Wind Strategy Update. 17a. Milan, May 17 th 2005

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Wind Strategy Update

17a

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Disclaimer

THESE SLIDES HAVE BEEN PREPARED BY THE COMPANY SOLELY FOR THE USE AT THE DB PRESENTATION IN MILAN.

THE INFORMATION CONTAINED HEREIN HAS NOT BEEN INDEPENDENTLY VERIFIED. NONE OF THE COMPANY OR REPRESENTATIVES SHALL HAVE ANY LIABILITY WHATSOEVER IN NEGLIGENCE OR OTHERWISE FOR ANY LOSS HOWSOEVER ARISING FROM ANY USE OF THESE SLIDES OR THEIR CONTENTS OR OTHERWISE ARISING IN CONNECTION WITH THESE SLIDES OR ANY MATERIAL DISCUSSED AT THE ANALYST PRESENTATION.

THIS DOCUMENT IS BEING FURNISHED TO YOU SOLELY FOR YOUR INFORMATION AND MAY NOT BE REPRODUCED OR REDISTRIBUTED TO ANY OTHER PERSON.

THE INFORMATION CONTAINED HEREIN AND OTHER MATERIAL DISCUSSED AT THE ANALYST PRESENTATION MAY INCLUDE FORWARD-LOOKING STATEMENTS THAT ARE NOT HISTORICAL FACTS , INCLUDING STATEMENTS ABOUT THE COMPANY’S BELIEFS AND EXPECTATIONS. THESE STATEMENTS ARE BASED ON CURRENT PLANS, ESTIMATES, PROJECTIONS AND PROJECTS, AND THEREFORE YOU SHOULD NOT PLACE UNDUE RELIANCE ON THEM.

FORWARD-LOOKING STATEMENTS INVOLVE INHERENT RISKS AND UNCERTAINTIES. WE CAUTION YOU THAT A NUMBER OF IMPORTANT FACTORS COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN ANY FORWARD-LOOKING STATEMENT. SUCH FACTORS INCLUDE, BUT ARE NOT LIMITED TO: THE DEVELOPMENT OF ENEL’S TELECOM BUSINESS, TRENDS IN ITS CORE ENERGY BUSINESS, ITS ABILITY TO IMPLEMENT COST-CUTTING PLANS, CHANGES IN THE REGULATORY ENVIRONMENT AND FUTURE CAPITAL EXPENDITURES.

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Tommaso Pompei

CEO, Wind

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UMTS

launch

Key Milestones

• In 5 years of operations Wind has become a leading telecom operator

1998

1999

2000

2001

2002

2003

Fixed line and GSM

licences awarded

Mobile / Free

Internet

service launched

UMTS Licence

Merger

with Infostrada

Acquisition of part

of Blu’s assets

Agreement with

NTT DoCoMo

to introduce

i-Mode in Italy

2004

Financial

independence

achieved

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“Think Global, Act Local”

• Exclusive license agreement with NTT

DoCoMo to launch i-Mode in Italy

• i-Mode alliances includes 12 operators in 16

countries

• Allows synergies on

– handsets development

– handsets purchase

– content acquisition

– branding

• Over 40 i-Mode handsets (10 UMTS)

• Proven business model involving content

providers

• Portal with more than 230 content sites,

provided by over 150 partners

• Average incremental i-Mode data ARPU over

€5 for active users

• 11 operators in 14 countries

• International roaming preferential agreement

• European-wide joint corporate offer

• Enhanced positioning vis-à-vis corporate

• Synergies on handset procurement

• Shared R&D experiences

• Sharing of commercial best practice and

cost benchmarking

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2004 Highlights

Achievements

• Exceeded all financial targets

• Achieved financial independence

in 2004 on a yearly basis vs. Q4

2004 previously expected

• Outperformed mobile

subscribers targets (19% market

share)

• Implemented successful €190m

Opex reduction efficiency

program (GE.CO.)

2004A Revenues

Fixed Line 38% Mobile 62%

2004A EBITDA €m

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Total Revenues: €4,508m

(1)

’03–’04 Growth: +2.1%

(1) Net of €194m of turnover contribution 1.358 1.035 0 500 1.000 1.500 2003 2004 + 31.2%

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6 / 22 -500 1,000 1,500 2,000 J a n -0 2 J u n -0 2 N o v -0 2 A p r-0 3 S e p -0 3 F e b -0 4 J u l-0 4 D e c -0 4 -500 1,000 1,500 2,000 J a n -0 2 J u n -0 2 N o v -0 2 A p r-0 3 S e p -0 3 F e b -0 4 J u l-0 4 D e c -0 4

Traffic Growth Dynamics

Mobile Voice Traffic (million min)

Fixed Voice Traffic (million min)

2002

2003

2004

Mobile traffic driven by market share

growth and on-net strategy

Fixed traffic migration to direct access

voice services

2002

2003

2004

+26% +23% +40% indirect direct -25% -34% -26% +182% +203% +25%

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Market Share Evolution

Market Share

Share of Gross Adds

34% 36% _28% 40% 38% 30% 24% 2% 2% 13% 25% 29% 2002 2003 2004

(1) Other includes Blu in 2002, H3G in 2003 and 2004

35% 36% 35% 47% 46% _42% 17% 2% 1% _4% 16% 19% 2002 2003 2004 Others (1)

