fi device can be combined with Piano Casa3 enabling customers to navigate from home or in mobility with their devices, thereby exploiting all the speed of the LTE connection. For customers wishing to navigate using the residual credit on their SIM, “3” has introduced Super Internet Ten that is the best offer as far as price/GB is concerned. With Super Internet Ten customers have 10 GB available a month at a cost of €5 that they can use on their tablets or any Wi-Fi device. In addition, to meet the needs of customers who occasionally need to navigate freely in internet without ceilings or restrictions, in February “3” introduced Super Internet Express 50GB

Report on operations 13 at September 30, 2017 that provides 50 gigabytes of internet traffic that can be used in six months with no ceiling or monthly restrictions for €40. Finally, to continue to increase the segment of convergent offers (voice + mobile broadband), “3” has extended its Special offers. These give voice customers (with a tie) the possibility of navigating freely in internet with another device at a reduced price. The Special offers contain: Casa3 Special which provides the same amount of gigabytes as Casa3 (30 GB) at a reduced price (€10 instead of €15) and Super Internet Special 5GB, introduced in April, that provides 5 gigabytes of monthly traffic for €5 instead of €8. Both offers have a Wi-Fi device included. In the prepaid segment “3” launched the new Play option in April 2017, an untied rechargeable no frills offer, with minutes and gigabytes included, dedicated to all customers in search of a convenient offer at only €8 but with all that is needed to always remain connected. For customers wishing to have the comfort and tranquility of “all inclusive” offers, with minutes, SMSs and gigabytes, “3” continued to make the All-In family available with the Start, Prime and Master offers at even more convenient prices (Start: 4 gigabytes for €9; Prime: 8 gigabytes for €14; Master: 30 gigabytes for €19). And for all Infostrada and Casa3 subscription customers the All-In offers were sold with a reduction in the monthly charge. As far as offers charged to bank accounts or credit cards are concerned, since April “3” has been proposing All-In Prime with 8 GB for €9 (instead of €14 for the rechargeable version) and All-In Master with 30 gigabytes for €14 (instead of €19 in the rechargeable version). All-In Start with a charge to a bank account or credit card was however available with the “Special” promo for €5, combined with Casa3 Special. In June the “3” brand proposed a new evolution of its commercial offer with the All-In options. In this respect starting June 21, despite keeping the same monthly charge as in previous months the brand developed the All-In Start, Prime and Master offers to consolidate the relationship of transparency and convenience it has with its customers. “3 “confirmed its attention to innovation and was the first on the Italian market to launch Giga Bank, a feature included in every All-In offer, thanks to which the gigabytes not used in any month are not lost but can be carried forward and used until the end of the following month. The new All-In offers provide unlimited minutes and 500 SMSs; the price depends on the gigabytes that customers choose: All-In Start includes 5 gigabytes and has a monthly cost of €9, All-In Prime offers 15 gigabytes for €14 a month and All-In Master includes up to 30 gigabytes for €19. As regards the untied rechargeable sector the new Play Young offer has been added to the Play option, targeted at millennials (customers under 30) and what they love doing. At a cost of only €6 (€9 from January 2018), charged against the residual credit, Play Young offers 300 minutes and 6 gigabytes with Music by 3 included as the means by which customers can listen to their own music without using up the gigabytes in the offer and without advertising interruptions, and the Card Grand Cinema 3 that can be used between Monday and Friday with 2 cinema tickets for the price of 1. As regards offers with telephones, with the aim of attracting “Internet driven” customers “3” continued with its “Giga Days” promotion and confirmed its vocation as technological leader by launching the Galaxy S8 and S8+, Samsung’s new flagship with infinity display, proposing a Galaxy S8+ included with the Free offers at the same price as the Galaxy S8. Free, available in the rechargeable and subscription versions, is the offer created by “3” for customers who are enthusiastic about technology and want to be constantly updated and have the latest technological discovery, with a no-worry all-inclusive offer that includes a top smartphone: customers can exchange their smartphone every 12 months for any one of those available. Thanks to a partnership with Huawei a TV campaign was launched in June on all of the major national networks and all of the main web channels to announce the new Play Limited Edition, which for €15 a month included 1,000 minutes, 10 gigabytes and the new Huawei P10, the latest top smartphone of a manufacturer who is growing fast thanks to the quality and sophisticated design of its products.

Report on operations 14 at September 30, 2017 On renewing the tariff portfolio of its voice offers the “3” brand further extended its telephone-included offers in June, and as part of its new All-In plans with Giga Bank gave customers the possibility of adding any of the smartphones in its price list. Thanks to Giga Bank, the innovative service of “3” which is the only one of its kind in Italy, customers who decide to add a smartphone to the new All-In offers can use their unused gigabytes until the end of the following month: the All-In Start offer with Giga Bank + Samsung Galaxy S8 at €20 a month was the star of “3”’s summer campaign on all the major national TV networks and all the main web channels, strengthening the technological positioning of the “3” brand which is geared towards the millennials, as always seeking simple offers and evolved smartphones in a value for money context. “3” has revolutionized its services portfolio in mobile broadband and has continued to improve its offers so that it can ensure greater freedom of navigation. “3” has made changes to its main offer (Casa3) by taking the frequency from weekly to monthly, keeping the same number of gigabytes (30 GB) and maintaining the same price of €15/month. The Casa3 offer has been joined by an even larger offer: Casa3 XL, again with monthly frequency, which offers 50 gigabytes at a price of €24.95. The “3” brand has entered a partnership with Netflix, the world’s leading internet TV, to offer its customers the best of streamed entertainment. This partnership is an important step, in line with the brand’s claim of “The Future you Want”, and will allow 3’s customers to watch critically-acclaimed series, blockbuster films, documentaries, stand-up comedians and children’s programs anywhere at any time, thanks to Netflix’s on-demand streaming service. With the Casa3 offers Netflix TV is included for three months together with a WebCube4 Wi-Fi or PocketCube router and a Google Chromecast device, with down payments starting from zero. On the prepaid front “3” has renewed the SuperInternet offers available in a SIM-only version in denominations of 5 gigabytes for €5/month, 10 gigabytes for €10/month and 30 gigabytes for €15/ month, untied with a charge against the residual credit and with a Wi-Fi device and Giga Bank included with charges made against credit cards or bank current accounts and a 30 months tie. For customers who want to navigate by using the residual credit on their SIM cards “3” has introduced Internet Play which is the best offer in terms of the price/GB ratio. With Super Internet Ten customers have 10 gigabytes available per month at a cost of €5/month which can be used on their tablets or on a Wi-Fi device. In addition, “3” has confirmed the Internet Express offers which are provided in two denominations: Internet Express which offers 20 gigabytes of internet traffic that can be used in 3 months without monthly ceilings or restrictions for €20 and Internet Express 50GB with 50 gigabytes that can be used in 6 months for €40. “3” has extended its convergent offers, providing voice customers (with tie) with the possibility of navigating freely in internet with another device at a reduced price. The Special offers include: Casa3 Special that provides the same number of gigabytes as Casa3 (30 GB) at a reduced price (€10 instead of €15) and Casa3 XL Special which provides 50 gigabytes of monthly traffic for €14.95 instead of €24.95. Both offers include a Wi-Fi device. In addition, as part of the project for improving the customer experience “3” has introduced two important changes. The first regards the possibility for “3” customers to use the WIND network in roaming at no extra cost compared to their offer. In addition, before the date set by European regulations, in May “3” launched Easy Europe, the service that allows all customers to use their national offer in other European Union countries as if they were in Italy. In the third quarter of 2017 the “3” brand additionally increased the effort made in earlier months with the launch of the Summer Edition, meaning that the best offers made by “3” were proposed at increasingly convenient prices for the whole of the summer. On the tied prepaid front, All-In Master Summer, with unlimited minutes, 500 SMSs and 30 gigabytes, was proposed at a price of only €9.50 instead of €19, and All-In Prime Summer, with the same number of minutes and SMSs but

Report on operations 15 at September 30, 2017 with 15 gigabytes, was offered at €7 a month instead of €14. The reduction in the monthly charge, valid until the end of the year will also hold from January 2018 for all customers who at the same time activated a Super Internet Summer SIM, the prepaid summer data offer (with a 12 months tie) that provided 5 gigabytes of internet for only €3 a month. On the other hand customers wishing to navigate with the top of the Company’s mobile broadband offer could subscribe to Casa3 XL for only €12.45 a month instead of €24.90, the ideal offer for anyone who loves watching TV series and films, with each month: 50 gigabytes of 4G/LTE internet traffic, unlimited night-time navigation, a Wi-Fi device, a Google Chromecast and a three months subscription to Netflix included. For all social network lovers seeking a simple offer with a large number of gigabytes in order to remain in touch with their friends, “3” created Play Summer, an untied rechargeable offer with 1,000 minutes and 15 gigabytes for only €9 a month. Regarding smartphone-included offers, the summer offers saw a range of the best phones to combine with the Play Summer and All-In Master Summer offers with minutes, SMSs and internet included at a price starting from an extra €1 a month, such as the Galaxy A3 and A5 and the Huawei P10 family. On the other hand Free Master Summer was the top of the range smartphones as the summer’s star attraction at a price never seen before, making available the Galaxy S8 family together with the Huawei P10 Plus and the LG G6 at a price of €25.50 a month and the iPhone 7 and iPhone 7 Plus at €29.50, with all the benefits of the Free offer which allows customers to change smartphone every year for the latest model on the market. “3” confirmed its vocation as technological leader by launching the iPhone 8 and iPhone 8 Plus on September 22, Apple’s new flagship with a new processor ready for the new frontier of increased reality, wireless top-up and an improved photo and video sector, proposing the iPhone 8 Plus with the Free offers at the same price as the iPhone 8. At the same time as the launch of the iPhone 8, Free added the Kasko option to all its offers so that customers can live a worry-free life with their smartphone, always protected from accidental damage. Free, available in the rechargeable and subscription versions, is the offer created by “3” for customers who are mad about technology and want to be constantly updated and always have the latest technological discovery, with a no- worry all-inclusive offer that includes a top smartphone: in this way change their smartphone every 12 months for any of those available. The smartphones currently available with Free are the iPhone 8, the iPhone 8 Plus and the Galaxy S8 and S8+ and Note 8. Following the success of the summer initiative, for the autumn “3” has proposed a new development in its offering portfolio in line with the brand’s technological positioning. For the rechargeable on residual credit world, “3” has launched a new Play option, an untied rechargeable no frills offer, with 300 minutes and 3 gigabytes included, dedicated to all customers in search of a convenient offer at only €3 but with all that is needed to always remain connected. And with an extra €2 it is also possible to combine Play SMS Plus, the rechargeable option that enables them to add 300 SMSs towards everyone. All-In Smart is the most complete untied offer as it provides 500 minutes, 500 SMSs and 5 gigabytes for €10 a month. Also at a cost of €10 a month customers can double their benefits by choosing the new All-In Prime, the option with a 24 months tie and payment by credit card or direct debit that includes 1,000 minutes, 1,000 SMSs and 10 gigabytes of internet traffic. For anyone wanting the very best on the other hand All-In Master provides 1,000 SMSs and 30 gigabytes of internet. The All-In offers with payment by credit card or direct debit include Giga Bank, the Company’s exclusive service that enables customers to accumulate gigabytes unused during the month for use at any time in the future.

Report on operations 16 at September 30, 2017 In September “3” launched an option dedicated to social network lovers seeking extra gigabytes for worry-free navigation. With Giga Boom they can add 15 gigabytes to be used by the end of December 2018 to their Play, All-In and Free offers at a price of €10 with a one-off payment charged against the residual amount on their SIMs. At the same time as the voice updates, “3” has also revolutionized its Data offer, simplifying the portfolio as follows. On the prepaid front the Super Internet Untied offer has been renewed, currently provided in two denominations of 10 gigabytes and 30 gigabytes at a respective cost of €5 and €15 for 28 days. In the case of payment by direct debit or credit card Super Internet 5GB is also available with 5 gigabytes at a cost of €3. In addition, for all the Super Internet offers with payment by direct debit or credit card the ceilings are monthly and include Giga Bank. With Giga Bank you don’t lose your gigabytes, you simply accumulate them and use them when you want. The 10 gigabyte and 30 gigabyte tied Super Internet offers with payment by direct debit or credit card are also available with a Wi-Fi router included, on sale with a 30 months tie. There are also significant changes in the Data subscription offer: the new 3Cube family of offers has been introduced which replaces the Casa3 offers. 3Cube is available in two denominations: 3Cube and 3Cube XL, with 30 gigabytes and 50 gigabytes, at the respective price of €10 and €15 a month. The two offers include: a 4G/LTE internet option, unlimited night-time navigation, a Wi-Fi device, a Google Chromecast and a 3 month subscription to Netflix. In addition, the 3Cube Special offer has been launched, with 50 gigabytes for only €10 a month, the super convenient data subscription for all new customers who activate it at the same time as an All-In Start, Prime or Master, Prepaid Free, Subscription Free, 3Fiber or 3ADSL voice offer. The offer is also available to existing “3” customers who have activated a subscription voice offer or a rechargeable voice offer with tie and charge on payment method. 3Cube Special also includes: a 4G/LTE internet option, unlimited night-time navigation, a Wi-Fi device, a Google Chromecast and a 3 month subscription to Netflix.

Voice, internet and business services offer

Wind Tre Business Following the creation of Wind Tre SpA, currently one of the leaders in the mobile telephone sector, Wind Tre Business was set up on May 23, 2017 as the new brand dedicated to businesses and the public administration. The brand is founded on three fundamental values that establish its positioning:  Trust: clarity and simplicity in offers and customer relations;  Relations: customer support services and a constant presence of the sales force;  Value: top quality innovative solutions and offers. An exceptional testimonial was chosen as a means of best communicating the birth of the new brand and emphasizing its founding values: Carlo Conti. Conti is one of Italy’s leading television and stage presenters, a person who perfectly embodies Wind Tre Business’s values thanks to his closeness and professionality with respect to the Italian public over the past few years. He will therefore play a central role in communicating the brand in the various media (television, , the press, etc.). Wind Tre Business provides a wide range of voice and data services to its corporate customers, to small and medium-sized enterprises (SMEs) and to professionals (SOHO), with specific offers for each market segment. Larger companies are increasingly oriented towards prepaid offers and to increase their control over spending Wind Tre Business proposes an offer based on the business budget with “all-inclusive” service charges: customers establish their telephone spending at a company level, identifying packages of traffic shared amongst the SIMs, thereby keeping control of the budget at a global level rather than at the level of single SIM card.

Report on operations 17 at September 30, 2017 Faced with the increasing interest in mobile applications (apps) designed to take certain business processes into mobility, Wind Tre Business has additionally launched Enterprise Mobility Services through strategic partnerships and vertical system integrator agreements.

In June, Wind Tre Business launched the new rechargeable portfolio GigaShare for the small and medium-sized business market. The aim of this is to satisfy the rising demand for gigabytes by way of a flexible offer that can be formulated on the basis of business customers’ individual needs. GigaShare consists of two separate offers, each created with a specific target in mind:  MyShare is the rechargeable offer for managers and professionals for sharing gigabytes across their devices and can be combined with the purchase of a top smartphone;  SmartShare is the rechargeable offer for co-workers for sharing gigabytes across several SIM cards and can be combined with the purchase of a basic smartphone. In effect these forms of sharing enable customers to obtain efficiency, savings and flexibility. Both offers also include the Extra Giga bundle which at the end of the shared data basket allows customers to activate another one of a different denomination, allowing them to continue with their work. For the first time the new rechargeable offer for businesses is also valid in the European Union, the United States and Switzerland as well as in Italy. From June 1, 2017 not only did Wind Tre Business bring forward the economic benefits of the requirements of the new European Regulation governing traffic used in the countries of the European Union, it also added Switzerland and the United States as countries in which it is possible for customers to make calls using their national tariff plan, under the same conditions and at no extra cost, including international calls from Italy to abroad. Nevertheless to satisfy the needs of customers frequently travelling abroad to countries other than those named, GigaShare provides the possibility of completing the offer with the Top Mondo offers that provide voice and data traffic in the main business destinations. On the other hand customers who only make occasional visits abroad can activate the weekly option Mondo which provides voice and data traffic throughout the world. The foreign offer is completed by the International Aziende option for calling abroad. A further important change is represented by the Work & Life product line. This enriches the Wind Tre Business offer with smart products and solutions for a person’s free time. More specifically, Work & Life includes the following services:  Digital Kit: free of charge vouchers for the digital transformation of a business;  Smart Working: a range of products for use in the office or in mobility;  Smart Life: exclusive products for free time.

The Cre@sito, Pec Smart, Mobile POS, WIND Smart Control, Windlex and Servizi 4 Mobility digital services complete the mobile offer for businesses. The Cre@sito service provides customers with the possibility of creating a website on their own through a user- friendly interface and of having a level II dominion and a mailbox. Pec Smart is a certified electronic mail service, mandatory by law for professionals and businesses, which has legal value equivalent to a registered letter with return receipt. WIND Smart Control is the innovative mobile device management solution of WIND Business created for all small and medium businesses needing to make the smartphones and tablets used by their employees safe and to configure and monitor these devices in a simple, rapid and effective way. This service has a cost of only €2 a month. Thanks to the partnership with 4Mobility, new services are available to provide an optimal management of working

Report on operations 18 at September 30, 2017 activities in mobility: organizing the day’s work in the best possible manner and recording this by way of reports, photos and videos; managing contacts and planning visits and having digital catalogues, products and documents in mobility; digitalizing and managing expense notes in the simplest way, creating and transferring them in real time. In order to extend its portfolio of offers and services dedicated to SMEs, a partnership agreement of significant importance has been entered with in order to be able to offer customers Office 365, the productivity suite in Microsoft’s Cloud. With Office 365 businesses have all the tools at their disposal that they need to work in mobility effectively and everywhere on any device (smartphones, tablets, laptops, PCs, Macs), so that they can manage, modify and share documents in real time while operating with the utmost safety. Wind Tre Business proposes the Microsoft Office 365 services in three packages: Basic, Plus and Top to respond to the various needs of businesses, starting from €4 a month per single account. All customers acquiring GigaShare obtain for each SIM an Office 365 Business suite with a Basic profile included for 24 months, and together with a top tier smartphone a further Office 365 Business suite with a Top profile free of charge for 24 months. In addition, thanks to the above-mentioned partnership with Microsoft the Wind Tre Business CRM Dynamics Online solution for customer relationship management is available. This provides small and medium businesses with a powerful, intuitive and easy-to-use tool, also in mobility, to assist them in the operational management of their customers, to increase the satisfaction of these customers and to make business and sales opportunities grow. This is the first pre-packaged “plug&play” solution of Microsoft CRM Dynamics Online on the market, entirely cloud-based, with no initial investment needed and with an assisted set-up.

Again as part of the development of digital services in partnership, Wind Tre Business’s offer has been enhanced by a number of important additional solutions:

 Business Analytics, the web cloud offer consisting of Real Time Monitor and Expense Manager services which implement a set of functionalities for permitting the analysis and supervision of the usage of the main telecommunications services.  Real Time Monitor, the solution that permits the real time analysis and management of a business’s mobile connectivity through a simple and intuitive digital interface that enables a business to analyze the voice/SMS/data traffic generated by individual users; autonomously manage the definition of traffic ceilings; activate an automatic alerting system that triggers on reaching specific usage values; generate automatic device action on exceeding specific traffic ceilings; make the most out of a standard and ad hoc reporting system.  Expense Manager, the smart system for reporting telephone traffic which enables businesses to organize invoice information in accordance with pre-established criteria, constructing graphic reports and statistical aggregations that allow a detailed analysis of the business’s spending to be performed.  Mobility Pack, the solution created for businesses that want to make the best use of their devices by providing their employees with a complete use experience in complete freedom, flexibility and security. Mobility Pack separately manages the utilization and traffic of two different use profiles: the business profile (dedicated and confidential utilization of business data and applications) and the personal profile (private utilization of data and applications), keeping business and private lives apart. Mobility Pack provides: o the separation of the business profile from the personal profile on different models of mobile devices

Report on operations 19 at September 30, 2017 o a cloud Enterprise Mobile Management solution that gives the IT Manager full control of the data and the business’s applications installed on the device o the collection and tariffing of the traffic of the business profile by means of a private APN o safe navigation on the internet through a firewalling/content filtering system.  Fleet Management, innovative security, protection and satellite localization solution, capable of combining the best of the Wind Tre network with the experience of the leading business in Europe in satellite computer systems. Fleet Management provides: o fleet tracking functionality - through real-time viewing of vehicles and journeys o driving style functionality – through simple and intuitive driving/consumption graphics set in relation to the journeys made by the vehicle.

Wind Tre Business has additionally launched three new digital touch points for strengthening its proposition for providing information and support to customers:  the www.windtrebusiness.it website dedicated to communicating offers and services for businesses and the public administration and a further customer support tool. Created with responsive technology and with a modern and interactive design, www.windtrebusiness.it is able to guarantee customers an involving experience from any device (desktop, tablet or smartphone) with the aim of developing the concept of a simple shop window of products and proposing itself as an innovative channel for acquiring and managing the customer. Through the new web channel businesses have the possibility of requesting customized advice in real time, leaving their contact information in the section set aside for the purpose. Specifically www.windtrebusiness.it is divided into four main areas: the first and the second are addressed to SMEs and large businesses respectively; the third is an area completely dedicated to assistance; finally, the fourth is dedicated to the events and roadshows that Wind Tre Business organizes throughout the country as an opportunity for meetings between managers, businesses and the public administration to promote a digital innovation culture. As is the case for all of the products and services of Wind Tre Business, the new website combines cutting edge technology with an easy-to-use facility in order to provide customers with top quality and the support required to compete on the market successfully.  The Wind Tre Business app, the channel for effective, intuitive and free of charge self-care, available on the App Store and the Google Play Store. The Wind Tre Business App allows customers to keep the various service profiles constantly under control, both in Italy and abroad, without using, in Italy, the data traffic included in the subscribed offer. With the new app they can monitor the offer and relative consumption and network coverage, become aware of the services available for international travel, request assistance directly from customer service and remain constantly updated about the latest things that Wind Tre Business has to offer.  Social profiles @windtrebiz disponibili on Facebook and Twitter. The new social profiles represent an important communication and conversation channel for getting to know about the offers and changes in the Wind Tre Business world and receiving information and assistance, thanks to the constant support of a dedicated social care team. Wind Tre Business develops initiatives throughout the country to promote and divulge the culture of innovation and digital transformation for various spheres and reference models, availing itself of the support of specialist partners in the sector.

