F-4

As filed with the Securities and Exchange Commission on June 10, 2004

Registration No. 333-                    

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM F-4

REGISTRATION STATEMENT

Under

THE SECURITIES ACT OF 1933

TELECOM ITALIA CAPITAL

société anonyme

(Exact name of registrant as specified in its charter)

Luxembourg	4899	Not Applicable
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification No.)

287-289 route d’Arlon

L-1150

Luxembourg

Tel: 011-352-456060-1

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Telecom Italia of North America, Inc.

745 Fifth Avenue

27th Floor

New York, New York 10151

Tel: (212) 310-9000

Fax: (212) 755-5766

(Name, address, including zip code, and telephone number, including area code, of agent for service)

TELECOM ITALIA S.p.A.

(Exact name of registrant as specified in its charter)

Republic of Italy	4899	Not Applicable
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification No.)

Piazza degli Affari 2

20123 Milano

Italy

Tel :011-39-02-8595-1

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Telecom Italia of North America, Inc.

745 Fifth Avenue

27th Floor

New York, New York 10151

Tel: (212) 310-9000

Fax: (212) 755-5766

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies of all communications to:

W. Preston Tollinger, Jr., Esq.

Morgan, Lewis & Bockius LLP

101 Park Avenue

New York, New York 10178

Tel: (212) 309-6915

Fax: (212) 309-6273

Approximate date of commencement of proposed sale to the public:    As soon as practicable after the effective date of this Registration Statement.

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    ¨

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered	Amount to be Registered	Proposed Maximum Offering Price Per Unit	Proposed Maximum Aggregate Offering Price	Amount of Registration Fee
Series A 4% Senior Notes Due 2008	$1,000,000,000	100%	$1,000,000,000	$126,700
Guarantee of Series A 4% Senior Notes Due 2008(1)	—	—	—	(2)
Series B 5.25% Senior Notes Due 2013	$2,000,000,000	100%	$2,000,000,000	$253,400
Guarantee of Series B 5.25% Senior Notes Due 2013(1)	—	—	—	(2)
Series C 6.375% Senior Notes Due 2033	$1,000,000,000	100%	$1,000,000,000	$126,700
Guarantee of Series C 6.375% Senior Notes Due 2033(1)	—	—	—	(2)
Total	$4,000,000,000	100%	$4,000,000,000	$506,800(3)

(1) Telecom Italia S.p.A. has guaranteed the Series A 4% Senior Notes Due 2008, Series B 5.25% Senior Notes Due 2013 and Series C 6.375% Senior Notes Due 2033 being registered hereby.

(2) Pursuant to Rule 457(n), no separate fee is payable with respect to the guarantees being registered hereby.

(3) Pursuant to Rule 457(p) under the Securities Act of 1933, as amended, $506,800 out of the total filing fee of $2,640,000 paid with respect to $10,000,000,000 of unsold debt securities is being carried forward from Registration Statement No. 333-12766 to this Registration Statement. Therefore, a registration fee of $0 is being paid in connection with the filing of this Registration Statement.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SUCH SECTION 8(A), MAY DETERMINE.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED JUNE 10, 2004

PROSPECTUS

OFFER TO EXCHANGE ALL OUTSTANDING SERIES A 4% GUARANTEED SENIOR NOTES DUE 2008, ALL OUTSTANDING SERIES B 5.25% GUARANTEED SENIOR NOTES DUE 2013, AND ALL OUTSTANDING SERIES C 6.375% GUARANTEED SENIOR NOTES DUE 2033 FOR REGISTERED SERIES A 4% GUARANTEED SENIOR NOTES DUE 2008, REGISTERED SERIES B 5.25% GUARANTEED SENIOR NOTES DUE 2013, AND REGISTERED SERIES C 6.375% GUARANTEED SENIOR NOTES DUE 2033

TELECOM ITALIA CAPITAL

Unconditionally Guaranteed By

TELECOM ITALIA S.p.A.

THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON                      , 2004, UNLESS EXTENDED

Material Terms of the Exchange Offer:

Ø Telecom Italia Capital is offering to exchange the initial notes that it sold in a private offering which closed on October 29, 2003 for new registered exchange notes.

Ø Based on interpretations by the staff of the U.S. Securities and Exchange Commission, we believe that, subject to some exceptions, the exchange notes may be offered for resale, resold and otherwise transferred by you without compliance with the registration and prospectus delivery provisions of the Securities Act.

Ø The initial notes are currently listed on the Luxembourg Stock Exchange. We currently intend to list the exchange notes on the Luxembourg Stock Exchange.

Ø The exchange offer expires at 5:00 p.m., New York City time,                      , 2004, unless extended.

Ø Tenders of outstanding initial notes may be withdrawn any time prior to the expiration of the exchange offer.

Ø All outstanding initial notes that are validly tendered and not validly withdrawn will be exchanged.

Ø You may tender your outstanding initial notes in integral multiples of U.S.$1,000.

Ø We believe that the exchange of initial notes for registered exchange notes will not be a taxable exchange for U.S. federal income tax purposes. Participation in the exchange offer may result in certain adverse tax consequences for non-U.S. residents as discussed in the section of this prospectus entitled “Italian Tax Considerations” on page 69.

Ø We will not receive any proceeds from the exchange offer.

Ø The exchange offer is subject to customary conditions, including that the exchange offer does not violate applicable law or any applicable interpretation of the staff of the U.S. Securities and Exchange Commission.

Ø The terms of the registered exchange notes to be issued are identical to the outstanding initial notes, except for the transfer restrictions and registration rights relating to the outstanding notes.

Ø No public market currently exists for the exchange notes.

We are not making an offer to exchange new registered exchange notes for outstanding initial notes in the Republic of Italy or in any jurisdiction where the offer is not permitted.

The exchange notes are subject to the same business and financial risks as the initial notes. Please refer to “r isk factors” beginning on page 28 of this prospectus for a description of the risks you should consider when evaluating this investment.

Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of the registered exchange notes to be distributed in the exchange offer, nor have any of these organizations determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this prospectus is                       , 2004

TABLE OF CONTENTS

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WHERE YOU CAN FIND MORE INFORMATION	1
ENFORCEABILITY OF CIVIL LIABILITIES UNDER THE UNITED STATES SECURITIES LAWS	3
CAUTIONARY STATEMENT RELATING TO FORWARD LOOKING STATEMENTS	4
PRESENTATION OF CERTAIN FINANCIAL AND OTHER INFORMATION	6
PROSPECTUS SUMMARY	7
RISK FACTORS	27
TERMS OF THE EXCHANGE OFFER	35
USE OF PROCEEDS	44
CAPITALIZATION	45
DESCRIPTION OF EXCHANGE NOTES AND GUARANTEES	47
TAX CONSIDERATIONS	65
PLAN OF DISTRIBUTION	71
GENERAL INFORMATION	72
LEGAL MATTERS	73
INDEPENDENT ACCOUNTANTS	73

CERTAIN DEFINED TERMS

In this prospectus, references to the “Issuer” and “TI Capital” refer to “Telecom Italia Capital”. References to the “Guarantor” and “Telecom Italia” refer to Telecom Italia S.p.A. References to “we”, “us” and “our” refer to Telecom Italia Capital or, if the context so requires, also to Telecom Italia S.p.A. and, if the context so requires, its consolidated subsidiaries (including TI Capital). References to “Telecom Italia Group” refer to Telecom Italia S.p.A. and its consolidated subsidiaries (including TI Capital). References to “Old Telecom Italia” and “Old Telecom Italia Group” and “New Telecom Italia” and “New Telecom Italia Group” refer to Telecom Italia S.p.A. and its consolidated subsidiaries as they existed immediately prior to, and immediately after, respectively, August 4, 2003, the effective date of the merger between Olivetti S.p.A. (“Olivetti”) and Old Telecom Italia.

NOTICE TO INVESTORS

You understand that it is the intention of TI Capital that the exchange notes will be offered and sold to investors, and trade in the secondary market between investors, and will be held by investors who are resident in countries listed in the Decree of the Ministry of Finance of Italy of September 4, 1996 as amended. A copy of the decree can be obtained from the website of the Ministry of Finance of Italy at www.finanze.it. See “Transfer Restrictions”. You also understand that, to the extent that Telecom Italia will become the obligor under the exchange notes due to substitution or otherwise (see “Description of Exchange Notes and Guarantees—Mergers and Similar Events”) and Telecom Italia will be required to withhold on any payments made on the exchange notes, there would be no obligation to gross up such payments to investors resident in the countries identified in the above Decrees as having a “privileged tax regime” or to investors resident in countries other than those identified in the above Decrees as having a “privileged tax regime” (including investors resident in the United States) who do not furnish the required certifications under applicable Italian tax requirements. See “Description of Exchange Notes and Guarantees—Payment of Additional Amounts”.

NOTICE TO INVESTORS IN ITALY

Neither the exchange offer nor this prospectus has been cleared by the Commissione Nazionale per le Società e la Borsa (“CONSOB”) and, accordingly, the exchange notes are not offered for exchange with the initial notes in the territory of the Republic of Italy. Therefore: (i) this prospectus may not be used in connection with an exchange offer in the Republic of Italy; and (ii) neither the Issuer, nor the Guarantor, nor the exchange agent (a) has delivered or will deliver this prospectus and any solicitation materials relating to the exchange offer in the Republic of Italy, (b) has solicited or will solicit exchanges of initial notes from any person within the Republic of Italy, (c) has accepted or will accept tenders of exchanges of initial notes from any person within the Republic of Italy, and/or (d) has offered, sold or delivered or will offer, sell or deliver, exchange notes to any person within the Republic of Italy. Any acceptance instructions in whatever form received from persons located in Italy shall be void and shall not be processed, validated or settled. In the case an Italian investor were to purchase the exchange notes on the secondary market and were holding the exchange notes at the time of the optional redemption (see “Optional Redemption” on page 14 of this prospectus), in certain cases there may be adverse tax consequences including the application of a 20% surtax. Italian investors holding the exchange notes will be responsible for such adverse tax consequences and no additional amounts will be paid in connection therewith by TI Capital or Telecom Italia.

NOTICE TO INVESTORS IN LUXEMBOURG

The exchange notes may not be offered to the public in the Grand Duchy of Luxembourg except in circumstances where the requirements of Luxembourg law concerning public offerings of securities have been met.

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NOTICE TO INVESTORS IN FRANCE

In France, the exchange notes may not be directly or indirectly offered or sold to the public, and offers and sales of the exchange notes will only be made in France to qualified investors or to a closed circle of investors acting for their own accounts, in accordance with Article L.411-2 of the Code Monétaire et Financier and Decret no. 98-880 dated October 1, 1998. Accordingly, this prospectus has not been submitted to the Autorité des Marchés Financiers. Neither this prospectus nor any other offering material may be distributed to the public in France. In the event that the exchange notes purchased by investors are directly or indirectly offered or sold to the public in France, the conditions set forth in Articles L.412-1 and L.621-8 of the Code Monétaire et Financier must be complied with.

Les titres ne pourront pas être offerts ou vendus directement ou indirectement au public en France et ne pourront l’être qu’à des investisseurs qualifiés ou à un cercle restreint d’investisseurs, agissant pour compte propre, conformément à l’Article L.411-2 du Code Monétaire et Financier et du Décret no. 98-880 du 1er Octobre 1998 . Par conséquent, ce prospectus n’a pas été soumis au visa de l’Autorité des Marchés Financiers. Ni ce prospectus ni aucun autre document promotionnel ne pourront être communiqués au public en France. La diffusion, directe ou indirecte, dans le public des titres ainsi acquis ne peut être realisée que dans les conditions prévues aux articles L.412-1 et 621-8 du Code Monétaire et Financier.

NOTICE TO INVESTORS IN GERMANY

The offering of the exchange notes is not a public offering in the Federal Republic of Germany. No application has been made under German law to publicly market the exchange notes in or out of the Federal Republic of Germany so that no public offer of the exchange notes or public distribution may be made in or out of the Federal Republic of Germany. The exchange notes are not registered or authorized for distribution under the Securities Sales Prospectus Act (Wertpapier-Verkaufsprospektgesetz), as amended, and accordingly may not be, and are not being, offered or advertised publicly or by public promotion. Therefore, the offer is strictly for private use and the offer is only being made to recipients to whom the document is personally addressed and does not constitute an offer or advertisement to the public. The exchange notes will only be available to persons who, by profession, trade or business, buy or sell exchange notes for their own or a third party’s account.

NOTICE TO INVESTORS IN THE UNITED KINGDOM

In the United Kingdom, the exchange notes will only be available for subscription pursuant to the offering to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses or otherwise in circumstances that will not constitute an offer to the public in the United Kingdom within the meaning of the Public Offers of Securities Regulations 1995, as amended. Prospectus is being distributed in the United Kingdom only to persons of the kind described in Article 19(5) (“investment professionals”) or Article 49(2) (“high net worth companies, unincorporated associations etc.”) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001, as amended, or to persons to whom it may otherwise lawfully be issued (collectively, “relevant persons”). By accepting delivery of this prospectus the recipient warrants and acknowledges that it is a relevant person. This communication must not be acted or relied upon by persons who are not relevant persons.

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WHERE YOU CAN FIND MORE INFORMATION

Telecom Italia

Telecom Italia is subject to the informational requirements of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), applicable to foreign private issuers and files annual reports and other information with the U.S. Securities and Exchange Commission (“SEC”). You may read and copy any document Telecom Italia files with the SEC at its public reference facilities at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. You may also obtain copies of the documents at prescribed rates by writing to the Public Reference Section of the SEC at 450 Fifth Street, NW, Washington, DC 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference facilities. Since November 4, 2002, Telecom Italia has been required to file and furnish its documents to the SEC on EDGAR, the SEC’s electronic filing system. All such filings made since such date can be reviewed on EDGAR by going to the SEC’s website: www.sec.gov.

On completion of the merger of Olivetti and Old Telecom Italia on August 4, 2003 (the “Merger”), Olivetti changed its name to Telecom Italia S.p.A. and succeeded to the Exchange Act information requirements of Old Telecom Italia. All annual reports on Form 20-F and reports on Form 6-K filed or furnished with the SEC prior to August 4, 2003, were so filed or furnished by Old Telecom Italia. As a foreign private issuer, Telecom Italia is exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements, and Telecom Italia’s officers, directors and controlling shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act.

Telecom Italia’s ordinary share ADSs and savings share ADSs are listed on the New York Stock Exchange and you can inspect Telecom Italia’s reports and other information at the New York Stock Exchange Inc., 20 Broad Street, New York, New York. For further information about Telecom Italia’s American Depositary Receipt arrangements, you may call the depositary under Telecom Italia’s American Depositary Receipt arrangements in the United States at (781) 575-4328.

TI Capital

TI Capital is a directly and indirectly wholly-owned subsidiary of Telecom Italia, organized under the laws of Luxembourg. TI Capital does not, and will not, file separate reports with the SEC.

TI Capital will issue the exchange notes described herein pursuant to an indenture as supplemented by a first supplemental indenture, both dated October 29, 2003. The indenture, the first supplemental indenture and their associated documents contain the full legal text of the matters described in “Description of Exchange Notes and Guarantees”. The indenture and the first supplemental indenture are available for inspection at BNP Paribas, 10A Boulevard Royal, L-2093, Luxembourg (the “listing agent”).

You may request, orally or in writing, a copy of the indenture dated October 29, 2003 as supplemented by the first supplemental indenture dated October 29, 2003, at no cost by contacting TI Capital at 287-289 route d’Arlon, L-1150 Luxembourg, tel.: 011-352-456060-1. Copies of the indenture and first supplemental indenture have also been filed with the SEC as exhibits to the registration statement on Form F-4 of which this prospectus forms a part, and may be obtained free of charge from the SEC’s web site at http://www.sec.gov.

Incorporation by reference

The SEC allows us to “incorporate by reference” the information we file with the SEC in other documents, which means:

• incorporated documents are considered part of this prospectus;

• Telecom Italia can disclose important information to you by referring you to those documents; and

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• information in this prospectus automatically updates and supersedes information in earlier documents that are incorporated by reference in this prospectus, and information that Telecom Italia files with the SEC after the date of this prospectus automatically updates and supersedes this prospectus.

We are incorporating by reference Telecom Italia’s Annual Report on Form 20-F for the year ended December 31, 2003 (the “Telecom Italia Annual Report”) (File No. 1-13882), which Telecom Italia filed with the SEC on June     , 2004, and a copy of which is being delivered herewith. The Telecom Italia Annual Report contains important information about Telecom Italia and its finances.

We also incorporate by reference each of the following documents that Telecom Italia will file with the SEC after the date of this prospectus from now until this exchange offer is completed:

• Reports filed under Section 13(a), 13(c) or 15(d) of the Exchange Act; and

• any future reports filed on Form 6-K that indicate they are incorporated by reference in this prospectus.

You may obtain a copy of any of the documents referred to above (excluding exhibits) at no cost by contacting our listing agent in Luxembourg at the following address:

BNP Paribas

Securities Services, Luxembourg Branch

23 Avenue de la Porte Neuve

L-2083

Luxembourg

To obtain timely delivery of any of our documents, you must make your request to us no later than             , 2004. The exchange offer will expire at 5:00 p.m., New York City time, on             , 2004. The exchange offer can be extended by us in our sole discretion, but we currently do not intend to extend the expiration date. See the caption “Terms of The Exchange Offer” on page 35 of this prospectus for more detailed information.

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ENFORCEABILITY OF CIVIL LIABILITIES

UNDER THE UNITED STATES SECURITIES LAWS

Telecom Italia is a joint stock company (Società per Azioni) organized under the laws of the Republic of Italy, and TI Capital is a company with limited liability (société anonyme) for an unlimited duration, established under the laws of Luxembourg. None of the members of the Board of Directors of TI Capital and only one member of the Board of Directors of Telecom Italia is a resident of the United States. All or a substantial portion of the assets of these non-U.S. residents and of TI Capital and Telecom Italia are located outside the United States. As a result, it may not be possible for you to effect service of process within the United States upon the non-U.S. resident directors or upon TI Capital or Telecom Italia or it may be difficult to enforce judgments obtained in U.S. courts based on the civil liability provisions of the U.S. securities laws against TI Capital or Telecom Italia in Luxembourg or Italy, as applicable. In addition, awards of punitive damages in actions brought in the United States or elsewhere may not be enforceable in Italy and in Luxembourg. Enforceability in Italy of final judgments of U.S. courts obtained in actions predicated upon the civil liability provisions of the federal securities laws of the United States is subject, among other things, to the absence of a conflicting judgment by an Italian court or of an action pending in Italy among the same parties arising from the same facts and circumstances and started before the U.S. proceedings, and to the Italian courts’ determination that the U.S. courts had jurisdiction, that process was appropriately served on the defendant, and that enforcement would not violate Italian public policy. In general, the enforceability in Italy of final judgments of U.S. courts would not require retrial in Italy, subject to the decision of the competent court of appeal ascertaining the existence of the above mentioned requirements and subject to challenge by the other party. In original actions brought before Italian courts, there is doubt as to the enforceability of liabilities based on the U.S. federal securities laws. The United States and Luxembourg do not currently have a treaty providing for recognition and enforcement of judgments (other than arbitration awards) in civil and commercial matters. As a result, a civil judgment by a U.S. court is enforceable in Luxembourg subject to applicable exequatur proceedings.

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CAUTIONARY STATEMENT RELATING TO FORWARD-LOOKING STATEMENTS

This prospectus contains certain forward-looking statements, which reflect Telecom Italia management’s current views with respect to certain future events and financial performance. Actual results may differ materially from those projected or implied in the forward-looking statements. Further, certain forward-looking statements are based upon assumptions of future events which may not prove to be accurate. The following important factors could cause actual results to differ materially from those projected or implied in any forward-looking statements. Due to such uncertainties and risks, you are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof:

• the continuing impact of increased competition in a liberalized market, including competition from global and regional alliances formed by other telecommunications operators in our core Italian domestic fixed-line and wireless markets;

• the ability of Telecom Italia to introduce new services to stimulate increased usage of our fixed and wireless networks to offset declines in the traditional fixed-line voice business due to the continuing impact of regulatory required price reductions, market share loss, pricing pressures generally and shifts in usage patterns;

• the level of demand for telecommunications services, particularly wireless telecommunications services in the maturing Italian market and for new higher value added products and services such as broadband;

• the ability of Telecom Italia to achieve cost-reduction targets in the time frame established or to continue the process of rationalizing its non-core assets;

• the success of Telecom Italia’s customer loyalty and retention programs, particularly in the fixed line business, and the impact of such programs on its revenues;

• the impact of regulatory decisions and changes in the regulatory environment, including implementation of recently-adopted EU directives in Italy;

• the impact and consequences of the Merger;

• the impact of the slowdown in Latin American economies and the slow recovery of economies generally on the international business of Telecom Italia focused on Latin America and on Telecom Italia’s foreign investments and capital expenditures;

• the continuing impact of rapid or “disruptive” changes in technologies;

• the impact of political and economic developments in Italy and other countries in which Telecom Italia operates;

• the impact of fluctuations in currency exchange and interest rates;

• Telecom Italia’s ability to successfully implement its 2004-2006 Industrial Plan;

• Telecom Italia’s ability to successfully achieve its debt reduction targets;

• Telecom Italia’s ability to successfully roll out its UMTS networks and services and to realize the benefits of its investment in UMTS licenses and related capital expenditures;

• Telecom Italia’s ability to successfully implement its internet and broadband strategy both in Italy and abroad;

• Telecom Italia’s ability to achieve the expected return on the significant investments and capital expenditures it has made and continues to make in Latin America;

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• the amount and timing of any future impairment charges for our licenses, goodwill or other assets; and

• the impact of litigation or decreased mobile communications usage arising from actual or perceived health risks or other problems relating to mobile handsets or transmission masts.

The foregoing factors should not be construed as exhaustive. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof. Accordingly, there can be no assurance that Telecom Italia will achieve its projected results.

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PRESENTATION OF CERTAIN FINANCIAL

AND OTHER INFORMATION

Unless otherwise indicated, the financial information contained in this prospectus and incorporated by reference herein is prepared using Italian GAAP. Note 27 of the Notes to the audited consolidated financial statements of Telecom Italia included in the Telecom Italia Annual Report incorporated by reference herein describe the material differences between Italian GAAP and U.S. GAAP as they relate to Telecom Italia. No U.S. GAAP financial statements have been prepared for Telecom Italia.

The currency used by Telecom Italia in preparing its consolidated financial statements is the euro. References to “euro,” “euros” and “€,” are to euros and references to “U.S. dollars,” “dollars,” “US$” or “$” are to U.S. dollars. For the purpose of this prospectus, “billion” means a thousand million. On June 1, 2004, the Noon Buying Rate (as defined below) was euro 1 = US$1.2210. The noon buying rate is determined based on cable transfers in foreign currencies as announced by the Federal Reserve Bank of New York for customs purposes (the “Noon Buying Rate”).

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PROSPECTUS SUMMARY

This summary highlights selected information from this prospectus and the documents we have referred you to in “Where You Can Find More Information”. It may not contain all the information which is important to you and we recommend that you read the entire document as well as the documents referred to under “Where You Can Find More Information”.