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Europe’s Most Successful Mobile Third Entrant

• Wind has become the largest 3

rd

_{mobile player in Continental Europe in}

just 5 years since its inception

Launch

Date

(Subscribers – millions)

Source: Internal elaboration on analyst reports

(1) 1H 2004 except Wind based on 2004A. EBITDA on total revenues net of turnover contribution

0

2

4

6

8

10

12 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

EBITDA

Margin

(1) Mar9 9 Oct 98 May 98 May 94 Jan9 9 Mar9 9 May 96

37%

32%

26%

30%

29%

25%

42%

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Europe’s largest alternative fixed line operator

• 18,300km of backbone optic fibre

cable based on Enel Grid and

Railways

• 488 active ULL sites covering 27%

of total market

• 2,700km of optic fibre MAN

Largest alternative carrier's

infrastructure in Europe

Wind market position

NOT replicable

Source: Company reports

1.182 1.435 1.604 1.790 Wind Arcor (Germany) Cegetel (France) Auna (Spain)

Alternative carriers revenues

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Three Strong Brands

Note: Data as of I° Quarter 2005

• Leading Internet brand in Italy

• 35% Internet narrow band market share

• First Internet Portal for pages viewed and second for

unique users

• Most recognised alternative fixed line operator

• Third largest wireless operator

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Integrated Pervasive Network

• €11bn cumulative investments to

date (of which €2+ bn spent on

licenses to date and €6+ bn for

mobile)

• 18,000 km of backbone fibre optic

cable

• 2,600 km of fibre optic MANs

• 488 active ULL sites, covering about

28% of the total market

• The GSM Network covers 99% of the

population and national GPRS

available overall the national territory

• Roll-out of UMTS network with over

than 1,000 node-B

• Largest convergent infrastructure by

an alternative operator

Network Highlights

Map of Wind Backbone

Gorlago Chiasso (CH) Tortona Portogruaro S. Vincenzo Cerveteri Albinia Sibari Paola Cefalù Reggio C. Cagliari Agrigento Gioiosa Marea Catania Palermo Enna Caltanisetta Milano Genova La Spezia Parma Bolzano Asti Chivasso Rovigo Alessandria Treviso Gorizia Trieste Foligno Torino Arezzo Ancona Reggio E. Rimini Massa Ivrea Serra S.Q. Campomarino Pescara Venezia Orvieto Pesaro Porto d’Ascoli Lamezia Cagliari Pozzuoli Benevento Rosarno Diamante

Gioia del Colle

Metaponto Sapri Bari Salerno Barletta Rutino Formia Varese Savona Pavia Brescia Imperia Bergamo Verona Vicenza Vercelli Padova Verbania Novara Cuneo Biella Mantova Pisa Siena Macerata Belluno Sondrio Livorno Firenze Cremona Forlì Ravenna Modena Prato Pistoia Lucca Trento Ferrara Aosta Piacenza Perugia Terni Chieti Teramo L’Aquila Rieti Viterbo Udine Pordenone Lecco Grosseto Ascoli P. Vibo Valentia Sassari Nuoro Oristano Agrigento Ragusa Siracusa Messina Isernia Caserta Catanzaro Crotone Lecce Brindisi Taranto Matera Potenza Foggia Bari Avellino Napoli Campobasso Latina Frosinone ROMA Alghero Ceprano Olbia Valmontone Montecorvino Galatina Scandale Feroleto A. Villanova Rizziconi Sciacca Caracoli T.I. Marsala Gela Rotonda Calenz. S.Maria C.V. S.Sofia Larino Andria Suvereto Vignole B. Colunga P. Speranza Dolo Martignone Marg. Nave Ala Dugale Cordignano Cimego S.Massenza Divaccia (SL) Sandrigo Villabona Camporosso Campochiesa Vado L. Magliano A. Castelnuovo Tavazz. Nogarole Rondissone Turb. Montestrutto Lodi Bovis. Salgareda P. Caiano Bologna Orte Cosenza Laino B. Garigliano Otranto Aethos (GR) S.Lucia Civitavecchia Trapani Claviere (FR) Broc Carros (FR) Padriciano Piossasco Como Siti ADM Siti Interconn. Siti OLA Cavo 4 fibre (FS) Cavo 72 fibre (FS) Cavo 24 fibre

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Wind’s Convergence Strategy

Mobile

IT

Ne

tw

ork

• Retail

• SME

Fixed

Corporate

Infrastructure

Marketing / Sales / CRM / Customer Care

Customer Base

• Corporate

• Government

• ENEL

• Enel Outsourcing contract for TLC services is the biggest in Europe

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2007

2004

Step 1:

Grow Customer

Base

• Increase market share

• Noi 2 / Noi Wind to create community with

lowest costs (SACs/ interconnect)