Report on operations 20 at September 30, 2017 Finally, to ensure maximum support with the best technology an advanced technical assistance service is available to all Wind Tre Business customers free of charge. In combination with the mobile offer Wind Tre Business provides businesses and the public administration with a fixed-line offer, described in detail in the section “Fixed Telephony and Internet”.

Innovative Services WIND and “3” continued with their proposal offer of digital contents such as apps, games, music, films, e-books and digital magazines which customers can download from the main stores using their telephone account as a means of payment without the need for a credit card. In addition to Google Play and Windows Phone Store, which have been active for a while and are constantly growing, 2017 has seen the extension of the use of telephone credit to the whole of the Apple world (iTunes, App Store, Apple Music, iBooks). This functionality was activated in March for “3” customers and in May for WIND customers. As of today Wind Tre is the first and only Italian operator to make the service available on the Apple platform. The launch of Windows Store for “3” customers also took place in May (already active for WIND customers since August 2016); this has extended the digital contents perimeter and added the possibility for customers to make use of contents downloaded from a lap-top. With a view to improving customers’ digital learning, WIND has taken a key role in a series of initiatives channeled through its monobrand stores having the aim of encouraging the payment of digital items using telephone credit and creating an interconnection between the digital and physical worlds. In addition, there have been numerous communications activities on the online channels that envisage the involvement of influencers particularly well-known for their love of games. There are currently more than 60 cities where the mobile ticketing service is active and it is now possible to buy tickets with telephone credit in Florence, Genoa, Milan, Naples and several other centers. In addition, at the beginning of 2017 the mobile ticketing service was launched in 10 additional cities (Alessandria, Massa, Viareggio and Salerno to name but a few), achieving highly significant coverage in the region of Tuscany where the residents of all the provincial capitals are able to benefit from this convenient service. In addition, since July 2017 it has been possible to use telephone credits to pay for the parking and recharging of electric vehicles at the Duferco Energie columns. WIND and “3” have additionally promoted several initiatives to disseminate the service and make it known to the public, receiving positive feedback on the social channels and visibility in the main local and national press. In 2017 alone WIND and “3” customers enabled the mobile ticketing service to save more than two tonnes of paper, which considering both brands makes a total of six since the service started in 2012.

International Roaming Wind Tre customers have two different types of roaming coverage depending on whether they belong to the WIND brand or the “3” brand. The two coverages are advancing in parallel. As of today WIND brand customers can count on 637 international roaming relations which guarantee them roaming coverage in 211 countries, among which prepaid customers have the possibility of “direct call” in 171 countries thanks to 379 agreements for the provision of this service. In addition all WIND brand customers can use LTE in roaming in 54 countries thanks to agreements with 92 operators. “3” brand customers can on the other hand count on 555 international roaming relations which guarantee them roaming coverage in 192 countries, among which prepaid customers have the possibility of “direct call” in 154 countries thanks to 340 agreements for the provision of this service. Further all “3” brand customers can use LTE in roaming in 19 countries with 31 operators.

Report on operations 21 at September 30, 2017 Since April Wind Tre customers can take advantage of the benefits of Easy Europe, which also allows them to use their national offer when they travel in the European Union at no extra cost. The portfolio is completed by offers valid throughout the world, which respond to the needs of customers who only go abroad occasionally and those who travel more often.

Sales and Distribution Wind Tre continues to improve the quality of its distribution channels and strengthen its sales network, marketing its mobile products and services including SIM cards, scratch cards and handsets through a series of exclusive outlets which at September 30, 2017 consisted of 1,817 sales points, 694 WIND brand sales points and 1,123 “3” brand sales points. The non-exclusive Wind Tre sales network consists of 3,734 multibrand dealers spread throughout the country and further strengthened by a presence in electronic store chains with various distribution models (counters, “3” corners). From May 2017 WIND’s offers dedicated to prospective customers for the consumer rechargeable segment can be purchased online. Two different forms of delivery are available: direct, sent by courier to the address named by the customer, or by booking the offer and entering the customer’s details and those of the MNP online and then paying/collecting the SIM card at the sales point. The new www..it website was inaugurated in June 2017 after being transformed through a restyling project into a responsive site aiming to optimize the existing functions of the online activation of services and offers, supporting and optimizing the business’s new e-commerce from a mobile standpoint. At the same time the partnership with Amazon continues; under this agreement customers can buy WIND products conveniently from their own home and with no delivery costs. WIND was the first telecommunications company in Italy to enable its services to be bought through Amazon. The partnership continues with FreedomPop, which continues to be one of the main digital purchase channels with its portfolio of dedicated offers. In addition, customers can continue to top-up their SIM cards from the website and from apps, paying by credit card or PayPal or by charging their WIND or Infostrada telephone account. The activation of a fixed-line offer (fiber or ADSL) for a new or existing telephone number can be requested from the www.wind.it website. Fixed and mobile customers can check their usage, change their offer and independently manage their lines in the website customer area and by using the apps. From the www.tre.it website customers can activate offers and services as well as buy telephones, smartphones, tablets and new mobile SIM cards. In addition, since September the new 3Fiber offer is available; this enables “3” customers to activate fiber at dedicated conditions. In September the new convergent offer WindHome and 3 Fiber was launched which enables WIND and “3” customers to stay connected inside or outside their homes. Customers can also top up online, paying by credit card or Paypal, and control and manage their telephone lines from the www.tre.it site or from the “3” customer area on the app. Thanks to the initiatives dedicated to the online stores, the activation of SIMs of the “3” brand in full online modality (dispatch of the order directly to the address selected by the customer) has increased five-fold compared to last year, while the online activations of the WIND brand grew by 350% in the third quarter.

Report on operations 22 at September 30, 2017 Fixed Telephony and Internet

WIND provides its consumer and microbusiness customers with a vast range of direct fixed network services, broadband internet and data transmission services. WIND provides broadband services to direct customers (unbundling) by renting the “last mile” of the access network from Telecom Italia, which is disconnected from Telecom Italia equipment and connected to WIND equipment at the telephone exchange. In addition, thanks to its strategic partnership with Open Fiber, WIND sells ultra-broadband services in FTTH mode (Fiber to the Home) in Milan, Bologna, Turin, Perugia, Bari, Catania, Padua, Cagliari, Palermo, Genoa and Naples where it markets offers in optic fiber which allow end users to reach speeds of up to 1 gigabit a second. In the other main Italian municipalities it sells ultra-broadband services in FTTC mode (Fiber to the Cabinet) with download speeds of up to 100 Mega and upload speeds of up to 10 Mega. In April 2016, WIND and Open Fiber signed a strategic commercial partnership aimed at accelerating the creation and dissemination of infrastructure in ultra-broadband in Italy’s main municipalities using FTTH technology. On the sites where it is present in unbundling WIND offers an ADSL Vera service; this enables the customer’s line to be stabilized at the maximum supported speed up to a downloading peak of 20 Mega, thus providing users with the best possible performance and ensuring a constantly stable line. The latest plan that started in January 2015 for expanding the Direct Access network has led to the unbundled coverage of over 70% of the lines, further strengthening WIND’s positioning as an alternative operator to Telecom Italia in the fixed sector.

Voice services Wind Tre’s fixed network voice customer base could count on 2.7 million subscribers at September 30, 2017 representing a decrease of 1.2% over September 30, 2016.

The following table sets out the key fixed-line indicators.

Fixed line 2017 2016 9 M 9 M (proforma) Change Customer base (thousands of lines) 2,706 2,739 (1.2%) of which LLU (thousands)(1) 2,513.0 2,469.4 1.8% (2) Revenue (millions of euro) 835.6 808.2 3.4%

Voice traffic (billions of minutes) (3) 6.1 7.2 (15.3%) ARPU (euro/month) 28.0 27.2 2.9% (1) Including LLU, Virtual LLU and ODA (2) Including TLC and CPE revenues (3) Voice Traffic Outgoing and Incoming off net

Internet and data WIND offers a vast range of internet and data transmission services to both its consumer and business customers. At September 30, 2017, the Group had 2.4 million broadband internet customers.

Report on operations 23 at September 30, 2017 The following table sets out the key internet access figures.

Internet and data services 2017 2016 9 M 9 M (proforma) Change Internet customer base (thousands) 2,378 2,319 2.5% of which narrowband (thousands) 6 4 50.0% of which broadband (thousands) 2,372 2,315 2.5% of which LLU (thousands) 2,004 2,111 (5.1%) of which shared access (thousands) 4 5 (20.0%)

Package and convergent services WIND is one of the leading suppliers in Italy of internet, fixed-line voice and data and mobile telephone services, having an integrated infrastructure and a network coverage which extends throughout the country. To make the positioning of WIND and “3” even more exclusive in the convergent services sector on September 11 two WIND brand (WindHome) and “3” (3Fiber) product lines were launched, targeted towards segments of customers interested in having fixed and mobile integrated packages. In particular WindHome is aimed at families, thanks to an offer that includes unlimited navigation from inside and outside the home: fiber up to 1,000 Mb and a data SIM with 50 gigabytes full speed to be shared with their smartphones. On sale as part of a combined offer are Modem Fisso and Modem Mobile to provide the best of technology inside and outside the home. 3Fiber addresses young customers who are fond of innovation, with a dedicated offer that includes fiber up to 1,000 Mb and a SIM with 1,000 minutes, 200 SMSs and 2 gigabytes. WindHome and 3Fiber are available in both fiber and ADSL coverage at a special price and are suitable for both residential users and VAT-registered users. In addition WIND and “3” customers can take up these offers at dedicated prices and add further SIMs at highly advantageous conditions. Customers who subscribe to WindHome can activate WindHome Magnum to make unlimited calls from their smartphone sharing the 50 gigabytes. Customers who subscribe to 3Fiber can activate All- In Master with a 50% discount or 3Cube Special with a dedicated promotion. WindHome can be enhanced with a wide range of solutions for the connected home starting from videocameras and smart radiators up to the most complete solution, the Smart Home Pack, which includes: Smart Plug, Motion Sensor and Videocamera. In addition, from September 25, WindHome & Sky Limited Edition is available for all customers wishing to combine the great TV of Sky with the benefits of fixed and mobile connectivity. In this way customers will always be connected, inside and outside the home, and will be able to access their preferred Sky contents everywhere thanks to the included Sky Go. The plan of opening the new fiber offer (FTTC and FTTH) in the main Italian communities continues. In particular for FTTH technology dedicated action has been taken by each individual city in terms of both communications and offers, in order to maximize the Company’s acquisitions and make a name for itself also in fiber technology.

Voice, internet and business services offer WIND provides PSTN, ISDN and VoIP fixed-line network voice services, data services, VAS and connectivity services to companies in the large business market, capitalizing on the experience gained with ENEL and using a dedicated call center. In this segment WIND is also able to tailor its offer to the specific needs expressed by customers and to the requirements set in tenders. The offers for businesses also include flat solutions with tariffs based on the number of users, which enable customers to keep complete control over their spending.

Report on operations 24 at September 30, 2017 Direct access to the network is assured for large-scale businesses by radio link, by direct optic fiber connections and by LLU direct access; in areas where direct access is not available, dedicated lines leased from Telecom Italia are used. In addition, WIND also extends its offer for the large business market through cloud services and its commercial proposal with ICT and managed services solutions, on both fixed and mobile networks. WIND has a partnership with the Enterprise division of Google which enables it to propose collaboration and communication solutions to businesses based on Google Cloud Apps. WIND has drawn up an offer, WIND Cloud per Aziende, consisting of a rich catalog of IaaS services and, in particular for medium-sized businesses, pre-configured bundles of data center and connectivity services which are capable of satisfying the needs of these customers and are available in an extremely short period of time. In addition, WIND has launched WIND Cloud Line, an IP PBX cloud solution that combines the mobile and fixed worlds, and Work & Life, a solution created to provide an integrated response to the requests for smart working increasingly to be found in businesses. The fixed network offer portfolio for sole traders requiring up to four lines (analogue or 2 ISDN) consists of the voice and ADSL bundle price lists (All Inclusive Business L and All Inclusive Business Unlimited), which offer unlimited calls to all national fixed and mobile numbers and unlimited ADSL, Absolute ADSL Business price lists, which offer unlimited ADSL connectivity and pay-per-use voice calls, and Noi Unlimited Affari price lists, which offer unlimited calls to all national fixed and mobile numbers, unlimited calls to all fixed and mobile numbers on the WIND- Infostrada telephone account and pay-per-use ADSL. The whole of the offering portfolio is available with WIND network coverage on lines already activated with other operators and also on new lines. For all sole trader customers, existing and new, the possibility continues of subscribing to the new second line offer, which envisages only one additional voice line that can also be used to send and receive faxes, and of using POS devices. Customers of other operators with additional numbers can now finally decide to pass over to Infostrada without losing their telephone numbers. The Absolute ADSL Business and All Inclusive Business Unlimited plans have become even more advantageous as a result of the corresponding Super versions which add mobile telephony to the bundle. To complete the offer ‘plug&play’ packs are being proposed at extremely competitive prices to respond to customers’ most common needs: the Internet Pack, consisting of a Wi-Fi router and a 3G internet key, offered in combination with a data SIM card having two months of completely free traffic included, enables customers to navigate on the mobile network while waiting for activation of the ADSL service and to have a back-up line on the mobile network once activation is completed; the Internet-&-Video Pack on the other hand contains an IP video-camera in addition to the Wi-Fi router and an internet key to enable customers to video-control their working environment, record images and obtain access from laptops or mobile devices. For SMEs, WIND offers a wide range of dual-play (voice + internet) products with tariff plans based on VoIP technology having unlimited traffic to national fixed and mobile numbers and to the international fixed network and unlimited ADSL up to maximum of 20 MB with a minimum guaranteed band of 300 kbps and a static IP address. The offer is available in a 2 line version (All Inclusive Aziende Smart) and in a 3 to 8 line version (All Inclusive Aziende). The VoIP offer becomes even more beneficial thanks to Super All Inclusive Aziende, if combined with the Unlimited subscription or rechargeable mobile plans using up to a maximum of 10 SIM cards, and Super Internet, if combined with the data offers. In addition the fixed offer is also available with fiber access (FTTC), allowing customers to navigate at up to 100 Mbit/s with the same monthly charge as ADSL.

Report on operations 25 at September 30, 2017 Another offer designed for small and medium businesses is Smart Office, which includes a virtual switchboard based on VoiP technology. Smart Office is available in two profiles: Small, which enables customers to activate up to 10 fixed and mobile extensions with 3 simultaneous calls, and Large, for businesses that need to have up to 100 extensions, of which up to 25 fixed, with 6 simultaneous calls. And with Super Smart Office customers can use discounts on connectivity if they also activate mobile offers. The Smart Office offer has been improved with the addition of the Extra Large version with fiber access for companies that require a virtual PBX and more than 6 calls from fixed internal extensions, with unlimited calls to everyone and up to 15 simultaneous calls. Another type of Smart Office is the Executive offer with SHDSL connectivity for medium or large companies that need more than 70 fixed internal extensions. In addition, Netride Smart is also available, a solution that provides considerable customization and flexibility possibilities, created to satisfy the needs of SME customers.

Sale and distribution of fixed network services WIND’s distribution strategy is based on the “ominichannel” concept (stores, web and telephone), satisfying the needs of customers who independently select the sales channel which suits them best. In terms of performance, the most important sales channel is the channel (monobrand and multibrand stores), which through integrated offers continues to increase in importance. Following this are the 159 call centers and the web, while the activities of the outbound call centers are by now residual and are mostly used for acquiring customers in very specific segments.

Interconnection services Wind Tre offers its wholesale services to other operators, making its network capacity available through these services, and manages incoming and outgoing call termination traffic on its network for domestic and international operators. Wind Tre is paid a fee by other operators for managing calls which terminate on its mobile or fixed network, while in the same way it is required to pay a termination charge to other operators for calls which terminate on their mobile or fixed telephone networks. Interconnection tariffs from mobile to mobile, from mobile to fixed, from fixed to mobile and from fixed to fixed are established by Wind Tre in accordance with AGCOM requirements.

Customer care service Wind Tre’s Customer Value Management department (CVM) sets itself the objective of understanding, anticipating and responding to the needs of current and potential customers with the aim of increasing the value of the relationship in all the segments covered, from the consumer market (mobile and fixed) to the business market, with an organizational structure focused by market. A success factor for the initiatives carried out by CVM, which is increasingly gaining importance, is the ability to know how to capture customers’ needs on a real-time basis during their lifecycle, and in particular in the presence of certain specific consumption behavior. This has become possible by making analysis and campaign management tools more sophisticated and evolved. Consistent with the identification of customer needs, Wind Tre’s CVM provides suitable solutions in terms of product and offer through traditional and digital relation channels. Commercial actions involving customers are also carried out through the use of the distribution network and customer care, which have developed from being acquisition and assistance channels to channels that develop value and customer loyalty. Customer care service activities for WIND and “3” are coordinated by the Customer Care Operations Department, which is organized to support the needs of the various segments in the most effective manner: rechargeable

Report on operations 26 at September 30, 2017 customers (mobile), subscription customers (fixed telephony, mobile telephony and internet) and business customers. Call centers dedicated to residential customers are located throughout the country and in addition in order to provide a tailored service for certain particularly important customer segments such as the ethnic communities WIND also provides a customer assistance service in other languages. The WIND customer care service continues to develop its operational organization, focusing not only on the service activation phase with specific measures but also on the increasing need for mobile-fixed-internet multi-service assistance. In this sense moves are being taken to develop business processes and architectural investments to strengthen the integrated management of customers with different services and brands. An addition has been made to customer satisfaction measurement methods by making it possible to observe the various points of contact between the customer and the Company. NPS methodology has been adopted which represents the benchmark approach in the service market. This methodology makes it possible to understand the customer’s needs better and accordingly to provide targeted replies, and more generally to identify the main areas for development. In a market characterized by a high dynamicity and by a constant renewal and enlargement of the offer and services portfolio a multi-channel approach to assistance has to be extended by diversifying the possibilities available to the customer. As a result the availability of “self-care” assistance through dedicated website areas, dedicated apps and chats, IVRs and services with automatic SMSs has accordingly been further developed to allow customers to select their preferred modality. This vision represents a cultural asset for both the WIND and the “3” brands, an approach that involves and combines all business sectors. The MyWind app had reached almost 17 million downloads at September 30, 2017 and remains extremely popular among customers for its simplicity of use and the completeness of its services, having a 4.2 rating on Android stores and 3.7 on iOS. The new app Veon, active since November 2016, which provides customers with an integrated experience of assistance services combined with typical Over The Top functionalities, had reached 2 million downloads at September 30, 2017. Version 2.0 of the app was released in July; this introduces a series of important changes including the possibility of associating with it a MyWind account, channels with contents and offers and an evolved notification system. The “3” Customer Area app remains the main contact channel for the “3” brand and has reached 16 million downloads, with a rating of 3.8 on Android stores and 3.4 on iOS.

Marketing and Branding Advertising Offline WIND brand In January 2017 WIND began its TV planning with a spot on Fiber, in movie format, containing the final episode of the Elves saga. In February WIND renewed its ATL format with a new creative strategy exalting the brand’s ‘tone of voice’ and confirming its positioning as a smart-fun name with the return of Fiorello, the par excellence brand ambassador. ‘I’m not changing, I’m staying with WIND’ is the claim of the new format which opened with a value-driven branding campaign and was followed between February and May by three product spots dedicated to All Inclusive, which doubled all its bundles for a year, and Wind Magnum, which is also available in combination with the new Samsung Galaxy S7/S8. The Wind Magnum Top Smartphone synergy at a special price and 2 additional gigabytes also played a

Report on operations 27 at September 30, 2017 leading role in a “3” national billboard campaign. Again in an OOH sphere billboard planning also concentrated on the roll-out of fiber with a first campaign of a national character, developed in 71 different cities, followed by local campaigns with planned domination in the 9 cities reached by fiber. WIND launched its summer offer on the basis of two key tags: #thewindunlimited and #noextracosti: all the new WIND offers have unlimited calls and internet in order to remain connected at no extra cost. WIND continued to cover music territory from June with the 11th edition of the Wind Music Awards, with the live event taking place on four evenings framed by the surroundings of Piazza del Popolo in . Wind Home became active in September, a new convergent product line that combines the speed of fiber with GIGA Full Speed that can be shared among smartphones in order to be “always connected, inside or outside the home”. Giorgio Panariello announced the big change of fiber for all and without limits together with the rapper Fabri Fibra.

Radio was covered with a campaign in partnership with Huawei with the aim of supporting the sales of Wind Magnum combined with the Huawei P9 smartphone.

As far as the press was concerned, a medium that is always dedicated to the ethnic target, planning continued in line with previous years and with a creative focus that exalts the idea of ‘Closer to your traditions even when you’re far away from home’. In April WIND announced its pre-eminence among telephone operators in the press and with Easy Europe enables its customers to use their national tariff plan throughout the European Union at no extra cost and with no activation charges.