Description of the Exchange Offer

The Exchange

On October 29, 2003, TI Capital issued

Ø $1,000,000,000 Series A 4% Guaranteed Senior Notes due 2008—(Common Codes: 017953281 and 017953354; CUSIP Nos.: 87927VAB4 and T92762AB8; ISIN Nos.: US87927VAB45 and UST92762AB80),

Ø $2,000,000,000 Series B 5.25% Guaranteed Senior Notes due 2013—(Common Codes: 017953150 and 017953168; CUSIP Nos.: 87927VAA6 and T92762AA0; ISIN Nos.: US87927VAA61 and UST92762AA08), and

Ø $1,000,000,000 Series C 6.375% Guaranteed Senior Notes due 2033—(Common Codes: 017953427 and 017953435; CUSIP Nos. 87927VAC2 and T92762AC6; ISIN Nos. US87927VAC28 and UST92762AC63) (collectively, the “initial notes”)

to Banc of America Securities LLC, Citigroup Global Markets Inc., Credit Suisse First Boston (Europe) Limited, J.P. Morgan Securities Inc., Lehman Brothers Inc., Merrill Lynch International and Morgan Stanley & Co. Incorporated (collectively, the “initial purchasers”) in transactions exempt from the registration requirements of the Securities Act of 1933 (the “Securities Act”) pursuant to Section 4(2) of the Securities Act and Regulation S thereunder and applicable state securities laws. Telecom Italia has irrevocably and unconditionally guaranteed the full and punctual payment of principal, interest, additional amounts and all other amounts, if any, that may become due and payable in respect of the initial notes.

When TI Capital issued the initial notes, we entered into a registration rights agreement with the initial purchasers (the “registration rights agreement”) in which we agreed to use our reasonable best efforts to complete an exchange offer for the initial notes on or prior to October 28, 2004.

Under the terms of the exchange offer, you are entitled to exchange the initial notes for registered Series A 4% Guaranteed Senior Notes due 2008 (the “Series A notes”), Series B 5.25% Guaranteed Senior Notes due 2013 (the “Series B notes”) and Series C 6.375% Guaranteed Senior Notes due 2033 (the “Series C notes” and, together with the Series A notes and the Series B notes, the “exchange notes”) with substantially identical terms. You should read the discussion under the heading “Description of the Exchange Notes and Guarantees” for further information regarding the notes. As of this date, there are $4,000,000,000 aggregate principal amount of the initial notes outstanding. The initial notes may be tendered only in integral multiples of $1,000.

Resale Of Exchange Notes

We believe that the exchange notes issued in this exchange offer may be offered for resale, resold or otherwise transferred by you without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that:

Ø any exchange notes received by you will be acquired in the ordinary course of business;

Ø you have no arrangement or understanding with any person to participate in the distribution of the notes or the exchange notes within the meaning of the Securities Act;

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Ø you are not an “affiliate” (as defined in Rule 405 of the Securities Act) of Telecom Italia or TI Capital;

Ø you are not engaged in, and do not intend to engage in, the distribution of the exchange notes within the meaning of the Securities Act;

Ø if you are a broker-dealer, you will receive exchange notes in exchange for notes that were acquired for your own account as a result of market-making activities or other trading activities and you will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such exchange notes; and

Ø if you are a broker-dealer, you did not purchase the initial notes being tendered in the exchange offer directly from TI Capital or Telecom Italia for resale pursuant to Rule 144A or any other available exemption from registration under the Securities Act.

If any of the foregoing is not true and you transfer any exchange note without delivering a prospectus meeting the requirements of the Securities Act or without an exemption from the registration requirements of the Securities Act, you may incur liability under the Securities Act. We do not assume or indemnify you against that liability.

If you are a broker-dealer and receive exchange notes for your own account in exchange for initial notes that you acquired as a result of market making or other trading activities, you must acknowledge that you will deliver a prospectus meeting the requirements of the Securities Act upon any resale of the exchange notes. A broker-dealer may use this prospectus in connection with an offer to resell, resale or other transfer of the exchange notes.

Consequences Of Failure To Exchange Initial Notes

If you do not exchange your initial notes for exchange notes, subject to some exceptions, you will no longer be able to require us to register the initial notes under the Securities Act. In addition, you will not be able to offer or sell the initial notes unless:

Ø they are registered under the Securities Act (and we will have no obligation to register them, except for some limited exceptions), or

Ø you offer or sell them under an exemption from the requirements of, or in a transaction not subject to, the Securities Act.

In addition, the trading market, if any, for the remaining initial notes may be adversely affected depending on the extent to which initial notes are tendered and accepted in the exchange offer.

Expiration Date

The exchange offer will expire at 5:00 p.m., New York City time, on [                     ], 2004 (the “expiration date”), unless we decide to extend the expiration date. TI Capital will be entitled to close the offer as long as it has accepted all initial notes validly tendered and not withdrawn in accordance with the terms of the exchange offer.

Interest On The Exchange Notes

The exchange notes will bear interest from May 15, 2004. Interest due on the exchange notes will be payable in cash and will be payable on the same dates on which interest is otherwise payable on the initial notes and to the same persons who are entitled to receive those payments of interest on the initial notes.

No interest will be paid on any initial notes when they are surrendered and exchanged in this offer. Initial notes not tendered in the exchange offer will bear interest at the same rate in effect at the time of original

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issuance of the initial notes and, after consummation of the exchange offer, will not be entitled to additional interest or further registration rights.

Conditions To The Exchange Offer

We will proceed with the exchange offer, so long as:

Ø the exchange offer does not violate any applicable law or applicable interpretation of law of the staff of the SEC;

Ø no litigation materially impairs our ability to proceed with the exchange offer, and

Ø we obtain all governmental approvals we deem necessary for the exchange offer.

Procedures For Tendering Initial Notes

If you wish to accept the exchange offer, you must:

Ø tender your initial notes by following the procedures for book-entry transfer, as described in this document, or if you hold them through a broker, dealer, bank, trust company or nominee, instructing such institution to do so on your behalf; or

Ø complete, sign and date the letter of transmittal, or a facsimile of it, and send the letter of transmittal and all other documents required by it to JPMorgan Chase Bank, as exchange agent, and deliver the initial notes to be exchanged to the exchange agent or comply with the procedures for guaranteed delivery.

Guaranteed Delivery Procedure

If you wish to tender your initial notes and you cannot get your required documents to the exchange agent by the expiration date, you may tender your initial notes according to the guaranteed delivery procedure described under the heading “The Exchange Offer—Guaranteed Delivery Procedure.”

Withdrawal Rights

You may withdraw the tender of your initial notes at any time prior to 5:00 p.m., New York City time, on the expiration date of the exchange offer. To withdraw, you must send a written or facsimile transmission notice of withdrawal to the exchange agent at its address set forth herein under “The Exchange Offer—Exchange Agent” by 5:00 p.m., New York City time, on the expiration date.

Acceptance of Initial Notes and Delivery of Exchange Notes

If all the conditions to the exchange offer are satisfied or waived, we will accept any and all initial notes that are properly tendered in the exchange offer prior to 5:00 p.m., New York City time, on the expiration date. TI Capital will deliver the exchange notes promptly after the expiration date.

Tax Considerations

We believe that the exchange of initial notes for notes will not be a taxable exchange for U.S. federal income tax purposes. You should consult your tax adviser about the tax consequences of the exchange as they apply to your individual circumstances.

For a fuller discussion of possible adverse tax consequences for non-U.S. residents, please see the section of this prospectus entitled “Italian Tax Considerations” on page 69.

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Exchange Agent

JPMorgan Chase Bank is serving as exchange agent for the exchange offer. You can find the address and telephone number for JPMorgan Chase Bank on the inside of the back cover of this prospectus.

Fees and Expenses

We will bear all expenses related to consummating the exchange offer and complying with the registration rights agreement.

Use of Proceeds

We will not receive any cash proceeds from the issuance of the exchange notes. We have used a portion of the net proceeds from the sale of the initial notes to repay a portion of Telecom Italia’s bank debt incurred in connection with the payment to Olivetti shareholders exercising withdrawal rights in connection with the Merger and the tender offers made by Olivetti prior to completion of the Merger. A portion of the proceeds has been and will be used to repay other long and short term debt and for general corporate purposes. Affiliates of J.P. Morgan Securities Inc., Banc of America Securities LLC, Citigroup Global Markets Inc., Credit Suisse First Boston (Europe) Limited, Lehman Brothers Inc. and Morgan Stanley & Co. Incorporated, who were also initial purchasers, have had certain bank loans they made to Telecom Italia repaid with a portion of the net proceeds of the sale of the initial notes. See “Use of Proceeds”.

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Description of the Companies

Telecom Italia S.p.A.

Telecom Italia S.p.A. is incorporated as a joint stock company under the laws of Italy. The duration of the company extends until December 31, 2100. The registered office and principal executive offices of Telecom Italia are at Piazza degli Affari 2, 20123 Milan, Italy. The telephone number is +39-02-85951.

On July 18, 1997, Old Telecom Italia’s predecessor company was merged with and into STET—Società Finanziaria Telefonica—per Azioni (“STET”), its parent holding company, with STET as the surviving corporation. As of the effective date of the merger, STET changed its name to “Telecom Italia S.p.A”. In November 1997, the Ministry of the Treasury of the Republic of Italy completed the privatization of Telecom Italia selling substantially all of its stake in the Old Telecom Italia Group through a global offering, and a private sale to a stable group of shareholders.

On May 21, 1999, Olivetti, through a tender offer, obtained control of the Old Telecom Italia Group when approximately 52.12% of Old Telecom Italia ordinary shares were tendered to Olivetti. Through a series of transactions which started in July 2001, Olimpia S.p.A. (“Olimpia”) acquired a 28.7% stake in Olivetti which resulted in the replacement of the then boards of directors of Olivetti and Old Telecom Italia.

On December 9, 2002 the Ministry of the Treasury sold its remaining stake in Old Telecom Italia ordinary and savings share capital.

On August 4, 2003, the Merger was consummated by Old Telecom Italia merging with and into Olivetti with Olivetti as the surviving company changing its name to “Telecom Italia S.p.A”. Following the Merger, the proportionate ownership of Telecom Italia’s share capital by shareholders unaffiliated with Pirelli S.p.A. (“Pirelli”), Olimpia’s largest shareholder or Olimpia, increased substantially to approximately 88.43% of the outstanding Ordinary Shares. Since that date Olimpia has acquired additional shares through market purchases and Olimpia is currently the largest shareholder of Telecom Italia with approximately a 17% holding of Telecom Italia’s shares. Please see “Item 7. Major Shareholders and Related-Party Transactions—Major Shareholders—The Olimpia Shareholders’ Agreements” in the Telecom Italia Annual Report incorporated herein by reference. Pirelli may be deemed to beneficially own 1,798,921,123 Telecom Italia shares (including the 1,751,765,823 Telecom Italia shares beneficially owned by Olimpia), representing approximately 17.46% of the total number of shares reported to be issued and outstanding.

At the end of 2003, the Telecom Italia Group was one of the world’s largest fixed telecommunications operators, with approximately 26.6 million subscriber fixed-lines installed (including ISDN) equivalent lines. Through its subsidiary TIM, the Telecom Italia Group was also the largest mobile telecommunications operator in Italy and one of the largest in the world, with more than 44.5 million mobile lines which include 26.1 million lines in Italy and more than 18.4 million outside Italy through controlled and associated companies of TIM (35.6 million lines in which we have an economic interest or proportionate lines). At December 31, 2003, the Telecom Italia Group also had 6.6 million mobile lines (2.2 million proportionate lines) through companies indirectly owned through Telecom Italia International. In Italy TIM is one of three operators with the right to provide GSM digital mobile telecommunications services and one of three operators with the right to provide DCS 1800 digital mobile telecommunications services (the fourth operator, Blu, was acquired in October 2002 and merged into TIM in December 2002). TIM is one of five entities which have acquired a UMTS license to provide third generation mobile services in Italy.

The Telecom Italia Group also provides leased lines and data communications services, internet services including broadband, and IT software and services. Telecom Italia also operates in the office products, IT office products and specialized applications for service automation in banking retail, gaming and public authorities services and specialized automation systems sector through Olivetti Tecnost.

The Telecom Italia Group’s international portfolio of subsidiaries and investments includes fixed and mobile telecommunications companies which operate mainly in Latin America and certain countries in Europe.

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TI Capital

TI Capital is a limited liability company (société anonyme) organized under the laws of Luxembourg, incorporated on September 27, 2000 and is a directly and indirectly wholly-owned subsidiary of Telecom Italia. TI Capital is registered with the Registre du Commerceet des Sociétés of Luxembourg under B-77.970. TI Capital’s Articles of Incorporation were published in the Mémorial, Journal Officiel du Grand-Duché de Luxembourg, Recueil des Sociétés et Associations No. C-755 on October 13, 2000. TI Capital’s Articles of Incorporation were amended for the last time on December 20, 2002 and the modifications were published in the Mémorial Journal Officiel du Grand-Duché de Luxembourg, Recueil des Sociétés et Associations No C-184 on February 26, 2003.

TI Capital’s registered office and postal address is 287-289 route d’Arlon, L-1150, Luxembourg and its telephone number is + 352-456060-1.

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Description of the Exchange Notes

The following summary contains basic information about the exchange notes and is not intended to be complete. It does not contain all the information that is important to you. For a more complete understanding of the exchange notes, please refer to the section of this prospectus entitled “Description of Exchange Notes and Guarantees”.

Issuer TI Capital

Guarantor Telecom Italia

Securities •      $1,000,000,000 Series A 4% Guaranteed Senior Notes due 2008 (the “Series A notes”),

•      $2,000,000,000 Series B 5.25% Guaranteed Senior Notes due 2013 (the “Series B notes”) and

•      $1,000,000,000 Series C 6.375% Guaranteed Senior Notes due 2033 (the “Series C notes” and, together with the Series A notes and the Series B notes, the “exchange notes”).

As used herein, “initial notes” refers collectively to the Series A 4% Guaranteed Senior Notes due 2008, Series B 5.25% Guaranteed Senior Notes due 2013 and Series C 6.375% Guaranteed Senior Notes due 2033 issued by TI Capital to certain initial purchasers on October 29, 2003, as described above under “The Exchange.” As used herein, “notes” refers to both the initial notes and the exchange notes.

Guaranty Telecom Italia has irrevocably and unconditionally guaranteed the full and punctual payment of principal, interest, additional amounts and all other amounts, if any, that may become due and payable in respect of the exchange notes. If TI Capital fails to punctually pay any such amount, Telecom Italia will immediately pay the same.

Maturities November 15, 2008 for the Series A notes,

November 15, 2013 for the Series B notes and

November 15, 2033 for the Series C notes.

Interest rate The Series A notes will bear interest at a rate of 4% per annum, the Series B notes will bear interest at a rate of 5.25% per annum and the Series C notes will bear interest at a rate of 6.375% per annum.

The exchange notes will bear interest based upon a 360-day year consisting of twelve 30-day months.

Interest payment date Interest on the exchange notes will be payable semiannually in arrears on May 15 and November 15 of each year, commencing on November 15, 2004. Interest on the exchange notes will be calculated on the basis of a 360-day year comprised of twelve 30-day months. No interest will be paid on any initial notes when they are surrendered and exchanged in this offer.

Regular record dates May 1 and November 1.

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Ranking The exchange notes will be unsecured by assets or property. The exchange notes will rank equally in right of payment with all other senior unsecured indebtedness of TI Capital from time to time outstanding. The guarantee will rank equally in right of payment with all of Telecom Italia’s senior unsecured indebtedness.

Payment of additional amounts TI Capital, as Issuer, and Telecom Italia, as Guarantor, will pay additional amounts in respect of any payments of interest or principal so that the amount you receive after Luxembourg or Italian withholding tax will equal the amount that you would have received if no withholding of tax had been applicable, subject to some exceptions as described under “Description of Exchange Notes and Guarantees—Payment of Additional Amounts”.

Optional redemption Beginning on May 15, 2005, the exchange notes will be redeemable in whole or in part at TI Capital’s option at any time at a redemption price equal to the greater of:

•      100% of the principal amount of the applicable exchange notes, or

•      as determined by the quotation agent, the sum of the present values of the remaining scheduled payments of principal and interest thereon (not including any portion of such payments of interest accrued as of the date of redemption) discounted to the redemption date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the adjusted treasury rate, plus:

20 basis points for the Series A notes,

25 basis points for the Series B notes,

30 basis points for the Series C notes,

plus accrued interest thereon to the date of redemption.

See: “Description of Exchange Notes and Guarantees—Redemption at TI Capital’s Option”.

Tax redemption If, due to changes in Italian or Luxembourg laws relating to withholding taxes applicable to payments of principal or interest, or in connection with certain merger or similar transactions of Telecom Italia or TI Capital, TI Capital, as Issuer, or Telecom Italia, as Guarantor (or its respective successors), is obligated to pay additional amounts on the exchange notes, TI Capital may redeem the outstanding exchange notes in whole, but not in part, at any time at a price equal to 100% of their principal amount plus accrued interest to the redemption date.

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Form and denomination You may hold a beneficial interest in the exchange notes through DTC, directly as a participant in DTC or indirectly through financial institutions that are DTC participants. Both Euroclear and Clearstream are DTC participants. As an owner of a beneficial interest in the exchange notes, you will generally not be entitled to have your notes registered in your name, will not be entitled to receive certificates in your name evidencing the exchange notes and will not be considered the holder of any exchange notes under the indenture.

Mergers and Assumptions Each of TI Capital and Telecom Italia is generally permitted to consolidate or merge with another company. TI Capital will be permitted to merge with an Italian company and either Telecom Italia or any Italian subsidiary of Telecom Italia will be permitted to assume the obligations of TI Capital subject to the delivery of certain legal opinions. To the extent that an Italian company, including Telecom Italia or any Italian subsidiary of Telecom Italia, will become the obligor under the notes and that such Italian company will be required to withhold on any payments made on the notes, there would be no obligation to gross up such payments to investors (including investors resident in the United States) who do not furnish the required certifications under applicable Italian tax requirements.

Luxembourg listing The initial notes are currently listed on the Luxembourg Stock Exchange. TI Capital will apply to list the exchange notes on the Luxembourg Stock Exchange in accordance with the rules and regulations of the Luxembourg Stock Exchange.

Trustee, principal paying agent and registrar JPMorgan Chase Bank

Governing law New York. For the avoidance of doubt, the provisions of Articles 86 to 94-8 of the Luxembourg law on commercial companies of 10 August 1915, as amended, are excluded.

Selling Restrictions We are not making an offer to exchange initial notes for registered exchange notes in any jurisdiction where the offer is not permitted. Neither the exchange offer nor this prospectus has been cleared by the Commissione Nazionale per le Società e la Borsa (CONSOB) and, accordingly, the exchange notes are not offered for exchange with the initial notes in the territory of the Republic of Italy. Therefore: (i) this prospectus may not be used in connection with an exchange offer in the Republic of Italy; and (ii) neither TI Capital nor Telecom Italia nor JPMorgan Chase Bank and JP Morgan Chase Bank Luxembourg S.A., as our exchange agents, (a) has delivered or will deliver this prospectus and any solicitation materials relating to the exchange offer in the Republic of Italy, (b) has solicited or will solicit exchanges of initial notes from any person within the Republic of Italy, (c) has accepted or will accept tenders of exchanges of initial notes from any person within the Republic of Italy, and/or (d) has

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offered, sold or delivered or will offer, sell or deliver, exchange notes to any person within the Republic of Italy. Any acceptance instrtuctions in whatever form received from persons located in Italy shall be void and shall not be processed, validated or settled.

Ratings Telecom Italia’s long-term rating is Baa2 stable outlook according to Moody’s, BBB+ positive outlook according to Standard and Poors and A- stable outlook according to Fitch.

Risk factors Prospective purchasers of the exchange notes should consider carefully all of the information set forth in this prospectus and, in particular, the information set forth under “Risk Factors” and “Transfer Restrictions” before exchanging the initial notes for the exchange notes.

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Summary Selected Financial Information

The Merger of Old Telecom Italia with and into Olivetti became effective on August 4, 2003. Olivetti was the surviving company in the Merger (and changed its name to Telecom Italia S.p.A.), and succeeded to the business of Old Telecom Italia.

As a result of the Merger, the summary selected financial data set forth below are consolidated financial data of Olivetti, not Old Telecom Italia, and are presented on the following basis:

• the Telecom Italia Group’s selected financial data as of and for the year ended December 31, 2003 have been extracted or derived from the consolidated financial statements of the Telecom Italia Group prepared in accordance with Italian GAAP and which have been audited by Reconta Ernst & Young S.p.A. independent auditor;

• the Telecom Italia Group’s selected financial data as of and for each of the years ended December 31, 2002, 2001, 2000 and 1999 have been extracted or derived (other than the 2000 pro forma data) from the Olivetti Group’s consolidated financial statements prepared in accordance with Italian GAAP and which have been audited by the following independent auditors: Reconta Ernst & Young S.p.A. (for the years ended December 31, 2002 and 2001), PricewaterhouseCoopers S.p.A. (for the years ended December 31, 2000 and 1999); and

• the summary historical consolidated financial data for the Telecom Italia Group as of March 31, 2004, and for the three months ended March 31, 2004 and 2003, have been derived from unaudited interim consolidated financial statements which, in our opinion, reflect all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of our results of operations for the unaudited interim periods. Results for the three months ended March 31, 2004 are not necessarily indicative of results that may be expected for the entire year.

Unless otherwise indicated, amounts presented are based on Italian GAAP. The selected financial data below should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Telecom Italia Annual Report. Certain income statement and balance sheet amounts have been reconciled to U.S. GAAP for the years ended December 31, 2003, 2002 and 2001. For additional information about the U.S. GAAP reconciliation, you should read Note 27 of the Notes to the audited consolidated financial statements of Telecom Italia included in the Telecom Italia Annual Report incorporated by reference herein.