• Reduce churn

• Enhance distribution channels

• Achieve excellence in network quality by end of

2005

• Focus on heavy users

• Stimulate off-net traffic

• Develop VAS through i-Mode

• CRM / Loyalty programs

Step 2:

Reduce ARPU

Gap

Mobile Strategy

“To achieve a large high quality mobile community (> 20% share, 15m subs) by

increasing customer base in the most cost effective way, to generate sustainable

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Advanced Mobile Data Strategy

• We are developing an integrated EDGE/UMTS Network

• Commercial focus is on service offering (i-mode) rather than

technology

• We will utilise UMTS network to absorb excess capacity

requirements on 2G network

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Fixed Line Strategy

• Increase Direct and Broadband customer base

• Increase ULL infrastructure to over 40% of lines

• Keep indirect customer base stable

• Introduce high value services (Broadband, Media)

• Leverage on offer bundling

• Improve Convergent Service

• VoIP

“To be the real alternative to Telecom Italia through direct access and superior

broadband solutions”

Step 1:

Grow Customer

Base

Step 2:

Increase ARPU

/ Profitability

2007

2004

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Business Market Strategy

• Wind wants to increase focus and presence on the corporate market

• VoIP

• Hybrid mobile handsets (

GSM, Umts, Wifi

)

• Adsl High speed IP access

• SLA management platforms

Positioning as a credible

integrated solution provider for

the whole of the market,

leveraging on new technology

trends and platforms

Addressing also the most

demanding Top customers,

exploiting own experience on

managing the impressive

figures of ENEL

• More than 1300 Intranet sites

• More than 500.000 M2M lines for telemeter

and remote control

• More than 150.000 calls/day handled by

the Enel contact centre

“To become the leading fully integrated alternative solutions provider for Italian

corporates with a 15% plus market share by 2010”

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Marco Alverà

CFO, Wind

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Service Revenues Composition (%)

Mobile

Fixed (Voice

& VAS)

Internet

&Data

Wholesale,

Enel,

Other

Consumer

Corporate

15%

12%

6%

8%

3%

51%

6%

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2003-2004: KPI Quarterly Evolution

Mobile Customers

Fixed Line Customers

Mobile ARPU

Fixed Line ARPU

11,2 11,6 9,1 9,0 9,6 9,9 10,6 9,0 8,0 8,5 9,0 9,5 10,0 10,5 11,0 11,5 12,0 Q1 03 Q2 03 Q3 03 Q4 03 Q1 04 Q2 04 Q3 04 Q4 04 (i n m il li o n s ) 3,4 3,2 _3,1 3,0 2,8 2,6 _2,5 2,4 132 141 176 224 256 341 49 125 0,0 0,5 1,0 1,5 2,0 2,5 3,0 3,5 4,0 Q1 03 Q2 03 Q3 03 Q4 03 Q1 04 Q2 04 Q3 04 Q4 04 0 200 400 600 800 1000 18,5 16,3 2,6 2,6 2,9 2,9 _2,9 _2,6 2,7 2,5 20,7 22,2 23,5 22,3 _21,6 _21,6 21,2 18,9 20,6 19,6 19,4 18,7 19,0 18,1 0,0 5,0 10,0 15,0 20,0 25,0 Q1 03 Q2 03 Q3 03 Q4 03 Q1 04 Q2 04 Q3 04 Q4 04 (i n € ) 26,4 28,7 6,8 6,3 _6,2 7,4 8,4 8,3 8,2 9,3 31,8 31,6 _31,0 32,4 36,2 36,4 34,6 38,0 24,8 25,3 25,0 27,8 28,1 25,0 0,0 10,0 20,0 30,0 40,0 Q1 03 Q2 03 Q3 03 Q4 03 Q1 04 Q2 04 Q3 04 Q4 04 (i n € ) Data Voice Internet Voice in m ill io n s in th o u s a n d s VOICE BROADBAND

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Cost Reduction Program (“GE.CO.”)

• GE.CO. achieved a 18%

reduction of the targeted cost

base, resulting in savings

equal to

€190m in 2004

• Main areas of intervention:

• Access and Transport

Network

– €130m, of which €58 m

deriving from contribution of

E-Net

• Provisioning and

Overheads

– €60m

• Information Technology

– €12m

987 2003

2004

2005

(E-Net)

1.045

190

855

15

840 -18%

-2%

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2003-2004 EBITDA Bridge

+50% +517 1,035 1,552 194 (57) (82) 56 283 1,358 Norm. EBITDA 2003 Fixed Contribution Margin ITC Costs Commercial Push Mobile Contribution Margin Efficiency initiatives 160 +36% +360 998 (37) One-off items EBITDA 2003 _EBITDANorm. 2004 EBITDA 2004 Turnover contribution

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Cash Flows 2002 – 2004

€ mln 581 939 1182 (853) 99 (1.776) (2.000) (1.500) (1.000) (500) 0 500 1.000 1.500

2002

2003

2004

Operating Cash Flow Levered Free Cash Flow