WINDTRE BUSINESS brand The new WINDTRE BUSINESS brand was activated in June with a portfolio of offers dedicated to businesses. For the new brand an exceptional testimonial from the show business world, Carlo Conti, has been involved. For the traditional media the campaign consists of the press, airport billboards, the radio and brochures.

“3” brand In 2017 the “3” brand presented itself to its customers in new attire. In January a branding campaign centered on the new pay-off ‘the future you want’ talked about the values of technology, transparency and trust which characterize the “3” brand’s positioning, as always on the cutting edge of technological decisions. The leading role in the story is taken by a young girl who dreams up solutions to revolutionize daily life and discovers that dreams really can come true through technology. The format continued with three commercial spots: in February All-In with Top-up Always On, unlimited minutes, 30 gigabytes and a new Samsung Galaxy A for €15 a month, in March for the first time with Fibra Infostrada also available for “3” customers for only €19.95 a year and in cross-selling with the All-In at half price and in April with Free combined with the brand new Samsung Galaxy S8 from €25 a month. In line with the TV spots, All-In and Free took the star roles in national OOH campaigns in February. The “3” brand’s summer, which concentrated on the pay-off “the summer you want”, celebrated the millennial target on TV with “digital” holiday experiences and social moments shared by smartphone: Play In Limited Edition with Huawei P10, 1,000 minutes and 10 gigabytes, and All-In, also combined with the Samsung Galaxy G8, with the brand new Giga Bank, unique in the telecommunications panorama, which enables customers to use their unused gigabytes by the end of the following month. “3” has always what you want and on occasion of the Casa/Netflix partnership its

Report on operations 28 at September 30, 2017 fluid pay-off becomes “the series you want”: Netflix’s best series and contents are included for 3 months with Casa3 and the offer is included in a dedicated package that includes Chromecast and WeCube.

Always close to the world of cinema with its Grande Cinema loyalty program, which offers “3” customers a free of charge entry ticket once a week, the “3” brand sponsored the launch of the film ‘Smetto Quando Voglio Masterclass’, on the big screen from February 2, with a product placement project and a national billboard campaign. It was also the main sponsor in March of the 61st ‘David di Donatello’ ceremony for prizes awarded by the Academy of Italian Cinema, which was additionally on the air on Sky with a spot and a dedicated offer: All-In Gold Edition, up to 30 gigabytes, minutes and SMSs for €30 a month.

Advertising Online Significant investments were made in the digital media on a constant basis throughout the first nine months of 2017, aimed at ensuring continuous awareness of all the Group’s brands and online sales through the various e-commerce channels. Planning covered all the main desktop and mobile websites, with the use of standard, impact and video formats and search advertising and envisaged retargeting action. As far as the WIND brand is concerned, worthy of mention are the Porta I Tuoi Amici, All Digital, Wind Magnum and Everything at €1 Promo campaigns, the Summer Card promotion in partnership with Now TV and the “Always on” campaigns aimed at ethnic targets, as well as performance activities supporting the Online top-up campaign and the offers exclusively available online. Also noted is the digital campaign aiming to bring the #unlimited concept to the public’s notice on the channels on the occasion of the Wind Summer Festival. In addition the two e-commerce hubs were launched in March in partnership with Amazon and Freedom Pop. February saw the online launch of the Veon app with its full-circle coverage of the web and social channels and the dual objective of creating a reputation and encouraging downloads of the app. In addition, use was made of the occasion to develop a viral video campaign and activities in partnership with influencers. In September the digital campaign focused on the “Download the Veon app and win the trip of your dreams” competition, supported awareness of this and promoted its installation. Worthy of mention in the period were also the national and georeferenced “always on” campaigns aimed at supporting awareness and the online sales of the ADSL and fiber offers, with special focus on the cities covered by FTTH and FTTC technology. The new WIND brand Wind Home Infostrada offer was launched in September with a display campaign directed at awareness and activation. As far as the “3” brand is concerned an All-In campaign in co-marketing with Samsung is worthy of note; this campaign was set up to communicate the benefits of “3”/Infostrada convergence, a display focusing on the new iPhone 7 and Huawei P10 models, and in the second quarter digital activities designed to support the online sales of offers from the Play family and online top-ups. In addition, in March “3” put its name to a digital campaign aimed at communicating the fact that it sponsors the 2017 David di Donatello awards on Sky properties. In terms of the B2B segment the new Wind Tre Business brand was launched in June, anticipated online by a teaser campaign. This campaign, which sees Carlo Conti in the leading role, is being developed online in several phases: the teaser was followed by an awareness phase and, starting in the middle of June, by the launch of the Gigashare offers supported by a performance plan. The digital activities supporting the collection leads continued without interruption for the whole of the period.

Report on operations 29 at September 30, 2017 The social channels are constantly active, being used to give high visibility to the whole of the offering portfolio of both brands, WIND and “3”, through the use of campaigns sponsored through organic publications reinforced by influencer marketing activities. Editorial plans of pure entertainment are also channeled through the social channels, thereby creating strong empathy and virality of the contents. Of importance was the live coverage of the 2017 David di Donatello award ceremony on the social channels of “3” with updates from the red carpet and exclusive contents.

Corporate advertising and special projects In January the Group put its name to the first institutional campaign as WIND and “3” combined: the number one Group in mobile telecommunications in Italy has arrived. A new entity capable of courageously and ambitiously facing the challenges of the future through its brands. One which will make innovation its mission. In line with the values of technology, transparency and trust, “3” took the decision to be the main sponsor of the 61st ceremony for the presentation of the David di Donatello awards, broadcast by Sky on 27 March. The most original and ‘visionary’ film among those in competition, Sarà, received the “3” Future Award. This step strengthened the link between the “3” brand and the world of the cinema, as always represented by the Grande Cinema 3 loyalty program. WIND continued to cover the music territory with two important musical events. The Wind Music Awards ceremony, the event produced by WIND in conjunction with the recording sector associations AFI, FIMI and PMI and with the collaboration of SIAE and ASSOMUSICA and set up to recognize the recording achievements of the leading artists on the Italian music scene (certified by FIMI/Gfk) and, for the first time, also their live performances, was held on June 5 and 6 at the Verona Arena and was broadcast by RAI 1 in prime time. The Wind Summer Festival: leading artists in Italian and international music performed on June 22, 23, 24 and 25 in Piazza del Popolo in Rome. The event was broadcast by Channel 5 for four evenings. Several events were covered locally in the third quarter, among which the Summer Jamboree, the biggest international festival of music and culture of the America of the 1940s and 1950s, which took place in Senigallia between July 26 and August 6, the 38th edition of the Rimini Meeting, one of the most important appointments for discussion and debate on economic, political, social and cultural issues in Italy, and the Levantine Fair, one of the leading fairs for Italy and the Mediterranean basin that was held in Bari between September 9 and 17. WIND launched its new branding campaign on September 20 on the main digital channels. The film entitled “The Bee” is a simple tale that “explores” the relationship between man and communication and reminds us that we shouldn’t set limits to our desire and ability to communicate, something that can “go beyond” the technology itself.

Materials supporting the launch of Home & Life branded products, in particular customized Home & Life Fit and Home & Life Cam products and the relative packs and guides, have been available in WIND stores from the middle of July and will also be available in “3” stores from the end of the year. In the product field various activities have been carried out in support of ultra-broadband technology in FTTH mode, with communications conducted through the double brand WIND and “3”: Guerrilla (Blitzkrieg) with posters, fliers and a parkour display in Milan, Bologna, Turin and Perugia in March and May. From June 12 to 25 guerrilla activities were extended to other cities. In addition to Milan, Turin, Perugia and Bologna these also took place in Cagliari, Catania, Padua, Bari and Venice. Local billboard planning began on June 26 to push fiber, with ad hoc positions close to the WIND and “3” stores.

Report on operations 30 at September 30, 2017 Simultaneous with its launch, the new Wind Tre Business brand participated as a partner at the twenty-eighth PA Forum held in Rome at the Fuksas Cloud from May 23 to 25: this is the biggest Italian appointment for debating issues on innovation in the public administration. The subjects dealt with during the event were smart working as a means of re-organizing the public sector, the policies of Industry 4.0 and the role of Wind Tre within the digital transformation process. At an institutional level, WIND continues with its contribution to young businessmen with the WIND Business Factor project.

Social channels

As part of social management, significant activities were performed during the first nine months of 2017 to ensure the awareness of the business’s brands and the visibility of all of its offers. During the summer period a dedicated editorial stream was launched for the WIND brand (cards, quote, amusing posts) as support for the Unlimited campaign, together with the relative hashtag: #thewindunlimited. There was then also an awareness campaign for WIND and Veon on the social channels with editorial support translated into the publication of posts, viral videos and connected contents. Veon Stories were significant as part of activities: there are four editorial channels in the Veon app divided into original channels, partners’ channels, global channels and a channel dedicated to WIND and Veon with the daily publication of articles, videos and offers (6 a day, 7 days a week). Online top-up was present 18 times for a total of 36 publications on Facebook and Twitter. The presence of competitions has been of importance: 7 out of a total of 132 publications consisting of teasers and a listing of the winners. In addition March saw the launching of the two e-commerce hubs in partnership with Amazon and Freedom Pop. With the latter, worthy of note was the “always on” social campaign planned for the whole of the current year and created for the offers dedicated to these partnerships. Of further note was the launch in September of Wind Home Infostrada where here too there was a fundamental presence consisting of editorial streams with cards, quotes, amusing posts and a dedicated hashtag: #windhome. Regarding fixed-line, the presence of Local Awareness sponsored formats was important: ad hoc posts in pplink format for various cities announcing the arrival of fiber. There were around 15 formats in total. The activities of social influencers within the ambit of the WIND brand have also enhanced the value of the initiatives of Digital Financial Services, the Unlimited campaign and the special promos launched for St. Valentine’s Day and Father’s Day, in addition to offers such as Summer Card, in partnership with Now TV, Wind Magnum and All Digital. In continuity with the previous half year social conversations have been monitored and enhanced with Real Time Marketing, a daily directly interacting with users, opinion leaders and social communities.

As part of the management of “3”, the “The future you want” campaign was launched to strengthen the brand’s new attire, with the presence on the social channels of editorial streams, original posts and a dedicated hashtag: #thefutureyouwant At the same time, to give a high level of visibility to the offer – firstly with All-In and Free and then with the “The summer you want campaign” – numerous activities were organized on the social channels: sponsorships, “teaser” editorials, partnerships and co-marketing activities. Out of all of these worthy of a mention are those with Netflix, Apple, Honor and Asus for whom original and exclusive contents were produced and special activities organized (such as the photos in the 3Store taken during the lunch arranged for the launch of Apple, the involvement of the actors of Stranger Things for Netflix, etc.).

Report on operations 31 at September 30, 2017 Regarding the “3” brand, the activities of marketing social influencers obtained wide consensus in the spring canvass and were additionally deployed in the summer and back to school campaigns to promote the offers, the partnerships with Honor and Asus and the co-marketing initiative with Netflix. The use of innovative formats for offer and engagement/entertainment editorials, including animated gifs, dynamic covers, video teasers and amusing images/videos, has had a considerable effect on increasing and maintaining top level engagement and sentiment indicators for both brands.

As part of the special projects and sponsorships, this year the Company has stood out again for arranging events such as the Wind Music Awards and the Wind Summer Festival. On the social channels in particular, support for the Wind Music Awards was guaranteed by social coverage before, live and during the broadcasting of the event: photos, videos, texts, backstage, Instagram Stories and TV pills. There was a total of 310 publications on Facebook, Twitter and Wind Instagram with relative hashtags: #thewindunlimited, #unlimitedsummer and #windsummerfestival. The event dedicated to the David of Donatello was also given a key presence with social coverage before the event and live: photos, videos, texts and backstage. There was a total of 108 publications on Facebook, Twitter and 3 Instagram with relative hashtag: #David2017. Finally, the launch of WIND’s new corporate video in September on all digital and social channels is worthy of a mention. The film entitled “The Bee” explores the relationship between man and communication and reminds us that we shouldn’t set limits to our desire and ability to communicate, something that can “go beyond” the technology itself. The new Wind Tre Business brand was activated in June with a portfolio of offers dedicated to businesses. Social channels also support the brand with dedicated pages on Facebook and Twitter where the offering campaigns are to be found together with engagement and entertainment activities.

Report on operations 32 at September 30, 2017 NETWORK

The Wind Tre network Wind Tre currently owns 2 mobile networks, coming from the assets of the two original companies, and a fixed network belonging to WIND. Following the merger, the 2 mobile network’s infrastructures will be progressively integrated with positive effects for customers, having better connectivity both in terms of covered areas and quality of indoor signal. As of September 30, 2017, Wind Tre’s fixed access network covered 70% of the Italian population with ADSL broadband technology + direct services while mobile network population coverage reached 99.9%. In particular, Wind Tre UMTS/HSPA and LTE are available to 98.7% and 91.6% of the Italian population respectively.

The following chart shows Wind Tre mobile’s coverage at September 30, 2017.

The integration between the transmission networks owned by WIND and Tre is almost complete with links in all provinces and major cities in Italy, resulting in a single infrastructure with 35,887 kilometers of fiber optic cable for Backbone and 6,744 kilometers of fiber optic cable for MANs, as of September 30, 2017. The wireline transmission network is completed by 29,687 kilometers of radio links.

Fixed-line Network As of September 30, 2017, Wind Tre ’s fixed-line access network had 1,957 LLU sites for direct subscriber connections with a capacity of approximately 3.466 million lines, and had interconnections with 32 GW IPs which allow to offer carrier selection access for indirect subscribers throughout Italy, as well as WLR services. Since 2015 Wind Tre has made investments in fiber activating the ultra-broadband services through Fiber to the Cabinet and Fiber to the Home technologies for almost 41% and 7% of the Italian population respectively. During 2016, the FTTH service was extended from Milan to Turin, Bologna and Perugia and in the first nine months of the year, leveraging on the agreement signed with Open Fiber (OF), this service was further extended to an additional 8 cities: Venice, Padua, Naples, Bari, Catania, Cagliari, Genova and Palermo. In the next years, thanks to a new agreement with Open Fiber, the ultra-broadband plan will be extended to further 258 cities in the most populated areas of Italy. This service provides fiber optic connections which allow end user to reach download speeds of up to 1000 Mbps and is designed to meet the needs of “Home-Family” customers.

The national voice switching network consists of:  an IMS network with 4 call control nodes,  a legacy network with 40 TDM exchanges,  a transit NGN network made of 4 media gateway controllers and 42 trunking gateways.

Report on operations 33 at September 30, 2017 This national network, to manage TDM / VoIP interconnections, is also completed by:  a network dedicated to interconnection with international operators consisting of 4 media gateway controllers and 12 trunking gateways,  an I-SBC layer for the connection with other national network operators.

Wind Tre’s infrastructure for data traffic is an “all IP” network, with over 50 PoPs (Point of Presence), for direct (xDSL) and indirect internet access services, as well as virtual private networks (xDSL, Fiber Optics). The IP access nodes network consist of 61 BRAS for consumer services and 84 Edge Routers for business application, located in PoP to ensure optimal coverage of the national territory.

Mobile Network Wind Tre offers mobile services through 2G, 3G and 4G technologies. After the merge and according to Ministerial directives, imposing the transfer of some frequency blocks previously owned by the two original companies, Wind Tre’s frequency spectrum will change during next years and will take the following configuration at the end of 2019:

System Current Spectrum Blocks

GSM 2x5 MHz – 900 MHz 2x5 MHz – 1800 MHz

UMTS 2x5 MHz – 900 MHz 2x20 MHz – 2100 MHz 10 MHz – 2100 MHz TDD

LTE 2x10 MHz – 800 MHz 2x15 MHz – 1800 MHz 2x20 MHz – 2600 MHz 30 MHz – 2600 MHz TDD

To meet the strong increase in data traffic demand, in 2017, Wind Tre concentrated its commitment mainly on the extension of LTE (long-term evolution) coverage to provide broadband mobile services. The company has decided to invest in this solution to improve the quality of the mobile network and to get benefits in terms of reduction of energy consumption.

As a first step towards consolidation of two mobile networks, starting from May 2, 2017, roaming on 2G and 3G WIND’s network was gradually opened all around Italy for 3 Italia customers, who can now use WIND’s network with the same prices and services of the home network; starting from August 2017 roaming was also available on 4G network. All this activities have allowed access to the mobile service even if Tre’s network is not available and have also allowed the TIM’s roaming switch off, completed during August 2017, resulting in future savings. By the end of August 2017, starting from the pilot cluster of Bologna, the consolidation of two existing mobile networks has

Report on operations 34 at September 30, 2017 begun; this process will be progressively extended to other areas of Italy with the intent to reach a full integration into a single infrastructure in 2019, with positive effects for customers who will have better connectivity and quality of service. As a result of this activity, some technical facilities for signal repetition will exceed the business needs: these assets will be dismantled or transferred to another operator starting from the end of 2017 and up to the end of 2019.

Wind Tre, has also roaming agreements with international telecommunications operators around the world which allow Wind Tre customers to use their mobile services in other countries.

The following table provides an analysis of Wind Tre’s GSM/GPRS, UMTS/HSDPA and LTE networks as of September 30, 2017.

GSM/GPRS Radiating sites (ON AIR) 14,796 BSC (Base Station Controllers) 218 MSC (Mobile Switching Centers)* 30 HLR (Home Location Register, FE, CUDB)* 20 SGSN (Service GPRS Support Node)/MME** 16 GGSN (Gateway GPRS Support Node)/PGW/SGW** 11

UMTS Node B (ON AIR) 25,864 RNC (Radio Network Controller) 218 MGW (Mediagateway) 47

LTE Enodeb (ON AIR) 11,768 HSS (FE, CUDB, Monolitici) 8 * Condiviso con GSM/UMTS ** Condiviso con UMTS/LTE

Report on operations 35 at September 30, 2017

HUMAN RESOURCES

At September 30, 2017 the Wind Tre Group had a workforce of 7,525 employees structured as follows.

Average no. of employees No. of employees at in the period

09/30/2017 09/30/2016(*) 09/30/2017 09/30/2016

Senior managers 175 237 188 241

Middle managers 766 897 833 904

Office staff 6,584 8,433 7,415 8,484

Total Wind Tre Group 7,525 9,567 8,416 9,629

(*) Data at September 30, 2016 referring to total number of employees of H3G and WIND Telecomunicazioni at the reference date (Proforma).

During 2017 the Group hired 86 employees while 1,897 left, of whom 680 due to the sale of a business.

The following table shows the geographical allocation of Wind Tre personnel.

Sites 09/30/2017 Wind Tre 09/30/2016 ex Wind 09/30/2016 ex H3g Rome 32% 33% 23% Milan(*) 19% 13% 32% Naples(*) 16% 18% 1% Palermo 5% 6% 10% Ivrea 8% 9% 0% Cagliari 1% 1% 18% Genoa 1% 1% 12% Other 18% 19% 4% Total 100% 100% 100%

(*)The Rho site is included in Milan and the Pozzuoli site is included in Naples.

Organization The Group’s new organizational structure was introduced during the first quarter of the year by setting up the two business units dedicated to covering the business and consumer market segments and a technology department dedicated to covering all network technologies and information technology with a view to achieving an effective integration of the systems. In addition, a department was set up within corporate staff dedicated specifically to controlling the plan for the integration between the two merged groups. At the same time the process for communicating the new organizational responsibilities was carried out.

Detailed descriptions of all operational responsibilities were established during the second quarter of the year and human resources were allocated, following a precise documentation of the activities and processes previously performed by the two merged groups, consistent with the business’s rightsizing plans. In addition, with the aim of improving business control, a commercial responsibility structure was set up at the same time having increased specialization on the consumer, digital and business customer segments and a specific focus on the services offered (mobile and home) functional to the Company’s brands.

Report on operations 36 at September 30, 2017 The implementation of the organizational model continued in the third quarter aiming to improve the vertical focus on the various business areas for the “mobile” and “home” consumer offer channeled through the WIND and 3 brands, the SME and large “mobile”, “fixed” and ICT offers channeled through the Wind Tre business brand and control the contents and evolution of the “digital market place” with the objective of increasing the margins and value of the offer. The plan to optimize business structures continued together with the revision of internal processes with the aim of improving effectiveness and efficiency.

Training A total of 4,522 man-days of training were given in the first nine months of 2017. These mainly involved specialized technical training for the technology department, with particular reference to training courses on the implementation of the new communications network. These initiatives will continue to involve Technology Operations, Access Deployment and Network Engineering up to the end of the year.

Development Work took place on a number of development initiatives during the first nine months of 2017. Wind Tre’s new performance and conduct appraisal model was drawn up in terms of content, processes and tools. Implementation activities are currently in progress in order to be able to carry out an appraisal of the whole of the Company’s workforce. The new leadership model that will act as a basis for all of the Company’s managers is also currently being established by determining the associated conduct. The whole of senior management was interviewed and a focus group set up with a number of executives, arriving at an agreed construction of the model, which will then be communicated to everyone and also be the subject of training courses.

Industrial relations Following the consolidation of the merger of WIND into H3G a company agreement was drawn up in February harmonizing the various contractual and legislative provisions. This includes among other things the flexibility of working hours, work-life balance, welfare and remuneration; in particular it will also be possible to convert productivity bonuses into welfare services, allowing employees who select this option to obtain the fiscal benefits envisaged by current legislation.

Again as part of the need to integrate the two groups agreements were reached with the trade unions on the transfer of personnel between the various sites, starting with Rho and Trezzano.

As provided by the national collective bargaining agreement for the telecommunications sector a meeting was held with the trade unions in May to present the latest business plan, at which in order to concentrate more on certain business objectives the Company announced the sale of the “133 Call center” business pursuant to article 2112 of the Italian civil code.