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	Year ended December 31,												Three Months ended March 31,
	1999(1)		2000(1)		2000 pro forma (Unaudited) (1)(2)		2001(1)		2002(1)		2003(1)		2003(1)		2004(1)
	(millions of Euro, except per share amounts)												(Unaudited)
Statement of Operations Data in accordance with Italian GAAP:
Operating revenues	28,207		30,116		28,374		32,016		31,408		30,850		7,291		7,418
Other income	512		483		459		476		504		345		69		58
Total revenues	28,719		30,599		28,833		32,492		31,912		31,195		7,360		7,476
Cost of materials	3,689		3,058		2,931		2,640		2,315		2,081		415		452
Salaries and social security contributions	5,231		5,245		4,965		4,919		4,737		4,303		1,115		1,033
Depreciation and amortization(3)	6,013		6,946		6,509		7,612		7,227		6,779		1,653		1,590
Other external charges	9,612		11,136		10,476		12,687		12,188		11,934		2,813		2,813
Changes in inventories	(79	)	(318	)	(296	)	92		62		114		(18	)	(44	)
Capitalized internal construction costs	(1,066	)	(912	)	(831	)	(583	)	(675	)	(805	)	(145	)	(156	)
Total operating expenses(3)	23,400		25,155		23,754		27,367		25,854		24,406		5,833		5,688
Operating income(3)	5,319		5,444		5,079		5,125		6,058		6,789		1,527		1,788
Financial income	1,468		1,202		1,162		1,446		1,569		992		288		292
Financial expense(3)	(2,252	)	(3,857	)	(3,648	)	(6,559	)	(4,647	)	(3,256	)	(940	)	(722	)
Of which write-downs and equity in losses in affiliated and other companies, net	(569	)	(1,037	)	(1,025	)	(1,771	)	(487	)	(91	)	(82	)	(14	)
Other income and (expense), net	5,667		135		165		(3,109	)	(5,496	)	(1,083	)	(7	)	(14	)
Income (loss) before income taxes and minority interests	10,202		2,924		2,758		(3,097	)	(2,516	)	3,442		868		1,344
Income taxes	(3,207	)	(1,923	)	(1,813	)	(579	)	2,210		(1,014	)	(713	)	(809	)
Net income (loss) before minority interests	6,995		1,001		945		(3,676	)	(306	)	2,428		155		535
Minority interests	(2,056	)	(1,941	)	(1,885	)	586		(467	)	(1,236	)	(552	)	(258	)
Net income (loss)	4,939		(940	)	(940	)	(3,090	)	(773	)	1,192		(397	)	277
Net income (loss) per Share(4)	1.03		(0.20	)	(0.20	)	(0.36	)	(0.09	)	0.07		(0.05	)	0.01
Dividends per Share	0.0310		0.0350		0.0350		—		—		0.1041	(5)	—		—
Dividends per Savings Share	0.1937		—		—		—		—		0.1151	(5)	—		—
Dividends per Preferred Shares	0.0362		—		—		—		—		—		—		—

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	Year ended December 31,
	1999(1)	2000(1)	2000 pro forma (Unaudited) (1)(2)	2001(1)		2002(1)		2003(1)
	(millions of Euro, except per share amounts)
Amounts in accordance with U.S. GAAP:
Total revenues	—	—	—	30,849		30,432		30,519
Operating income	—	—	—	3,661		7,225		8,095
Net income (loss) before minority interests, discontinued operations and cumulative effect of accounting changes	—	—	—	(2,932	)	6,231		3,135
Minority interests	—	—	—	18		(3,016	)	(1,523	)
Net income (loss) from discontinued operations	—	—	—	(1,112	)	(1,259	)	250
Cumulative effect of accounting changes, net of tax	—	—	—	20		—		(21	)
Net income (loss)	—	—	—	(4,006	)	1,956		1,841
Net income (loss) per Share before discontinued operations and cumulative effect of accounting changes—Basic	—	—	—	(0.85	)	0.79		0.18
Net income (loss) per Share before discontinued operations and cumulative effect of accounting changes —Diluted	—	—	—	(0.85	)	0.79		0.18
Net income (loss) per Share from discontinued operations—Basic	—	—	—	0.01		0.00		0.00
Net income (loss) per Share from discontinued operations—Diluted	—	—	—	0.01		0.00		0.00
Net income (loss) per Share from cumulative effect of accounting changes —Basic	—	—	—	0.01		0.00		(0.00	)
Net income (loss) per Share from cumulative effect of accounting changes—Diluted	—	—	—	0.01		0.00		(0.00	)
Net income (loss) per Share—Basic(6)	—	—	—	(1.17	)	0.48		0.20
Net income (loss) per Share—Diluted(6)	—	—	—	(1.17	)	0.48		0.20

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	Year ended December 31,						As of March 31,
	1999(1)	2000(1)	2000 pro forma (Unaudited) (1)(2)	2001(1)	2002(1)	2003(1)	2004(1)
	(millions of Euro)						(Unaudited)
Balance Sheet Data in accordance with Italian GAAP:
Total current assets(3)	15,892	21,097	20,957	23,417	22,597	22,498	22,082
Fixed assets, net	23,865	23,776	21,072	22,097	19,449	18,324	17,977
Intangible assets, net(3)	28,006	39,528	39,062	39,045	34,412	33,853	33,474
Total assets	75,526	95,360	91,832	94,227	83,384	80,501	79,537
Short-term debt	6,000	16,927	16,536	9,072	6,827	10,613	6,863
Total current liabilities	20,099	30,179	29,207	22,984	20,385	23,373	19,222
Long-term debt	24,291	27,485	25,950	37,747	33,804	30,852	33,071
Total liabilities	49,216	63,994	61,304	67,874	62,760	59,912	58,358
Total stockholders’ equity before minority interest	9,549	13,856	13,856	12,729	11,640	16,092	16,390
Total stockholders’ equity	26,310	31,366	30,528	26,353	20,624	20,589	21,179
Amounts in accordance with U.S. GAAP:
Total current assets	—	—	—	22,786	21,599	21,342	—
Fixed assets, net	—	—	—	24,331	21,503	21,593	—
Intangible assets, net	—	—	—	45,880	41,170	58,479	—
Total assets	—	—	—	103,588	92,911	108,093	—
Total current liabilities	—	—	—	22,725	18,599	23,196	—
Long-term debt	—	—	—	43,117	38,375	32,586	—
Total liabilities	—	—	—	76,436	68,314	67,946	—
Stockholders’ equity(7)	—	—	—	13,612	15,224	35,067	—

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	Year ended December 31,						As of March 31,
	1999(1)	2000(1)	2000 pro forma (Unaudited) (1)(2)	2001(1)	2002(1)	2003(1)	2003(1)	2004(1)
							(Unaudited)
Financial Ratios in accordance with Italian GAAP:
Gross operating margin (Gross operating profit/operating revenues)(%)(8)	43.0	43.6	43.1	42.7	44.6	46.3	45.4	47.1
Operating income/operating revenues (ROS) (%)	18.9	18.1	17.9	16.0	19.3	22.0	20.9	24.1
Net debt/Net invested capital (debt ratio)(%)(9)	51.0	54.5	53.9	59.3	61.8	61.8	60.7	59.2
Ratio of Earnings to fixed charges (10)	11.82	2.76	2.87	0.58	0.21	2.55	2.59	3.56
Financial Ratios in accordance with U.S. GAAP:
Ratio of Earnings to fixed charges (10)	—	—	—	0.71	2.15	3.02	—	—
Statistical Data:
Subscriber fixed lines in Italy (thousands)(11)	26,502	27,153	27,153	27,353	27,142	26,596	27,107	26,429
ISDN equivalent lines in Italy (thousands)(12)	3,049	4,584	4,584	5,403	5,756	6,027	5,888	6,008
Broadband Access in Italy and abroad (ADSL + XDSL) – (thousands)(13)	—	—	—	390	850	2,200	1,100	2,800
Voice Offers in Italy – (thousands)(14)	—	—	—	4,094	5,224	5,547	5,392	5,546
Network infrastructure in Italy:
— access network in copper (millions of km—pair)	103.4	104.0	104.0	104.3	104.3	105.2	104.3	105.2
— access network and transport in fiber optics (millions of km of fiber optics)	2.9	3.1	3.1	3.2	3.6	3.6	3.60	3.65
Network infrastructure abroad:
— European backbone (km of fiber optics)	—	36,600	36,600	36,600	36,600	39,500	36,600	39,500
TIM lines in Italy (thousands)(15)	18,527	21,601	21,601	23,946	25,302	26,076	25,657	26,036
TIM group foreign lines (thousands) (16)	4,788	7,637	7,637	10,923	13,809	18,438	14,514	21,601
TIM group lines total (Italy + foreign in thousands) (16)	23,315	29,238	29,238	34,869	39,111	44,514	40,171	47,637
GSM penetration in Italy (% of population)	99.2	99.6	99.6	99.7	99.8	99.8	99.8	99.8
E-TACS penetration in Italy (% of population)	97.9	98.0	98.0	98.0	98.0	97.9	97.9	97.9
Page views Virgilio (millions)	505	2,218	2,218	3,945	5,267	6,612	1,641	1,905
Group’s employees (at period-end)	129,073	120,973	113,475	116,020	106,620	93,187	104,379	93,036
Group’s employees (average number)	128,603	131,266	123,994	113,974	107,079	95,804	99,982	89,083
Operating revenues/Group’s employees (average number) (thousands)	219.3	229.4	228.8	280.9	293.3	322.0	72.9	83.3

(1) Beginning with the consolidated financial statements for the year ended December 31, 2001, under Italian GAAP, Nortel Inversora and the controlled Telecom Argentina group (Nortel Inversora group), which in 2000 were consolidated proportionally, have been accounted for using the equity method. Prior to 2000 the Nortel Inversora group was accounted for on the equity method. Under U.S. GAAP, the Nortel Inversora group is accounted for using the equity method. These differences in accounting treatment for 2000 did not affect net income and stockholders’ equity but had an impact on other line items, such as operating revenues and operating expenses, as well as a number of balance sheet line items.

(2) The 2000 unaudited pro forma amounts give effect to the consolidation of the Nortel Inversora group using the equity method instead of the proportional consolidation method.

(3) Beginning in 2003, Telecom Italia changed the manner in which it accounts for bond issuance expenses including them under current assets (prepaid expenses). Previously, such costs were included in Intangible

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assets, net. Consequently this change also impacted certain statement of operations items. As a result of this change, the previous periods have been reclassified and presented consistent with the 2003 presentation.

(4) Net income per Share in 1999 is calculated on the basis of 4,812,541,305 shares outstanding, of which 4,721,387,429 Shares, 15,221,888 Preferred Shares and 75,931,988 Savings Shares (net of 2,697,500 Shares of treasury stock acquired from employees in the prior years). Net loss per Share in 2000 is calculated on the basis of 4,700,065,553 Shares outstanding, net of 214,628,828 Shares of treasury stock of which 2,697,500 Shares were held by the Company and 211,931,328 Shares were held by its subsidiary Olivetti International S.A Net loss per Share in 2001 is calculated on the basis of 8,569,072,736 Shares outstanding, net of 214,628,828 Shares of treasury stock held by the Company and by its subsidiary Olivetti International S.A Net loss per Share in 2002 is calculated on the basis of 8,630,610,804 Shares outstanding, net of 214,628,828 Shares of treasury stock.

Net income per Share in 2003 is calculated on the basis of 15,996,955,942 shares outstanding, of which 10,201,034,873 Shares and 5,795,921,069 Savings Shares; the 10,201,034,873 Shares outstanding are net of 101,208,867 Shares of treasury stock already held by the Company and its subsidiary Olivetti International S.A. resulting from the redistribution of the share capital in connection with the Merger.

The significant changes in share capital compared with the end of 2002 were mainly due to the Merger of Old Telecom Italia into Olivetti, effective from August 4, 2003, which provided for an exchange ratio of 7 Olivetti ordinary shares, par value € 1 each, for every ordinary share of Old Telecom Italia, par value 0.55 each, and 7 Olivetti savings shares, par value € 1 each for every savings shares of Old Telecom Italia, par value € 0.55 each. From August 4, 2003, the Shares and Savings Shares of Telecom Italia were issued as a result of the Merger. The change in the number of issued shares in the year 2003 can be analyzed as follows:

• until August 4, 2003: (a) issuance of 11,361,740 Shares of which 11,137,324 ordinary shares were issued on conversion of “Olivetti 1.5% 2001-2010 convertible bond with redemption premium”, 141,134 ordinary shares were issued on the exercise of “Olivetti 2001-2002 ordinary share warrants” and 83,282 ordinary shares were issued on the conversion of “Olivetti 1.5% 2001-2004 convertible bond with redemption premium”; (b) cancellation of 10,958,057 ordinary shares following the exercise of withdrawal rights of dissenting shareholders as permitted in accordance with the terms of the Merger; (c) cancellation of the remaining 8,845,643,315 ordinary shares (including 214,628,828 treasury shares), par value € 1 each, to be replaced by new Shares;

• on and after August 4, 2003: (a) issuance of 10,287,061,839 new Shares, par value € 0.55 each (including 101,208,867 treasury shares), and 5,795,921,069 new Savings Shares, par value € 0.55 each, in substitution for the cancelled shares; (b) issuance of 15,181,901 new Shares, of which 11,009,743 shares were issued on the exercise of “ex Telecom Italia 1999 Stock Option Plan”, 4,028,290 shares were issued on the conversion of “Olivetti 1.5% 2001-2010 convertible bonds with redemption premium” and 143,868 shares were issued on the conversion of “Olivetti 1.5% 2001-2004 convertible bonds with redemption premium”.

For more details on changes in stockholders’ equity for the years ended December 31, 2001, 2002 and 2003, respectively, please see page F-6 of the Telecom Italia Annual Report, “Telecom Italia S.p.A. Statements of Consolidated Stockholders’ Equity for the Years Ended December 31, 2001, 2002 and 2003” incorporated by reference herein.

The calculations take into account the requirement that holders of Savings Shares are entitled to an additional dividend equal to 2% of the par value of shares above dividends paid on the Shares; until July 2000 the par value of ordinary, savings and preferred shares was Lire 1,000 per share. Furthermore, the Extraordinary Shareholders’ Meeting of Telecom Italia (formerly Olivetti S.p.A.) held on July 4, 2000 approved the conversion of 15,221,888 preferred shares and 78,629,488 savings shares, at par value, into an equal number of ordinary shares. Approval was also given during the same Extraordinary Shareholders’ Meeting to the free of charge share capital increase by utilizing unrestricted reserves, increasing the par

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value from Lire 1,000 to Lire 1,936.27 (corresponding to € 1) of all the ordinary shares (both issued ordinary shares and shares that would have been issued in the future by implementing the resolutions previously passed with regard to conversion of bonds and the exercise of warrants), with the concurrent redenomination of share capital in €. Finally, following the Merger, effective from August 4, 2003, the Telecom Italia share capital consists of Shares and Savings Shares. Net income per Savings Share was € 1.04 in 1999, € 0.08 in 2003 and € 0.02 in the first quarter of 2004.

(5) Telecom Italia’s dividend coupons for the year ended December 31, 2003 were clipped on May 24, 2004, and such dividends for the year ended December 31, 2003 were repayable from May 27, 2004.

(6) In accordance with U.S. GAAP, the Net income (loss) per Share has been calculated using the two class method, since the Company has both Shares and Savings Shares outstanding. Under this method, set forth in Statement of Financial Accounting Standards No. 128, “Earnings per Share”, Basic earnings per share is computed by dividing income available to shareholders by the weighted average number of shares outstanding, and diluted earnings per share is increased to include any potential common shares and is adjusted for any changes to income that would result from the assumed conversion of those potential common shares. For the purpose of these calculations, the weighted average number of Shares was 3,424,694,178 for the year ended December 31, 2001 and 4,054,375,543 for the year ended December 31, 2002 and the weighted average number of Shares and Savings Shares was 6,620,513,494 and 2,414,967,112 for the year ended December 31, 2003. The calculations take into account the requirement that holders of Savings Shares are entitled to an additional dividend equal to 2% of the par value of Savings Shares above dividends paid on the Shares. The calculations take also into account that 2001 and 2002 (after the redenomination of the share capital into € following the resolution taken by the Extraordinary Shareholders’ Meeting held on July 4, 2000) the par value of Shares was € 1 per share, and that in 2003, after the Merger, the par value of Shares and Savings Shares was reduced to € 0.55 per share. In addition, in accordance with U.S. GAAP, net income (loss) per Savings Share—Basic was €0.21 in 2003.

(7) Stockholders’ equity under U.S. GAAP is calculated after elimination of minority interest. See Note 27 of Notes to Consolidated Financial Statements included elsewhere herein.

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(8) Gross Operating Profit was €12,131 million, €13,117 million, €12,216 million, €13,655 million, €14,015 million and €14,280 million in each of 1999, 2000 (historical), 2000 (pro forma), 2001, 2002 and 2003, respectively. Gross Operating Profit was €3,308 million and €3,494 million in the three months ended March 31, 2003 and 2004, respectively. Because Gross Operating Profit includes certain financial statement items and excludes others it is considered a non-GAAP financial measure as defined in Item 10 of Regulation S-K under the 1934 Act. Telecom Italia believes that Gross Operating Profit provides the best indication of the Telecom Italia Group’s operating performance and is meaningful information for investors and is consistent with how we present ourselves to the analyst community. In addition the Telecom Italia Group also believes (although other telecommunication operators will calculate such information differently) that Gross Operating Profit permits an adequate comparison of the Telecom Italia Group’s performance against its peer group. The following table reconciles operating income to the calculation of Gross Operating Profit by showing the Statement of Operation items included in calculating Gross Operating Profit.

	Year ended December 31,												Three Months ended March 31,
	1999		2000		2000 pro forma (Unaudited)		2001		2002		2003		2003		2004
	(millions of Euro)												(Unaudited)
Operating income	5,319		5,444		5,079		5,125		6,058		6,789		1,527		1,788
Depreciation and Amortization	6,013		6,946		6,509		7,612		7,227		6,779		1,653		1,590
Other external charges: (*)
• Provision for bad debts	416		495		412		448		546		471		75		51
• Write-downs of fixed assets and intangibles	88		48		48		17		58		6		—		1
• Provision for risk	263		154		143		389		114		70		32		12
• Other provisions and operating charges	522		417		388		431		466		485		83		106
Other income (excluding operating grants, reimbursements for personnel costs and costs of external services rendered)	(490	)	(387	)	(363	)	(367	)	(454	)	(320	)	(62	)	(54	)
Gross Operating Profit	12,131		13,117		12,216		13,655		14,015		14,280		3,308		3,494

(*) The following items included as part of “Other external charges” are added back to operating income in the calculation of gross operating profit.

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(9) Net financial debt is a non-GAAP financial measure as defined in Item 10 of Regulation S-K under the 1934 Act. Although net financial debt is a non-GAAP measure, it is widely used in Italy by financial institutions to assess liquidity and the adequacy of a company’s financial structure. Therefore, Telecom Italia believes it is useful information for investors to receive and is consistent with how Telecom Italia presents itself to the analyst community. Net financial debt is calculated as follows:

	As of December 31,												As of March 31,
	1999		2000		2000 pro forma (Unaudited)		2001		2002		2003		2004
	(millions of Euro)												(Unaudited)
Short-term debt, including current portion of long-term debt	6,000		16,927		16,536		9,072		6,827		10,613		6,863
Long-term debt	24,291		27,485		25,950		37,747		33,804		30,852		33,071
Gross debt	30,291		44,412		42,486		46,819		40,631		41,465		39,934
Cash and cash equivalents:
• Bank and postal accounts	(1,149	)	(2,763	)	(2,745	)	(3,626	)	(4,363	)	(4,870	)	(7,514	)
• Cash and valuables on hand	(13	)	(8	)	(7	)	(76	)	(7	)	(7	)	(6	)
• Receivables for securities held under reverse repurchase agreements	(133	)	(1	)	(1	)	(4	)	(56	)	(60	)	(12	)
Marketable securities (*)	(1,749	)	(2,909	)	(2,759	)	(3,616	)	(1,927	)	(2,719	)	(1,456	)
Financial accounts receivable (included under “Receivables” and “Other current assets”)	(232	)	(1,210	)	(1,210	)	(894	)	(995	)	(826	)	(446	)
Financial prepaid expense/deferred income, net and accrued financial income/expense, net (long-term)	—		(328	)	(328	)	(705	)	(511	)	(307	)	(265	)
Financial prepaid expense/deferred income, net and accrued financial income/expense, net (short-term)	364		331		292		464		627		670		551
Net Financial Debt	27,379		37,524		35,728		38,362		33,399		33,346		30,786

(*) In 1999, 2000, 2001 and 2002 data include Old Telecom Italia shares held by Olivetti.

(10) For purposes of calculating the ratio of “earnings to fixed charges”:

Ø “earnings” is calculated by adding:

• pre-tax income from continuing operations before adjustment for minority interests in consolidated subsidiaries;

• “fixed charges” (as defined below);

• amortization of capitalized interest and issue debt discounts or premiums;

• dividends from equity investees; and

• equity in losses of equity investees;

and then subtracting:

• capitalized interest for the applicable period; and

• equity in earnings of equity investees.

Ø “fixed charges” is calculated by adding:

• interest costs (both expensed and capitalized);

• issue costs and any original issue debt discounts or premiums; and

• an estimate of the interest within rental expense for operating leases.

The term “equity investees” means investments that Telecom Italia accounts for using the equity method of accounting.

A ratio of less than one indicates that earnings are inadequate to cover fixed charges. The amount by which fixed charges exceeded earnings for the years ended December 31, 2001 and 2002 under Italian GAAP was €1,172 million and €2,037 million, respectively. The amount by which fixed charges exceeded earnings for the year ended December 31, 2001 under U.S. GAAP was €931million.

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(11) Data include multiple lines for ISDN and exclude internal lines.

(12) Data exclude internal lines.

(13) Number of contracts. Broadband access contracts in Italy as of December 31, 2001, 2002 and 2003 were 390,000, 850,000 and 2,040,000, respectively, while as of March 31, 2003 and 2004 were 1,100,000 and 2,575,000, respectively.

(14) Number of contracts; data include Teleconomy, Hellò and other Business voice offers.

(15) Data refer to TACS and GSM services lines, including holders of Prepaid Cards.

(16) The foreign lines include those of mobile telecom affiliates in Turkey and the Czech Republic.

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RISK FACTORS

The exchange of your initial notes for exchange notes will involve a degree of risk, including those risks which are described in this section. You should carefully consider the following discussion of risks, as well as the risks set forth under the heading “Risk Factors” appearing in the Telecom Italia Annual Report incorporated by reference herein before deciding whether an investment in the exchange notes is suitable for you.

Risk Factors Relating to Our Business.

Strong competition in Italy may further reduce our core market share of domestic and international traffic and may cause further reductions in prices and margins.

Strong domestic competition exists in all of the principal telecommunications business areas in Italy in which we operate, including, most significantly, our fixed-line and mobile voice telecommunications businesses. This competition may increase further due to the consolidation and globalization of the telecommunications industry in Europe and elsewhere. Consolidation is increasing rapidly and competition is expected to rise at all levels in the future. In addition, the use of the single European currency and the liberalization of the Italian telecommunication market has further intensified competition by facilitating international operators’ entry into the Italian market and direct competition with our fixed line and mobile telephony businesses, particularly in the local and long-distance markets. As of December 31, 2003, there were a number of significant competitors offering fixed-line services and three other operators offering mobile services in the Italian domestic market; the third mobile competitor (H3G) entered the market in 2003, offering third generation commercial services. Although we stopped the decline in our market share of voice traffic in our fixed line business during 2003, continuing pressures on prices due to competition and further erosion in market shares could adversely affect our results of operations. Additional changes in the regulatory regime, including carrier preselection, number portability and local loop unbundling as well as the implementation of new EU telecommunications directives could further increase competition for the services we provide, particularly in our fixed line business, which could also adversely affect our business.

Our business may be adversely affected and we may be unable to increase our revenues if we are unable to continue the introduction of new services to stimulate increased usage of our fixed and wireless networks.

In order to sustain growth in revenues despite increased competition and lower prices, particularly in our core Italian domestic market, our strategy has been to introduce new services in our fixed-line and wireless services to increase traffic on our networks and find alternative revenue sources, in addition to carrying voice traffic on our networks. These services include non-voice services such as ADSL, which provides services such as fast Internet, multimedia and video conferencing, data traffic and value-added services such as interactive mobile services that allow users to receive news or engage in simple banking transactions. Other revenue sources also include increased interconnection traffic from other operators using our fixed-line network. In addition to the introduction of new services in recent years, we continue to develop new products and services, such as new data services for business customers, broadband services, enhanced communication services and new equipment and voice packages, in order to attract and retain customers, particularly business customers, and to stimulate usage of our fixed and wireless telecommunications network. We are also investing in new infrastructure and technologies to enable us to introduce new products and services. We expect that these strategic initiatives will require substantial expenditures and commitment of human resources. Although these initiatives are core to our strategy, we may be unable to introduce commercially these new products and services, and even if we introduce them, there can be no assurance they will be successful.

Our business will be adversely affected if we are unable to successfully implement our business plans, particularly in light of the Merger. Factors beyond our control may prevent us from successfully implementing our strategy.

Following the change in control of Old Telecom Italia in late 2001, we adopted our 2002-2004 Industrial Plan (the “Industrial Plan”) and established priorities for this three year period. The main objectives were to:

• Strengthen competitive capabilities;

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• Improve cost efficiency; and

• Strengthen the financial structure.

Significant portions of the Industrial Plan were completed during 2002 and 2003, particularly the sale of non-core assets and debt reduction. We also took steps to strengthen our competitive position in our core Italian domestic market through the introduction of new products and tariff packages and our focus on lowering costs through the reduction of operating expenses and capital expenditures.

In connection with the Merger, we confirmed the objectives and guidelines of the Industrial Plan and stated that we had established certain targets, which include strict limits on capital expenditures and cost controls, together with further assets sales, to reduce the significantly higher levels of debt we have as a result of the Merger.

Factors beyond our control that could affect the further implementation and completion of the Industrial Plan and reaching our targets for the period 2004-2006 include:

• our ability to manage costs;

• our ability to attract and retain highly-skilled and qualified personnel;

• our ability to divest additional non-core businesses and the adequacy of the returns of such divestitures;

• our ability to leverage on our core skills with particular focus on Latin America mobile and international broadband operations;

• difficulties in developing and introducing new technologies, managing innovation, providing value-added services and increasing usage of our networks;

• our ability to manage the fixed to mobile substitution trends;

• the need to establish and maintain strategic relationships;

• declining prices for some of our services and increasing competition;

• the effect of adverse economic trends on our principal markets;

• the effect of foreign exchange fluctuations on our results of operations; and

• the success of new “disruptive” technologies that could cannibalize fixed and mobile revenues.

