to download Telecom Italia Annual Report 2011 - Company Reporting

On December 16, 2011 Telecom Italia, the injured party in the aforesaid criminal proceedings, filed a
civil compliant against persons unknown with the Public Prosecutor’s Office of Monza.
However, in relation to the transactions cited, Telecom Italia deemed assessment of the risk of recovery
of the deducted VAT, as well as interest and fines, setting aside approximately 10 million euros for risk
provision.
Application for indictment of Telecom Italia S.p.A. for an administrative offence pursuant to Legislative
Decree no. 231/2001.
In December 2008 Telecom Italia received notification of the application for its committal for trial for the
administrative offence specified in articles 21 and 25, subsections 2 and 4, of legislative decree no.
231/2001 in relation to affairs involving several former employees and former collaborators of the
Company charged – among other things – with offences involving corruption of public officials, with the
object of acquiring information from confidential files. In May 2010 Telecom Italia was definitively no
longer a defendant in the criminal trial, the Judge having approved the motion for settlement of the
proceedings presented by the Company (plea bargaining) .
The trial phase of the proceedings, currently underway, started in September 2010 before Section One
of the Milan Court of Assizes. During the first sessions, Telecom Italia filed its application to be a civil
party in the proceedings against all the defendants committed for trial, for all the offences they are
accused of, including the crimes of corruption and criminal conspiracy. The Company's application to be
a civil party in the proceedings was granted by the Court on January 26, 2011. Telecom Italia is also the
party with civil liability in relation to 11 persons charged with criminal conspiracy, corruption and hacking
committed against a total of 32 civil parties. Telecom Italia Latam and Telecom Italia Audit and
Compliance Services remain civil parties in the trial for damages deriving from crimes other than
unlawful appropriation.
In relation to the details of the requests for the Company to pay and/or indemnify third parties, it should
be noted that, given the current state of play and on the basis of the elements available that can be
used for estimates, it is deemed possible that the Company could lose such proceedings. As regards one
case only, on the basis of the available information and the state of the legal proceedings, a negative
outcome is considered probable. As a result a specific provision of a relatively minor amount,which fully
covers the risk has been made.
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It should be noted that for some disputes, described below, on the basis of the information available at
the closing date of the financial statements and with particular reference to the complexity of the
proceedings, to their progress, and to elements of uncertainty of a technical - trial nature, it was not
possible to make a reliable estimate of the size and/or times of any payments. Moreover, in the case in
which the diffusion of information relative to the dispute could seriously jeopardise the position of
Telecom Italia or its subsidiaries, only the general nature of the dispute is described.
Antitrust Case A426
On May 13, 2010, following a complaint lodged by Fastweb, the Italian Antitrust Authority (AGCM)
started an investigation into an alleged abuse of dominant position by Telecom Italia. According to
Fastweb, Telecom Italia acted so as to exclude its competitors in the public tenders held in 2010 by
Consip and Enel for the award of contracts for fixed telephony services and IP connectivity. In particular,
according to the complainant, Telecom Italia did not provide its competitors with some pieces of
information of a technical-economic nature that were allegedly essential for the submission of
competitive bids, and provided its retail divisions with network services at more favourable conditions
than those applied to all other operators.
Fastweb had previously filed a similar complaint to AGCom which wholly dismissed the case in a note
issued on May 26, 2010.
While reiterating that it had always acted in full compliance with the applicable regulations, Telecom
Italia filed a proposal of undertakings in order to remove all the concerns set forth in the AGCM decision
to open the investigation. Considering that said proposal was not manifestly meritless, AGCM published
it on its website on July 29, 2011, inviting comments from interested third parties.
Telecom Italia Group
Consolidated Financial Statements
Note 24 – Contingent liabilities, other information,
commitments and guarantees
245