The trade union procedure provided by law was initiated in June together with the company Comdata (identified as the partner in the sales operation), during which the reasons for the transfer, the economic, legal and social consequences and the measures envisaged with respect to employees were set out.

Report on operations 37 at September 30, 2017 On June 27, Wind Tre and Comdata entered an agreement with the trade unions establishing the remuneration to be paid to the transferred employees in addition to that provided by law.

Given the particular commercial and operational relevance of the contract with Comdata, a number of important occupational guarantees were agreed with the unions for the workers involved in the transfer, including the application of the clauses provided by the national collective bargaining agreement for the telecommunications sector in the case of a change in contractor.

In addition to the national strike called to bring attention to the need to renew the national collective bargaining agreement for the telecommunications sector, the first half of the year also saw the initiative taken by the trade unions in June against the Company’s plan to sell the “133 Call Center”. Despite this, no critical matters regarding the provision of services to the end customer or repercussions on operations in general were noted during the strike action.

Following the sale of the “133 Call Center” to Comdata the activities provided by the agreement signed with the unions in this respect have been carried out.

In particular, individual transactions were agreed with the transferred workers who had made a request in which a one-off amount was recognized against a waiver of making any claims against Wind Tre. Over half of the transferred workers adhered to this initiative.

No union initiatives were taken during the period that had an effect on business operations.

Safety in the workplace In accordance with the agreement reached between the state and the regions on training a total of 930 workers were given safety in the workplace training during the first nine months of 2017 for a total of 749 man-days. The following table provides details of this by area and sector.

Staff and Total Area Technology IT commercial CC area by area entities Nord west 137 5 13 10 165 North east 170 1 30 201 Centre 97 53 5 155 South 177 31 37 164 409 Total trained workers 930

A total of 3,500 health inspection examinations were carried out during the period in accordance with business roles, the health protocols allocated and the relative deadlines.

Report on operations 38 at September 30, 2017 REGULATORY FRAMEWORK AT SEPTEMBER 30, 2017

Mobile Networks and Services

EU Regulation

In application of European Regulation 2015/2120 in March AGCOM notified Wind Tre by way of Resolution 123/17/CONS as to a number of aspects relating to the applications “Veon” and “Music by 3” which the Authority believed to be in contrast with article 3, paragraph 3 of the Regulation, under the interpretation provided by BEREC2. In April, Wind Tre notified the Authority of the measures it had adopted to ensure full compliance with the order and the European Regulation. In May the Authority send Wind Tre a further communication concerning adherence to the requirements of Resolution 123/17/CONS, noting the requirement to implement additional measures. On July 3, 2017 Wind Tre provided AGCOM with additional information following an AGCOM request of June 12, 2017 and on August 8, 2017 Wind Tre informed the Authority that it had implemented the technical measures adopted to avoid a possible fine pending the appeal lodged with the Regional Administrative Court (TAR).

Mobile Termination

In September 2015 AGCOM extended3 the validity of the mobile termination rate of €0.98 per minute established in 20114 through to the conclusion of its market analysis at the end of 2017. This rate is the maximum price cap for all SMP notified operators when they provide mobile termination services to their customers, MVNOs included. In the same decision, given that operators of countries outside the European Union (EU) or the European Economic Area (EEA) apply mobile termination rates on their networks higher than those regulated at a European level (for example Italian operators at €0.98 per minute), AGCOM allowed Italian mobile operators to establish from a commercial standpoint their own fair and reasonable mobile termination rates for calls originating from non EU/EEA operators. Both WIND and H3G took advantage of this opportunity setting prices depending on the origin of the call. In January 2017, following Resolution 45/17/CONS, AGCOM initiated a new cycle of market analyses for mobile termination and completed the information collecting phase in July 2017. The publication of the consultation documents is currently awaited.

EU Roaming Regulation

In November 2015 European legislation was issued5 amending the previous regulation6 on roaming, having as its objective the elimination of the difference between roaming tariffs and domestic tariffs for occasional travel (Roaming Like At Home) throughout the European Union starting from June 15, 2017. The same regulation provided a transitional period from April 2016 to June 2017 during which mobile operators were allowed to apply a surcharge.

2 BEREC Guidelines on the Implementation by National Regulators of European Net Neutrality Rules. 3 Resolution 497/15/CONS 4 Resolution 621/11/CONS 5 Regulation (EU) 2015/2120 6 Regulation (EU) 2012/531

Report on operations 39 at September 30, 2017 To complete the above mentioned regulation, in December 2016 the European Commission also published the implementing regulation7 designed to define criteria for the fair use policy and for the evaluation of the sustainability of RLAH and a further regulation8 on the maximum tariffs applicable until June 15, 2017 for voice calls received by European customers when roaming in one of the European Union countries. The publication of Regulation 2017/920 in the European Official Journal on June 9, 2017, which amends rules for wholesale roaming markets, completed the regulatory framework required for the new EEA roaming regulation based on “Roaming Like At Home” to become effective from June 15, 2017. In accordance with that principle Wind Tre adapted the offers of the two brands in advance of the deadline, namely on April 24, 2017 for the WIND brand and on May 8, 2017 for the “3” brand.

Spectrum

In December 2016, AGCOM announced the start of a fact-finding survey9 on prospects for the development of mobile and wireless systems towards the fifth generation (5G) and the utilization of new portions of the spectrum above 6GHz. In March 2017 AGCOM published a document on the fact-finding survey and the deadline for responses which was initially set as June 26, 2017 was subsequently postponed to July 5, 2017. Wind Tre sent its response to the fact-finding survey in accordance with the deadline.

During 2016 H3G completed the coverage obligations set for the spectrum in the 2600 MHz band in advance with respect to the deadline set at the time of the assignment of the rights of use (LTE auction).

Again during 2016 the former WIND Telecomunicazioni S.p.A. carried out a change of technology (refarming) from GSM to UMTS (3G) on a 2x5 MHz block in the 900 MHz band on a specific portion of the national territory.

Pursuant to and in accordance with article 1, paragraphs 568-575 of Law no. 232 of December 11, 2016 and article 25, paragraph 6 of the Electronic Communications Code, Wind Tre S.p.A. requested authorization, with effect from July 1, 2017, to change the technology on the entire allocated 900 and 1800 MHz band with expiry date June 30, 2018 and at the same time to extend the term for the above-mentioned rights of use to the new technical conditions at December 31, 2029. Wind Tre has additionally paid the fee indicated in the Ministry’s Provision of July 26, 2017 in accordance with the terms and means stated therein.

In addition, the technical and financial plan for the extension to December 31, 2029 of the rights to use the frequencies in the 2100 MHz band has been filed with the Ministry for Economic Development as required by the provision of that ministry dated October 24, 2016 and protocolled with no. 67608.

In accordance with the requirements of the Ministry for Economic Development’s provision Wind Tre notified that the initial issue of frequencies in favor of Iliad S.p.A., in the 2600 MHz band, had taken place on June 30, 2017.

In conclusion, in order to implement European Commission Communication no. 2016/588, the “5G Action Plan”, by 2020, by way of a notice published on March 16, 2017 the Ministry for Economic Development initiated a procedure for acquiring planning proposals for carrying out pre-commercial testing within radio spectrum 3.6 – 3.8 GHz in the following three national areas: Area 1 – Milan metropolitan area, Area 2 – Prato and L’Aquila and Area 3 – Bari and

7 Implementing Regulation (EU) 2016/2286 8 Implementing Regulation (EU) 2016/2292 9 Resolution 557/16/CONS

Report on operations 40 at September 30, 2017 Matera. The closing date for submitting applications for participation which was originally set as May 15, 2017 was subsequently postponed to June 12, 2017.

Together with Open Fiber S.p.A., Wind Tre S.p.A. has presented a planning proposal for taking part in the testing proposed by the Ministry for Economic Development (MISE) as stated in the above-mentioned public notice. MISE published a classification on August 2 and the proposal for Area 2 (Prato and L’Aquila) submitted by Wind Tre S.p.A. together with Open Fiber S.p.A. was ranked first.

On September 20 the final phase of the “negotiated procedure” between the MISE and the group consisting of Wind Tre S.p.A. and Open Fiber S.p.A. was concluded, and on September 22 confirmation was given of the award to Wind Tre S.p.A. and Open Fiber S.p.A., with the MISE issuing a temporary authorization for pre-commercial 5G testing in the 3.6 – 3.8 GHz portion of the spectrum for Area 2 Prato and L’Aquila.

National Numbering Plan and SMS/MMS Alias

In July 2016, AGCOM set up a public consultation10 on modifications and additions to the “Numbering plan in the sector and implementation regulations” in relation to the use of alphanumeric identification codes. On September 28, 2017, AGCOM published its Final Decision 132/17/CIR, concluding the proceeding without making any changes to the existing NNP on the subject. In December 2016, AGCOM initiated public consultation no. 561/16/CONS on modifications and additions to the National Numbering Plan for the use of the 455 codes utilized by non-profit organizations for fund raising. In May 2017 AGCOM published Resolution 17/17/CIR which updates the discipline for managing 455 numbers, requiring operators to adopt a new self-regulation code within 90 days of the publication of the provision. At the beginning of August 2017, within the time period established by Resolution 17/17/CIR, operators submitted the new version of the self-regulation code to AGCOM. Approval of the code by AGCOM is currently awaited.

In April 2017, by way of Resolution 18/17/CIR, AGCOM extended the term for the alias testing in progress to March 31, 2018.

During July and September AGCOM organized talks with operators as a means of identifying any developments connected with the way by which IINs (Issue Identification Numbers) are allocated for eSIM purposes. The talks are still in progress and a public consultation is expected in October.

Database of all internet access networks

In December 2016 AGCOM completed the proceeding11 initiated in 2015 to draw up innovative solutions to fill the digital gap between broad and ultra-broad band and map the internet access network. Wind Tre provided the information requested by the Authority by the set deadline. In the meantime AGCOM has published the application on its website enabling the information contained in its data banks to be viewed.

10 Resolution 158/16/CIR 11 Determination 1/16/DSD

Report on operations 41 at September 30, 2017 Fixed-line network

TIM Broccatelli reference offers

During 2016 the Authority started several proceedings for assessing the TIM Reference Offers for 2015 and 2016 relating to: a) wholesale fixed-line services for unbundled access services; b) dedicated capacity transmission services12; c) copper and NGA based bitstream services, VULA and related ancillary services; d) WLR services; e) fixed network interconnection services; f) NGA infrastructure. In December 201613 AGCOM approved the TIM reference offers for 2015 and 2016 relating to dedicated capacity transmission services (point b) above). In January, February and March 2017 AGCOM approved the reference offers for 2015 and 2016 relating to LLU, bitstream copper and NGA and WLR services (points a), c) and d) above) as well as the corresponding reference offers for the fixed network interconnection services (point e). In July 2017 AGCOM approved the reference offers for point f).

In December 2016 AGCOM initiated14 a public consultation relating to the economic and technical conditions of the 2013 Reference Offers of TIM for copper bitstream services, wholesale unbundled services for access to metal networks and sub-networks and co-location services. This proceeding was initiated in execution of sentence no. 3143/2016 of the Council of State relating to AGCOM Resolutions 746/13/CONS, 747/13/CONS and 155/14/CONS. The proceeding is in progress.

In August 2017 the proceedings were started for the approval of the 2017 Telecom Reference offers for the following wholesale services: a) wholesale fixed-line services for unbundled access services; b) dedicated capacity transmission services; c) copper and NGA based bitstream services, VULA and related ancillary services; d) WLR services. The proceedings are in progress.

Market analyses

In January 2017 by way of Resolution 43/17/CONS, AGCOM initiated a new cycle of market analyses relating to fixed-line access. These markets comprise the main wholesale fixed access services and include i) unbundling and subloop unbundling (LLU and SLU); ii) bitstream copper; iii) bitstream NGA and VULA (FTTH and FTTC); iv) FTTH P2P and GPON; v) WLR; vi) NGA access services (dark fiber, cable ducts, verticals); vii) end to end; viii) backhauling services.

On May 29, 2017 AGCOM sent operators qualitative and quantitative questionnaires. Wind Tre has sent in its replies to the questionnaires and publication of the public consultation by AGCOM is currently awaited.

Again in January by way of Resolution 44/17/CONS, AGCOM initiated a new cycle of market analyses relating to fixed position high quality wholesale access services – terminating circuits (market no. 4 of European Commission Recommendation 2014/710/EU).

In June 2017 AGCOM sent operators qualitative and quantitative questionnaires. Wind Tre has sent in its replies to the questionnaires and publication of the public consultation by AGCOM is currently awaited.

12 Terminating circuits, interconnection links, kit deliveries and internal cabling within TIM premises. 13 Resolution 596/16/CONS 14 Resolution 627/16/CONS

Report on operations 42 at September 30, 2017 Technical working groups

In 2016 the Authority set up a number of working groups designed to address the technical issues relating to wholesale services. In particular the following matters were the subject of discussion by the workgroups: a) the new assurance process for unsuccessful intervention on WLR and asymmetric bitstream lines; b) the technical specifications of street cabinets within the provision of wholesale FTTCab and subloop unbundling services; c) the technical specifications required for implementing Multi Operator Vectoring (MOV); d) procedures to be used in the case of the switch-off of the copper network by TIM. In 2017 AGCOM set up workgroups relating to e) the passage to direct routing in the fixed-line sphere; f) migration to TIM’s new delivery chain in the fixed-line sphere; g) the methodology for determining the overbooking factor for regulatory purposes; h) the updating of the fixed migration procedures of users utilizing TI’s fiber offer or that of other operators. Discussions are in progress.

In particular in July and September 2017 meetings were held by the working groups relating to i) the procedures for the switch-off of the copper network by TIM and ii) migration to TIM’s new delivery chain in the fixed-line sphere (with respect to the latter the start of migration, initially planned for July 1, has been postponed to October, compatible with the results of the tests in progress).

Universal service

By way of Resolution 113/16/CONS of March 24, 2016, AGCOM submitted for consultation a review of the scope of application of the universal service obligations in relation to internet access and the relative quality objectives.

. In this respect by way of Final Resolution 253/17/CONS of June 27, 2017, AGCOM concluded that: once the ultra-broadband (BUL) tenders have been allocated together with the relative coverage, the cost of the universal service extended to connectivity services with a speed of at least 2 Mbps should remain restricted to residual areas excluded from broadband and ultra-broadband coverage.

. When revising universal service obligations, as a means of supplementing fixed network access, the qualitative requirements may be set for fixed wireless, satellite or mobile connections that must guarantee a speed of at least 2 Mbps.

By way of Resolution 133/17/CIR of September 26, 2017, AGCOM set up a public consultation on the results of the activities to calculate the net cost of the universal service for 2008 and 2009.

Replicability testing of TIM’s fixed-line offers

By way of Resolution 584/16/CONS, AGCOM approved the guidelines for assessing the replicability of the retail offers of the notified operator for fixed network access services (TIM); as required by that resolution, following specific checks carried out by the Authority, AGCOM determined the “production mix”, meaning the weights to be allocated to the cost of each system-based solution as part of verifying the replicability of TIM’s retail ultra-broadband fiber- optic offers.

Report on operations 43 at September 30, 2017 Equal treatment and unbundling of provisioning and assurance services for LLU and SLU services

In May 2016 AGCOM started a proceeding15 to assess TIM’s proposal for the unbundling and outsourcing of provisioning and assurance activities for LLU and SLU services and the measures required to provide greater assurance as to equal treatment in the provision of regulated fixed wholesale access services.

With the publication of Resolution 321/17/CONS in August 2017 the procedure was completed and AGCOM issued its decision on the subject of unbundling. The decision, for which an effective date of September 1 has been set, provides for a series of interactive meetings over the next few months between TIM, alternative fixed operators, system businesses and authorities.

Proceeding for the revision of SLAs and penalties pursuant to Resolution 623/15/CONS

On the basis of Resolution 623/15/CONS relating to wholesale markets for fixed access services, AGCOM has initiated a proceeding for the review of the current framework for SLA and penalties in order to improve the “Equivalence of Output” model to which TIM, the dominant operator, is required to adhere in providing wholesale access services. The proceeding is in progress and AGCOM has asked operators to provide their initial observations.

Review of non-discrimination key performance indicators as per Resolution 623/15/CONS

Following its approval of Resolution 623/15/CONS relating to wholesale markets for fixed access services, AGCOM has initiated a review proceeding on non-discrimination key performance indicators in order to ensure compliance with equality of treatment between TIM and alternative operators. In this respect AGCOM requested operators to provide their observations at two distinct times, in April and November 2016. The proceeding is in progress.

The deadline for the conclusion of the proceeding has been extended by way of a communication of September 11, 2017 to take account of the need to understand more about the potential effects that the unbundling measure introduced by Resolution 321/17/CONS may have on the definition of the KPIs and the workgroup’s activities.

Fact-finding survey into digital platforms and electronic communications services

By way of Resolution 357/15/CONS, AGCOM initiated a fact-finding survey into digital platforms, addressed to all parties who operate along the value chain of the new digital services provided through the internet platform. The survey aims i) to understand the business models employed by these entities; ii) to determine the means to protect users and the market as a whole; iii) to evaluate the opportunity of defining rules to establish a "level playing field" between new and traditional subjects; iv) to understand the functioning of platforms for distributing the apps and their underlying technologies; v) to understand the role played in the new digital ecosystem by the social communication apps (e.g. WhatsApp, Viber, WeChat, Facebook Messenger, Skype).

On June 28, 2016, by way of Resolution 165/16/CONS, AGCOM published the main findings of the fact-finding survey for the consumer section.

Again with respect to Resolution 357/15/CONS, in November 2016 AGCOM put a series of questions to the above parties on Big Data, to which Wind Tre promptly responded. These represented an anticipation of a fact-finding

15 Resolution 122/16/CONS

Report on operations 44 at September 30, 2017 survey specifically dedicated to the subject, initiated by way of Resolution 217/17/CONS, to be carried out jointly with AGCM and the personal data protection authority. The objective of the survey is among others “to identify any critical matters connected with big data, to establish of a set of rules designed to foster and protect competition in the digital economy markets and to safeguard privacy and the consumer”. The publication of the questions relating to the fact-finding survey is currently awaited.

Fixed termination

In September 2016 AGCOM adopted its final decision16 on fixed public telephone network interconnection services. The decision confirmed AGCOM’s previous decisions on the matter that established symmetric termination rates between TIM and other operators.

As envisaged by this decision the Authority has set up a technical workgroup to assess the most suitable means, and the related critical matters, with which operators must modify the routing technology used in the fixed-line telephone networks, moving from the current onward routing technique to direct routing. The group’s work is currently in progress.

Migration procedures and pure number portability

In October 2015 AGCOM submitted for consultation17 a review of the timing underlying the fixed pure number portability procedure. The consultation ended in April with Resolution 40/16/CIR setting up a technical workgroup to review current fixed number portability procedures.

At the same time the Authority set up a technical workgroup to amend the current procedures for user transfer in order to adapt these in the case of optic fiber access services provided by wholesale operators other than Telecom Italia Wholesale. The technical workgroup is in progress.

Television frequencies and networks Article 1 of the decree issued by the Ministry of Economic Development on August 4, 2016 established that the fees for spectrum rights of use for 2014, 2015 and 2016 should be paid by December 31, 2016. This annual contribution is due for the use of spectra with national coverage for terrestrial television bands and amounts to €1,966,990 for each network (multiplex). This is reduced by 60% for sales of capacity between 75% and 100%.

By way of the decree issued by the Ministry of Economic Development on April 13, 2017 the ministry indicated the reference amount for 2017 for the annual fee due for the use of spectra with national coverage for terrestrial television bands. This fee has been set as €2,042,058 for each network (multiplex) applying a contribution rate of 7.5% and keeping unchanged the reductions envisaged for the sale of capacity established by the previous decree.

16 Resolution 425/16/CONS 17 Resolution 119/15/CIR

Report on operations 45 at September 30, 2017 Antitrust issues

Proceeding A428C

On July 15, 2015 AGCM initiated a proceeding against TIM for alleged infringement pursuant to article 15, paragraph 2 of Law no. 287/90 for failing to comply with letters a) and c) of the Authority’s Provision 24339 of May 9, 2013 (a provision issued at the end of proceeding A428). This proceeding, which had been subject to a series of postponements, was brought to an end on December 21, 2016 by way of Provision 26310 under which the Authority resolved: a) that there is no presupposition for the sanction, b) that Telecom Italia S.p.A. should continue with the implementation of the project for the reorganization of the business model ensuring equality of treatment up to planned completion and that it should inform the Authority as to the performance levels of the access service supply systems and the stage of completion of the reorganization project by way of written documentation within thirty days of the date indicated by the Party for completing the implementation stage of the project stated at letter b).

Proceedings A500 A and B

In November 2016 AGCM initiated investigation proceedings against TIM and Vodafone for two separate but similar alleged violations of article 102 of the TFUE (abuse of dominant position) against the two companies operating in the national bulk SMS market. On December 19, 2016 WIND and H3G each sent a formal request to the Authority to participate in the proceedings and both requests were upheld. On April 6, 2017 AGCM notified Wind Tre that the commitments submitted separately by TIM and Vodafone had been rejected. In this case the Authority maintained that these commitments were insufficient to eliminate the charge of anti-competitive conduct.

The proceeding has been extended to apply also to Telecom Italia Sparkle. As reported in Provision 26716 (published by AGCM on August 2, 2017) on July 28, 2017 the results of the investigations were sent to the parties. In addition, the deadline for concluding the two proceedings has been extended to December 31, 2017, as AGCM considers the need to guarantee the full right to reply regarding the requests of Vodafone, Telecom Italia and Telecom Italia Sparkle to be justified.