Regulatory decisions and changes in the regulatory environment could adversely affect our business.

Our fixed and mobile telecommunications operations, as well as our broadband services businesses, are subject to significant extensive regulatory requirements in Italy and our international operations and investments are subject to regulation in their host countries. In Italy, we are the only operator subject to universal service obligations, which requires us to provide:

• fixed line public voice telecommunications services in non-profitable areas;

• subscriber information services at affordable prices; and

• public payphones.

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In addition, the Italian regulator responsible in Italy for the regulation of the telecommunications, radio and television broadcasting sector (the “National Regulatory Authority”) has identified the Company as an operator having significant market power in all relevant markets. As a result, we are, or will be, subject to a number of regulatory constraints, including:

• a requirement to conduct our business in a transparent and non-discriminatory fashion;

• a requirement to have our prices for fixed voice telephony services and Reference Interconnection Offer, the tariff charged to other operators to utilize our network, subject respectively to a price cap and a network cap mechanism. This cap mechanism places certain limits on our ability to change our prices for certain services; and

• a requirement to provide interconnection services, leased lines and access to the local loop to other operators at cost-oriented prices. These services include allowing other operators to connect to our network and transport traffic through the network as well as offering certain services related to our local access network, or local loop, on an unbundled basis to these other operators to enable these operators directly to access customers connected to the network by leasing the necessary components from us.

As a member of the EU, Italy is required to adapt its telecommunications regulatory framework to the legislative and regulatory framework established by the EU for the regulation of the European telecommunications market. The EU Commission approved a new electronic communications framework in March 2002 which has been effective in Italy since September 2003. The implementation of these revised telecommunications regulations and possible future decisions relating thereto may change the regulatory environment in a manner adverse to us. Please see “Item 4. Information on the “Telecom Italia Group—Regulation” in the Telecom Italia Annual Report incorporated herein by reference for more information on the regulatory requirements to which we are subject.

We are unable to predict the impact of any proposed or potential changes in the regulatory environment in which we operate both in Italy and internationally. Changes in laws, regulation or government policy could adversely affect our business and competitiveness. In particular, our ability to compete effectively in our existing or new markets could be adversely affected if regulators decide to expand the restrictions and obligations to which we are subject or extend them to new services and markets. In addition, changes in tax laws in countries in which we operate could adversely affect our results of operations. Finally, decisions by regulators regarding the granting, amendment or renewal of licenses, to us or to third parties, could adversely affect our future operations in Italy and in other countries where we operate.

We may not achieve the expected return on our significant investments and capital expenditures made in Latin America due to the competitive environment in these markets.

In recent years we have repositioned our international strategy, sold significant non-core international assets, and elected to focus our international strategy on:

• consolidating our international presence in Latin America;

• developing our international investments in high-growth market segments, such as wireless, data and internet (broadband);

• strengthening our role of strategic partner in existing investments by increasing the transfer of our technological expertise and marketing know-how; and

• rationalizing our existing international portfolio by divesting minority participations in non-strategic geographical markets.

As a result of this change in strategy, in the 2002-2003 period we divested certain of our most significant European assets such as BDT (Bouygues Decaux Telecom), Autel (Mobilkom Austria), Telekom Austria, 9Telecom group and Auna and we are still seeking to divest certain international non-strategic assets. In addition, certain investments which were made during the 1999-2001 period declined significantly in value resulting in

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write-downs and asset impairments which materially adversely affected our results of operations in 2001 and 2002, with a lesser impact in 2003. We will continue to target our international investments in Latin America, particularly mobile telecommunications in Brazil, European broadband and mobile telecommunications in selected markets. These investments will require significant capital expenditures and there can be no assurance that we will be able to achieve a return on our investments in markets where we have previously suffered losses and writedowns.

Continuing rapid changes in technologies could increase competition or require us to make substantial additional investments.

Many of the services we offer are technology-intensive and the development of new technologies may render such services non-competitive. We make and will have to make substantial additional investments in new technologies to remain competitive. The new technologies we choose may not prove to be commercially successful. In addition, we may not receive the necessary licenses to provide services based on new technologies in Italy or abroad. As a result, we could lose customers, fail to attract new customers or incur substantial costs in order to maintain our customer base.

The value of our operations and investments may be adversely affected by political and economic developments in Italy or other countries.

Our business is dependent on general economic conditions in Italy, including levels of interest rates, inflation and taxes. A significant deterioration in these conditions could adversely affect our business and results of operations. We may also be adversely affected by political and economic developments in other countries where we have made significant investments in telecommunications operators. Some of these countries have political, economic and legal systems that are unpredictable. Political or economic upheaval or changes in laws or their application in these countries may harm the operations of the companies in which we have invested and impair the value of these investments. We have had investments in Turkey, Argentina and Brazil in recent years in which we have had to take significant write-downs in value due to political and economic developments in those countries. A significant additional risk of operating in emerging market countries is that foreign exchange restrictions could be established. This could effectively prevent us from receiving profits from, or from selling our investments in, these countries.

Fluctuations in currency exchange and interest rates may adversely affect our results.

Because we have made substantial international investments, primarily in U.S. dollars, and have significantly expanded our operations outside the euro zone, particularly in Latin America, movements in the exchange rates of the euro against other currencies can adversely affect our revenues and operating results. A rise in the value of the euro relative to other currencies in certain countries in which we operate or have made investments will reduce the relative value of the revenues or assets of our operations in those countries and, therefore, may adversely affect our operating results or financial position. In addition, we have raised, and may raise in an increasing proportion in the future, financing in currencies other than the euro, principally the U.S. dollar. Accordingly, the value of those liabilities will be affected by fluctuations of the currencies of the countries in which we operate against the currency in which the financing is denominated. We generally enter into a number of forward currency transactions, swaps and options to manage foreign currency risk exposure with respect to our non-euro denominated liabilities. However, we can give no assurances that we will be successful in managing foreign currency risk exposure, taking into consideration that appropriate foreign currency swaps and options may not be available as needed on the relevant financial markets. In recent years reported results of our Latin American operations have been adversely affected by changes in local currencies against the euro. During 2003, in particular, the strengthening of the euro against local currencies in Latin America adversely affected our reported revenues in euro by €641 million.

Our total gross financial debt at year end 2003 was €41,465 million (€40,631 million at year end 2002) and included borrowings of €5,274 million relating to the cash out for the Merger. Although our total interest payable

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has decreased as the result of average debt exposure reduction and of interest rate fluctuations our exposure of total debt subject to floating interest rates increased as a result of the Merger. We enter into derivative transactions to hedge our interest exposure and to diversify debt parameters in order to reduce debt cost and volatility within predefined target boundaries. However, we can give no assurance that fluctuations in interest rates will not adversely affect our results of operations.

We may not realize the benefits of our investment in UMTS licenses and related capital expenditures.

Through our mobile businesses, we have acquired two third generation mobile telephone, or UMTS, licenses to commence operations of UMTS services in Italy and Greece. Our Italian mobile company, TIM, committed to pay €2,417 million for its license, with €2,066 million paid in December 2000 and three installments of €117 million paid in November 2001, November 2002 and December 2003, for its UMTS license in Italy and, through its subsidiary STET Hellas, a further €145 million for a UMTS license in Greece (of which approximately €101 million has already been paid). The size of the market for UMTS products and services is unknown and may fall short of the industry’s expectations. We cannot be certain that the demand for such services will justify the related costs. In some locations, we have made investments, although required under the licenses, which may not be commercially desirable. In addition, we have a number of significant competitors in each of these geographic markets planning to offer these services.

We will be rolling out the UMTS networks, together with our competitors, in compliance with the terms and conditions of our respective licenses. Given the substantial costs of upgrading our existing networks to support UMTS and the uncertainty regarding the commercial adoption of UMTS, we may not be able to recoup our investment according to our estimates, if at all. The commercial success of UMTS will also depend on handset availability and their price. We have entered into and intend to enter into arrangements with other operators to share the costs and infrastructure of our planned UMTS networks. However, we cannot give any assurance that we will succeed in concluding the necessary agreements with other operators on satisfactory terms. Moreover, while network sharing is intended to reduce costs, we cannot give any assurance that this will be the case or that we will be able to make such network sharing work commercially or technically.

The mobile telecommunications market in Italy has matured and become saturated in recent years and growth has slowed significantly which means our revenues may not grow as rapidly as in the past.

In recent years, our consolidated revenues have grown or remained stable in large part because of the rapid growth in the mobile communications business which has offset flat or declining revenues in our Italian fixed line business. This growth has been driven largely by the rapid expansion of the mobile telecommunications market in Italy. However, as a result of this growth, the Italian market is approaching saturation levels, with penetration rates now around 99%. TIM’s domestic market share has remained relatively stable at approximately 46% in the past two years so revenue growth is no longer driven by the rapid subscriber growth which TIM experienced in the 1998-2001 period.

Continued growth in the mobile telecommunications markets in which we operate will depend on a number of factors, many of which are outside our control. These factors include:

• the activities of our competitors, including consolidation, tariff reductions and handset subsidies;

• the development and introduction of new and alternative technologies for mobile telecommunications products and services and the attractiveness of these to customers;

• the success of new disruptive technologies;

• customer usage habits;

• general economic conditions; and

• health risks or safety concerns associated with mobile telephones and transmission equipment.

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If the mobile telecommunications markets in which we operate do not continue to expand, or we are unable to retain our existing customers or stimulate increases in customer usage, our financial condition and results of operations may be harmed.

Devaluations of telecom assets and write-downs could adversely affect our financial condition and results of operations.

In the past three years the market for telecom stocks and credit ratings of market participants, as well as our ongoing review and refinement of our business plan, has resulted in substantial impairment write-downs of our assets which materially adversely affected our results of operations in 2001 and 2002. There can be no assurance that similar events in the future may not result in further substantial impairment write-downs from assets. Accounting standards relating to asset valuations and impairment may be refined to require the use of new criteria or methodology. Beginning in fiscal year 2002, under U.S. GAAP, we tested goodwill for impairment pursuant to SFAS 142 “Goodwill and Other Intangible Assets”. In accordance with the provisions of SFAS 142, goodwill is no longer amortized, but is subject to annual impairment tests based on fair value. An interim assessment of goodwill may be necessary if an impairment indicator indicates that the fair value of a reporting unit may have decreased. Future changes in the fair value of our business units could adversely affect our U.S. GAAP results and financial conditions.

We may be adversely affected if we fail to successfully implement our Internet and broadband strategy in Italy and internationally.

The introduction of internet and broadband services are an important element of our growth strategy and means to increase the use of our networks in Italy and expand our operations outside of Italy, particularly in Europe. Our strategy is to replace the mature, traditional voice services with value added contents and services to consumers and small and medium-sized companies. Our ability to successfully implement this strategy may be affected if:

• Internet usage in Italy grows more slowly than anticipated, for reasons such as changes in Internet users’ preferences;

• broadband penetration in Italy and other European countries does not grow as we expect;

• competition increases, for reasons such as the entry of new competitors, consolidation in the industry or technological developments introducing new platforms for internet access and/or internet distribution or other operators can provide broadband connections superior to that we can offer; and

• we experience any network interruptions or related problems with network infrastructure.

Outside of Italy our ability to implement this strategy will depend on whether we are able to acquire assets or networks or utilize networks of incumbent operators that will allow us to offer such services.

Any of the above factors may adversely affect our business and results of operations.

System failures could result in reduced user traffic and reduced revenue and could harm our reputation.

Our technical infrastructure (including our network infrastructure for fixed-line and mobile telecommunication services) is vulnerable to damage or interruption from information and telecommunication technology failures, power loss, floods, windstorms, fires, terrorism, intentional wrongdoing, human error and similar events. Unanticipated problems at our facilities, system failures, hardware or software failures, computer viruses or hacker attacks could affect the quality of our services and cause service interruptions. Any of these occurrences could result in reduced user traffic and reduced revenue and could harm our reputation.

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Actual or perceived health risks or other problems relating to mobile handsets or transmission masts could lead to litigation or decreased mobile communications usage.

Various reports have alleged that certain radio frequency emissions from wireless handsets and transmission equipment may be linked to various health concerns and may interfere with various electronic devices. We cannot rule out that exposure to electromagnetic fields or other emissions originating from wireless handsets will not be identified as a health risk in the future. Our mobile communications business may be harmed as a result of these alleged health risks. For example, the perception of these health risks could result in a lower number of customers, reduced usage per customer or potential consumer liability.

In addition, although Italian law already requires strict limits in relation to transmission equipment, these concerns may cause regulators to impose greater restrictions on the construction of base station towers or other infrastructure, which may hinder the completion of network build-outs and the commercial availability of new services.

As a result of the Merger of Old Telecom Italia and Olivetti we remain highly leveraged.

Under Italian GAAP, our gross financial debt was €41,465 million at December 31, 2003, compared with €40,631 million at December 31, 2002, and our total net financial debt was approximately €33,346 million as of December 31, 2003 compared with €33,399 million at December 31, 2002. See Note 9 of Selected Financial and Statistical Information in the Telecom Italia Annual Report incorporated by reference herein which reconciles our net financial debt to our gross debt. The amounts at December 31, 2003 take into account the Merger, including indebtedness of €5.3 billion incurred to finance the withdrawal rights and the tender offers which were part of the overall Merger transaction. We were able to maintain our overall gross and net financial debt levels after giving effect to the €5.3 billion described above due to:

• significant cash flow generation by our core businesses as well as by our focus on the management of working capital, and

• net proceeds from disposals completed during 2003 used to reduce outstanding debt which offset the borrowings needed for the cash out for the Merger.

By the end of 2004, we are targeting to reduce our net financial debt below €30 billion principally through cash flow generation. There can be no assurance that factors beyond our control, including but not limited to deterioration in general economic conditions, will not significantly affect our ability to reduce such debt.

In 2005 we will be obliged to adopt International Financial Reporting Standards (“IFRS”) which will impact our financial results as they differ in significant respects from Italian GAAP.

We currently prepare our financial statements in accordance with Italian GAAP. In June 2002, the Council of Ministers of the EU adopted new regulations requiring all listed EU companies, including us, to apply IFRS (previously known as “International Accounting Standards” or “IAS”) in preparing their consolidated financial statements from January 1, 2005. Because IFRS emphasizes the measure of the fair value of certain assets and liabilities, applying these standards to our financial statements may have a considerable impact on a number of important areas, including, among others, goodwill and intangible assets, employee benefits and financial instruments, accounting for share-based payments, long-term assets and business combinations. Because our financial statements prepared in accordance with IFRS will differ from our financial statements prepared in accordance with Italian GAAP, the methods used by the financial community to assess our financial performance and value our publicly-traded securities could be affected. Please see “Item 5. Operating and Financial Review and Prospects—Adoption of International Accounting Standards” in the Telecom Italia Annual Report incorporated by reference herein.

Risk Factors Relating to the Exchange Offer

Servicing our debt obligations requires a significant amount of cash, and our ability to generate cash depends on many factors beyond our control.

Our ability to pay the principal of and interest on the exchange notes, our credit facilities and other debt securities depends, among other things, upon our future financial performance and our ability to refinance

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indebtedness, if necessary. Our business may not generate sufficient cash flow to satisfy our debt service obligations, and we may not be able to obtain funding sufficient to do so. If this occurs, we may need to reduce or delay capital expenditures or other business opportunities. In addition, we may need to refinance our debt, obtain additional financing or sell assets to raise cash, which we may not be able to do on commercially reasonable terms, if at all.

A downgrade in our credit ratings could limit our ability to market securities, increase our borrowing costs and/or hurt our relationships with creditors.

Our credit ratings, which are intended to measure our ability to meet our debt obligations, are an important factor in determining our cost of borrowing funds. The interest rates of our borrowings are largely dependent on our credit ratings. A downgrade of our credit ratings would likely increase our cost of borrowing and adversely affect our results of operations.

A downgrade of our credit ratings could also limit our ability to raise capital or our subsidiaries’ ability to conduct their businesses. A securities rating is not a recommendation to buy, sell or hold securities. Ratings may be subject to revision or withdrawal at any time by the assigning rating organization and each rating should be evaluated independently of any other rating.

The exchange notes will be effectively subordinated to our secured debt

The exchange notes will not be secured by any of our assets. Therefore, in the event of our bankruptcy, liquidation or reorganization, holders of our secured debt will have claims with respect to the assets securing their debt that have priority over your claims as holders of the exchange notes. To the extent that the value of the secured assets is insufficient to repay our secured debt, holders of the secured debt would be entitled to share in any of our remaining assets equally with you and any other senior unsecured lenders.

An active trading market for the exchange notes may not develop or continue

TI Capital cannot assure you regarding the future development or continuance of a market for the exchange notes or the ability of holders of the exchange notes to sell their exchange notes or the price at which such holders may be able to sell their exchange notes. The exchange notes could trade at prices that may be higher or lower than the offering price of the initial notes depending on many factors, including prevailing interest rates, Telecom Italia’s operating results and the market for similar securities. There can be no assurance as to the liquidity of any trading market for the exchange notes or that an active public market for the exchange notes will develop, or if developed, will continue.

If you do not participate in the exchange offer, you will continue to be subject to U.S. transfer restrictions.

Exchange notes will only be issued in exchange for initial notes that are timely and properly tendered. Therefore, you should allow sufficient time to ensure timely delivery of the initial notes and you should carefully follow the instructions on how to tender your initial notes. Neither we nor the exchange agent are required to tell you of any defects or irregularities with respect to your tender of the initial notes. If you do not exchange your initial notes for exchange notes pursuant to the exchange offer, the initial notes you hold will continue to be subject to the existing U.S. transfer restrictions. In general, the initial notes may not be offered or sold, unless registered under the Securities Act, or exempt from registration under the Securities Act and applicable state securities laws. We do not anticipate that we will register initial notes under the Securities Act.

After the exchange offer is consummated, if you continue to hold any initial notes of either series, you may have trouble selling them because there will be fewer initial notes of such series outstanding. In addition, if a large number of initial notes of either series is not tendered or is tendered improperly, the limited amount of exchange notes of such series that would be issued and outstanding after we consummate the exchange offer could lower the market price of such exchange notes.

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TERMS OF THE EXCHANGE OFFER

General

In connection with the issuance of the initial notes pursuant to a Purchase Agreement, dated as of October 22, 2003, by and among us and the initial purchasers, the initial purchasers and their respective assignees became entitled to the benefits of the registration rights agreement, dated as of October 22, 2003, by and among us and the initial purchasers relating to the initial notes.

The registration rights agreement requires us to file the registration statement of which this prospectus is a part for a registered exchange offer relating to an issue of exchange notes identical in all material respects to the initial notes but containing no restrictive legend. Under the registration rights agreement, we are required, among other things, to:

Ø use our reasonable best efforts to cause this exchange offer registration statement to be declared effective by the SEC not later than 365 days following the date of original issuance of the initial notes (the “Issue Date”);

Ø mail, or cause to be mailed, to each holder of record entitled to participate in the exchange offer a copy of the prospectus forming part of the exchange registration statement, together with an appropriate letter of transmittal and related documents;

Ø keep the exchange offer open for not less than 20 business days after the date notice thereof is mailed to holders of the initial notes

Ø utilize the services of a depositary for the exchange offer with an address in the Borough of Manhattan, The City of New York;

Ø permit holders to withdraw validly tendered notes at any time prior to the close of business, New York time, on the last business day on which the exchange offer shall remain open; and

Ø otherwise comply in all material respects with all applicable laws, rules and regulations.

The exchange offer being made hereby, if commenced and consummated within the time periods described in this paragraph, will satisfy those requirements under the registration rights agreement.

Upon the terms and subject to the conditions set forth in this prospectus and in the letter of transmittal, all initial notes validly tendered and not withdrawn prior to 5:00 p.m., New York City time, on the expiration date will be accepted for exchange. Exchange notes of the same class will be issued in exchange for an equal principal amount of outstanding initial notes accepted in the exchange offer. Initial notes may be tendered only in integral multiples of $1,000. This prospectus, together with the letter of transmittal, is being sent to all record holders of initial notes as of [            ], 2004. The exchange offer is not conditioned upon any minimum principal amount of initial notes being tendered in exchange. However, our obligation to accept initial notes for exchange is subject to certain conditions as set forth herein under “—Conditions.”

Initial notes will be deemed accepted when, as and if JPMorgan Chase Bank, in its capacity as trustee, has given oral or written notice of acceptance to the exchange agent. The exchange agent will act as agent for the tendering holders of initial notes for the purposes of receiving the exchange notes and delivering them to the holders.

Under existing interpretations of the SEC set forth in no-action letters to third parties, the exchange notes would in general be freely transferable (other than by holders who are broker-dealers or by any holder who is an affiliate of ours) after the exchange offer without further registration under the Securities Act. Under those existing SEC interpretations, each holder of notes participating in the exchange offer will be required to represent

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to TI Capital and to Telecom Italia, among other things, that, at the time of the consummation of the exchange offer:

Ø any exchange notes received by that holder will be acquired in the ordinary course of business;

Ø that holder has no arrangement or understanding with any person to participate in the distribution of the notes or the exchange notes within the meaning of the Securities Act;

Ø the holder is not an “affiliate” (as defined in Rule 405 of the Securities Act) of Telecom Italia;

Ø that holder is not engaged in, and does not intend to engage in, the distribution of the exchange notes within the meaning of the Securities Act;

Ø if that holder is a broker-dealer, it will receive exchange notes in exchange for notes that were acquired for its own account as a result of market-making activities or other trading activities and it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such exchange notes; and

Ø if that holder is a broker-dealer, it did not purchase the notes being tendered in the exchange offer directly from TI Capital or Telecom Italia for resale pursuant to Rule 144A or any other available exemption from registration under the Securities Act.

If a holder of initial notes is engaged in or intends to engage in a distribution of the exchange notes or has any arrangement or understanding with respect to the distribution of the exchange notes to be acquired pursuant to the exchange offer, the holder may not rely on the applicable interpretations of the staff of the SEC and must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any secondary resale transaction. Each broker-dealer that receives exchange notes for its own account in the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. The letter of transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to have admitted that it is an “underwriter” within the meaning of the Securities Act.

This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer to satisfy its prospectus delivery obligations under the Securities Act in connection with resales of exchange notes for its own account. We have agreed that we will keep the registration statement of which this prospectus is a part effective for a period of up to six months or such earlier date as each participating broker-dealer shall have notified us in writing that it has resold all exchange notes acquired in the exchange offer. See “Plan of Distribution.”

As soon as practicable after the close of the exchange offer, TI Capital will:

i. accept for exchange all registrable initial notes validly tendered and not validly withdrawn as part of the exchange offer; and

ii. deliver to the trustee for cancellation all registrable initial notes so accepted for exchange and cause the trustee to authenticate and deliver promptly to each holder of registrable initial notes, exchange notes equal in principal amount to the securities of such holder so accepted for exchange.

In the event that:

i. TI Capital is not permitted to effect the exchange offer because the exchange offer is not permitted by applicable law or SEC policy; or

ii. the exchange offer is not consummated by October 28, 2004 for any other reason; or

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iii. any holder notifies us prior to the consummation of the exchange offer that such holder was prohibited by law or SEC policy to participate in the exchange offer and provides us with an opinion of counsel to that effect,

then we shall use our reasonable best efforts to file a registration statement on Form F-3 (the “Form F-3”) with the SEC providing for (x) the sale by the holders of all the initial notes, in the case of (i) and (ii) above, or (y) the sale of such notes by the holders of initial notes who provide timely notice to us in the case of (iii) above, in each case, as soon as reasonably practicable after the occurrence of the event summarized above which gives rise to our obligation to file the Form F-3.

Alternatively, if an initial purchaser notifies us prior to the consummation of the exchange offer of its desire to exchange its unsold allotment of initial notes for exchange notes in the exchange offer in lieu of having such notes registered for resale on a Form F-3, we shall use our reasonable best efforts to file with the SEC a post-effective amendment to the exchange offer registration statement (the “post-effective amendment”), which post-effective amendment shall contain the information required by Items 507 and 508 of Regulation S-K, as applicable, relating to the exchange notes received by the initial purchasers. The post-effective amendment and Form F-3 are hereafter referred to as and governed by the provisions applicable to a “shelf registration statement.”

We will, in the event that a shelf registration statement is filed, provide to each holder of the notes being registered thereon copies of the prospectus that is a part of the shelf registration statement, notify each such holder when the shelf registration statement has become effective and take certain other actions as are required to permit unrestricted resales of the notes. A holder that sells notes pursuant to the shelf registration statement will be required to be named as a selling security holder in the related prospectus and to deliver a prospectus to purchasers, will be subject to certain of the civil liability provisions under the Securities Act in connection with its sales and will be bound by the provisions of the registration rights agreement that are applicable to that holder (including certain indemnification rights and obligations).

If:

i. a shelf registration statement is required to be filed by us, the shelf registration statement is not declared effective by the SEC by October 28, 2004; or

ii. the exchange offer is not consummated on or prior to October 28, 2004, unless applicable law or the applicable interpretations of the staff of the SEC do not permit TI Capital to effect the exchange offer; or

iii. after either the shelf registration statement or exchange registration statement is declared effective by the SEC, such registration statement ceases to be effective or usable in connection with resales of initial notes or exchange notes, as the case may be, in accordance with and during the periods specified in the registration rights agreement; (each of (i), (ii) and (iii) referred to as a “Registration Default”),

then we will be obligated to pay additional interest on the initial notes or exchange notes, as the case may be, equal to 0.50% per annum of the aggregate principal amount of the notes held by such holder which shall accrue from and including the date on which any such Registration Default has occurred to but excluding the date on which all Registration Defaults have been cured.

Upon completion of the exchange offer, subject to certain exceptions, holders of initial notes who do not exchange their initial notes for exchange notes in the exchange offer will no longer be entitled to registration rights and will not be able to offer or sell their initial notes, unless the initial notes are subsequently registered under the Securities Act (which, subject to certain limited exceptions described above, we will have no obligation to do), except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. See “Risk Factors—If you do not participate in the exchange offer, you will continue to be subject to transfer restrictions.”

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Expiration Date; Extensions; Amendments; Termination

The term “expiration date” shall mean                 , 2004, (twenty (20) business days following the commencement of the exchange offer), unless the exchange offer is extended if and as required by applicable law, in which case the term “expiration date” shall mean the latest date to which the exchange offer is extended. TI Capital will be entitled to close the offer as long as it has accepted all initial notes validly tendered and not withdrawn in accordance with the terms of the exchange offer.

In order to extend the expiration date, we will notify the exchange agent of any extension by oral or written notice and may notify the holders of the initial notes by mailing an announcement or by means of a press release or other public announcement prior to 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date.

We reserve the right to delay acceptance of any initial notes, to extend the exchange offer or to terminate the exchange offer and not permit acceptance of initial notes not previously accepted if any of the conditions set forth herein under “—Conditions” shall have occurred and shall not have been waived by us (if permitted to be waived), by giving oral or written notice of such delay, extension or termination to the exchange agent. We also reserve the right to amend the terms of the exchange offer in any manner deemed by us to be advantageous to the holders of the initial notes. If any material change is made to terms of the exchange offer, the exchange offer shall remain open for a minimum of an additional five business days, if the exchange offer would otherwise expire during such period. Any such delay in acceptance, extension, termination or amendment will be followed as promptly as practicable by oral or written notice of the delay to the exchange agent. If the exchange offer is amended in a manner determined by us to constitute a material change, we will promptly disclose the amendment in a manner reasonably calculated to inform the holders of the initial notes of the amendment including providing public announcement, or giving oral or written notice to the holders of the initial notes. A material change in the terms of the exchange offer could include, among other things, a change in the timing of the exchange offer, a change in the exchange agent, and other similar changes in the terms of the exchange offer.

Without limiting the manner in which we may choose to make a public announcement of any delay, extension, amendment or termination of the exchange offer, we will have no obligation to publish, advertise, or otherwise communicate any such public announcement.

Interest On The Exchange Notes

The exchange notes will bear interest from May 15, 2004. Interest due on the exchange notes will be payable in cash and will be payable on the same dates on which interest is otherwise payable on the initial notes and to the same persons who are entitled to receive those payments of interest on the initial notes.

No interest will be paid on any initial notes when they are surrendered and exchanged in this offer. Initial notes not tendered in the exchange offer will bear interest at the same rate in effect at the time of original issuance of the initial notes and, after consummation of the exchange offer, will not be entitled to additional interest or further registration rights.

Procedures For Tendering

Only a holder of initial notes may tender in the exchange offer. Owners of beneficial interests in initial notes who wish to tender such beneficial interests should carefully read this section, as well as “—Book-Entry Transfer”, “—Guaranteed Delivery Procedure” and the instructions contained in the associated letter of transmittal.

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In all cases, issuance of exchange notes for outstanding initial notes that are accepted for exchange pursuant to the exchange offer will be made only after timely receipt by the exchange agent of:

Ø a confirmation of a book-entry transfer of such initial notes into the exchange agent’s account at the Depository Trust Company (the “Book-Entry Transfer Facility” or “DTC”);

Ø a duly executed letter of transmittal or a properly transmitted agent’s message, as defined below, as applicable; and

Ø all other required documents.

THE METHOD OF DELIVERY OF LETTERS OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE HOLDERS. INSTEAD OF DELIVERY BY MAIL, IT IS RECOMMENDED THAT HOLDERS USE AN OVERNIGHT OR HAND-DELIVERY SERVICE. IF SUCH DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT REGISTERED MAIL, PROPERLY INSURED, WITH RETURN RECEIPT REQUESTED, BE USED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY. NO LETTERS OF TRANSMITTAL OR INITIAL NOTES SHOULD BE SENT OR TRANSFERRED TO US.

Delivery of all documents must be made to an exchange agent at its address set forth below. Holders of initial notes may also request their respective brokers, dealers, commercial banks, trust companies or nominees to tender initial notes for them through the facilities of DTC, Clearstream or Euroclear.

The term “agent’s message” means a message, transmitted by the Book-Entry Transfer Facility to, and received by, the exchange agent and forming a part of a book-entry confirmation, which states that the Book-Entry Transfer Facility has received an express acknowledgment from the participant (including Clearstream or Euroclear) in the Book-Entry Transfer Facility tendering initial notes that are the subject of the Book-Entry Confirmation that the participant has received and agrees to be bound by the terms of the letter of transmittal, and that we may enforce this agreement against the participant.

The tender by a holder of initial notes will constitute an agreement between such holder and us in accordance with the terms and subject to the conditions set forth herein and in the letter of transmittal.

Any beneficial owner whose initial notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and who wishes to tender should contact the registered holder promptly and instruct the registered holder to tender on his or her behalf.

Signatures on a letter of transmittal or a notice of withdrawal, as the case may be, must be guaranteed by a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or correspondent in the United States or an “eligible guarantor” institution within the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934 (each, an “Eligible Institution”), unless the initial notes tendered pursuant thereto are tendered:

Ø by a registered holder (or by a participant in DTC whose name appears on a security position listing as the owner) who has not completed the box entitled “Special Issuance Instructions” or “Special Delivery Instructions” on the letter of transmittal and the exchange notes are being issued directly to such registered holder (or deposited into the participant’s account at DTC); or

Ø for the account of an Eligible Institution.

If the letter of transmittal is signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and unless waived by us, evidence satisfactory to us of their authority to so act must be submitted with the letter of transmittal.

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Issuances of exchange notes in exchange for initial notes tendered pursuant to a notice of guaranteed delivery by an Eligible Institution will be made only against delivery of the letter of transmittal or a properly transmitted agent’s message and any other required documents, and the timely received confirmation of a book-entry transfer of initial notes into the exchange agent’s account at DTC with the exchange agent.

All questions as to the validity, form, eligibility, time of receipt, acceptance and withdrawal of the tendered initial notes will be determined by us in our sole discretion, which determination will be final and binding. We reserve the absolute right to reject any and all initial notes not properly tendered or any initial notes which, if accepted, would, in our opinion or that of our counsel, be unlawful. We also reserve the absolute right to waive any conditions of the exchange offer or irregularities or defects in tender as to particular initial notes. Our interpretation of the terms and conditions of the exchange offer (including the instructions in the letter of transmittal) will be final

and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of initial notes must be cured within such time as we will determine. None of us, the exchange agents and any other person shall be under any duty to give notification of defects or irregularities with respect to tenders of initial notes, and none of them shall incur any liability for failure to give such notification. Tenders of initial notes will not be deemed to have been made until such irregularities have been cured or waived. Any initial notes received by the exchange agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned without cost by the exchange agent to the tendering holders of such initial notes, unless otherwise provided in the letter of transmittal, as soon as practicable following the expiration date.

In addition, TI Capital reserves the right in its sole discretion, subject to the provisions of the indenture, to:

Ø purchase or make offers for any initial notes that remain outstanding subsequent to the expiration date or, as set forth under “—Expiration Date; Extensions; Amendments; Termination,” to terminate the exchange offer in accordance with the terms of the registration rights agreement; and

Ø to the extent permitted by applicable law, purchase initial notes in the open market, in privately negotiated transactions or otherwise.

The terms of any such purchases or offers could differ from the terms of the exchange offer.

Acceptance of Initial Notes for Exchange; Delivery of Exchange Notes

Upon satisfaction or waiver of all of the conditions to the exchange offer, all initial notes properly tendered will be accepted, promptly after the expiration date, and the exchange notes will be issued promptly after acceptance of the initial notes. See “—Conditions” below. For purposes of the exchange offer, initial notes shall be deemed to have been accepted as validly tendered for exchange when, as and if we have given oral or written notice thereof to the exchange agent.

In all cases, issuance of exchange notes for initial notes that are accepted for exchange pursuant to the exchange offer will be made only after timely receipt by the exchange agent of certificates for such initial notes or a timely Book-Entry Confirmation of such initial notes into the exchange agent’s account at the Book-Entry Transfer Facility, a properly completed and duly executed letter of transmittal or a properly transmitted agent’s message and all other required documents. If any tendered initial notes are not accepted for any reason set forth in the terms and conditions of the exchange offer or if initial notes are submitted for a greater principal amount than the holder desires to exchange, such unaccepted or non-exchanged initial notes will be returned without expense to the tendering holder as promptly as practicable after the expiration or termination of the exchange offer. In the case of initial notes tendered by the book-entry transfer procedures described below, the non-exchanged initial notes will be credited to an account maintained with the Book-Entry Transfer Facility.

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Book-Entry Transfer

JPMorgan Chase Bank as exchange agent will make a request to establish an account with respect to the initial notes at the Book-Entry Transfer Facility for purposes of the exchange offer within two business days after the date of this prospectus. Any financial institution (including Clearstream or Euroclear) that is a participant in the Book-Entry Transfer Facility’s systems may make book-entry delivery of initial notes by causing the Book-Entry Transfer Facility to transfer such initial notes into the exchange agent’s account at the Book-Entry Transfer Facility in accordance with such Book-Entry Transfer Facility’s procedures for transfer.

DTC’s Automated Tender Offer Program, or ATOP, is the only method of processing exchange offers through DTC. To accept an exchange offer through ATOP, participants in DTC must send electronic instructions to DTC through DTC’s communication system. In addition, such tendering participants should deliver a copy of the letter of transmittal to the exchange agent unless an agent’s message is transmitted in lieu thereof. DTC is obligated to communicate those electronic instructions to the exchange agent through an agent’s message. To tender initial notes through ATOP, the electronic instructions sent to DTC and transmitted by DTC to the exchange agent must contain the character by which the participant acknowledges its receipt of and agrees to be bound by the letter of

transmittal. Any instruction through ATOP is at your risk and such instruction will be deemed made only when actually received by the exchange agent.

In order for an acceptance of an exchange of initial notes through ATOP to be valid, an agent’s message must be transmitted to and received by the exchange agent prior to the expiration date, or the guaranteed delivery procedures described below must be complied with. Delivery of instructions to DTC does not constitute delivery to the exchange agent.

Guaranteed Delivery Procedure

If you wish to tender your initial notes and time will not permit the required documents to reach the exchange agent before the expiration date, or the procedures for book-entry transfer cannot be completed on a timely basis and an agent’s message delivered, a tender may be effected if:

Ø the tender is made through an Eligible Institution;

Ø prior to the expiration date, the exchange agent receives from such Eligible Institution a properly completed and duly executed notice of guaranteed delivery, substantially in the form provided by us, by facsimile transmission, mail or hand delivery, or a properly transmitted agent’s message in lieu of notice of guaranteed delivery setting forth the name and address of the holder of the initial notes and the amount of initial notes tendered, stating that the tender is being made thereby and guaranteeing that within five business days after the expiration date, the certificates for all physically tendered initial notes, in proper form for transfer, or a Book-Entry Confirmation, as the case may be, and any other documents required by the letter of transmittal will be deposited by the Eligible Institution with the exchange agent; and

Ø the certificates for all physically tendered initial notes, in proper form for transfer, or a Book-Entry Confirmation, as the case may be, and all other documents required by the letter of transmittal are received by the exchange agent within five business days after the expiration date.

Withdrawal of Tenders

Except as otherwise provided herein, tenders of initial notes may be withdrawn at any time prior to 5:00 p.m., New York City time, on the expiration date.

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For a withdrawal to be effective, a written notice of withdrawal must be received by the exchange agent prior to 5:00 p.m., New York City time on the expiration date at the address set forth below under “—Exchange Agent” and prior to acceptance for exchange thereof by the Company. Any such notice of withdrawal must:

Ø specify the name of the person having tendered the initial notes to be withdrawn (the “Depositor”);

Ø identify the initial notes to be withdrawn, including, if applicable, the registration number or numbers and total principal amount of such initial notes;

Ø be signed by the Depositor in the same manner as the original signature on the letter of transmittal by which such initial notes were tendered (including any required signature guarantees) or be accompanied by documents of transfer sufficient to permit the trustee with respect to the initial notes to register the transfer of such initial notes into the name of the Depositor withdrawing the tender;

Ø specify the name in which any such initial notes are to be registered, if different from that of the Depositor; and

Ø if the initial notes have been tendered pursuant to the book-entry procedures, specify the name and number of the participant’s (including Clearstream’s or Euroclear’s) account at DTC to be credited, if different than that of the Depositor.

All questions as to the validity, form and eligibility, time of receipt of such notices will be determined by us, which determination shall be final and binding on all parties. Any initial notes so withdrawn will be deemed not to have been validly tendered for exchange for purposes of the exchange offer. Any initial notes that have been tendered for exchange and that are not exchanged for any reason will be returned to the holder thereof without cost to such holder (or, in the case of initial notes tendered by book-entry transfer, such initial notes will be credited to an account maintained with the Book-Entry Transfer Facility for the initial notes) as soon as practicable after withdrawal, rejection of tender or termination of the exchange offer. Properly withdrawn initial notes may be re-tendered by following one of the procedures described under “—Procedures for Tendering” and “—Book-Entry Transfer” above at any time on or prior to the expiration date.

Conditions

Notwithstanding any other term of the exchange offer, initial notes will not be required to be accepted for exchange, nor will exchange notes be issued in exchange for any initial notes, and we may terminate or amend the exchange offer as provided herein before the acceptance of such initial notes if:

Ø because of any change in law, or applicable interpretations thereof by the SEC, we determine that TI Capital is not permitted to effect the exchange offer;

Ø an action or proceeding is commenced or threatened that would materially impair our ability to proceed with the exchange offer; or

Ø not all government approvals that we deem necessary for the consummation of the exchange offer have been received.

We have no obligation to, and will not knowingly, permit acceptance of tenders of initial notes:

Ø from our affiliates within the meaning of Rule 405 under the Securities Act;

Ø from any other holder or holders who are not eligible to participate in the exchange offer under applicable law or interpretations by the SEC; or

Ø if the exchange notes to be received by such holder or holders of initial notes in the exchange offer, upon receipt, will not be tradable by such holder without restriction under the Securities Act and the Securities and Exchange Act of 1934 (the “Exchange Act”) and without material restrictions under the “blue sky” or securities laws of substantially all the states of the United States.

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Accounting Treatment

The exchange notes will be recorded at the same carrying value as the initial notes, as reflected in our accounting records on the date of the exchange. Accordingly, no gain or loss for accounting purposes will be recognized by us. The costs of the exchange offer and the unamortized expenses related to the issuance of the initial notes will be amortized over the term of the exchange notes.

Appraisal Rights; Regulatory Approvals;

You do not have any appraisal or dissenters’ rights under the indenture in connection with the exchange offer. We intend to conduct the exchange offer in accordance with the provisions of the registration rights agreement and the applicable requirements of the Securities Act, the Exchange Act and the rules and regulations of the SEC. Other than having the registration statement of which this prospectus forms a part declared effective by the SEC, we

are not aware of any U.S. federal or state regulatory approvals that must be obtained in connection with the exchange offer.

Exchange Agents

JPMorgan Chase Bank has been appointed as exchange agent for the exchange offer. Questions and requests for assistance and requests for additional copies of this prospectus or of the letter of transmittal should be directed to the exchange agent addressed as follows:

If tendering an initial note or requesting information with respect to the exchange of an initial note:

By Mail, Overnight Mail or Courier:

JPMorgan Chase Bank

4 New York Plaza 15th Floor

New York, NY 10004

U.S.A

Attention: Institutional Trust Services

Confirm by telephone: (212) 623-5159

Facsimile Transmission: (212) 623-6207 or 6214

We will apply to have the exchange notes listed on the Luxembourg Stock Exchange. In connection therewith, we will give notice to the Luxembourg Stock Exchange and will publish in a Luxembourg newspaper, which is expected to be [                ], the announcement of the beginning of the exchange offer and, following completion of such offer, the results of such offer,

We have also appointed a Luxembourg exchange agent through which all relevant documents with respect to the exchange offer will be made available. The Luxembourg exchange agent will be able to perform all agency functions to be performed by any exchange agent, including providing a letter of transmittal and other relevant documents to you, accepting such documents on our behalf, accepting definitive initial notes for exchange, and delivering exchange notes to holders entitled thereto. The contact information for our Luxembourg exchange agent is as follows:

J.P. Morgan Bank Luxembourg S.A.

5, rue Plaetis, Floor 1

L-2338 Luxembourg

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Fees and Expenses

We will pay the expenses of soliciting tenders under the exchange offer. The principal solicitation for tenders pursuant to the exchange offer is being made by mail; however, additional solicitations may be made by telephone, telecopy or in person by our officers and regular employees.

We will not make any payments to brokers, dealers or other persons soliciting acceptances of the exchange offer. We will, however, pay the exchange agent reasonable and customary fees for its services and will reimburse the exchange agent for its reasonable out-of-pocket expenses in connection therewith. We may also pay brokerage houses and other custodians, nominees and fiduciaries the reasonable out-of-pocket expenses incurred by them in forwarding copies of the prospectus, letters of transmittal and related documents to the beneficial owners of the initial notes, and in handling or forwarding tenders for exchange.

The expenses to be incurred in connection with the exchange offer will be paid by us, including fees and expenses of the exchange agent and trustee and accounting, legal, printing and related fees and expenses.

We will pay all transfer taxes, if any, applicable to the exchange of notes pursuant to the exchange offer. If, however, a transfer tax is imposed for any reason other than the exchange of the outstanding notes pursuant to the exchange offer, then you must pay the amount of the transfer taxes. If you do not submit satisfactory evidence of payment of the taxes or exemption from payment with the letter of transmittal, the amount of the transfer taxes will be billed directly to you.

USE OF PROCEEDS

We will not receive any cash proceeds from the issuance of the exchange notes. We have used a portion of the net proceeds from the sale of the initial notes to repay a portion of Telecom Italia’s bank debt incurred in connection with the payment to Olivetti shareholders exercising withdrawal rights in connection with the Merger and the tender offers made by Olivetti prior to completion of the Merger. A portion of the proceeds has been and will be used to repay other long and short term debt and for general corporate purposes. The amount of the net proceeds was US$3,968.7 million which, at the exchange rate of October 22, 2003 of euro 1 = US$1.1694, corresponded to approximately €3,394 million. Affiliates of J.P. Morgan Securities Inc., Banc of America Securities LLC, Citigroup Global Markets Inc., Credit Suisse First Boston (Europe) Limited, Lehman Brothers Inc. and Morgan Stanley & Co. Incorporated, who were also initial purchasers, have had certain bank loans they made to Telecom Italia repaid with a portion of the net proceeds of the sale of the initial notes.

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CAPITALIZATION

Telecom Italia Group

The following table provides as of March 31, 2004 on an actual basis and in accordance with Italian GAAP the cash and cash equivalents, the short-term debt and the capitalization of the Telecom Italia Group.

	As of March 31, 2004
	(Unaudited) (millions of Euro)
Cash and cash equivalents	7,532
Total short-term debt	6,863
Long-term debt
Payable to banks	1,105
Payable to other financial institutions	561
Notes and bonds	25,726
Convertible notes	5,596
Other long-term debt	83
Total long-term debt(a)	33,071
Stockholders’ equity
Share capital(1)	8,856
Additional paid-in capital	93
Reserves, retained earnings and profit for the period	7,441
Total stockholders’ equity before minority interest	16,390
Minority interest	4,789
Total stockholders’ equity(b)	21,179
Total capitalization(a + b)	54,250

(1) As of March 31, 2004, Telecom Italia’s share capital (equal to €8,855,712,120.75) comprised:

• 10,305,373,696 ordinary shares (par value of €0.55 each, corresponding to €5,667,955,532.80 subscribed, issued and existing); and

• 5,795,921,069 savings shares (par value of €0.55 each, corresponding to €3,187,756,587.95) subscribed, issued and existing.

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Telecom Italia Capital

The following table provides as of March 31, 2004 on an actual basis and in accordance with Luxembourg GAAP the cash and cash equivalents, the short-term debt and the capitalization of Telecom Italia Capital.

	As of March 31, 2004
	(Unaudited) (thousands of Euro)
Cash and cash equivalents	0
Total short-term debt	2,536
Long-term debt
Payable to banks	22,234
Payable to other financial institutions	—
Debenture loans	3,272,251
Convertible debentures	—
Other long-term debt	—
Total long-term debt(a)	3,294,485
Stockholders’ equity
Share capital, [100,000 shares, nominal value €23.36 per share]	2,336
Additional paid-in capital	—
Reserves, retained earnings and loss for the period	522
Total stockholders’ equity(b)	2,858
Total capitalization(a + b)	3,297,343

Except as disclosed in this prospectus (including the documents incorporated by reference herein), there has not been any material change in the capitalization of the Telecom Italia Group since March 31, 2004 or of Telecom Italia Capital since March 31, 2004.

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DESCRIPTION OF EXCHANGE NOTES AND GUARANTEES

The following is a summary of the main terms of the exchange notes to be issued by TI Capital and guaranteed by Telecom Italia. The exchange notes will be governed by a document called the indenture, dated October 29, 2003 as supplemented by the first supplemental indenture also dated October 29, 2003. Herein we refer to the indenture as supplemented by the first supplemental indenture as the “indenture”. The indenture is a contract entered into among TI Capital, as Issuer, Telecom Italia, as Guarantor and JPMorgan Chase Bank as trustee (the “Trustee”).