Proceeding I799

This proceeding has been initiated against Telecom Italia and Fastweb for an alleged understanding to restrict competition (article 101 of the TFUE) deriving from the agreement that led to the creation of Flash Fiber for implementing FTTH solutions in certain specific cities.

This proceeding, in which Wind Tre was authorized to participate, which was also set up on the basis of a report made by WIND on July 29, 2016 and then subsequent reports made by Vodafone and Enel, is expected to be concluded by December 31, 2017.

On June 28, 2017 the Authority published TIM’s commitments (provision no. 26654) and those of Fastweb (provision no. 26655) in order to submit them to market testing. Observations on the submitted commitments must be received by the Authority no later than August 3, 2017.

The Authority has postponed the deadline for the proceeding to assess the commitments from October 2, 2017 to October 31, 2017 after accepting the requests for an extension made by the parties for the submission of information in reply to the observations made during the market test, setting the new date as September 25, 2017.

Report on operations 46 at September 30, 2017 Proceeding I757 – WIND commitment compliance

The annual compliance report on the commitments accepted by AGCM as part of proceeding I757 for an alleged vertical agreement between WIND and its multibrand sales chain was submitted to the Authority in March 2017.

At its meeting of May 17, 2017 the Authority acknowledged the compliance report and agreed that it had been prepared in accordance with the commitments undertaken in provision no. 25230 of December 11, 2014. This report must be submitted in March of each year for the commitments to hold.

Proceeding A514

A proceeding against Telecom Italia SpA (TI) was initiated on June 28, 2017 to ascertain whether there had been a violation of article 102 of the TFUE (abuse of a dominant position) on the basis of reports submitted by Infratel, Vodafone Italia, Enel SpA, Open Fiber SpA and Wind Tre SpA.

On the basis of the information received by the Authority TI allegedly conducted itself in a series of different ways with the aim of achieving two objectives harmful to competition:

 obstructing tenders called by Infratel Italia for the coverage of the white areas with FTTH networks in order to maintain the monopoly position it has historically held in those areas and avoid the entry of new competing operators;

 capturing customers by providing the new segment of retail ultra-broadband telecommunications services in advance, including by way of anti-competitive commercial policies (unrepeatable prices, lock-ins). In this way TI would allegedly achieve two objectives: on the retail market to make it harder to take over its customer base on migration to the ultra-broadband offers; and on the wholesale market to discourage investment in the new networks and make these less profitable.

Personal data protection

On April 15, 2016 the European Parliament approved the Data Protection Reform Package, consisting in particular of a General Regulation which from May 25, 2018 will replace Privacy Directive 95/46/EC and as a consequence all related national legislation such as for example the Italian Data Protection Code (Legislative Decree no. 196 of June 30, 2003). All the activities of both technical and organizational implementation requested by the above regulation are in progress. On March 20, 2017 a violation in the Selfcare tre.it computer system was identified by one of the Group’s foreign suppliers (notified to the Data Protection Authority on March 21) with the resulting illegal viewing and acquisition of credentials included in a file containing the personal data of 5,118 customers (of whom 683 no longer active). On March 23, 2017 Wind Tre contacted the 402 customers whose personal area had been accessed. On March 26, 2017 a provision was notified under which the Data Protection Authority required Wind Tre to advise all those concerned who had not received the March 23 communication, in writing and within 15 days of receipt of the provision, and Wind Tre duly complied. On July 28, 2017 the Data Protection Authority notified a new provision which prescribes the need to inform all the other concerned parties whose numbers were included in the file. Wind Tre satisfied the requirement in August. The proceeding is still pending.

Report on operations 47 at September 30, 2017 In 2016 the Data Protection Authority carried out a number of inspections whose results are not yet known. In particular:

 Inspection of the WIND brand in August 2016 arising from a contact campaign sent to certain customers to obtain their consent. Following the inspection, the Data Protection Authority notified a prescriptive provision which has been satisfied by Wind Tre, although the Company has filed an appeal that is still pending. Following the above inspection a provision has been notified for a fine of €20 thousand.

 Two inspections have been carried out relating to the “3” brand (one in November 2016 and one in January 2017) with the results not yet known.

Consumer protection

Regarding the proceedings of the Italian Competition Authority (AGCM) on consumer protection matters, one proceeding concerning the Consumer Code regulation and relating to the right of withdrawal as part of remote selling is still pending for the WIND/Infostrada brand (PS10685); this proceeding is expected to be concluded by May 6, 2017 and a fine is possible. A proceeding involving the Infostrada brand (PS10571) relating to the charge for the fee due for the modem in the case of remodulation is pending. A proceeding (PS 10702) involving the “3” brand has been initiated for alleged lack of adequate information relating to the phrase “without limits” used commercially and involving the WIND brand for alleged lack of adequate information concerning the cost of early withdrawal from fixed network offers.

Two consultations were initiated in 2016 on the activities carried out by AGCOM in the field of consumer protection: the first, on the subject of provisions concerning special economic conditions reserved for certain categories of customer (Resolution 378/16/CONS), was recently concluded by way of Resolution 46/17/CONS, while the second on the partial modification of Resolution 252/16/CONS was concluded by way of final decision 121/17/CONS. Recently (at the end of September) a dispute has been initiated against Wind Tre (6/17/DTC) pursuant to Resolution 121/17/CONS. An examination of such is in progress. In addition, a public consultation has been set up on measures following seismic events (Resolution 84/17/CONS). A proceeding initiated in 2016 against the WIND brand on the provision of international roaming services in Europe (Resolution 31/17/CONS) has been brought to an end, as has a proceeding on the submission of claims by telephone (21/16/DTC) and a proceeding initiated in 2016 on migration procedures. As far as the “3” brand is concerned the proceeding on the provision of roaming services in Europe (32/17/CONS) has been concluded, as have been the activities for compliance with Decision 579/16 (on the involuntary use of the answering service). For the “3” brand a proceeding (1/17/DTC) concerning the LTE modulation initiated in 2016 has been concluded with a fine. A dispute has recently been initiated in connection with 4 repricing information campaigns (3/17/CTC). With the participation of the Ugo Bordoni Foundation the technical workgroups in AGCOM are continuing their work on Resolutions 580/15/CONS (on provisions on quality and mobile and personal communications service charters) and 244/08/CSP as amended (on quality and service charters for access to internet from a fixed workstation).

Report on operations 48 at September 30, 2017 Trading Practices Three proceedings have recently been closed: i) PS10685 initiated against the WIND brand on 2016 activities (closed on July 18, 2017) and relating to a cooling off period for customers in connection with remote sales (closed with a fine of €2.1 million); ii) PS10571 initiated on the fixed Infostrada brand relating to the deferral of fixed network terminals (closed with a fine of €0.5 million). Proceeding PS10702 initiated by AGCOM is in progress.

Disputes between operators before AGCOM By way of Resolution 449/16/CONS changes and additions were made to the “Regulation on the resolution of disputes between operators” as per attachment A of Resolution 226/15/CONS, adapting the requirements of the previous regulation to those of article 9 of Legislative Decree no. 33/2016 with identifies the Communications Authority as the body competent for the resolution of disputes between network operators and physical infrastructure managers or between owners of real estate property, or condominia where established by law, and network operators, in relation to the rights and responsibilities envisaged by articles 3, 4, 5, 6 and 8 of such decree.

Report on operations 49 at September 30, 2017

OUTLOOK

The market, in 2017, showed a renewed competitive pressure, especially in the mobile segment, also because in 2018 is expected the entry of Iliad, a fourth infrastructured mobile operator, required by the European Commission as a mandatory condition for approving the merger between WIND and H3G which took place on December 30, 2016. In the fixed-line market the expectation is of a progressive slowdown in value contraction due to the upcoming arrival of fiber on a larger scale and an overall quality improvement in broadband. In 2017, Wind Tre will explore the opportunities arising from the combination of new technologies and new demands expressed by the market, in particular strengthening digital channels in terms of new services, customer interaction and process efficiencies. The company will contribute to the country’s digitalization through planned investments of €6 billion in the telecommunications network, innovation and new technologies over five years (2017-2021). Wind Tre has the aim of becoming the most innovative digital telecommunications operator in Italy with the largest and most extensive mobile broadband network in the country. Additionally it is also the Group’s intention to seek new growth opportunities in the business segment of the market. Wind Tre will continue to strengthen its position in the mobile, fixed-line voice and internet segments as well as enhancing its convergent business model. Considerable emphasis continue to be placed on increasing efficiency and obtaining a further optimization of the cost structure as part of the integration for the two operating companies. During the first nine months of 2017, Wind Tre achieved cost synergies (OpEx) for approximately €98 million confirming the target of approximately €700 million annually at 2020/2021 (70% OpEx and 30% CaPex).

Over the coming months, telco and media operators may be required to modify their billing cycle from 28 days per month to calendar month.

The public administration may possibly issue requests for tenders for the allocation of broadband frequencies in the 3.6 – 3.8 GHz and/or 700 MHz bands or procedures for the postponement of the expiry dates of the frequencies already allocated with the aim of obtaining an overall alignment of the expiry dates of all the rights of use of mobile frequencies in technological neutrality (for example the frequencies in the 2100 MHz band).

During the last few months of 2017, AGCOM is expected to publish public consultations on market analyses of fixed access and mobile termination services and on terminating services, while AGCOM’s orientation on the prices and obligations that will be submitted to the market’s attention on the services analyzed will be given particular attention.

Report on operations 50 at September 30, 2017

WIND TRE GROUP

Consolidated interim financial statements as of and for the nine-month period ended September 30, 2017

FINANCIAL STATEMENTS AND NOTES THERETO

COMPOSITION OF THE CORPORATE BODIES (BOARD OF DIRECTORS AND BOARD OF STATUTORY AUDITORS) OF WIND TRE SPA

Board of Directors (1)

Chairman Christian Nicolas Roger Salbaing

Directors Jeffrey Alan Hedberg, Managing Director

Kjell Morten Johnsen

Board of Statutory Auditors (2)

Chairman Giancarlo Russo Corvace

Standing auditor Marcello Romano

Standing auditor Luca Occhetta

Substitute auditor Roberto Colussi

Substitute auditor Maurizio Paternò di Montecupo

(1) The shareholders’ meeting of the Company (formerly H3G S.p.A.) convened on November 5, 2016, appointed the Board of Directors until the date of the shareholders’ meeting that will meet for the approval of the Company’s financial statements as at December 31, 2018. On June 22, 2017 the shareholders’ meeting of the Company appointed Mr. Jeffrey Alan Hedberg as new board member of the Company in replacement of the resigned Managing Director Mr. Maximo Ibarra. On same date the Board of Directors of the Company appointed Mr. Hedberg as Managing Director of the Company and granted this latter with the relevant powers to manage the Company. The Managing Director will hold the office until the expiry of the mandate of the current Board of Directors.

(2) The shareholders’ meeting of the Company (formerly H3G SpA) convened on November 5, 2016 appointed the Board of Statutory Auditors until the date of the shareholders’ meeting that approves the Company’s financial statements for the year ending December 31, 2018.

Consolidated interim financial statements 52 as of and for the period ended September 30, 2017

CONTENTS

COMPOSITION OF THE CORPORATE BODIES (BOARD OF DIRECTORS AND BOARD OF STATUTORY AUDITORS) OF WIND TRE SPA ...... 52 CONSOLIDATED INCOME STATEMENT ...... 55 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME ...... 56 CONSOLIDATED STATEMENT OF FINANCIAL POSITION ...... 57 CONSOLIDATED STATEMENT OF CASH FLOWS ...... 58 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ...... 59 1 INTRODUCTION ...... 60 2 GENERAL ACCOUNTING POLICIES ...... 61 3 BASIS OF CONSOLIDATION ...... 66 4 ACQUISITIONS AND DISPOSALS ...... 68 5 REVENUE ...... 68 6 OTHER REVENUE ...... 69 7 PURCHASES AND SERVICES ...... 69 8 OTHER OPERATING COSTS ...... 69 9 PERSONNEL EXPENSES ...... 70 10 RESTRUCTURING COSTS ...... 70 11 DEPRECIATION AND AMORTIZATION ...... 70 12 REVERSAL OF IMPAIRMENT LOSSES/(IMPAIRMENT LOSSES) ON NON-CURRENT ASSETS .... 71 13 GAINS (LOSSES) ON DISPOSAL OF NON-CURRENT ASSETS ...... 71 14 FINANCE INCOME AND EXPENSE ...... 71 15 INCOME TAX ...... 72 16 PROPERTY, PLANT AND EQUIPMENT ...... 72 17 INTANGIBLE ASSETS ...... 73 18 FINANCIAL ASSETS ...... 75 19 OTHER NON CURRENT ASSETS ...... 76 20 INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD ...... 76 21 DEFERRED TAX ASSETS AND LIABILITIES ...... 76 22 EQUITY ...... 77 23 PROVISIONS ...... 78 24 FINANCIAL LIABILITIES ...... 79 25 DERIVATIVE FINANCIAL INSTRUMENTS ...... 80 26 NET DEBT ...... 82 27 RELATED PARTY TRANSACTIONS ...... 82

Consolidated interim financial statements 53 as of and for the period ended September 30, 2017

28 OTHER INFORMATION ...... 85 29 SUBSEQUENT EVENTS ...... 88

Consolidated interim financial statements 54 as of and for the period ended September 30, 2017

CONSOLIDATED INCOME STATEMENT

2017 2016 2017 2016 (millions of euro) Note 9 months 9 months III quarter III quarter

Revenue 5 4,530 1,477 1,529 514 Other revenue 6 96 32 14 10 Total revenue 4,626 1,509 1,543 524

Purchases and services 7 (2,491) (986) (802) (323) Other operating costs 8 (225) (86) (80) (28) Personnel expenses 9 (291) (118) (82) (38) Restructuring costs 10 (200) - (60) - Operating income before depreciation and amortization, reversal of impairment 1,419 319 519 135 losses/impairment losses on non-current assets and gains/losses on disposal of non-current assets

Depreciation and amortization 11 (2,472) (310) (856) (109) Reversal of impairment losses/(impairment losses) on non- 12 (23) - (23) - current assets Gains/(losses) on disposal of non-current assets 13 (2) - 3 - Operating income (1,078) 9 (357) 26

Finance income 14 89 1 35 1 Finance expense 14 (514) (37) (175) (12) Foreign exchange gains/(losses), net 5 - 7 - Profit/(Loss) before tax (1,498) (27) (490) 15

Income tax 15 (56) - (14) - Profit/(Loss) for the period (1,554) (27) (504) 15

Consolidated interim financial statements 55 as of and for the period ended September 30, 2017

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

2017 2016 2017 2016 (millions of euro) Note 9 months 9 months III quarter III quarter

Profit / (Loss) for the period (1,554) (27) (504) 15 Other comprehensive income that will be

reclassified subsequently to profit or loss Gains/(losses) on cash flow hedging instruments (4) - (15) -

Total Other comprehensive income that will be (4) - (15) - reclassified subsequently to profit or loss Total comprehensive income/(loss) for the 22 (1,558) (27) (519) 15 period

Consolidated interim financial statements 56 as of and for the period ended September 30, 2017

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

At September 30, At December 31, (millions of euro) Note 2017 2016

Assets Property, plant and equipment 16 3,916 5,618 Intangible assets 17 9,814 10,001 Financial assets 18 1,956 2,494 Other assets 19 649 244 Investments accounted for using the equity method 20 - 77 Deferred tax assets 21 102 125 Total non-current assets 16,437 18,559

Inventories 97 72 Trade receivables 1,262 1,287 Financial assets 18 45 24 Current tax assets 19 27 Other receivables 311 265 Cash and cash equivalents 405 603 Assets held for sale 132 50 Total current assets 2,271 2,328 TOTAL ASSETS 18,708 20,887

Equity and Liabilities Equity Issued capital 474 474 Share premium reserve 3,119 3,119 Other reserves 11,292 11,650 Retained earnings (12,239) (11,039) Total equity 22 2,646 4,204

Liabilities Financial liabilities 24 12,340 12,838 Employee benefits 70 79 Provisions 23 138 140 Other non-current liabilities 85 110 Deferred tax liabilities 21 371 368 Total non-current liabilities 13,004 13,535

Financial liabilities 24 191 176 Trade payables 2,116 2,272 Other payables 708 648 Income tax payables 43 52 Total current liabilities 3,058 3,148 Total liabilities 16,062 16,683 TOTAL EQUITY AND LIABILITIES 18,708 20,887

Consolidated interim financial statements 57 as of and for the period ended September 30, 2017

CONSOLIDATED STATEMENT OF CASH FLOWS

2017 2016 (millions of euro) 9 months 9 months

Cash flows from operating activities Profit/(Loss) for the period (1,554) (27) Net financial expenses 431 36 Income taxes 56 - Profit/(Loss) for the period before taxes, interest and profit/losses on disposal assets (1,067) 9 Adjustments to reconcile the loss for the period with the cash flows from/(used in) operating activities Depreciation, amortization and (reversal of impairment losses)/impairment losses on non-current assets 2,495 310 Net changes in provisions and employee benefits 15 6 Impairment of trade receivables 149 59 Changes in inventories (24) 32 Changes in current assets/liabilities (753) 87 Gains on subsidiary disposal (11) - Losses on disposal of non-current assets 2 - Interest paid (396) (1) Taxes paid (30) - Net cash flows from operating activities 380 502

Cash flows from investing activities Acquisition of property, plant and equipment (397) (169) Acquisition of intangible assets (345) (184) Assets disposal 77 29 Fellow subsidiary disposal 88 - Net cash flows used in investing activities (577) (324)

Cash flows from financing activities Banks financing borrowing: Repayments (1) (50) Parent company and fellow subsidiaries borrowings: Proceeds - 37 Repayments - (2) Future increase in share capital - (1) Net cash flows from/(used in) financing activities (1) (16)

Net cash flows for the period (198) 162

Cash and cash equivalents at the beginning of the period 603 89 Cash and cash equivalents at the end of the period 405 251

Consolidated interim financial statements 58 as of and for the period ended September 30, 2017

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Equity attributable to the owners of the parent

Retained Share premium earnings/(losses (millions of euro) Issued capital reserve Other reserves carried forward) Equity

Balances at January 1, 2016 474 3.119 9.488 (9,032) 4,049

Total comprehensive income for - - - - - period

- Profit/(Loss) for the period - - - (27) (27)

Transactions with equity holders - - - - -

Balances at September 30, 2016 474 3,119 9,488 (9,059) 4,022

Balances at January 1, 2017 474 3,119 11,650 (11,039) 4,204

Total comprehensive income for the - - - - - period

- Profit/(Loss) for the period - - - (1,554) (1,554)

- Cash flow hedges - - (4) - (4)

- Other movements - - (354) 354 -

Balances at September 30, 2017 474 3,119 11,292 (12,239) 2,646

Consolidated interim financial statements 59 as of and for the period ended September 30, 2017

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS OF THE WIND TRE GROUP AS OF AND FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2017

1 INTRODUCTION

Wind Tre SpA (hereafter referred to as Wind Tre or the Company and together with its subsidiaries the Group or the Wind Tre Group) is a joint stock company having registered office in Via Leonardo da Vinci, 1, Trezzano sul Naviglio, Milan, Italy. Wind Tre is a leading operator in the fixed and mobile telecommunications and data services sector in Italy and is strongly oriented towards providing in mobility data communication services and internet mobile access services in broadband and wireless mode. In addition, it accompanies its offer with a wide range of content, applications and multimedia support.

These consolidated financial statements for the nine months ended September 30, 2017 were approved by the Company’s Board of Directors on November 7, 2017. At the date of approval of these consolidated financial statements Wind Tre is controlled by Wind Tre Italia SpA (hereafter referred to as Wind Tre Italia) which in turn is controlled by the Luxembourg based entity VIP-CKH Luxembourg Sàrl (hereafter referred to as VIP-CKH or the Joint Venture). VIP-CKH is a joint venture whose share capital is owned as to 50% by CK Hutchison Holdings Limited (hereafter referred to as CK Hutchison) and by Veon Ltd. (formerly VimpelCom Ltd. and hereafter referred to as Veon), which jointly own and operate their respective telecommunications businesses in Italy. CK Hutchison is a limited liability company incorporated in the Cayman Islands and registered in the Register of Companies of the Cayman Islands (no. MC-294.571) whose shares are listed on the Hong Kong stock exchange and whose principal place of business is located at 12th Floor, Cheung Kong Center, 2 Queen’s Road Central, Hong Kong. Veon is incorporated under Bermuda law, domiciled in Claude Debussylaan 88, 1082 MD Amsterdam, Netherlands and listed on NASDAQ.

The economic data for the first nine months of 2017 are not immediately comparable with those of the same period of the previous year because they refer only to the financial statements of the former H3G Group, which did not previously draw up interim financial statements under IAS 34; accordingly the comparative figures have not been subject to review by the audit firm.

A proforma income statement is included in the Report on operation to simulate the effects of the merger from January 1, 2016 and allow the comparative commentary of some data.

On the formation of the Joint Venture at the end of last year the respective holding and operating companies of the telecommunications businesses in Italy of CK Hutchison and Veon, namely Wind Tre Italia and WIND Acquisition Holdings Finance SpA, and Wind Tre and WIND Telecomunicazioni SpA, and all their subsidiaries became subsidiaries of the Joint Venture, and the Joint Venture became the new parent company of the Group holding the telecommunications businesses in Italy of CK Hutchison and Veon.

Following the above mentioned transaction WIND Acquisition Holdings Finance SpA and WIND Telecomunicazioni SpA have been merged in Wind Tre Italia and in Wind Tre respectively.

The approval of the transaction obtained from the European Commission, that led to the formation of the Joint Venture, required the implementation of a number of remedies which included the signing of certain agreements with Iliad, a French telecom operator, aiming to allow Iliad to enter the Italian market. The agreements have resulted in the commitment of the Wind Tre Group to sell to Iliad frequencies and sites in the period 2017 – 2019 as well as

Consolidated interim financial statements 60 as of and for the period ended September 30, 2017

to sign certain temporary agreements which enable Iliad to operate telecommunications services in the Italian market while Iliad is creating its own network. As a result of these agreements the carrying amount of the assets to be sold have been reviewed in terms of impairment or by revising their useful lives. In addition, where the sale is expected to occur within 12 months from the closing date the assets in question have been recognized and measured in accordance with the requirements of IFRS 5 for assets held for sale. These valuations were updated in the interim financial statements as of September 30, 2017.

The following diagram sets out the structure of the Wind Tre Group at September 30, 2017.

The entry into the market of Iliad, the fourth infrastructure mobile operator, required by the European Commission as a mandatory condition for approving the merger between WIND Telecomunicazioni SpA and H3G SpA which took place at the end of last year, is planned for the end of 2017 or the beginning of 2018. For more information on the above transaction please refer to the Wind Tre Group Notes to the Consolidated Financial Statements as of December 31, 2016.

2 GENERAL ACCOUNTING POLICIES

2.1 Basis of preparation

The consolidated financial statements for the period ended September 30, 2017 have been prepared on a going concern basis in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standard Board (IASB) and with all the SIC/IFRIC interpretations, as endorsed by the European Union and contained in EU Regulation (EC) no. 1606/2002 of the European Parliament and of the Council of July 19, 2002.

The statement of financial position is prepared using an analysis of assets and liabilities into current and non-current. The income statement is prepared in accordance with IAS 1 "Presentation of Financial Statements" with a classification of expenses by nature that is believed to provide more relevant information than a classification by function.

The structure and content of these consolidated interim financial statements comply with the disclosure requirements of IAS 34 Interim Financial Reporting. The consolidated interim financial statements have been prepared in

Consolidated interim financial statements 61 as of and for the period ended September 30, 2017

accordance with IAS 1, while the notes thereto have been drawn up in a condensed format, as permitted by IAS 34. Accordingly, these consolidated interim financial statements do not include all the disclosures required for annual financial statements and should be read in conjunction with the consolidated financial statements as of and for the year ended December 31, 2016. The consolidated financial statements as of and for the year ended December 31, 2016 and for the interim financial statement as of September 30, 2017 are available on request at the registered office of the Parent and on the website www.windtre.it. The income statement and statement of comprehensive income figures provided relate to the nine months ended September 30, 2017. As described in the foregoing, comparative data refer only to the H3G group and therefore the comparability of data must take into account this distinction. The accounting standards adopted by the Group are the same as those used for the preparation of the consolidated financial statements as of and for the year ended December 31, 2016 with the exception of the calculation of income taxes that is based on the best estimate of the tax rate that will be applied for the entire period. Amounts set aside for income taxes are therefore subject to variation in the next interim periods as the annual tax rate is revised. In preparing these consolidated financial statements the Group adopted historical cost as the basis of measurement except for certain financial instruments for which, in accordance with IAS 39, measurement at fair value has been used. These consolidated financial statements are expressed in , the currency of the economy in which the Group operates. Unless otherwise stated, all amounts shown in the tables and in these notes are expressed in millions of euros. The preparation of these notes required management to apply accounting policies and methodologies that are occasionally based on complex, subjective judgments, estimates based on past experience and assumptions determined to be reasonable and realistic based on the related circumstances and on the available information. The application of these estimates and assumptions affects the reported amounts in the income statement, the statement of comprehensive income, the statement of financial position, the cash flow statement and the accompanying notes. The closing amounts of items in the consolidated annual financial statements that were initially determined for the purposes of the consolidated interim financial statements by using the above estimates and assumptions may differ from those based on such estimates and assumptions, given the uncertainty surrounding the assumptions and conditions upon which these estimates are based. Management’s significant judgments on the application of Group accounting policies and the main causes of uncertainty of these estimates are the same as those applied in the preparation of the consolidated financial statements as of and for the year ended December 31, 2016.

For the purposes of comparison, balances in the statement of financial position have been reclassified where necessary. These reclassifications do not affect the Group’s profit for the year or equity.

In this regard in order to ensure a representation in line with sector practice management has changed the presentation in the financial statements of customer acquisition costs (mainly represented by commissions paid to the sales network) which are capitalized as intangible assets where the criteria provided by the applicable standards for recognition as fixed assets are met and amortized over the minimum contractual life. In previous years these costs were deferred over the minimum contractual life and presented as "Financial assets" in the non-current section; this presentation has no effect on the opening balance of shareholders' equity and results of prior years.

Consolidated interim financial statements 62 as of and for the period ended September 30, 2017

2.2 Accounting standards and interpretations

The Group has adopted all the newly issued and amended standards of the IASB and interpretations of the IFRIC, endorsed by the European Union, applicable to its transactions and effective for financial statements for years beginning January 1, 2017 and thereafter.

. New accounting standards and interpretations

Standards effective in 2017

In the first nine months of 2017, no standards or interpretations that have already been endorsed by the EU have become officially applicable.

Accounting standards and interpretations issued by IASB/IFRIC – not yet effective

Set out below is the information required to assess the possible impact arising from the application of new accounting standards and interpretations that have already been issued but have not yet become effective or have not been adopted by the EU and thus cannot be applied to the interim financial statements as of September 30, 2017.

Unless otherwise indicated, the Company does not believe that the application of these standards will have any significant impact on its economic results, except for the need for further possible disclosures.

Standard, amendment or interpretation Status

Amendment to IAS 7 “Statement of Cash Flows” under the Expected endorsement in Q4 2017. disclosure initiative

Amendment to IAS 12 “Income Taxes”: Recognition of Deferred Expected endorsement in Q4 2017. Tax Assets for Unrealised Losses

Table 1 - IFRSs whose effective date is expected for accounting periods beginning on or after January 1, 2017 (the effective date determined by the IASB may differ from the effective date for the EU.

Amendment to IAS 7 “Statement of Cash flows” under the disclosure initiative - The amendment introduces an additional disclosure that will enable users of financial statements to evaluate changes in liabilities arising from financing activities. The amendment is part of the IASB’s Disclosure Initiative, aimed at understanding how financial statement disclosures can be improved.

Amendment to IAS 12 “Income Taxes” – This amendment regarding the “Recognition of Deferred Tax Assets for Unrealised Losses” clarifies how to account for deferred tax assets arising from debt instruments measured at fair value.

Consolidated interim financial statements 63 as of and for the period ended September 30, 2017

Standard, amendment or interpretation Status

IFRS 15 “Revenue from Contracts with Customers” (issued on Endorsed: September 22, 2016 May 28, 2014) including amendments to IFRS 15. Effective date Effective (EU): January 1, 2018 of IFRS 15 (issued on September 11, 2015)

Clarifications to IFRS 15 Revenue from Contracts with Expected endorsement in Q4 2017 Customers (issued on 12 April 2016) Endorsed: November 19, 2016 IFRS 9 “Financial Instruments” Effective (EU): January 1, 2018 Amendment to IAS 40 “Investment Property” relating to Expected endorsement in Q1 2018 transfers of investment property

Annual improvements 2014–2016 relating to: IFRS 1 “First-time Adoption of IFRS” Expected endorsement in Q4 2017 IFRS 12 ”Disclosure of Interests in Other Entities” and IAS 28 “Investments in Associates and Joint Ventures”

IFRIC 22 “Foreign Currency Transactions and Advance Expected endorsement in Q1 2018 Consideration”

Table 2 - IFRSs whose effective date is expected for accounting periods beginning on or after January 1, 2018 (the effective date determined by the IASB may differ from the effective date for the EU.

IFRS 15 “Revenue from Contracts with Customers” – This replaces IAS 18 “Revenues” and IAS 11 “Construction Contracts” and the interpretations IFRIC 13 “Customer Loyalty Programs”, IFRIC 15 “Agreements for the Construction of Real Estate”, IFRIC 18 “Transfer of Assets from Customers” and SIC 31 “Barter Transactions Involving Advertising Services”. It applies to all contracts with customers except from those included in the scope of IAS 17 “Leases”, IFRS 4 “Insurance Contracts” or IAS 39/IFRS 9 “Financial Instruments”.

IFRS 15 paragraphs relating to the recognition and measurement of revenue introduce a 5-step model: i) identification of the contract with the customer; ii) identification of “performance obligations”, that is to say the separable components that are part of a sole contract but that have to be separated for accounting purposes; iii) determination of the selling price; iv) price allocation for the various “performance obligations” and v) revenue recognition when performance obligations are satisfied. IFRS 15 completes the financial statement disclosures to be presented with the nature, amount, timing and uncertainties of revenues and their cash flows.

The Group has started up the activities deemed necessary to assess the effect of the application of IFRS 15 and to apply the standard with effect from 2018 when the standard becomes effective, with retrospective application to all contracts not completed at January 1, 2018. The various effects on the performance obligations identification and the consequent price allocation, especially in the context of bundle deals, are currently being analyzed and quantified.

Clarifications to IFRS 15 Revenue from Contracts with Customers – integrate the principles by providing clarifications how to identify a “performance obligation” to the considerations related to the “principal/agent” and to the licensing”.

IFRS 9 “Financial Instruments” – This replaces IAS 39 “Financial Instruments” and contains a model to evaluate financial instruments based on three categories: amortized cost, fair value through profit or loss and fair value through other comprehensive income”. The standard envisages a new impairment model that is different from that currently included in IAS 39 and is more focused on expected credit losses. The Group has started up the activities deemed necessary to assess the effect of the application of IFRS 9.

Consolidated interim financial statements 64 as of and for the period ended September 30, 2017

Amendment to IAS 40 “Investment Property”; this amendment clarifies that there must be a change in use to transfer assets to, or from, investment properties. To determine that an asset has changed use there should be an assessment of whether the property meets the definition. This change must be supported by suitable evidence.

Changes in annual improvements 2014–2016 possibly affecting the Group in the future are:

IFRS 12 ”Disclosure of Interests in Other Entities”; clarification of the scope of the standard.

IAS 28 ”Investments in Associates and Joint ventures”; clarification of measuring at fair value of an associate or joint venture.

IFRIC 22 “Foreign Currency Transactions and Advance Consideration”; this IFRIC addresses foreign currency transactions or parts of transactions where there is consideration that is denominated or priced in a foreign currency. The interpretation provides guidance for when a single payment/receipt is made as well as for situations where multiple payments/receipts are made. The guidance aims to reduce diversity in practice.

Standard, amendment or interpretation Status

IFRS 16 “Leases” Expected endorsement in Q4 2017

Amendment to IAS 28 “Investments in Associates and Joint ventures” related to the accounting of interes in associates and Expected endorsement in 2018 joint ventures

IFRIC 23 Uncertainty over Tax Ttreatments Expected endorsement in 2018

Amendment to IFRS 9 “Financial Instruments” relating to the valuation of certain financial instruments denominated “negative Expected endorsement in 2018 compensation”

Table 3 - IFRSs whose effective date is expected for accounting periods beginning on or after January 1, 2019 (the effective date determined by the IASB may differ from the effective date for the EU.

IFRS 16 “Leases” – This replaces IAS 17 “Leases” and interpretations IFRIC 4 “Determining Whether an Arrangement Contains a Lease”, SIC 15 “Operating Leases—Incentives” and SIC 27 “Evaluating the Substance of Transactions Involving the Legal Form of a Lease”. IFRS 16 eliminates the classification of leases as either operating leases or finance leases for a lessee; instead all leases are treated in a similar way to finance leases applying IAS 17. Leases are to be recognized as right-of-use assets with the corresponding recognition of a financial liability. Partial exemptions to this rule are allowed for short-term leases (i.e. leases of 12 months or less) and leases of low-value assets (for example, the lease of a personal computer). The Group has started up the activities deemed necessary to assess the effect of the application of IFRS 16.

Amendment to IAS 28 “Investments in Associates and Joint ventures” – clarify that an entity applies IFRS 9 “Financial Instruments” to long term interests in an associate or joint ventures.

IFRIC 23 “Uncertainty over income tax treatments” – explains how to recognise and measure deferred and current income tax assets and liabilities where there is uncertainty over a tax treatment (or where there is uncertainty over whether that treatment will be accepted by the tax authority).

Amendment to the IFRS 9 “Financial Instruments” – introduce the possibility that such a financial asset would be eligible to be measured at amortized cost.

Consolidated interim financial statements 65 as of and for the period ended September 30, 2017

3 BASIS OF CONSOLIDATION

The companies controlled by the Group ("subsidiaries") are consolidated on a line-by-line basis. Control exists when the Company has simultaneously:  decisional power, that is the power to govern the financial and operating policies of the entity, meaning those activities that have a significant influence on the results of the company;  the right to the variable results (positive or negative) arising from its investment in the entity;  the ability to use its decision-making power to determine the amount of the results arising from its investment in the entity. The existence of control is checked whenever facts and circumstances indicate a change in one or more of the three qualifying elements of the control. Subsidiaries are consolidated from the date of acquisition and deconsolidated when such control ceases. Where there is an acquisition or loss of control of a company included in the consolidation perimeter, the consolidated financial statements include the net income of the company for the period in which the parent company has control. The financial statements used in the consolidation process are those prepared by the individual Group entities as of and for the period ended September 30, 2017 in accordance with the IFRS adopted by the European Union (EU) in drawing up these statements and approved by the respective Boards of Directors.

The consolidation procedures used are as follows:  the assets and liabilities and income and expenses of consolidated subsidiaries are included on a line-by-line basis, allocating to non-controlling interests, where applicable, the share of equity and profit or loss for the year that is attributable to them. The resulting balances are presented separately in consolidated equity and the consolidated income statement;  except for business combinations under common control as noted below the purchase method of accounting is used to account for business combinations in which control of an entity is acquired. The cost of an acquisition is measured as the fair value of the assets acquired, liabilities incurred or assumed and equity instruments issued at the acquisition date. Any excess of the cost of acquisition over the fair value of the assets and liabilities acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in profit or loss after first verifying that the fair values attributed to the acquired assets and liabilities and the cost of the acquisition have been measured correctly;  business combinations in which all of the combining entities or businesses are ultimately controlled by the same party or parties both before and after the business combination are considered business combinations involving entities under common control. In the absence of an accounting standard guiding the accounting treatment of these operations the Group applies IAS 8, consolidating the carrying amounts of the transferred entity and reporting any gains arising from the transfer directly in equity;  the purchase of investments from minority holders in entities where control is already exercised is not considered a purchase but an equity transaction. Therefore, the difference between the cost incurred for the acquisition and the respective share of the accounting equity acquired is recognized directly in equity;

Consolidated interim financial statements 66 as of and for the period ended September 30, 2017

 unrealized gains and losses arising from transactions carried out between companies consolidated on a line- by-line basis and the respective tax effects are eliminated, as are corresponding balances of receivables and payables, income and expense, and finance income and expense;  gains and losses arising from the sale of investments in consolidated subsidiaries are recognized in income as the difference between the selling price and the corresponding portion of the consolidated equity sold.

The following table provides a summary of the Group’s investments showing the criteria used for consolidation and measurement.

Share/quota Basis of consolidation / Registered office % holding capital measurement

Euro 09.30.2017 09.30.2017 Subsidiaries WIND Retail Srl Italy 1,026,957 100 Line-by-line WIND Acquisition Finance SA Luxembourg 60,031,000 100 Line-by-line 3lettronica Industriale SpA Italy 16,000,000 100 Line-by-line Others MIX Srl Italy 99,000 9.75 Cost Consel Italy 51,000 1 Cost Janna Scarl Italy 13,717,365 17 Cost QXN Italy 500,000 10 Cost Dono per…Scarl Italy 30,000 In liquidation Cost

Business combinations under common control

A business combination involving entities or businesses “under common control” is a business combination in which all the combining entities or businesses are ultimately controlled by the same party or parties both before and after the business combination, and that control is not transitory. These transactions are not contemplated by IFRS 3, which outlines the accounting method for business combinations, or by any other IFRS. In the absence of an accounting standard of reference, it is believed that the selection of the accounting principle most suitable is the general objective set out in IAS 8 in order to provide relevant and reliable information about a transaction. In this context, some guidance in the Italian context can be found in OPI 1 (Assirevi preliminary guidelines on IFRS) relating to accounting for business combinations under common control in “Separate and Consolidated Financial Statements”. Taking into account the OPI 1 guidance, which is applicable to all reorganizational transactions (mergers) completed in Italy after the major transaction completed at a higher level which created the joint venture, the Group has decided to select the predecessor accounting method (based on continuity of values and not on IFRS 3 principles) as an accounting policy for this kind of transaction. Use of the predecessor accounting method is also in line with certain other generally accepted accounting principles that permit, or require, this accounting to be used for other common control transactions or similar circumstances.

The concept of continuing values requires the recognition in the financial statements of the acquirer of the same values as those recorded in the books of the companies / business segments acquired before the transaction or, if available, the values in the consolidated financial statements of the common parent (the “predecessor accounting” principle). Where the values transferred are higher than these historical values, both the acquirer and the seller must eliminate the excess by reducing equity.

Consolidated interim financial statements 67 as of and for the period ended September 30, 2017

In relation to the date from which a transaction under common control can be considered, OPI 1 and predecessor accounting allow the backdating of the accounting consequences if the aim of the transaction is to reorganize a Group after a major transaction has occurred at a higher level. The backdating can be applied up to the date of when the major transaction occurred.

The economic data for the first nine months of 2017 are not immediately comparable with those of the same period of the previous year as a result of the different contribution to the consolidated income statement of the former H3G SpA and the former WIND Telecomunicazioni SpA involved in the merger that took place in 2016. A proforma income statement is included in the Report on operations to simulate the effects of the merger since January 1, 2016.

Segment reporting

The Group has determined that it has one reportable segment based on the information reviewed by its Management in making decisions regarding allocation of resources and to assess performance.

4 ACQUISITIONS AND DISPOSALS

On June 29, 2017, in the context of the licensing agreement with the French operator Iliad, €50 million were collected from licenses classified as “Assets held for sale" at the end of last year as foreseen in the contractual plan. On July 4, 2017, the whole 10% of the shares of Galata SpA was sold for a total of approximately €88 million. On July 6, 2017 the sale contract of the branch "Call Center 133" has been signed with the Comdata company. For more details please refer to “Report on operations”.

5 REVENUE

The following table provides an analysis of Revenue for the nine months and for the third quarter of 2017 compared with the corresponding periods of 2016.

(millions of euro) 2017 2016 2017 2016 9 months 9 months Change III quarter III quarter Change Revenue from sales 553 290 263 176 92 84

- Telephone services 3,429 964 2,465 1,165 340 825 - Interconnection traffic 372 162 210 123 54 69 - International roaming 62 33 29 31 15 16 - Judicial authority services 5 - 5 2 - 2 - Other revenue from services 109 28 81 32 13 19 Revenue from services 3,977 1,187 2,790 1,353 422 931 Total 4,530 1,477 3,053 1,529 514 1,015

Revenue from sales mainly refers to the sale of mobile telephone handsets and accessories.

Consolidated interim financial statements 68 as of and for the period ended September 30, 2017

The Telephone services mainly refer to revenues from voice fixed and mobile services and internet services mobile data transmission.

Interconnection traffic includes revenue from other telecommunications operators for the termination of traffic to the Company’s customers.

Other revenue from services mainly refer to business spaces, sites and network sublease and revenue from MVNO.

6 OTHER REVENUE

Other revenue amounts in total to €96 million in the nine months of 2017 and refers principally to release to income statement of capital contribution for the period and other non recurring revenues.

7 PURCHASES AND SERVICES

The following table provides an analysis of Purchases and services for the nine months and for the third quarter of 2017 compared with the corresponding periods of 2016.

(millions of euro) 2017 2016 2017 2016 9 months 9 months Change III quarter III quarter Change Purchases of raw materials, consumables, supplies and 537 267 270 159 85 74 goods Interconnection traffic 419 167 252 139 55 84 Rental of local network and circuits 284 12 272 96 4 92 Outsourcing costs for other services 280 40 240 91 13 78 Lease of civil/technical sites and use of third party assets 261 137 124 87 46 41 Customer acquisition costs 225 137 88 73 49 24 Maintenance and repair 123 89 34 36 29 7 Power consumption and other utilities 106 37 69 37 13 24 Advertising and promotional services 62 29 33 6 5 1 National and international roaming 47 24 23 24 9 15 Consultancies and professional services 26 10 16 7 3 4 Change in inventories (22) 2 (24) - 2 (2) Other services 143 35 108 47 10 37 Total purchases and services 2,491 986 1,505 802 323 479

8 OTHER OPERATING COSTS

The following table provides an analysis of Other operating costs for the nine months and for the third quarter of 2017 compared with the corresponding periods of 2016.

Consolidated interim financial statements 69 as of and for the period ended September 30, 2017

(millions of euro) 2017 2016 2017 2016 9 months 9 months Change III quarter III quarter Change Impairment losses on trade receivables and current 149 59 90 56 18 38 assets Annual license and frequency fees 47 16 31 15 5 10 Accruals to provision for risks and charges 10 3 7 4 2 2 Other operating costs 19 8 11 5 3 2 Total other operating costs 225 86 139 80 28 52

9 PERSONNEL EXPENSES

The following table provides an analysis of Personnel expenses for the nine months and for the third quarter of 2017 compared with the corresponding periods of 2016.

(millions of euro) 2017 2016 2017 2016 9 months 9 months Change III quarter III quarter Change Wages and salaries 263 94 169 74 30 44 Social security charges 70 24 46 19 8 11 Post-employment benefits 18 7 11 6 3 3 Other personnel expenses 12 3 9 4 - 4 (Costs capitalized for internal works) (72) (10) (62) (21) (3) (18) Total personnel expenses 291 118 173 82 38 44

On February 24, 2017, an agreement was reached to harmonize the various contractual and regulatory disciplines following the merger at the end of last year. For more information, see the Report on Operations.