This summary is subject to and is qualified by reference to all the provisions of the indenture, including, without limitation, the definitions of certain terms used in the indenture. For the sake of clarity, the use of the defined term Telecom Italia in this section of the prospectus means Telecom Italia S.p.A. in its capacity as guarantor of TI Capital’s obligations under the initial notes and the exchange notes, without reference to the consolidated subsidiaries of Telecom Italia S.p.A. Wherever particular provisions or defined terms of the indenture are referred to, these provisions or defined terms are incorporated in this prospectus by reference. We urge you to read the indenture because it, and not this description, defines your rights as a holder of exchange notes. The indenture is available for inspection at the office of the Trustee.

The indenture has been filed as an exhibit to the registration statement of which this prospectus is a part. It is available as set forth under the heading “Where You Can Find More Information.”

Differences Between the Exchange Notes and the Initial Notes

The terms of the exchange notes of a series are identical to the terms of the initial notes of such series, except that:

• the exchange notes will be registered under the Securities Act;

• additional interest which would have been payable pursuant to the Indenture if we had failed to consummate this exchange offer by October 28, 2004 will not be payable in respect of the exchange notes;

• the exchange notes will not be entitled to registration rights under the registration rights agreement;

• interest on the exchange notes will accrue from the last day on which interest was paid on the initial notes;

• the non-call period for any optional call could be extended; and

• except for the restrictions described under “Transfer Restrictions” below, the exchange notes will not be subject to any restrictions on transfer.

Exchange Notes

The exchange notes will be issued as separate series only in the form of fully registered global securities. Global securities will be deposited with the Trustee as custodian for DTC and registered in the name of Cede & Co., as nominee of DTC.

The exchange notes will be issued in three series referred to herein as “Series A”, “Series B” and “Series C”.

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• The Series A notes will be issued in an aggregate principal amount of $1,000,000,000. The Series A notes will bear interest at 4% per annum and will mature on November 15, 2008.

• The Series B notes will be issued in an aggregate principal amount of $2,000,000,000. The Series B notes will bear interest at 5.25% per annum and will mature on November 15, 2013.

• The Series C notes will be issued in an aggregate principal amount of $1,000,000,000. The Series C notes will bear interest at 6.375% per annum and will mature on November 15, 2033.

Interest on the exchange notes will be payable semiannually in arrears on May 15 and November 15 of each year, commencing on November 15, 2004. Interest on the exchange notes will be calculated on the basis of a 360-day year comprised of twelve 30-day months. No interest will be paid on any initial notes when they are surrendered and exchanged in this offer.

Unless previously redeemed, see “Redemption at TI Capital’s Option” and “Optional Tax Redemption”, the aggregate outstanding principal amount of each series of exchange notes will be payable on the applicable maturity date.

The exchange notes will pay interest to the person in whose name the global security is registered at the close of business on the record date relating thereto, which will be the preceding May 1 or November 1, as the case may be. The exchange notes are issuable in denominations of $1,000 and any integral multiple thereof.

The exchange notes will be unsecured and unsubordinated and will rank equally with TI Capital’s existing and future senior debt and rank senior to all TI Capital’s future subordinated debt.

If any interest payment date or maturity date or date of redemption for the exchange notes falls on a day that is not a Business Day (as described below), the related payment of principal or interest will be made on the next succeeding Business Day as if it were made on the date such payment was due, and no interest will accrue on the amount so payable for the period from and after such interest payment date or maturity date, as the case may be.

“Business Day” means any day other than a Saturday or Sunday or a day on which banking institutions in The City of New York, New York are generally authorized or obliged by law, regulations or executive order to close.

The exchange notes will be governed and construed in accordance with the laws of the State of New York. The provisions of Articles 86 to 94-8 of the Luxembourg law on commercial companies of August 10, 1915, are excluded and will not be applicable. In connection with any legal action or proceeding relating to the exchange notes, TI Capital has agreed to submit to the nonexclusive jurisdiction of any Federal or State court in the Borough of Manhattan, the City of New York.

Under New York law, claims relating to payment of principal and interest on the exchange notes will be prescribed according to the applicable statute of limitations.

BNP Paribas Luxembourg will act as Luxembourg paying and transfer agent.

Guarantees

Telecom Italia will unconditionally and irrevocably guarantee the due and punctual payment of the principal of, premium, if any, and interest on the exchange notes issued by TI Capital, including any additional amounts which may be payable by TI Capital in respect of its exchange notes, as described under “—Payment of Additional Amounts”. Telecom Italia guarantees the payment of such amounts when such amounts become due and payable, whether at the stated maturity of the debt securities, by declaration or acceleration, call for redemption or otherwise.

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The guarantees of Telecom Italia for the exchange notes issued by TI Capital will be unsecured obligations of Telecom Italia and each will rank equally in right of payment with other unsecured and unsubordinated indebtedness of Telecom Italia. Telecom Italia has provided a restriction on liens for the benefit of the exchange notes as provided under “—Restrictive Covenants—Restrictions on Liens”. In connection with other debt issuances, Telecom Italia (including debt issued by Olivetti) has provided different restrictions on liens that in some cases could be viewed as more restrictive. Consequently it is possible that, under certain limited circumstances, other debt of Telecom Italia could be secured when the exchange notes offered hereby are not secured.

The guarantees will be governed and construed in accordance with the laws of the State of New York. In connection with any legal action or proceeding relating to the guarantees, Telecom Italia has agreed to submit to the nonexclusive jurisdiction of any Federal or State court in the Borough of Manhattan, the City of New York.

Legal Ownership

Book-Entry System

Upon issuance, the exchange notes will be represented by one or more global notes (each a “Global Note”). Each Global Note will be deposited with, or on behalf of, DTC and registered in the name of Cede & Co., as nominee of DTC. Except under the circumstances described below, Global Notes will not be exchangeable at the option of the holder for certificated notes and Global Notes will not otherwise be issuable in definite form.

Upon issuance of the Global Notes, DTC will credit the respective principal amounts of the exchange notes represented by the Global Notes to the accounts of institutions that have accounts with DTC or its nominee (“participants”), including Euroclear and Clearstream. The accounts to be credited shall be designated by the initial purchasers. Ownership of beneficial interests in the Global Notes will be limited to participants or persons that may hold interests through participants. Ownership of beneficial interest in the Global Notes will be shown on, and the transfer of that ownership will be effected only through, records maintained by DTC or its nominee (with respect to participants’ interests) or by participants or persons that hold through participants. Such beneficial interest shall be in denominations of $1,000 or integral multiples thereof.

So long as DTC, or its nominee, is the registered owner or holder of the Global Notes, DTC or its nominee, as the case may be, will be considered the sole owner or holder of the Global Notes for all purposes under the indenture.

Except as set forth below, owners of beneficial interests in the Global Notes:

• will not be entitled to have the exchange notes represented by the Global Notes registered in their names,

• will not receive or be entitled to receive physical delivery of exchange notes in definitive form registered in their names, and

• will not receive or be entitled to receive physical delivery of exchange notes in definitive form and will not be considered the owners or holders thereof under the indenture.

Accordingly, each person owning a beneficial interest in the Global Notes must rely on the procedures of DTC, and indirectly Euroclear and Clearstream, and, if such person is not a participant, on the procedures of the participant through which such person owns its interest, to exercise any rights of a holder under the indenture.

Principal and interest payments on Global Notes registered in the name of or held by DTC or its nominee will be made to DTC or its nominee, as the case may be, as the registered owner or holder of the Global Note. None of TI Capital, Telecom Italia, the Trustee, or any paying agent for such Global Notes will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in Global Notes or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.

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TI Capital expects that DTC, upon receipt of any payments of principal or interest in respect of the Global Notes, will credit the accounts of the related participants (including Euroclear and Clearstream), with payments in amounts proportionate to their respective beneficial interests in the principal amount of the Global Notes as shown on the records of DTC. Payments by participants to owners of beneficial interest in the Global Notes held through such participants will be the responsibility of the participants, as is now the case with securities held for the accounts of customers in bearer form or registered in “street name”.

Unless and until it is exchanged in whole or in part for exchange notes in definitive form in accordance with the terms of the indenture, a Global Note may not be transferred except as a whole by the depositary to a nominee of the depositary or by a nominee of DTC to DTC or another nominee of DTC.

Beneficial interests in the Global Notes will trade in DTC’s Same-Day Funds Settlement System, and secondary market trading activity in such interests will, therefore, settle in same-day funds.

Definitive Exchange Notes

Global Notes shall be exchangeable for definitive exchange notes registered in the names of persons other than DTC or its nominee for such Global Notes only if:

• DTC has notified TI Capital and Telecom Italia that it is unwilling or unable to continue as depositary,

• DTC has ceased to be a clearing agency registered under the Exchange Act, or

• there shall have occurred and be continuing an Event of Default (as defined in the indenture) with respect to the exchange notes.

Any Global Note that is exchangeable for definitive exchange notes pursuant to the preceding sentence shall be exchangeable for exchange notes issuable in denominations of $1,000 and integral multiples thereof and registered in such names as DTC shall direct. Subject to the foregoing, a Global Note shall not be exchangeable, except for a Global Note of like denomination to be registered in the name of DTC or its nominee. Bearer exchange notes will not be issued.

In the remainder of this description “you” means direct holders and not street name or other indirect holders of debt securities.

Additional Mechanics

Payment and Paying Agents

TI Capital will pay interest, principal and any other money due on the exchange notes in registered form at the corporate trust office of the trustee in New York City. That office is currently located at 4 New York Plaza, 15th Floor, New York, NY 10004. If you ever hold definitive exchange notes you will make arrangements to have your payments picked up at or wired from that office or such other paying agency as we may establish.

TI Capital may also arrange for additional payment offices, and may cancel or change these offices, including its use of the Trustee’s corporate trust office. These offices are called paying agents. TI Capital may also choose to act as its own paying agent. TI Capital must notify you of changes in the paying agents for the exchange notes.

Holders buying and selling debt securities in registered form must work out between them how to compensate for the fact that TI Capital will pay all the interest for an interest period to the one who is the registered holder on the regular record date. The most common manner is to adjust the sales price of the debt securities to pro rate interest fairly between buyer and seller. This pro rated interest amount is called accrued interest.

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Street name and other indirect holders should consult their banks or brokers for information on how they will receive payments.

Notices

TI Capital and the trustee will send notices only to direct holders, using their addresses as listed in the trustee’s records. Such notices will be mailed to holders of registered securities.

Regardless of who acts as paying agent, all money that TI Capital pays to a paying agent that remains unclaimed at the end of five years after the amount is due to direct holders will be repaid to TI Capital. After that five-year period, you may look only to TI Capital, or its successor, for payment and not to the trustee, any other paying agent or anyone else.

Mergers and Similar Events

Each of TI Capital and Telecom Italia is generally permitted to consolidate or merge with another company or firm. Each of TI Capital and Telecom Italia is also permitted to sell or lease substantially all of its assets to another company or to buy or lease substantially all of the assets of another company. However, neither TI Capital nor Telecom Italia may take any of these actions unless all the following conditions are met:

• Where TI Capital and Telecom Italia merges out of existence or sells or leases all or substantially all of its assets, the other company must assume its obligations, including, in the case of Telecom Italia, the obligations arising from Telecom Italia’s guarantee, on the debt securities either by law or contractual arrangements. The other company’s assumption of these obligations must include the obligation to pay the additional amounts described under “—Payment of Additional Amounts”. If the other company is organized under the laws of a country other than Luxembourg or Italy in the case of, respectively, TI Capital and Telecom Italia, it must indemnify you against any governmental charge or other cost resulting from the transaction; provided that, subject to the delivery of the opinions described below, TI Capital will be permitted to merge with an Italian company.

• The merger, sale or lease of all or substantially all of its assets or other transaction must not cause a default on the exchange notes, and Telecom Italia and TI Capital must not already be in default. For purposes of this no-default test, a default would include an event of default that has occurred and not been cured, as described under “—Events of Default”. A default for this purpose would also include any event that would be an event of default if the requirements for giving Telecom Italia or TI Capital default notice of their default having to exist for a specific period of time were disregarded.

Subject to the delivery of the opinions described below, Telecom Italia or one or more of its Italian subsidiaries will be permitted to assume the obligations of TI Capital on the exchange notes for the payment of the principal of and interest on the exchange notes and any other payments on the exchange notes, including any additional amounts described under “—Payment of Additional Amounts”. Upon assuming the obligations of TI Capital, Telecom Italia or any such subsidiary may exercise every right and power of TI Capital under the indenture.

Telecom Italia or one of its Italian subsidiaries may only become the obligor under the exchange notes by assumption or merger if TI Capital (or any successor) delivers to the trustee a legal opinion, reasonably satisfactory to the Trustee, of nationally recognized external Italian and U.S. law firms to the effect that the provisions of the indenture and Trust Indenture Act of 1939 are not in conflict with mandatory provisions of Italian law applicable to holders of notes of Italian companies.

It is possible that an assumption, merger or other similar transaction may cause the holders of the exchange notes to be treated for U.S. federal income tax purposes as though they had exchanged the exchange notes for

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new notes. This could result in the recognition of taxable gain or loss for U.S. federal income tax purposes and possibly other adverse tax consequences.

In the case of an assumption, merger or other similar transaction the Luxembourg Stock Exchange will be informed and a notice will be published in a newspaper of general circulation in Luxembourg.

Modification and Waiver

There are three types of changes TI Capital, or its successors, can make to the indenture and the exchange notes.

Changes Requiring Your Approval

First, there are changes that cannot be made to the exchange notes without the specific approval of each holder of exchange notes. The following is the list of those changes:

• change the stated maturity of the principal on the exchange notes;

• change the interest on the exchange notes;

• reduce the principal amount due on the exchange notes;

• change any obligation of TI Capital to pay additional amounts described under “—Payment of Additional Amounts”;

• reduce the amount of principal payable upon acceleration of the maturity of an exchange note following a default;

• change the place or currency of payment of an exchange note;

• impair your right to sue for payment;

• reduce the percentage of holders of exchange notes whose consent is needed to modify or amend the indenture;

• reduce the percentage of holders of exchange notes whose consent is needed to waive compliance with various provisions of the indenture or to waive various defaults;

• modify any other aspect of the provisions dealing with modification and waiver of the indenture; and

• change the obligations of Telecom Italia as Guarantor with respect to payment of principal, premium, if any, and interest payments.

Changes Requiring a Majority Vote

The second type of change to the indenture and the exchange notes is the kind that requires a vote in favor by holders of exchange notes owning a majority of the outstanding principal amount of the particular series affected. Most changes fall into this category, except for clarifying changes and other changes that would not adversely affect holders of the exchange notes in any material respect. The same vote would be required for TI Capital to obtain a waiver of all or part of the covenants described in this section, or a waiver of a past default. However, TI Capital cannot obtain a waiver of a payment default or any other aspect of the indenture or the exchange notes listed in the first category described under “—Changes Requiring Your Approval” unless TI Capital obtains your individual consent to the waiver.

Changes Not Requiring Approval

The third type of change does not require any vote by holders of the exchange notes. This type is limited to clarifications and other changes that would not adversely affect holders of the exchange notes in any material respect.

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Further Details Concerning Voting

Exchange notes will not be considered outstanding, and therefore not eligible to vote, if TI Capital has deposited or set aside in trust for you money for their payment or redemption. Exchange notes will also not be eligible to vote if they have been fully defeased as described under “Discharge and Defeasance”.

TI Capital will generally be entitled to set any day as a record date for the purpose of determining the holders of outstanding exchange notes that are entitled to vote or take other action under the indenture. In limited circumstances, the trustee will be entitled to set a record date for action by holders. If TI Capital or the trustee set a record date for a vote or other action to be taken by holders of a particular series of the exchange notes, that vote or action may be taken only by persons who are holders of outstanding exchange notes of that series on the record date and must be taken within 180 days following the record date or another period that TI Capital may specify (or as the trustee may specify if it set the record date). TI Capital may shorten or lengthen (but not beyond 180 days) this period from time to time.

Street name and other indirect holders should consult their banks or brokers for information on how approval may be granted or denied if TI Capital seeks to change the terms of the Indenture or request a waiver.

Redemption at TI Capital’s Option

Beginning on May 15, 2005, the exchange notes will be redeemable in whole or in part at TI Capital’s (or TI Capital successor’s) option at any time at a redemption price equal to the greater of:

• 100% of the principal amount of the applicable exchange notes; or

• as determined by the quotation agent, the sum of the present values of the remaining scheduled payments of principal and interest thereon (not including any portion of such payments of interest accrued as of the date of redemption) discounted to the redemption date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the adjusted treasury rate, plus 20 basis points for the Series A notes, 25 basis points for the Series B notes and 30 basis points for the Series C notes,

plus accrued interest thereon to the date of redemption.

The definition of certain terms used in the paragraph above are listed below.

Adjusted treasury rate means, with respect to any redemption date:

• the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated “H.15(519)” or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded U.S. Treasury securities adjusted to constant maturity under the caption “Treasury Constant Maturities,” for the maturity corresponding to the comparable treasury issue (if no maturity is within three months before or after the remaining life (as defined below), yields for the two published maturities most closely corresponding to the comparable treasury issue will be determined and the treasury rate will be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month); or

• if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semiannual equivalent yield to maturity or interpolated (on a day count basis) of the comparable treasury issue, calculated using a price for the comparable treasury issue (expressed as a percentage of its principal amount) equal to the comparable treasury price for such redemption date.

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The treasury rate will be calculated on the third Business Day preceding the date fixed for redemption.

Comparable treasury issue means the U.S. Treasury security selected by the quotation agent as having an actual or interpolated maturity comparable to the remaining term of the exchange notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such exchange notes.

Comparable treasury price means, with respect to any redemption date, (1) the average of five reference treasury dealer quotations for such redemption date, after excluding the highest and lowest reference treasury dealer quotations, or (2) if the quotation agent obtains fewer than four such reference treasury dealer quotations, the average of all such quotations.

Quotation agent means either Citigroup Global Markets Inc., J.P. Morgan Securities Inc. and Lehman Brothers Inc. or such other agent as appointed by TI Capital or Telecom Italia, or, if these firms are unwilling or unable to select the comparable treasury issue, an independent investment banking institution of national standing appointed by TI Capital or Telecom Italia.

Reference treasury dealer means:

• each of Citigroup Global Markets Inc., J.P. Morgan Securities Inc. and Lehman Brothers Inc., or their affiliates which are primary US Government securities dealers, or their respective successors; provided, however, that if any of the foregoing shall cease to be a primary U.S. Government securities dealer in New York City (a “primary treasury dealer”), TI Capital will substitute such reference treasury dealer with another primary treasury dealer; and

• any other primary treasury dealer selected by the quotation agent after consultation with TI Capital or Telecom Italia.

Reference treasury dealer quotations means with respect to each reference treasury dealer and any redemption date, the average, as determined by the quotation agent, of the bid and asked prices for the comparable treasury issue (expressed in each case as a percentage of its principal amount) quoted in writing to the quotation agent by such reference treasury dealer at 3:30 p.m. (New York City time) on the third Business Day preceding such redemption date.

Remaining scheduled payments means, with respect to each note to be redeemed, the remaining scheduled payments of the principal thereof and interest thereon that would be due after the related redemption date but for such redemption; provided, however, that, if that redemption date is not an interest payment date with respect to such exchange notes, the amount of the next succeeding scheduled interest payment thereon will be reduced by the amount of interest accrued thereon to that redemption date.

If less than all of a series of exchange notes is to be redeemed at any time, selection of exchange notes for redemption will be made by the Trustee on a pro rata basis, by lot or by such method as the Trustee deems fair and appropriate; provided that exchange notes with a principal amount of $1,000 will not be redeemed in part.

TI Capital will give DTC a notice of redemption at least 30 but not more than 60 days before the redemption date. If any exchange notes are to be redeemed in part only, the notice of redemption that relates to such exchange notes will state the portion of the principal amount thereof to be redeemed. A new note in principal amount equal to the unredeemed portion thereof will be issued in the name of the holder thereof upon cancellation of the original note.

Unless TI Capital defaults in payment of the redemption price, on and after the redemption date, interest will cease to accrue on the exchange notes or portions thereof called for redemption.

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In the case of redemption of TI Capital’s option, the Luxembourg Stock Exchange will be informed of the redemption and a notice will be published on the Luxemburger Wort.

Optional Tax Redemption

Other than as described above under “—Redemption at TI Capital’s Option,” TI Capital will have the option to redeem the debt securities in the two situations described below. The redemption price for the exchange notes will be equal to the principal amount of the exchange notes being redeemed plus accrued interest and any additional amounts due on the date fixed for redemption. Furthermore, TI Capital must give you between 30 and 60 days’ notice before redeeming the exchange notes.

• The first situation is where, as a result of a change in, execution of or amendment to any laws, regulations or treaties or the official application or interpretation of any laws, regulations or treaties, either:

• TI Capital or Telecom Italia (or its successor) would be required to pay additional amounts as described below under “Payments of Additional Amounts”, or

• Telecom Italia or any of its subsidiaries would have to deduct or withhold tax on any payment to TI Capital (or its successor) to enable TI Capital (or its successor) to make a payment of principal or interest on a debt security.

This applies only in the case of changes, executions, amendments, applications or interpretations that occur on or after the date hereof and in the jurisdiction where TI Capital (Luxembourg) or Telecom Italia (Italy) is incorporated. If TI Capital or Telecom Italia is succeeded by another entity, the applicable jurisdiction will be the jurisdiction in which the successor entity is organized, and the applicable date will be the date the entity became a successor.

TI Capital would not have the option to redeem if TI Capital or Telecom Italia could have avoided the payment of additional amounts or the deduction or withholding by using reasonable measures available to TI Capital or Telecom Italia.

• The second situation is where a person into which TI Capital or Telecom Italia is merged or to whom it has conveyed, transferred or leased all or substantially all of its property is required to pay additional amounts. TI Capital would have the option to redeem the debt securities even if TI Capital or Telecom Italia is required to pay additional amounts immediately after the merger, conveyance, transfer or lease. Neither Telecom Italia nor TI Capital is required to use reasonable measures to avoid the obligation to pay additional amounts in this situation. However, TI Capital will not have the option to redeem if the sole purpose of such a merger would be to permit TI Capital to redeem the debt securities.

The election of TI Capital to redeem shall be evidenced by a board resolution or in another manner specified in the indenture. In case of any redemption TI Capital shall, at least 60 days prior to the redemption date (unless a shorter notice will be reasonably satisfactory to the Trustee), notify the Trustee of the redemption date and of the principal amount of exchange notes to be redeemed.

Payment of Additional Amounts

Luxembourg or Italy may require TI Capital, as Issuer, or Telecom Italia, as Guarantor, to withhold amounts from payments of principal or interest on the exchange notes or any amounts to be paid under the guarantees, as the case may be, for taxes or any other governmental charges. If Luxembourg or Italy requires a withholding of this type, TI Capital or Telecom Italia, as the case may be, may be required to pay you additional amounts so that the net amount you receive will be the amount specified in the note to which you are entitled.

TI Capital or Telecom Italia, as the case may be, will not have to pay additional amounts in respect of taxes or other governmental charges that are required to be deducted or withheld by any paying agent from a payment

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on a note, if such payment can be made without such deduction or withholding by any other paying agent, or in respect of taxes or other governmental charges that would not have been imposed but for:

• the existence of any present or former connection between you and Luxembourg or Italy, as the case may be, other than the mere holding of the exchange note and the receipt of payments thereon;

• the application of the European Directive 2003/48/EC of June 3, 2003, on the taxation of income from savings, as well as any measure adopted according or pursuant to such directive;

• a failure to comply with any certification, documentation, information or other reporting requirements concerning your nationality, residence, identity or connection with Luxembourg or Italy, as the case may be, if such compliance is required as a precondition to relief or exemption from such taxes or other governmental charges (including, without limitation, a certification that you are not resident in Luxembourg or Italy or are not an individual resident of a member state of the European Union);

• a change in law that becomes effective more than 30 days after a payment on the debt security becomes due and payable or on which payment thereof is duly provided for, whichever occurs later; or

• any tax or other governmental charge imposed on non residents in Italy as provided under Italian laws and regulations relating to states or territories deemed to have a “priviliged tax regime” for Italian tax law purposes.