10 RESTRUCTURING COSTS

The item, amounting €200 million at September 30, 2017, is mainly due to costs already incurred or related to implementing the business’s restructuring and reorganization plan, drawn up with the objective of the incorporation.

11 DEPRECIATION AND AMORTIZATION

The following table provides an analysis of Depreciation and amortization for the nine months and for the third quarter of 2017 compared with the corresponding periods of 2016.

(millions of euro) 2017 2016 2017 2016 9 months 9 months Change III quarter III quarter Change Depreciation of property, plant and equipment - Plant and machinery 2,026 151 1,875 707 55 652 - Industrial and commercial equipment 16 1 15 4 - 4 - Other assets 14 6 8 4 2 2

Amortization of intangible assets with finite lives - Industrial patents and similar rights 100 46 54 33 16 17 - Concessions, licenses, trademarks and similar 45 19 26 17 7 10 rights - Other intangible assets 271 87 184 91 29 62 Total depreciation and amortization 2,472 310 2,162 856 109 747

Consolidated interim financial statements 70 as of and for the period ended September 30, 2017

The increase of the item is mainly related to the effect of the acceleration of the amortization on part of the network infrastructure and on some IT systems in order to align the remaining useful life following an optimization plan and the construction of a new generation integrated network as well as of some sites as a result of agreements with Iliad.

12 REVERSAL OF IMPAIRMENT LOSSES/(IMPAIRMENT LOSSES) ON NON-CURRENT ASSETS

Impairment of € 23 million refer to the cost incurred during the period, related to the renewal, until December 31, 2029, of the licenses to be transferred to Iliad. This amount has already been reflected in the balance sheet at the realizable value established in the contracts signed in 2016.

13 GAINS (LOSSES) ON DISPOSAL OF NON-CURRENT ASSETS

The item “Gains (losses) on disposal of non-current assets” mainly refers to losses for disposal of plant and equipment for the modernization of the network.

14 FINANCE INCOME AND EXPENSE

The following table provides an analysis of Finance income for the nine months and for the third quarter of 2017 compared with the corresponding periods of 2016.

(millions of euro) 2017 2016 2017 2016 9 months 9 months Change III quarter III quarter Change Cash flow hedges reversed from equity 1 - 1 (2) - (2) Fair value measurement of non-hedging derivatives 3 - 3 1 - 1 Other 85 1 84 36 1 35 Total finance income 89 1 88 35 1 34

Other financial income at September 30, 2017 consists mainly of the interest of €72 million arising on the receivable from the parent Wind Tre Italia SpA under the intercompany agreements entered in April 23, 2014 and in August 4, 2014, for which details may be found in note 18 and finance income for €11 million arising from the gain for the sale of the 10% of the shares of Galata SpA.

The following table provides an analysis of Finance expense for the nine months and for the third quarter of 2017 compared with the corresponding periods of 2016.

Consolidated interim financial statements 71 as of and for the period ended September 30, 2017

(millions of euro) 2017 2016 2017 2016 Change Change 9 months 9 months III quarter III quarter Interest expense on: Bond issues 437 - 437 143 - 143 Shareholders loans 35 35 - 12 12 - Bank loans 33 - 33 8 - 8 Discounted provisions 1 - 1 1 - 1 Cash flow hedges, reversed from equity (82) - (82) (20) - (20) Fair value measurement of derivatives 50 - 50 17 - 17 Other 40 2 38 14 - 14 Total finance expense 514 37 477 175 12 163

Finance expense consists mostly of accrued interest on financial liabilities outstanding at September 30, 2017, for which further details may be found in note 24. The item also includes the positive effect of hedge accounting of €82 million, the negative effects related to the fair value measurement of the embedded derivatives on bonds of €41 million and the ineffectiveness recorded on hedging derivatives of €9 million.

15 INCOME TAX

The following table provides an analysis of Income tax for the nine months and for the third quarter of 2017 compared with the corresponding periods of 2016.

(millions of euro) 2017 2016 2017 2016 9 months 9 months Change III quarter III quarter Change Current tax 25 - 25 9 - 9 Deferred tax 31 - 31 5 - 5 Total income taxes 56 - 56 14 - 14

The net charge for the period is made up of the following:  current income taxes expense of €25 million (of which €9 million for tax of the subsidiary WIND Acquisition Finance SA and €16 million for IRAP tax) charged on the consolidated taxable income for the period and estimated against the effective tax rate on the entire exercise;  net deferred tax income of €31 million, arising from the release of deferred tax assets.

16 PROPERTY, PLANT AND EQUIPMENT

The following table sets out the changes in Property, Plant and Equipment during the first nine months of 2017.

(millions of euro) Carrying Carrying amount at amount at Additions Depreciation Disposals Others December September 31, 2016 30, 2017 Land and buildings 1 - - - - 1 Plant and machinery 5,503 380 (2,026) (13) (26) 3,818 Equipment 43 5 (16) (1) 4 35 Other 71 12 (14) - (7) 62 Total 5,618 397 (2,056) (14) (29) 3,916

Consolidated interim financial statements 72 as of and for the period ended September 30, 2017

The cost, accumulated impairment losses and accumulated depreciation at September 30, 2017 can be summarized as follows.

(millions of euro) At September 30, 2017 Accumulated Accumulated Carrying Cost impairment losses depreciation Amount Land and buildings 1 - - 1 Plant and machinery 16,511 (2) (12,691) 3,818 Equipment 569 - (534) 35 Other 528 - (466) 62 Total 17,609 (2) (13,691) 3,916

The change in Plant and machinery is mainly related to the effect of the acceleration of the amortization on part of the network infrastructure and on some IT systems (see note 11 for details) and to the purchases of the period mainly related to radio links and high frequency equipment for the expansion of the mobile access network, exchanges and electronic installations and plant and machinery under construction (IT infrastructures and 3G and LTE technologies). Disposals amounted €14 million and relate to disposals and value adjustments of equipment, infrastructure and transmission systems, which are no longer usable. At September 30, 2017, transmission equipment, telephone systems and commutation switchboards owned by the Parent company and having a carrying amount of €103 million (€98 million at December 31, 2016) were held by customers for use. Transmission equipment for direct access through “unbundling of the local loop” having a carrying amount of €2 million at September 30, 2017 (€2 million at December 31, 2016) was held on deposit by Telecom Italia SpA. Plant and machinery additionally includes the expenditure incurred to acquire the exclusive rights for the use of cable products and optic fiber for a total of €71 million at September 30, 2017 (€78 million at December 31, 2016).

The item “Others” includes a negative amount of €29 million mainly related to the reclassification of the assets that will be transferred to Iliad in the next twelve months, under “Assets held for sale”.

17 INTANGIBLE ASSETS

The following table sets out the changes in Intangible assets during the first nine months of 2017.

(millions of euro) Carrying Transfer to Carrying amount at other amount at Additions Amort. Disposals December natural September 31, 2016 account 30, 2017 316 73 (100) - 1 290 Industrial patents and intellectual property rights Concessions, licenses, trademarks and similar 5,364 69 (45) - (103) 5,285 rights 718 203 (271) (13) (1) 636 Other intangible assets 3,603 - - - - 3,603 Goodwill 10,001 345 (416) (13) (103) 9,814 Total

The cost, accumulated impairment losses and accumulated amortization at September 30, 2017 can be summarized as follows.

Consolidated interim financial statements 73 as of and for the period ended September 30, 2017

(millions of euro)) At September 30, 2017 Accumulated Accumulated Carrying Cost impairment losses amortization amount Industrial patents and intellectual property rights 2,064 - (1,774) 290

Concessions, licenses, trademarks and similar rights 10,515 (1,611) (3,619) 5,285

Other intangible assets 3,698 - (3,062) 636

Goodwill 4,027 (75) (349) 3,603 Total 20,304 (1.686) (8,804) 9,814

Industrial patents and intellectual property rights consist of the cost for the outright purchase of application software licenses or the right to use such licenses for an unlimited period and the capitalized costs relating to the time spent by Parent personnel in designing, developing and implementing information systems, which at September 30, 2017 amounted to €19 million. Concessions, licenses, trademarks and similar rights include individual licenses for the installation of networks and concessions to operate in the regulated activities of the telecommunications sector granted to the Group’s companies by the relevant authorities, as detailed below.

Individual Licenses or General Authorizations or Use of Frequencies Date of issue Date of expiry (1) Wind Tre Group Installation of network and provision of voice telephony services on the Italian national territory (2) February 1998 February 2018 Installation and provision of public telecommunications networks on the Italian national territory April 1998 April 2018 (2)

Provision of public digital mobile communications services using DCS 1800 technology, including June 1998 June 2018 (3) the possibility of operating in frequencies in the 900 MHz band using GSM technology on the Italian national territory

Provision of third generation mobile communications services adopting the UMTS standard (IMT- January 2001 December 2029 (5) 2000 family) and the installation of the related network on the Italian national territory (4)

Use of frequencies for broadband point-multipoint radio networks in the 24.5-26.5 GHz band for July 2002 July 2022 the geographical area corresponding to the specified Italian region/autonomous province (6)

Use of frequencies for providing terrestrial publicly available broadband mobile services in the 800, January 2012 December 2029 1800 and 2600 MHz bands (LTE technology) (7)

(1) Under the current rules, individual licenses are subject to renewal upon request be submitted at least sixty days before the deadline (art.25 paragraph 6, of Legislative Decree no. 259/03) or application for extension. (2) The Group is the assignee of additional licenses valid for the installation of the network and provision of fixed telephony services also following the previous merger of Infostrada SpA in WIND Telecomunicazioni SpA and the merger of WIND Telecomunicazioni SpA in H3G SpA.

(3) In accordance with art. 1, paragraphs 568 to 575, of Law no. 232 of December 11, 2016 and art. 25, paragraph 6, of Legislative Decree no. 259/03 and subsequent amendments a refarming application was submitted on February 15, 2017 to the MISE with effect from July 1, 2017 and the relative extension until 2029 of the right to use the 900 and 1800 MHz frequencies having an original expiry date of June 30, 2018. Moreover, Wind Tre has already paid the contribution due according to Ministry Decree of 26 July 2017. (4) The Group is the assignee of two valid individual licenses and the related rights of use of frequencies in the 2100 MHz band, already issued to WIND Telecomunicazioni SpA and H3G SpA respectively with effect from 1 January 2002. (5) The extension to 2029 is subject to compliance with the provisions of Ministry of Economic Development with order issued in October 2016, and to the payment of the contributions due for the years 2022 to 2029 pursuant to art. 35 of the Electronic Communications Code pursuant to Legislative Decree no. 259/03 and subsequent amendments.

(6) Overall 21 multiple point individual licenses have been allocated.

(7) Following the participation respectively by WIND Telecomunicazioni SpA and H3G SpA to tender for the allocation of rights to use frequencies in the bands 800, 1800, 2000 and 2600 MHz for terrestrial services to the public at large electronic communication band, published in the OJ of the Italian Republic no. 75 of 27 June 2011, the Group holds the rights to use frequencies in the bands 800, 1800 and 2600 (FDD and TDD) MHz, respectively, issued in January and February 2012. It also holds the rights of use on a national basis of a coupled block of 2x5 MHz in the 1800 MHz band following the exercise of subscription rights on the preferential allocation of these frequencies, by order of allocation of 12 April 2012 having effect from 1 June 2012 and expiring on 31 December 2029.

In addition, Concessions, licenses, trademarks and similar rights for €1,300 million refer also to trademarks, which have an indefinite useful life.

Consolidated interim financial statements 74 as of and for the period ended September 30, 2017

Similar rights consist of rights of way and the right to use assets owned by third parties for a predetermined period of time and are initially recognized at their one-off purchase price, including any accessory costs. This item relates for the most part to the right of way on the Italian railway network and the purchase of the right to use the existing optic fiber on the network with a net value of €129 million at September 30, 2017 and to the capitalization of expenditure for the backbone rights of way of TERNA/TELAT with a net value of €107 million at September 30, 2017. Other intangible assets mainly relate to the residual value of the capitalized customer acquisition cost amounting to €230 million and to the customer list amounting to €171 million. Goodwill pertains to the legal entity WIND Retail Srl for €23 million and to the parent Wind Tre SpA for €3,580 million, both of which are, however, part of a single Cash Generating Unit for the purposes of IAS 36. Transfer to other natural account for €103 million is mainly related to the reclassification of the licenses, which will be transferred to Iliad in the next twelve months, to “Assets held for sale”.

18 FINANCIAL ASSETS

The following table sets out Financial assets at September 30, 2017 and at December 31, 2016.

(millions of euro) At September 30, 2017 At December 31, 2016 Non- Non- current Current Total current Current Total Financial assets measured at cost 2 - 2 2 - 2

Derivative financial instruments 870 - 870 1,460 - 1,460

Financial receivables 1,084 45 1,129 1,032 24 1,056

Total 1,956 45 2,001 2,494 24 2,518

Financial assets measured at cost consist of non-controlling interests in companies and consortia for €2 million and mainly refer to an investment of 17% in Janna Scarl.

Derivative financial instruments include the positive fair value of derivative financial instruments, detailed as follows: i) embedded derivatives on bond issues amounting to €357 million; and ii) cross currency swap hedging derivatives on financial liabilities amounting to €513 million. Additional details on the composition of the balance and respective changes are to be found in note 25.

Financial receivables, amounting to €1,129 million at September 30, 2017, mainly include the loans granted by Wind Tre to Wind Tre Italia SpA for €1,115 million (of which €72 million related to accrued interest), resulting from the two intercompany agreements signed on April 23, 2014 and August 4, 2014 respectively. In particular, the first loan, with a nominal value of €925 million (with repayment date in April 2024 and an annual fixed interest rate of 9%) was fully disbursed at September 30, 2017. The second loan for up to a nominal value of €75 million (with reimbursement in August 2024 and annual fixed interest rate of 8.5%) was drawn down in the amount of €67 million at September 30, 2017.

The increase in Financial receivables over December 31, 2016 is mainly due to the capitalization of accrued interest made during the first nine months of 2017.

Consolidated interim financial statements 75 as of and for the period ended September 30, 2017

19 OTHER NON CURRENT ASSETS

The item at September 30, 2017 shows a balance of €649 million of which €403 million are related to the long term portion of the pre-paid expenses for the contribution paid to the Ministry of the Economic Development for the extension of the frequency right of use and €246 million are related to the long term portion of trade receivables.

20 INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

The item at September 30, 2017 shows a balance equal to zero compared to €77 million in the previous year. On July 4, 2017, the parent company handed over n. 100,000 shares representing 10% of the holding in Galata SpA.

21 DEFERRED TAX ASSETS AND LIABILITIES

The following tables provide the variation of Deferred tax assets and Deferred tax liabilities by origin at September 30, 2017 and at December 31, 2016.

(millions of euro) At December 31, At September 30, Decrease Increase 2016 2017 Measurement of financial assets/liabilities 125 (23) - 102

Deferred tax assets 125 (23) - 102

Employee benefits 2 (2) - -

Accelerated depreciation and amortization 8 (4) - 4

Fair value of Property, plant, and equipment 19 - 194 213

Depreciation of Purchase Price Allocation 491 (34) - 457

Allowance for doubtful accounts (53) - (62) (115)

Amortization and depreciation of non-current assets (44) 3 (122) (163)

Losses carryforward for offset (34) 34 - -

Provisions for risks and charges (taxed) (21) - (4) (25) Deferred tax liabilities 368 (3) 6 371

The decrease during the period of €23 million in deferred tax assets is mainly referable to change in tax rates applicable to subsidiaries. Deferred tax liabilities at September 30, 2017 are mainly due to temporary differences on Depreciation of Purchase Price Allocation.

The following table provides an analysis of Deferred tax assets and Deferred tax liabilities at September 30, 2017 and December 31, 2016, between those falling due within 12 months and those falling due after 12 months.

(millions of euro) At September 30, At December 31, 2017 2016

-within 12 months - 5

-after 12 months 102 120

Total Deferred tax assets 102 125

Consolidated interim financial statements 76 as of and for the period ended September 30, 2017

(millions of euro) At September 30, At December 31, 2017 2016

-within 12 months - 25

-after 12 months 371 343

Total Deferred tax liabilities 371 368

Deferred tax assets of €1,393 million were not recognized on temporary differences that can be carried forward indefinitely due to the lack of reasonable certainty as to their recoverability (€1,173 million at December 31, 2016). These arise from previous years losses carried forward and from finance expenses which due to legislative limits are currently non-deductible.

22 EQUITY

The following table sets out the composition of Shareholders’ Equity at September 30, 2017 and December 31, 2016.

(millions of euro) At September 30, At December 31, 2017 2016

Issued capital 474 474

Share premium reserve 3,119 3,119 Other reserves and retained earnings (accumulated losses), including profit/(Loss) for (947) 611 the year

- Reserve for remeasurement of employee defined benefit plans (IAS19) (11) (11)

- Cash flow hedge reserve (85) (81)

- Parent company legal reserve 10 10

- Sundry reserves and retained earnings (accumulated losses), including loss for the period (861) 693 Total Equity 2,646 4,204

The Parent Company's share capital amounts to €474,303,795.00, fully paid, consisting of 94,860,759 shares each of nominal value €5.00 wholly owned by the sole shareholder Wind Tre Italia. The number of the Parent Company’s shares has not changed during the year. Following the confirmation and extension of the pledge on the shares of the Parent Company it is noted that, derogating from article 2352, paragraph 1 of the Italian Civil Code and by express contractual stipulation, entitlement to vote at shareholders’ meetings of the Parent Company remains with the direct parent Wind Tre Italia, despite such pledge.

Changes in equity attributable to the owners of the Company during the first nine months 2017 as well as the loss for the period mainly arose from an increase in the cash flow hedge reserve as the effect of the income and the expense recognized among other components of the Consolidated Statement of Comprehensive Income for the period that relate entirely to the transactions on hedging derivatives on cash flows, as described in further detail in note 25. The Company obtains the capital needed to fund its requirements for business development and operations; sources of funds are found in a balanced mix of equity and debt. Debt is structured on the basis of different maturities and currencies to ensure adequate diversification of funding sources and efficient access to external financing sources.

Consolidated interim financial statements 77 as of and for the period ended September 30, 2017

23 PROVISIONS

The following table sets out changes in Provisions during the first nine months of 2017.

(millions of euro) At December At September Increases (Utilization) (Release) 31, 2016 30, 2017 Litigation 56 16 (15) (1) 56 Universal service contribution 5 - - - 5 Handset assistance 1 - (1) - - Dismantling and removal 30 - (1) - 29 Other provisions 48 3 (3) - 48 Total 140 19 (20) (1) 138

The timing of payments in respect of non-current provisions is, with few exceptions, not contractually fixed and cannot be estimated with certainty. Litigation The provision at the respective dates is based on estimates using the best information available of the total charge that the Group expects to incur upon settlement of all outstanding legal proceedings (for details on the main proceedings in progress, reference should be made to the paragraph on the main pending legal proceedings in note 28).

Universal service contribution Article 3, paragraph 6, of Presidential Decree no. 318 of September 19, 1997 regarding the “Implementation of European Union Directives” establishes a mechanism designed to distribute the net cost of providing the universal service throughout the country whenever the related obligations represent an unfair cost for the entity or entities assigned the responsibility for supplying the service.

Handset assistance The provision represents an estimate of the costs that the Group may incur for assistance for handsets sold under warranty.

Dismantling and removal The item consists of the estimate of the dismantling and removal costs which may be incurred as a result of contractual obligations which require the asset to be returned to its original state and condition.

Other provisions This item consists of the measurement of certain liabilities arising from obligations assumed by the Group for which an estimate is made at the date of these financial statements of the amount to be settled upon due date. The balance at September 30, 2017 includes €34 million for liabilities for termination benefits arising from agency contracts in existence at the reporting date and €2 million relating to compensation plans for the long-term retention and incentive of management.

Consolidated interim financial statements 78 as of and for the period ended September 30, 2017

24 FINANCIAL LIABILITIES

The following table sets out an analysis of Financial liabilities at September 30, 2017 and at December 31, 2016.

(millions of euro) At September 30, 2017 At December 31, 2016 Non-current Current Total Non-current Current Total

Bond issues 9,757 190 9,947 10,293 160 10,453

Loans from parent companies 1,752 - 1,752 1,717 - 1,717

Bank loans 683 - 683 677 8 685

Loans from others 127 1 128 128 1 129

Derivative financial instruments 21 - 21 23 7 30 Total financial liabilities 12,340 191 12,531 12,838 176 13,014

The following tables provide the most important information regarding bank loans and bond issues outstanding at September 30, 2017.

(millions of euro) Carrying Carrying Nominal amount at amount at amount at September December September Issue Interest Bond issues 30, 2017 31, 2016 30, 2017 price Currency Due date rate Price Euribor 3M Frn PURPLE III 2020 Eur 400 400 400 100% EUR 07/15/2020 100.5% +4.125% SSN PURPLE II 2020 B EUR 379 383 375 100% EUR 07/15/2020 4.00% 101% Senior Secured Floating Rate Notes 2019 € Euribor 3M 150 150 150 100% EUR 04/30/2019 100.5% (DOVE) +5.25% Senior Secured Fixed Rate Notes 2020 $ (DOVE) 474 524 466 100% USD 04/30/2020 6.50% 103.4% Senior Notes 2021 € (PURPLE I) 1,791 1,758 1,750 100% EUR 04/23/2021 7.00% 104% Senior Notes 2021 $ (PURPLE I) 2,441 2,690 2,370 100% USD 04/23/2021 7.38% 103.9% Senior Secured Notes 2020 € (PURPLE II) 2,109 2,127 2,100 100% EUR 07/15/2020 4.00% 101% Senior Secured Notes 2020 $ (PURPLE II) 1,628 1,847 1,608 100% USD 07/15/2020 4.75% 100.8% Senior Secured Floating Rate Notes 2020 € Euribor 3M 575 574 575 100% EUR 07/15/2020 100.3% (PURPLE II) +4.00% Totale 9,947 10,453 9,794

(millions of euro) Carrying Carrying Nominal amount at amount at amount at September 30, December September Residual Bank loans 2017 31, 2016 30, 2017 Commitment Currency Due date Interest rate Senior Facility Agreement - Term Loan B1 683 685 700 700 Eur 11/26/2019 Euribor +4.25% - RCF R1 - - - 400 Eur 11/26/2019 Euribor +4.25% Total 683 685 700 1,100

The following table provides the breakdown of effective interest rates and lending currency, net of derivative financial instruments and Loans from shareholders, of loans at September 30, 2017.