These provisions will also apply to any taxes or governmental charges imposed by any jurisdiction in which a successor to TI Capital or Telecom Italia is organized.

For additional information, see section 803 of the indenture.

Restrictive Covenants

Restrictions on Liens

Some of TI Capital’s and Telecom Italia’s property may be subject to a mortgage or other legal mechanism that gives their lenders preferential rights in that property over other lenders, including you and the other direct holders of the exchange notes, or over their general creditors if they fail to pay them back. These preferential rights are called liens. Each of TI Capital and Telecom Italia promises that it will not create or permit to subsist any encumbrance to secure capital market indebtedness, which is described further below, on the whole or any part of its present or future revenues or assets, other than permitted encumbrances.

As used here, encumbrance means:

• any mortgage, charge, pledge, lien or other encumbrance securing any obligation of any individual, corporation, partnership, joint venture, trust, unincorporated organization or government or any agency or political subdivision thereof; and

• any arrangement providing a creditor with prior right to an asset, or its proceeds of sale, over other creditors in a liquidation.

As used here, permitted encumbrance means:

• any encumbrance existing on the date of issuance of the exchange notes;

• any encumbrance over or affecting any asset acquired by TI Capital or Telecom Italia after the date hereof and subject to which such asset is acquired, if:

• such encumbrance was not created in contemplation of the acquisition of such asset by TI Capital or Telecom Italia;

• the amount thereby secured has not been increased in contemplation of, or since the date of, the acquisition of such asset by TI Capital or Telecom Italia;

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• any encumbrance over or affecting any asset of any company which becomes an obligor after the date hereof, where such encumbrance is created prior to the date on which such company becomes an obligor, if:

• such encumbrance was not created in contemplation of that company becoming an obligor; and

• the amount thereby secured has not been increased in contemplation of, or since the date of, that company becoming an obligor;

• any netting or set-off arrangement entered into by any member of the Telecom Italia group in the normal course of its banking arrangements for the purpose of netting debit and credit balances;

• any title transfer or retention of title arrangement entered into by any member of the Telecom Italia group in the normal course of its trading activities on the counterparty’s standard or usual terms;

• encumbrances created in substitution of any encumbrance permitted under the first two sub-bullet points above over the same or substituted assets. This only applies if: (a) the principal amount secured by the substitute encumbrance does not exceed the principal amount outstanding and secured by the initial encumbrance; and (b) in the case of substituted assets, if the market value of the substituted assets at the time of the substitution does not exceed the market value of the assets replaced;

• encumbrances created to secure:

• loans provided, supported or subsidized by a governmental agency, national or multinational investment guarantee agency, export credit agency or a lending organization established by the United Nations, the European Union or other international treaty organization, including, without limitation the European Investment Bank, the European Bank for Reconstruction and Development and the International Finance Corporation;

• project finance indebtedness (as described below);

this will, however, only apply if the encumbrance is created on an asset of the project being financed by such loans (and/or on the shares in, and/or shareholder loans made to, the company conducting such project) or, as the case may be, such project finance indebtedness and remains confined to that asset (and/or shares and/or shareholder loans);

• encumbrances arising out of the refinancing of any capital markets indebtedness secured by any encumbrance permitted by the preceding sub-paragraphs. This sub-paragraph will, however, only apply if the amount of such capital markets indebtedness is not increased and is not secured by an encumbrance over any additional assets;

• any encumbrance arising by operation of law;

• any encumbrance created in connection with convertible bonds or notes where the encumbrance is created over the assets into which the convertible bonds or notes may be converted and secures only the obligation of TI Capital to effect the conversion of the bonds or notes into such assets;

• any encumbrance created in the ordinary course of business to secure capital market indebtedness under hedging transactions entered into for the purpose of managing risks arising under funded debt obligations such as credit support annexes and agreements;

• any encumbrance over or affecting any asset of Telecom Italia to secure capital markets indebtedness under a permitted leasing transaction (as described below); provided that the aggregate capital markets indebtedness secured by all such encumbrances does not exceed €1 billion;

• any encumbrance created on short-term receivables used in any asset-backed financing;

• any encumbrance on real estate assets of Telecom Italia, any subsidiary or any person to which such real estate assets may be contributed by Telecom Italia or any subsidiary in connection with the issuance of any indebtedness, whether such indebtedness is secured or unsecured by such real estate assets or any

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other assets of such person to which real estate assets have been contributed by Telecom Italia or any subsidiary; and

• any other encumbrance securing capital market indebtedness of an aggregate amount not exceeding 10% of the total net worth of Telecom Italia (as disclosed in the most recent audited consolidated balance sheet of Telecom Italia).

As used here, capital markets indebtedness means any obligation for the payment of borrowed money which is in the form of, or represented or evidenced by, a certificate of indebtedness or in the form of, or represented or evidenced by, bonds, notes or other securities which are listed or traded on a stock exchange or other recognized securities market. For the purposes of avoiding any doubt in respect of asset-backed financings originated by Telecom Italia or TI Capital, the expressions “assets” and “obligations for the payment of borrowed money” as used in this definition do not include assets and obligations of Telecom Italia or TI Capital which, pursuant to the requirements of law and accounting principles generally accepted in Italy or Luxembourg, as the case may be, currently need not, and are not, reflected in the balance sheet of Telecom Italia or TI Capital, as the case may be.

As used here, permitted leasing transaction means one or more transactions or a series of transactions as a result of which Telecom Italia disposes of or otherwise transfers (including, without limitation, by way of sale of title or grant of a leasehold or other access, utilization and/or possessory interest(s)) its rights to possess, use and/or exploit all or a portion of a particular asset or particular assets owned, used and/or operated by Telecom Italia (or its rights and/or interests in respect thereof) to one or more other persons in circumstances where Telecom Italia or an affiliate shall have the right to obtain or retain possession, use and/or otherwise exploit the asset or assets (or rights and/or interests therein) so disposed of or otherwise transferred.

As used here project finance Indebtedness means any indebtedness incurred by a debtor to finance the ownership, acquisition, construction, development and/or operation of an asset in respect of which the person or persons to whom such indebtedness is, or may be, owed have no recourse whatsoever for the repayment of or payment of any sum relating to such indebtedness other than:

• recourse to such debtor for amounts limited to the cash flow from such asset; and/or

• recourse to such debtor generally, which recourse is limited to a claim for damages (other than liquidated damages and damages required to be calculated in a specified way) for breach of an obligation, representation or warranty (not being a payment obligation, representation or warranty or an obligation, representation or warranty to procure payment by another or an obligation, representation or warranty to comply or to procure compliance by another with any financial ratios or other test of financial condition) by the person against whom such recourse is available; and/or

• if such debtor has been established specifically for the purpose of constructing, developing, owning and/or operating the relevant asset and such debtor owns no other significant assets and carries on no other business, recourse to all of the assets and undertaking of such debtor and the shares in the capital of such debtor and shareholder loans made to such debtor.

Discharge and Defeasance

TI Capital or Telecom Italia can be legally released from any payment or other obligation on the exchange

notes except for various obligations described below if in addition to other actions, put in place the following arrangements for you to be repaid:

• TI Capital or Telecom Italia deposits in trust for your benefit and the benefit of all other direct holders of the exchange notes a combination of money and U.S. government or U.S. government agency notes or bonds that will generate enough cash to make interest, premium, if any, principal and any other payments on the exchange notes on their various due dates.

• TI Capital or Telecom Italia delivers to the trustee a legal opinion of their counsel confirming that there has been a change in U.S. federal income tax law, and under then current U.S. federal income tax law TI

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Capital or Telecom Italia may make the above deposit without causing you to be taxed on the exchange notes any differently than if TI Capital or Telecom Italia did not make the deposit and just repaid the exchange notes itself. TI Capital or Telecom Italia would not have to deliver this opinion if TI Capital or Telecom Italia received from, or there has been published by, the U.S. Internal Revenue Service a ruling that states the same conclusion.

• If the exchange notes are listed on the Luxembourg Stock Exchange or another exchange, TI Capital or Telecom Italia must deliver to the trustee a legal opinion of their counsel confirming that the deposit, defeasance and discharge will not cause the exchange notes to be delisted from such exchange.

However, even if TI Capital or Telecom Italia takes these actions, a number of TI Capital’s or Telecom Italia’s obligations relating to the exchange notes will remain. These include the following obligations:

• to register the transfer and exchange of exchange notes,

• to replace mutilated, destroyed, lost or stolen exchange notes,

• to maintain paying agencies, and

• to hold money for payment in trust.

Ranking

The exchange notes are not secured by any of Telecom Italia’s or TI Capital’s property or assets. Accordingly, your ownership of the exchange notes means you are one of Telecom Italia’s or TI Capital’s senior unsecured creditors. The debt securities are not subordinated to any of Telecom Italia’s or TI Capital’s other debt obligations and therefore they rank equally with all Telecom Italia’s and TI Capital’s other senior unsecured and unsubordinated indebtedness.

Events of Default

You will have special rights if an event of default occurs and is not cured, as described later in this subsection.

An “event of default” with respect to the exchange notes is defined in the indenture as:

• The failure by TI Capital or Telecom Italia to pay principal on a note within 10 days from the relevant due date or the failure to pay interest on a note within 30 days from the relevant due date;

• The failure by TI Capital to perform any other obligation under the exchange notes or the failure by Telecom Italia to perform any obligation under its guarantee and such failure continues for more than 60 days after the trustee has received notice of it from the affected holder of the exchange notes;

• Any of TI Capital’s or Telecom Italia’s capital market indebtedness (as defined above in “—Restrictive Covenants—Restrictions on Liens”) in excess of €100 million (or the equivalent thereof in other currencies) has to be repaid prematurely due to a default under its terms;

• The failure by TI Capital or Telecom Italia to fulfill any payment obligation exceeding €100 million or its equivalent under any capital market indebtedness (as defined above in “—Restrictive Covenants—Restriction on Liens”) of TI Capital or Telecom Italia, or under any guarantee provided for any such capital market indebtedness in excess of €100 million (or the equivalent thereof in other currencies) of others, and this failure remains uncured for 30 days;

• Any security or guarantee relating to capital market indebtedness in excess of €100 million (or the equivalent thereof in other currencies) provided by TI Capital or Telecom Italia is enforced by the lenders and such enforcement is not contested in good faith by TI Capital or Telecom Italia or TI Capital or Telecom Italia publicly announce their inability to meet their financial obligations;

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• A court opens insolvency or equivalent proceedings against TI Capital or Telecom Italia which are not resolved within six months, unless such proceedings are frivolous or vexatious and contested in good faith and appropriately and do not result in court orders; or TI Capital or Telecom Italia apply for such insolvency or equivalent proceedings;

• TI Capital or Telecom Italia approves a resolution pursuant to which it goes into liquidation unless this is done in connection with a merger, or other form of combination with another company and such company assumes all obligations contracted by TI Capital or Telecom Italia, in connection with the exchange notes; or

• Telecom Italia’s guarantee relating to the exchange notes ceases to be valid or legally binding for any reason.

If an event of default has occurred and has not been cured, the trustee or the holders of 25% in principal amount of the outstanding exchange notes of the affected series may declare the entire principal amount of all the exchange notes of that series to be due and immediately payable. This is called a declaration of acceleration of maturity. A declaration of acceleration of maturity may be canceled by the holders of at least a majority in principal amount of the exchange notes of the affected series.

Except in cases of default, where the Trustee has some special duties, the Trustee is not required to take any action under the indenture at the request of any holders unless the holders offer the Trustee reasonable protection from expenses and liability. This protection is called an indemnity. If reasonable indemnity is provided, the holders of a majority in principal amount of the outstanding exchange notes of the relevant series may direct the time, method and place of conducting any lawsuit or other formal legal action seeking any remedy available to the trustee. These majority holders may also direct the trustee in performing another action under the indenture.

Before you bypass the Trustee and bring your own lawsuit or other formal legal action or take other steps to enforce your rights or protect your interests relating to the exchange notes, the following must occur:

• You must give the trustee written notice that an event of default has occurred and remains uncured.

• The holders of 25% in principal amount of all outstanding exchange notes of the relevant series must make a written request that the trustee take action because of the default, and must offer reasonable indemnity to the trustee against the cost and other liabilities of taking that action.

• The trustee must have not taken action for 60 days after receipt of the above notice and offer of indemnity.

Each of TI Capital and Telecom Italia will furnish to the trustee every year, within 120 days after the end of Telecom Italia’s fiscal year, a written statement from its designated officers certifying that, to their knowledge, it is in compliance with the indenture and the exchange notes, or else specifying any default.

Street name and other indirect holders should consult their banks or brokers for information on how to give notice or direction to or make a request of the trustee and to make or cancel a declaration of acceleration.

Regarding the Trustee

Telecom Italia and several of its subsidiaries maintain banking relations with the Trustee in the ordinary course of their business.

If an event of default occurs, or a default, that would become an event of default if the requirements for giving you a default notice or any specific grace period of time were disregarded occurs, the Trustee may be considered to have a conflicting interest with respect to the debt securities for purposes of the Trust Indenture Act of 1939. In that case, the Trustee may be required to resign as Trustee under the applicable indenture, TI Capital and Telecom Italia would be required to appoint a successor Trustee.

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Global Clearance and Settlement

The Clearing systems

The information in this section concerning DTC, Clearstream and Euroclear, and DTC and their book-entry systems has been obtained from sources that TI Capital and Telecom Italia believe to be reliable. Neither TI Capital nor Telecom Italia make any representation or warranty with respect to this information, other than that it has been accurately extracted and/or summarized from those sources.

DTC

DTC is a limited-purpose trust company organized under the laws of the State of New York, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code and a “clearing agency” registered pursuant to the provisions of Section 17A of the Exchange Act.

DTC was created to hold securities for its participants and to facilitate the clearance and settlement of transactions between its participants through electronic book-entry changes in accounts of its participants, thereby eliminating the need for physical movement of certificates. DTC participants include the initial purchasers, the U.S. depositaries, the fiscal agent, securities brokers and dealers, banks, trust companies and clearing corporations and may in the future include certain other organizations. Indirect access to the DTC system is also available to others that clear through or maintain a custodial relationship with a DTC participant, either directly or indirectly.

Transfers of ownership or other interests in Global Bonds in DTC may be made only through DTC participants.

Clearstream, Luxembourg

Clearstream (formerly Cedelbank) is incorporated under the laws of Luxembourg as a bank. Clearstream holds securities for its participating organizations and facilitates the clearance and settlement of securities transactions between its participants through electronic book-entry changes in accounts of its participants, thereby eliminating the need for physical movement of certificates. Clearstream provides to its participants, among other things, services for safekeeping, administration, clearance and settlement of internationally traded securities and securities lending and borrowing.

Clearstream interfaces with domestic markets in several countries. As a bank, Clearstream is subject to regulation by the Commission de Surveillance du Secteur Financier. Clearstream participants are financial institutions around the world, including the initial purchasers, other securities brokers and dealers, banks, trust companies and clearing corporations and certain other organizations. Indirect access to Clearstream is also available to others that clear through or maintain a custodial relationship with a Clearstream participant either directly or indirectly.

Euroclear

Euroclear was created in 1968 to hold securities for its participants and to clear and settle transactions between its participants through simultaneous electronic book-entry delivery against payment, thereby eliminating the need for physical movement of certificates and any risk from lack of simultaneous transfers of securities and cash.

Euroclear provides various other services, including securities lending and borrowing, and interfaces with domestic markets in several countries. Euroclear is operated by Euroclear Bank S.A./N.V. (which we refer to in this prospectus as the “Euroclear Operator”) under a contract with Euro-Clear Clearance Systems, S.C. a Belgian cooperative corporation (which we refer to in this prospectus as the “Cooperative”). All operations are

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conducted by the Euroclear Operator and all Euroclear securities clearance accounts and Euroclear cash accounts are accounts with the Euroclear Operator, not the Cooperative. The Cooperative establishes policy for Euroclear on behalf of Euroclear participants. Euroclear participants include banks (including central banks), the initial purchasers, other securities brokers and dealers and other professional financial intermediaries. Indirect access to Euroclear is also available to others that clear through or maintain a custodial relationship with a Euroclear participant, either directly or indirectly.

Because the Euroclear Operator is a Belgian banking corporation, Euroclear is regulated and examined by the Belgian Banking Commission.

Securities clearance accounts and cash accounts with the Euroclear Operator are governed by the Terms and Conditions Governing Use of Euroclear and the related Operating Procedures of the Euroclear System, and applicable Belgian law (which we refer to in this prospectus as the “Terms and Conditions”). The Terms and Conditions govern transfers of securities and cash within Euroclear, withdrawals of securities and cash from Euroclear, and receipts of payments with respect to securities in Euroclear. All securities in Euroclear are held on a fungible basis without attribution of specific certificates to specific securities clearance accounts. The Euroclear Operator acts under the Terms and Conditions only on behalf of Euroclear participants, and has no record of or relationship with persons holding through Euroclear participants.

Clearing Numbers

The clearing numbers of the exchange notes are set forth below:

Note	Common Codes	CUSIP Numbers	ISIN Numbers
Series A notes
Series B notes
Series C notes

Transfer Restrictions

You understand that it is the intention of TI Capital that the exchange notes will be offered and sold to investors, and trade in the secondary market between investors, and will be held by investors who are, resident in countries or territories listed in the Decree of the Ministry of Finance of Italy of September 4, 1996 as amended. A copy of the decree can be obtained from the website of the Ministry of Finance of Italy at www.finanze.it. You also understand that, to the extent that Telecom Italia becomes the obligor under the exchange notes due to substitution or otherwise (see “Description of Exchange Notes and Guarantees—Mergers and Similar Events”) and Telecom Italia was obligated to withhold on any payments made on the exchange notes, there would be no obligation to gross up such payments to investors not resident in the countries identified in the above Decree. See “Description of Exchange Notes and Guarantees—Payment of Additional Amounts”.

The following is the current list of countries or territories where, if the exchange notes were held by residents of such countries or territories, and Telecom Italia were to become the obligor on the exchange notes, Telecom Italia would have no obligation to gross up payments in the event of a withholding on any payments on the exchange notes: Andorra, Anguilla, Aruba, the Bahamas, Barbados, Barbuda, Belize, Bermuda, the British Virgin Islands, Brunei, the Cayman Islands, the Channel Islands, Cyprus, Djibouti, French Polynesia, Gibraltar, Grenada, Guatemala, Hong Kong, the Isle of Man, Kiribati, Lebanon, Liberia, Liechtenstein, Macau, Malaysia, the Maldives, the Marshall Islands, Montserrat, Nauru, the Netherlands Antilles, Nevis, New Caledonia, Niue, the Philippines, Oman, the Solomon Islands, St. Kitts, St. Lucia, St. Vincent and the Grenadines, the Seychelles, Singapore, Tonga, the Turks and Caicos Islands, Tuvalu, Vanuatu and Samoa.

The following is the current list of countries or territories where, if the exchange notes were held by residents of such countries or territories and Telecom Italia were to become the obligor on the exchange notes,

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Telecom Italia may have no obligation to gross up payments in the event of a withholding on any payments on the exchange notes: Angola, Antigua, Bahrain, Costa Rica, Dominica, Ecuador, Jamaica, Kenya, Korea (Rep.), Kuwait, Malta, Mauritius, Monaco, Panama, Puerto Rico, Switzerland, United Arab Emirates and Uruguay. The countries and territories listed in this paragraph are either considered (under Italian tax law) as having a privileged tax regime subject to activity specific exemptions or are not considered (under Italian tax law) as having a privileged tax regime but are deemed to be tax havens with regard to certain activities.

You also understand the exchange notes will not be offered, sold or delivered in Italy. Italian investors may suffer adverse tax consequences from holding the exchange notes and in connection therewith there is no obligation for either TI Capital or Telecom Italia to gross up any payment on the exchange notes made to Italian investors.

Registration Rights Agreement

In connection with the issuance of the initial notes, TI Capital and Telecom Italia entered into a registration rights agreement with Citigroup Global Markets Inc., J.P. Morgan Securities Inc. and Lehman Brothers Inc., as the representatives of the initial purchasers. The following summary of selected provisions of the registration rights agreement is not complete and is subject to, and is qualified in its entirety by reference to, all the provisions of the registration rights agreement. Copies of the registration rights agreement are available from TI Capital and Telecom Italia upon request.

Under the registration rights agreement, TI Capital and Telecom Italia have agreed to consummate the exchange offer no later than 365 days after the issue date.

Upon becoming effective, this exchange offer registration statement will permit the holders of the initial notes, except as described below, the opportunity to exchange their initial notes for the exchange notes. Under existing interpretations of the SEC set forth in no-action letters to third parties, the exchange notes would in general be freely transferable (other than by holders who are broker-dealers or by any holder who is an affiliate of ours) after the exchange offer without further registration under the Securities Act. Under those existing SEC interpretations, each holder of initial notes participating in the exchange offer will be required to represent to TI Capital and to Telecom Italia, among other things, that, at the time of the consummation of the exchange offer:

• any exchange notes received by that holder will be acquired in the ordinary course of business;

• that holder has no arrangement or understanding with any person to participate in the distribution of the initial notes or the exchange notes within the meaning of the Securities Act;

• the holder is not an “affiliate” (as defined in Rule 405 of the Securities Act) of Telecom Italia;

• that holder is not engaged in, and does not intend to engage in, the distribution of the exchange notes within the meaning of the Securities Act;

• if that holder is a broker-dealer, it will receive exchange notes in exchange for initial notes that were acquired for its own account as a result of market-making activities or other trading activities and it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such exchange notes; and

• if that holder is a broker-dealer, it did not purchase the initial notes being tendered in the exchange offer directly from TI Capital or Telecom Italia for resale pursuant to Rule 144A or any other available exemption from registration under the Securities Act.

Any holder that is not able to make these representations or certain similar representations will not be entitled to participate in the exchange offer or to exchange its initial notes for exchange notes.

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The exchange notes, if issued, will be issued under the indenture. The initial notes and, if issued, the exchange notes, will constitute a single series of debt securities under the indenture. This means that, in circumstances where the indenture provides for holders of debt securities of any series to vote or take any other action as a single class, holders of the initial notes who do not exchange their initial notes for exchange notes and holders of exchange notes will vote or take that action as a single class. The exchange notes will represent the same underlying indebtedness as the initial notes for which they are exchanged.

Although TI Capital and Telecom Italia have filed this exchange offer registration statement with the SEC, there can be no assurance that the exchange offer registration statement will become effective. The registration rights agreement provides that if TI Capital and Telecom Italia have not consummated the exchange offer by October 28, 2004, then, in addition to the interest otherwise payable on the initial notes, additional interest will accrue and be payable on the initial notes at a rate of 0.50% per annum until that requirement is satisfied.

Any amounts of additional interest due will be payable in cash and will be payable on the same dates on which interest is otherwise payable on the initial notes and to the same persons who are entitled to receive those payments of interest on the initial notes. The amount of additional interest payable for any period will be determined by multiplying the additional interest rate (as described above) by the principal amount of the initial notes and then multiplying that product by a fraction, the numerator of which is the number of days that the additional interest rate was applicable during that period (determined on the basis of a 360-day year comprising twelve 30-day months), and the denominator of which is 360.

If TI Capital effects the exchange offer, TI Capital will be entitled to close that offer as long as they have accepted all initial notes validly tendered and not withdrawn in accordance with the terms of the exchange offer. Initial notes not tendered in the exchange offer will bear interest at the same rate in effect at the time of original issuance of the initial notes and, after consummation of the exchange offer, will not be entitled to additional interest or further registration rights.