(millions of euro) At September 30, 2017

<5% 5%

US dollars 1,618 474 2,431 - - 4,523

Total 5,081 3,108 2,441 128 - 10,758

Changes in balances of bonds at September 30, 2017 is mainly due to the change in the period of the euro/USD exchange rate on financial liabilities in foreign currency.

Consolidated interim financial statements 79 as of and for the period ended September 30, 2017

The Senior Facility Agreement contains financial covenants which the Group must test if the amount drawn down from the Revolving Credit Facility (“RCF”) exceeds 35% of the total. No amounts had been drawn down from the RCF at September 30, 2017.

An analysis of the derivative financial instruments balance and of the respective changes is found in note 25.

25 DERIVATIVE FINANCIAL INSTRUMENTS

The following table provides details of the outstanding Derivative financial instruments at September 30, 2017 and changes over December 31, 2016, analyzed by the type of risk hedged.

(millions of euro) At September 30, 2017 At December 31, 2016 Fair Value (+) Fair Value (-) Fair Value (+) Fair Value (-)

- Exchange rate risk 513 - 744 - - Interest rate risk - 21 - 27 Total cash flow hedges 513 21 744 27

- Exchange rate risk - - 317 - Total fair value hedges - - 317 - Non-hedge accounting derivatives 357 - 399 3 Total non Hedge Accounting Derivatives 357 - 399 3

Total 870 21 1,460 30

Changes in the fair value of derivatives arise mainly from variations in the interest rate curve and movements in the euro/USD exchange rate over the period.

The following table shows the detail of current and non-current derivative instruments.

(millions of euro) At September 30, 2017 At December 31, 2016 Fair Value (+) Fair Value (-) Fair Value (+) Fair Value (-) Current - - - 7 Non current 870 21 1,460 23 Total derivatives 870 21 1,460 30

The fair value of cross currency swap and plain vanilla interest rate swaps is determined through directly observable inputs such as interest rates curves (Level 2 in the fair value hierarchy). The fair value of embedded derivatives is determined by comparing the fair value of the total bond with the fair value of comparable bonds that do not incorporate this option. The fair value of loans is calculated using the DCF model (Level 3 in the fair value hierarchy). With respect to the latter, the entire change in the period is due solely to movements in the fair value of the instrument as a whole and therefore not to the sale or purchase of the underlying.

Consolidated interim financial statements 80 as of and for the period ended September 30, 2017

The following tables provide an analysis of financial assets and liabilities measured at fair value by hierarchy at September 30, 2017 and at December 31, 2016.

(millions of Euro) Level 1 Level 2 Level 3 Total Assets at fair value

Derivative financial instruments - 513 357 870 Total assets - 513 357 870

Liabilities at fair value Derivative financial instruments - 21 - 21 Total liabilities - 21 - 21

(millions of Euro) Level 1 Level 2 Level 3 Total Assets at fair value

Derivative financial instruments - 1,061 399 1,460 Total assets - 1,061 399 1,460 Liabilities at fair value Derivative financial instruments - 30 - 30 Total liabilities - 30 - 30

Level 3 includes the embedded derivative fair value on loans and relates to the early repayment option while Level 2 includes the fair value of other derivatives. In 2017 and 2016 there were no transfers either from Level 1 to Level 2 or vice versa or from Level 3 to other levels or vice versa.

It should also be noted that at September 30, 2017 there no additional financial instruments measured at fair value other than those indicated in the tables above.

Consolidated interim financial statements 81 as of and for the period ended September 30, 2017

26 NET DEBT

The following statement shows the Group’s net financial debt analyzed into its principal components, as described in notes 18, 24 and 25 relating to financial items in the statement of financial position.

(millions of euro) At September 30, At December 31, 2017 2016

Bond issues 9,757 10,293 Loans from parent companies 1,752 1,717 Bank loans 683 677 Loans from others 127 128 Derivative financial instruments 21 23 Non-current financial liabilities 12,340 12,838

Bond issues 190 160 Bank loans - 8 Loans from others 1 1 Derivative financial instruments - 7 Current financial liabilities 191 176

TOTAL GROSS FINANCIAL DEBT 12,531 13,014

Cash and cash equivalents (405) (603)

Financial receivables (41) (21) Current financial assets (41) (21)

Derivative financial instruments (870) (1,460) Financial receivables (1,077) (1,026) Non-current financial assets (1,947) (2,486)

TOTAL FINANCIAL ASSETS (2,393) (3,110) NET FINANCIAL DEBT 10,138 9,904

Net debt does not include guarantee deposits of €7 million at September 30, 2017 and of €5 million at December 31, 2016.

27 RELATED PARTY TRANSACTIONS

Transactions with related parties Related party transactions are part of normal operations which are conducted on an arm's length basis from an economic standpoint and formalized in agreements, and mainly relate to transactions with telephone operators.

The associate Galata SpA has been totally sold on July 4, 2017 and the relative transactions arose from the service agreement signed with Wind Tre SpA for the provision of a wide range of services on technological sites that host Wind Tre equipment.

At September 30, 2017, Group companies did not hold treasury shares of the parent Wind Tre Italia, either directly or through trustees, or hold shares of the indirect parent VIP-CKH Luxembourg Sàrl.

Consolidated interim financial statements 82 as of and for the period ended September 30, 2017

The table below provides a summary of the main effects on the income statement and statement of financial position following transactions during the year with related parties, all companies of the Veon and CK Hutchison groups, joint venturers at 50% in the parent company VIP-CKH.

With reference to the transactions with the parents, Wind Tre has an outstanding loan with both Wind Tre Italia and VIP-CKH, for which details may be found in notes 18 and 24.

Consolidated interim financial statements 83 as of and for the period ended September 30, 2017

(thousands of euro) At September 30, 2017

Financial Trade Other Financial Trade Financial Other Revenue income/ Expenses receivables receivables receivables payables payables payables (expenses) Wind Tre Italia S.p.A. 53 (21,318) 1,512 - 246 1,114,529 3,529 1,453,644 4,039 VIP-CKH Luxemburg S.a.r.l. 10 (13,810) - - - - 261 296,927 - Vimpelcom ltd 3 - - - 115 - - - - Galata (*) 2,631 - 95,117 ------Armenija Telefon Kompani 7 - 1 1 - - 18 - - DiGi (Malaysia) 4 - - 11 - - 2 - - DTAC/UCOM (Thailand) - - 5 26 - - 8 - - GrameenPhone () 24 - 22 - - - 88 - - KaR-Tel 11 - 2 15 - - 13 - - Kievstar 630 - 13,834 19 - - 6,744 - - Maritime - - 654 9 - - 349 - - Mobitel LLC 1 - 3 - - - 11 - - Orascom Telecom 34 - 88 1,406 - - 85 - - BanglalinkSpA Digital - - 1 970 - - 3 - - PakistanCommunications Mobile Limited 1 - 6 449 - - - - - SKYCommunications MOBILE LLC Ltd. ------1 - - Telenor Magyarorszag KFT 210 - 98 73 - - 422 - - (Hungary) Telenor Mobile 838 - 58 188 - - 1,717 - - Communications AS ()Telenor (Pakistan) - - 3 - - - 5 - - Telenor Serbia (Serbia) 211 - 44 214 - - 901 - - Unitel 1 - 1 5 - - - - - VimpelCom Lao Co, Ltd ------Vympel-Kommunikacii 982 - 2,976 40 - - 1,335 - - SpA* 127 - - - 271 - - - 411 Vimpelcom International - - - - 22 - - - - Tacomservices LLC () - - - 1 - - 1 - - Telenor Sverige AB 4 - 1 1 - - 46 - - Weather Capital Special - - 16 ------KlaroluxPurposes In I vestmentsSA Sarl - - 4 ------Global Luxembourg SARL - - 4 ------Global Telecom SARL - - 4 ------Global Telecom Finance SCA - - 4 ------Global Luxembourg Finance - - 4 ------GlobalSCA Telecom Acquisition - - 4 ------Global Telecom One Sarl - - 4 ------Global Telecom Oscar - - 6 ------Telenor Bulgaria EAD 133 - 13 15 - - 149 - - DTAC TriNet Co., Ltd. 154 - 3 151 - - 398 - - Telenor A/S 244 - 28 31 - - 490 - - Telenor Montenegro 12 - 71 42 - - 45 - - Vodafone Hutchison Australia 38 - 3 83 - - 6 - - HutchisonPty Ltd. Telecommunications Lanka - - 1 ------(Private) Limited PT. Hutchison 3 Indonesia - - 1 - - - 1 - - Hutchison 3G UK Limited 75 - 54 188 - - 176 - - Telefonica Ireland Limited 7 - 11 - - - 47 - - Hutchison Drei GmbH 45 - 52 5 - - 155 - - HI3G Access AB 7 - 3 89 - - 3 - - Europe - - 275 - - - 239 - 781 Investments S.a.r.l HI3G Denmark ApS 13 - 1 26 - - 1 - - Hutchison 3G Ireland Limited - - 5 - - - 5 - - Hutchison Global Enabling 4 - 61 112 (24) - - - 85 HutchisonServices Limited Telephone 208 - 11 625 - - 134 - - HutchisonCompany LimitedTelephone - - 1 19 - - 2 - - (Macau) Company Limited Hutchison Global 743 - 3,097 229 - - 896 - - NewCommunications Millennium Corp.Limited ------H3G Procurement Services - - - 4 750 - - - - HutchisonS.a.r.l. 3G Enterprises ------33 - - HutchisonS.a.r.l. 3G Italy ------HutchisonInvestments Whampoa S.a.r.l. 3G ------1 - - HutchisonContent S.a.r.l. Whampoa 3G IP 60 - 707 - 55 - 846 - 3,653 HutchisonS.a.r.l. Whampoa 3G ------139 - 31 Procurement S.a.r.l. Hutchison Telecommunications - - 3 - - - 2 - - (Vietnam) S.à r.l.-BCC Hutchison Digital Solution ------S.r.l. Total 7,525 (35,128) 118,877 5,047 1,435 1,114,529 19,307 1,750,571 9,000

(*) On July 4, 2017, was sold the whole 10% of the shares of the entity. Values indicated refers to June 30, 2017

Consolidated interim financial statements 84 as of and for the period ended September 30, 2017

28 OTHER INFORMATION

Operating Leases

The Group leases various cell sites, offices, outlets and motor vehicles under operating lease agreements. The leases have varying terms, escalation clauses and renewal rights. Cell site leases are negotiated for an average term of 6 years. Offices are negotiated for an average term of 6 years and motor vehicles leases are negotiated for an average term of 2.5 years. The Group is required to give 3 months’ notice for the termination of cell site leases and 6 months for the termination of offices leases.

The future aggregated minimum lease payments under operating leases with a due date of less than one year are as follows:

(millions of euro) At 30 September At 31 December 2017 2016 Cell sites 207 149 Offices 43 34 Outlets 24 16 Motor vehicles 4 2 Total 278 201

Main pending legal proceedings The Wind Tre Group is subject to various legal proceedings arising in the ordinary course of business. Below is a description of all material pending legal proceedings as at September 30, 2017, excluding those situations in which the cost arising from a negative outcome of the proceedings cannot be estimated or for which a negative outcome is not considered probable.

Proceedings with agents and retail dealers

At September 30, 2017, a number of proceedings relating to the termination of agency agreements were pending at different stages of judgment. The agents dealers in these proceedings are seeking typically payment from the former WIND Tre SpA of damages and indemnities, including a termination indemnity pursuant to article 1751 of the Italian Civil Code.

Proceedings concerning misleading advertising and unfair commercial practices Under Legislative Decree No.146/2007, the Italian Antitrust Authority (AGCM) has the power to initiate proceedings concerning unfair commercial practices and misleading advertising and issue fines up to €5 million for each proceeding (amount redefined by Law N°. 135/12 dated August 2012). During 2015, four proceedings initiated by the AGCM against Wind Tre for unfair commercial practice were closed with the payment of fines totalling €1.55 million and the order to cease the alleged unfair practices (one of these proceedings relates to Wind Tre’s non- compliance with the AGCM’s order to stop the alleged underlying unfair practice). The company has filed an appeal with the Lazio Administrative Court (Lazio TAR) against these fines and the related administrative litigations is pending.

In 2016 AGCM initiated four new proceedings (respectively on February, April, July and December) against Wind Tre for alleged unfair commercial practices: the first proceeding has been closed without ascertaining any unfair practice; the second and the third one have been closed with the payment respectively of a fine of €455 thousand and a fine

Consolidated interim financial statements 85 as of and for the period ended September 30, 2017

of €450 thousand (for both fines Wind Tre has filed an appeal before the Lazio TAR). The Group is still waiting for the AGCM’s final decision in the fourth proceedings. In 2017 AGCM initiated a new proceedings against Wind Tre for alleged unfair commercial practice which is still pending.

Audit by the Italian tax authorities The Agenzia delle Entrate (“ADE”) (the Italian tax authorities) conducted a tax audit on the senior lenders under the senior facility agreement of 24 November 2010 (“SFA”), raising an objection to the non-application of substitute tax on the SFA. Each senior lender is liable for the substitute tax disputed on its own portion of the SFA, but may claim indemnification from Wind Tre. The indemnification right has already been exercised. It should be noted that appeals against the assessments have been filed by the senior lenders in coordination with Wind Tre. ADE has withdrawn two assessments raised with certain senior lenders concluding that no substitute tax is due. As a consequence the ADE has requested the courts to withdraw its claim in respect of these two assessments.

Other contingent assets and liabilities The Wind Tre Group had the following contingent liabilities at September 30, 2017.

Proceedings concerning electromagnetic radiation There are pending proceedings regarding the installation of base radio stations. The proceedings typically concern the emission of electromagnetic radiation. At September 30, 2017 five proceedings for electromagnetic emissions were pending as a consequence of BTS installations.

Audit of dealers’ fees In 2001 WIND Telecomunicazioni SpA, now Wind Tre, received a dispute notice from the tax authorities regarding the tax treatment adopted in 1999, 2000 and 2001 for certain fees paid to dealers. With respect to the tax disputes for 1999, 2000 and 2001 Wind Tre obtained a positive outcome in the supreme court proceedings. For 2000 the Supreme Court has remitted the dispute to the Commission of Second Instance that has given a judgement in favour of Wind Tre.

Wind Tre / Crest One SpA On October 9, 2009, Crest One SpA (‘‘Crest One’’) initiated proceedings against Wind Tre for: (i) the refund of an amount of approximately €16 million previously paid to Wind Tre by Crest One as value added tax under a distribution agreement entered into between Crest One and Wind Tre, and (ii) the compensation of damages alleged to have been suffered by Crest One pursuant to the payment of such value added tax by Crest One to Wind Tre. The Court of Rome has rejected the claims of Crest One which has filed with the Court of Appeal. At the hearing of July 18, 2017, the Court reserved its decision and granted to parties terms to file final briefs; judgment is awaited.

Fastweb / Wind Tre On January 2, 2014, Fastweb served a claim on Wind Tre based on antitrust proceedings no. A/357, which in August 2007 convicted Wind Tre and Telecom Italia for abuse of their dominant positions in the wholesale termination market in favour of their respective internal commercial divisions and to the detriment of the competitors in the fixed market (i.e. internal-external discriminatory application of economic and technical conditions for fixed-to-mobile on net and intercom calls to business clients). Amongst other issues Wind Tre has argued that the claim is time barred

Consolidated interim financial statements 86 as of and for the period ended September 30, 2017

because it was filed outside the statute of limitations. On December 10, 2015, the presiding judge decided to defer to the panel of the tribunal to deliberate on Wind Tre’s time-bar argument, scheduling the next hearing for March 30, 2016 (then postponed to April 6, 2016). At this hearing the parties filed their conclusions and, at the end of June 2016, filed their final memoranda. A partial ruling on the time-bar argument was issued on November 23, 2016, rejecting Fastweb’s request for damages relating to 2002-2007 as it is definitely time-barred. In the same ruling, the judge decided to appoint an expert asking for a technical support to verify whether damages have been suffered by Fastweb for the following claimed period or not. The technical verification is ongoing. On May 16, 2017, Fastweb challenged the ruling on time barring/ limitation 2002-2007 before the Court of Appeal.

Other disputes During the second quarter of 2017 the Group continued with the credit collection actions started in December 2012 against a company specialising in selling prepaid traffic, VAS and broadband services. On December 22, 2014 the Court of Rome declared the company bankrupt. The Group took part in the bankruptcy procedure for credit collection, formally approved by the Judge on June 26, 2015, and is currently awaiting payment.

During 2017 credit recovery actions were also continued against a communications services company (wholesale), active in services for MVNO. Proceedings against this company have been directly handled by AGCom. On December 16, 2014, the Court declared the company bankrupt. The Group took part in the bankruptcy procedure for credit collection, formally approved by the Judge on June 9, 2015, and is currently awaiting payment. The contingent liabilities arising from these proceedings will be recognized as provisions in the balance sheet if management believes that the risk of a loss is probable.

Guarantees

No Group company has granted any security or guarantee, either directly or indirectly, in favor of parent companies or companies controlled by the latter.

The collateral pledged by Group companies at September 30, 2017 as a security for liabilities may be summarized as follows:  a special lien pursuant to article 46 of the Consolidated Banking Law on certain assets, present and future, belonging to the Parent as specified in the relevant deed, in favor of the lenders under the Senior Facility Agreement, as from time to time amended and restated, and other creditors specified in the relevant deed;  a pledge on the Parent’s trademarks and intellectual property rights, as specified in the relevant deed, pledged in favor of the lenders under the Senior Facility Agreement, as from time to time amended and restated, and other creditors specified in the relevant deed;  a pledge on the shares representing 100% of the corporate capital of the subsidiary WIND Acquisition Finance SA owned by the Parent in favor of a pool of banks pursuant to the related share pledge agreement;  a pledge under English law on a bank account of the Parent in favor of the lenders under the Senior Facility Agreement and the other creditors specified in the related deed of pledge;  an assignment under English law of receivables arising from hedging contracts of the Parent in favor of the lenders under the Senior Facility Agreement, as from time to time amended and restated, and the other creditors specified in the related deed of assignment.

Consolidated interim financial statements 87 as of and for the period ended September 30, 2017

Finally, in order to provide a security for its obligations, the Parent has assigned by way of security its trade receivables, receivables arising from intercompany loans and receivables relating to insurance policies, present and future, as described in the specific instrument, to the lenders under the Senior Facility Agreement, as amended and supplemented from time to time, the hedge counterparties of the hedging agreements entered into by Wind Tre SpA and WIND Acquisition Finance SA and the other secured creditors specified in the confirmation deed related to the assignment of receivables, including in favor of the holders of the notes issued by WIND Acquisition Finance SA.

Moreover, Wind Tre SpA has assigned by way of security its receivables arising from the put and call option dated May 26, 2005 and from the agreement for the purchase of the interest in the corporate capital of Wind Tre SpA dated May 26, 2005, as described in the relevant deed, to the lenders under the Senior Facility Agreement, as amended and supplemented from time to time.

A description is provided below of personal guarantees (sureties) issued mainly by banks and insurance companies on behalf of the Group and in favor of third parties in respect of commitments of various kinds. The total of these, amounting to €132 million at September 30, 2017 includes:

 sureties totaling €16 million issued by insurance companies, mainly relating to participation in tenders;

 sureties totaling €116 million issued by banks, relating to participation in tenders, of which €43 million in favor of the Minister for Economic Development for the participation in the tender procedure it had been awarded for the frequency use rights in the 800, 1800, 2000 and 2600 MHz bands, to sponsorships, property leases, operations regarding prize competitions, events and excavation licenses.

29 SUBSEQUENT EVENTS

On October 24, 2017 Wind Tre concluded the pricing of an offering of €5.625 billion senior secured notes and $2.0 billion senior secured notes, in a combination of: (i) €2.250 billion Senior Secured Floating Rate Notes due 2024, (ii) €1.625 billion 2.625% Senior Secured Notes due 2023, (iii) €1.750 billion 3.125% Senior Secured Notes due 2025 and (iv) $2.0 billion 5.0% Senior Secured Notes due 2026. In the same date, Wind Tre Spa concluded a new €3.4 billion senior facilities agreement dated October 24, 2017 consisting of a €3.0 billion amortizing term loan and a €400 million revolving credit facility. Proceeds from the offering and from the new agreement will be used to: (i) repay outstanding amounts under the Issuer’s existing senior facilities agreement, (ii) repay loans with the Issuer’s subsidiary, Wind Acquisition Finance S.A. which will use the funds to repay all of Wind Acquisition Finance S.A existing senior secured notes and senior notes and (iii) fund costs, fees and expenses, including call premia relating to the foregoing. The completion of the transaction allows to achieve a refinancing of all of the Wind Tre group’s senior and junior secured third party debt with the aim of optimizing the capital structure, reducing annualized interest costs and extending maturities.

Consolidated interim financial statements 88 as of and for the period ended September 30, 2017