If TI Capital effects the exchange offer, application will be made to list the exchange notes on the Luxembourg Stock Exchange. Notices informing the holders of the initial notes of the beginning of the exchange period as well as the result of the exchange offer will be published in a newspaper of general circulation in Luxembourg. It will be possible to participate in the exchange offer through an agent in Luxembourg. The documents relating to the exchange offer will be available in Luxembourg.

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TAX C ONSIDERATIONS

United States Federal Income Tax Considerations

General

The following summary describes certain U.S. federal income tax consequences of the acquisition, ownership and disposition of the notes by U.S. Holders (as defined below) that will hold the notes as capital assets. It does not purport to be a comprehensive description of all the tax considerations that may be relevant to a decision to purchase the notes. In particular, this summary does not address tax considerations applicable to U.S. Holders that may be subject to special tax rules including, without limitation: (i) financial institutions; (ii) insurance companies; (iii) dealers or traders in securities or currencies; (iv) tax-exempt entities; (v) persons that will hold notes as part of a “hedging” or “conversion” transaction or as a position in a “straddle” or as part of a “synthetic security” or other integrated transaction for U.S. federal income tax purposes; (vi) persons that have a “functional currency” other than the U.S. dollar; (vii) regulated investment companies; and (viii) persons that hold the notes through partnerships or other pass-through entities. Further, this summary does not address alternative minimum tax consequences.

This summary is based on the Internal Revenue Code of 1986, as amended (the “Code”), and U.S. Treasury regulations and judicial and administrative interpretations thereof, in each case as in effect on the date of this listing memorandum. All of the foregoing are subject to change, which change could apply retroactively and could affect the tax consequences described below.

U.S. Holders should consult their own tax advisor with respect to the U.S. federal, state, local and foreign tax consequences of acquiring, owning and disposing of notes. U.S. Holders should also review the discussion under “—Luxembourg Tax Considerations” and “—Italian Tax Considerations” for a discussion of the Luxembourg and Italian tax consequences to a U.S. Holder of the ownership of notes. For purposes of this summary a “U.S. Holder” is a beneficial owner of notes that is, for U.S. federal income tax purposes: (i) a citizen or resident of the United States; (ii) a corporation, or other entity treated as a corporation, created or organized in or under the laws of the United States or any state thereof (including the District of Columbia); or (iii) an estate or trust, the income of which is subject to U.S. federal income taxation regardless of its source and regardless of whether it is effectively connected with the conduct of a business in the United States.

Exchange of Notes

An exchange of initial notes for exchange notes pursuant to the exchange offer will not be treated as a taxable exchange for U.S. federal income tax purposes. Accordingly, U.S. Holders who exchange their initial notes for exchange notes will not recognize income, gain or loss for U.S. federal income tax purposes. A U.S. Holder’s tax basis in the exchange notes will be equal to its adjusted basis in the initial notes and its holding period for the exchange notes will include the period during which it held the initial notes.

Payments of Interest

Interest (including any additional amounts) paid on a note will be taxable to a U.S. Holder as ordinary interest income at the time it is received or accrued, depending on the U.S. Holder’s method of accounting for U.S. federal income tax purposes. Interest will be treated as foreign source income for purposes of calculating a U.S. Holder’s foreign tax credit limitation. The limitation on foreign taxes eligible for the foreign tax credit is calculated separately with respect to specific classes of income. For this purpose, the interest on a note should generally constitute “passive income,” or in the case of certain U.S. Holders, “financial services income,” which may be relevant for certain U.S. Holders.

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Market Discount

The resale of notes may be affected by the impact on a purchaser of the market discount provisions of the Code. For this purpose, the market discount on a note acquired by a purchaser of notes other than an initial purchaser generally will equal the amount, if any, by which the stated redemption price at maturity of the note exceeds the purchaser’s adjusted tax basis in the note immediately after its acquisition. Subject to a limited

exception, these provisions generally require a U.S. Holder who acquires a note at a market discount to treat as ordinary income that is generally treated as interest income any gain it recognizes on the disposition of that note to the extent of the accrued market discount on that note at the time of maturity or disposition, unless such U.S. Holder elects to include accrued market discount in income over the life of the note.

This election to include market discount in income over the life of the note, once made by a U.S. Holder, applies to all market discount obligations acquired by such U.S. Holder on or after the first taxable year to which the election applies and may not be revoked without the consent of the IRS. In general, market discount will be treated as accruing on a straight-line basis over the remaining term of the note at the time of acquisition, or, at the U.S. Holder’s election, under a constant yield method. If a U.S. Holder makes an election, it will apply only to the note with respect to which it is made, and it may not be revoked. A U.S. Holder who acquires a note at a market discount who does not elect to include accrued market discount in income over the life of the note may be required to defer the deduction of a portion of the interest on any indebtedness it incurs or maintains to purchase or carry the note until maturity or until it disposes of the note in a taxable transaction.

Amortizable Premium

A note is purchased at a premium if its adjusted basis, immediately after its purchase exceeds the amounts payable (other than qualified stated interest) on the note. A U.S. Holder who purchases a note at a premium generally may elect to amortize that premium from the purchase date to the note’s maturity date under a constant-yield method that reflects semiannual compounding based on the note’s payment period. Amortized premium is treated as an offset to interest income on a note and not as a separate deduction. A U.S. Holder’s election to amortize premium on a constant yield method, once made, applies to all debt obligations held or subsequently acquired by such U.S. Holder on or after the first day of the first taxable year to which the election applies and such U.S. Holder may not revoke it without the consent of the IRS.

Disposition of a Note

Upon the sale, exchange, redemption or other taxable disposition of a note, a U.S. Holder generally will recognize U.S. source capital gain or loss equal to the difference between the amount realized on such disposition (except as described above under “—Market Discount” and except to the extent any amount realized is attributable to accrued but unpaid interest, which will be treated as interest income as described above) and the U.S. Holder’s adjusted tax basis in the note. A U.S. Holder’s adjusted tax basis in a note will generally equal the cost of the note to such holder.

Backup Withholding and Information Reporting

Information returns may be filed with the Internal Revenue Service in connection with payments on the notes and the proceeds from a sale or other disposition of the notes. A U.S. Holder may be subject to U.S. backup withholding tax on these payments if the U.S. Holder fails to provide its taxpayer identification number to the paying agent and comply with certain certification procedures or otherwise establish an exemption from backup withholding. The amount of any backup withholding from a payment to a U.S. Holder will be allowed as a credit against the U.S. Holders U.S. federal income tax liability and may entitle the U.S. Holder to a refund, provided that the required information is furnished to the Internal Revenue Service.

Luxembourg Tax Considerations

The following is a general description of the material Luxembourg tax consequences of purchasing, owning, exchanging and disposing of the notes. It does not purport to be a complete analysis of all possible tax situations

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that may be relevant to a decision to purchase, own, exchange or dispose of the notes. It does, in particular, not address the situation of any companies taking advantage of a special income tax treatment in Luxembourg, such as holding companies regulated under the Law of July 31, 1929 or undertakings for collective investments. Prospective purchasers of the notes should consult their own tax advisors as to the applicable tax consequences of the ownership of the notes, based on their particular circumstances. This summary does not allow any conclusions to be drawn with respect to issues not specifically addressed. The following description of

Luxembourg tax law is based upon the Luxembourg law and regulations as in effect on the date of this Prospectus and is subject to any amendments in law later introduced, whether or not on a retroactive basis.

Exchange of the initial notes for exchange notes

Luxembourg non-residents

Holders of the initial notes who are non-resident of Luxembourg and who do not hold the initial notes through a permanent establishment in Luxembourg are not liable to any Luxembourg income tax upon exchange of the initial notes for exchange notes.

Luxembourg resident individuals

Luxembourg resident individual holders of the initial notes are not subject to taxation on capital gains upon the exchange of the initial notes for exchange notes, unless the initial notes are exchanged for exchange notes within six months of their date of acquisition. They may opt for not realizing the capital gains upon the exchange of the initial notes for exchange notes by carrying the acquisition value and the date of acquisition of the initial notes over to the exchange notes.

Luxembourg resident companies

Luxembourg resident companies (société de capitaux) holders of the notes or foreign entities of the same type which have a permanent establishment in Luxembourg with which the holding of the initial notes is connected, must include in their taxable income the difference between the fair market value of the exchange notes and the lower of the cost or book value of the initial notes exchanged. They may opt for not realizing the capital gains upon the exchange of the initial notes for exchange notes by carrying the acquisition value and the date of acquisition of the initial notes over to the exchange notes.

Tax Residency

A holder of the exchange notes will not become resident, or be deemed to be resident, in Luxembourg by reason only of the holding of the exchange notes, or the execution, performance, delivery and/or enforcement of the exchange notes.

Taxation of the holders of the exchange notes

Withholding tax

Under Luxembourg tax law currently in effect, there is no withholding tax for Luxembourg residents and non-residents on payments of interest (including accrued but unpaid interest), nor is any Luxembourg withholding tax payable on payments received upon redemption, repayment of the principal or upon an exchange of the exchange notes.

Luxembourg non-residents

Holders of the exchange notes who are non-resident of Luxembourg and who do not hold the exchange notes through a permanent establishment in Luxembourg are not liable to any Luxembourg income tax, whether

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they receive payments of interest (including accrued but unpaid interest), or payments upon redemption, repayment of principal or exchange of the exchange notes, or realize capital gains on the sale of any exchange notes.

Taxation of Luxembourg residents – General

Holders of the exchange notes who are resident of Luxembourg or who have a permanent establishment in Luxembourg with which the holding of the exchange notes is connected must include any interest received (or accrued for Luxembourg resident companies) in their taxable income.

These holders will not be liable to any Luxembourg income tax on repayment of principal.

Luxembourg resident individuals

Luxembourg resident individual holders of the exchange notes are not subject to taxation on capital gains upon the transfer of the exchange notes, unless the transfer of the exchange notes precedes their acquisition or the exchange notes are disposed of within six months of the date of their acquisition. Upon a redemption of the exchange notes, individual Luxembourg resident holders must however include the portion of the redemption price corresponding to accrued but unpaid interest in their taxable income.

Luxembourg resident companies

Luxembourg resident companies (société de capitaux) holders of the exchange notes or foreign entities of the same type which have a permanent establishment in Luxembourg with which the holding of the exchange notes is connected, must include in their taxable income the difference between the sale, exchange or redemption price (including accrued but unpaid interest) and the lower of the cost or book value of the exchange notes sold, redeemed or exchanged.

EU savings directive

The Council of the European Union has adopted a directive on June 3, 2003 regarding the taxation of savings income. Subject to a number of important conditions being met, Member States will be required from 1 January 2005 to provide to the tax authorities of another Member State details of payments of interest (or other similar income) paid by a paying agent within its jurisdiction to or for the benefit of an individual resident in that other Member State, except that Belgium, Luxembourg and Austria will instead operate a withholding system for a transitional period in relation to such payments.

Other Taxes

Luxembourg net wealth tax will not be levied on a holder of the exchange notes, unless (i) such holder is a Luxembourg resident or (ii) such exchange notes are attributable to an enterprise or part thereof which is carried on in Luxembourg through a permanent establishment or a permanent representative.

There is no Luxembourg registration tax, stamp duty or any other similar tax or duty payable in Luxembourg by the holders of the exchange notes as a consequence of the issuance of the exchange notes, nor will any of these taxes be payable as a consequence of a subsequent transfer, repurchase or redemption of the exchange notes.

There is no Luxembourg value added tax payable in respect of payments in consideration for the issuance of the exchange notes or in respect of the payment of interest or principal under the exchange notes or the transfer of the exchange notes. Luxembourg value added tax may, however, be payable in respect of fees charged for certain services rendered to the Issuer, if for Luxembourg value added tax purposes such services are rendered or are deemed to be rendered in Luxembourg and an exemption from Luxembourg value added tax does not apply with respect to such services.

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No gift, estate or inheritance taxes is levied on the transfer of the exchange notes upon death of a holder in cases where the deceased was not a resident of Luxembourg for inheritance tax purposes.

Italian Tax Considerations

The following is a summary of certain Italian tax consequences of the receipt of interest on the notes and capital gains upon the exchange or disposal thereof by non Italian investors, along with a summary of the Italian tax treatment of payments which might possibly be made by the Guarantor under the notes.

This summary is based upon Italian tax law and practice as in effect on the date of the prospectus and is subject to change, potentially with retroactive effect.

Prospective investors in the debt securities should consult their own advisors regarding the Italian or other tax consequences of the purchase, ownership and disposition of the debt securities in their particular circumstances, including the effect of any state, local or foreign tax laws.

Interest on Debt Securities

Interest payable on debt securities issued by TI Capital to a beneficial owner who is not resident in Italy and is not acting through an Italian permanent establishment is not subject to Italian taxes. To the extent that debt securities are deposited by a non-resident holder in an account with an Italian withholding agent, interest payable to a non-resident beneficial owner is subject to the substitute tax at rates up to 27%, according to the same rules applicable to Italian resident holders, unless the holder produces a declaration of non-residence in Italy. In addition, any element of the proceeds of sale of debt securities by a non-resident holder which represents accrued, and express or implied, interest in respect of such debt securities will be subject to Italian substitute tax if the debt securities are sold through an Italian withholding agent, unless such holder produces a declaration of non-residence and has provided details of the period during which he was the beneficial owner of the debt securities and the interest derived therefrom.

Payments under the Guarantees by Telecom Italia

There is no authority directly on point regarding the Italian tax regime of payments made by Telecom Italia under the guarantees. Accordingly, there can be no assurance that the Italian revenue authorities will not assert an alternative treatment of such payments than that set forth herein or that an Italian court would not sustain such an alternative treatment.

Payments to non-resident holders made by Telecom Italia under the guarantees, which represent interest payable on the debt securities, are subject to the Italian tax regime described above under “Interest on Debt Securities”.

Capital Gains on Debt Securities

Capital gains realized by non-residents from the sale of debt securities issued by TI Capital are in principle not subject to tax in Italy. However, a 12.5% substitute tax may apply to the extent the bonds are located in the Italian territory unless:

• the debt securities are listed on a regulated market; or

• the debt securities are not listed on a regulated market, but the following requirements are satisfied:

• the holder is resident of a country which allows an adequate exchange of information with Italy or, in the case of institutional investors not subject to tax, they are established in such country;

• the relevant Italian withholding agent, if any, receives a self-declaration from the holder of the debt securities which states that the holder is a resident of that country. The self-declaration, which must

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be in conformity with the model approved by the Ministry of Economy and Finance (approved in Decree of the Ministry of Economy and Finance of December 12, 2001, published in the Ordinary Supplement No. 287 to the Official Journal No. 301 of December 29, 2001), is valid until revoked by the investor and does not have to be filed if an equivalent self-declaration (including Form 116/IMP) has been submitted to the same intermediary for the same or different purposes; in the case of institutional investors not subject to tax, the institutional investor shall be regarded as the beneficial owner and the relevant self-declaration shall be produced by the management company; or

• the holder is resident in a country which has entered into a double taxation convention with Italy that provides for the exclusive right to tax such gains in the holder’s country of residence.

Early Redemption

The early redemption of notes with a maturity period of no less than 18 months issued by a non-resident company, if occurring before expiration of the first 18 months, in certain cases may trigger the liability for the holder of a 20% surtax to be paid on all interest and other proceeds accrued until the date of early redemption.

In any event, the 20% surtax applies only if the holder of the securities is resident in Italy at the date of the early redemption. Conversely, no surtax applies if the holder is not resident in Italy, even if the notes are deposited by the non-resident holder in an account with an Italian withholding agent (provided that the holder produces a declaration of non-residence in Italy).

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PLAN OF DISTRIBUTI ON

Each broker-dealer that receives exchange notes for its own account in exchange for initial notes pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of exchange notes received in exchange for initial notes where such initial notes were acquired as a result of market-making activities or other trading activities. We have agreed that, starting on the expiration date and ending on the close of business 180 days after the expiration date, we will make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale.

We will not receive any proceeds from any sale of exchange notes by broker-dealers. Exchange notes received by broker-dealers for their own account pursuant to the exchange offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the exchange notes or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or at negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer and/or the purchasers of any such exchange notes. Any broker-dealer that resells exchange notes that were received by it for its own account pursuant to the exchange offer and any broker or dealer that participates in a distribution of such exchange notes may be deemed to be an “underwriter” within the meaning of the Securities Act and any profit on any such resale of exchange notes and any commission or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The letter of transmittal states that by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.

For a period of 180 days after the expiration date, we will promptly send additional copies of this prospectus and any amendment or supplement to this prospectus to any broker-dealer that requests such documents in the letter of transmittal. We have agreed to pay all expenses incident to the exchange offer (including the expenses of one counsel for the holders of the exchange notes), other than commissions or concessions of any brokers or dealers and will indemnify the holders of the exchange notes (including any broker-dealers) against certain liabilities, including liabilities under the Securities Act.

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GENERAL I NFORMATION

Luxembourg Listing

The initial notes are currently listed on the Luxembourg Stock Exchange. We will apply to list the exchange notes on the Luxembourg Stock Exchange. In connection with such listing application, the legal notice relating to the issuance of the exchange notes and the constitutional documents of TI Capital and Telecom Italia will be deposited with the Register of Commerce and Companies in Luxembourg, where such documents may be examined and copies thereof may be obtained upon request. Additionally, copies of Telecom Italia’s Articles of Association and all reports prepared and filed are available at the office of BNP Paribas Luxembourg, the paying agent in Luxembourg. We will maintain a paying agent and registrar in Luxembourg for so long as any initial notes or exchange notes are listed on the Luxembourg Stock Exchange.

Authorization

We have obtained all necessary consents, approvals and authorizations in connection with the issuance and performance of the initial notes, exchange notes and guarantees. The issuance of the initial notes and guarantees was approved by the board of directors of Telecom Italia on October 10, 2003. The issuance of the initial notes and exchange notes was approved by the board of directors of TI Capital on October 16, 2003. The terms and conditions of this exchange offer, the issuance of the exchange notes and guarantees in connection herewith and the preparation and filing with the SEC of this prospectus was approved by the board of directors of Telecom Italia on May 20, 2004.

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LEGAL MATTERS

The validity of the exchange notes and the guarantees under New York law and certain matters of United States law relating to the exchange notes offered through this prospectus will be passed upon for Telecom Italia by Morgan, Lewis & Bockius LLP. Certain matters of Italian law will be passed upon for Telecom Italia by Gianni, Origoni, Grippo & Partners. Certain matters of Italian tax law will be passed upon for Telecom Italia by Maisto e Associati. Certain matters of Luxembourg law, including Luxembourg tax law, will be passed upon for TI Capital by Linklaters Loesch.

INDEPENDE NT ACCOUNTANTS

Reconta Ernst & Young S.p.A., independent accountants, have audited the Telecom Italia consolidated financial statements at December 31, 2003, 2002 and 2001, as stated in their report set forth in the Telecom Italia Annual Report incorporated by reference herein.

Deloitte & Touche Sociedad de Auditores y Consultores Limitada, independent accountants, have audited the consolidated financial statements of Empresa Nacional de Telecomunicaciones S.A. (Chile) for the fiscal years ended December 31, 2003, 2002 and 2001, as stated in their report set forth in the Telecom Italia Annual Report incorporated by reference herein.

PricewaterhouseCoopers S.p.A., independent accountants, have audited the consolidated financial statements of Finsiel Consulenza e Applicazioni Informatiche S.p.A. for the fiscal years ended December 31, 2003, 2002 and 2001, as stated in their report set forth in the Telecom Italia Annual Report incorporated by reference herein.

KPMG Alpen-Treuhand GmbH, independent accountants, have audited the consolidated financial statements of Telekom Austria A.G. for the fiscal year ended December 31, 2003, as stated in their report set forth in the Telecom Italia Annual Report incorporated by reference herein.

Grant Thornton, independent accountants, have audited the consolidated financial statements of Mobilkom Austria AG & Co KG and Mobilkom Austria AG for the fiscal year ended December 31, 2003, as stated in their report set forth in the Telecom Italia Annual Report incorporated by reference herein.

KPMG Austria GmbH and Grant Thornton—Jonasch & Platzer, independent accountants, have audited the combined consolidated financial statements of Mobilkom Austria A.G. & Co KG and Mobilkom Austria A.G. for the fiscal year ended December 31, 2001 and the consolidated financial statements of Telekom Austria A.G. for the fiscal year ended December 31, 2001, as stated in their reports set forth in the Telecom Italia Annual Report incorporated by reference herein.

PricewaterhouseCoopers, independent accountants, have audited the financial statements of Is—TIM Telekomunikasyon Hizmetleri A.S. for the fiscal year ended December 31, 2001, as stated in their report set forth in the Telecom Italia Annual Report incorporated by reference herein.

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ISSUER

Telecom Italia Capital

Société Anonyme

287-289 Route d’Arlon

L-1150 Luxembourg

GUARANTOR

Telecom Italia S.p.A.

Piazza degli Affari 2

20123 Milan, Italy

TRUSTEE

JPMorgan Chase Bank

4 New York Plaza 15th Floor

New York, New York 10004

U.S.A.

AGENTS

Exchange Agent	Exchange Agent Luxembourg Affiliate
JPMorgan Chase Bank	J.P. Morgan Bank Luxembourg S.A.
4 New York Plaza 15th Floor	5, rue Plaetis, Floor 1
New York, NY 10004	L-2338 Luxembourg
U.S.A.

Principal Paying Agent

JPMorgan Chase Bank

4 New York Plaza 15th Floor

New York, New York 10004

U.S.A.

Listing Agent and Luxembourg

Paying and Transfer Agent

BNP Paribas

Securities Services, Luxembourg Branch

23 Avenue de la Porte Neuve

L-2083, Luxembourg

LEGAL ADVISOR TO THE ISSUER AND GUARANTOR

As to U.S. Law:

Morgan, Lewis & Bockius LLP

101 Park Avenue

New York, NY 10178

U.S.A

As to Italian Law:	As to Italian Tax Law:
Gianni, Origoni, Grippo & Partners	Maisto e Associati
Via delle Quattro Fontane, 20	Piazza Filippo Meda 5
00184 Rome, Italy	20121 Milan, Italy

As to Luxembourg Law:

Linklaters Loesch

Rue Carlo Hemmer 4

L-1734 Luxembourg

INDEPENDENT AUDITORS

Telecom Italia S.p.A.	Telecom Italia Capital
Reconta Ernst & Young	Ernst & Young
Via G. Romagnosi 18/A	6 Rue Jean Monnet
00196 Rome, Italy	L-2180 Luxembourg

OFFER TO EXCHANGE

TELECOM ITALIA CAPITAL

$1,000,000,000 Series A 4% Guaranteed Senior Notes due 2008

$2,000,000,000 Series B 5.25% Guaranteed Senior Notes due 2013

$1,000,000,000 Series C 6.375% Guaranteed Senior Notes due 2033

Guaranteed on a senior, unsecured basis by Telecom Italia S.p.A.

P R O S P E C T U S

Dated [    ], 2004

No dealer, salesperson or other person has been authorized to file any information or to make any representations not contained in this Prospectus and, if given, or made, such information or representation must not be relied upon as having been authorized by Telecom Italia S.p.A. or Telecom Italia Capital or any of their respective agents. This Prospectus does not constitute an offer to sell or a solicitation of an offer to buy in the territory of the Republic of Italy or in any jurisdiction to any person to whom it is unlawful to make such offer or solicitation in such jurisdiction. Neither the delivery of this Prospectus nor any sale made hereunder shall, under any circumstances create any implication that the information contained herein is correct as of any time subsequent to the date hereof or that there has been no change in the affairs of Telecom Italia S.p.A. or Telecom Italia Capital since such date.

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 20. Indemnification of Directors and Officers

The Registrants have obtained liability insurance for the members of their respective Boards of Directors and certain of their officers. This includes insurance against liabilities under the Securities Act of 1933, as amended.

Item 21. Exhibits and Financial Statement Schedules

(a)(1)	Financial Statements. See Annual Report on Form 20-F filed as Exhibit 13.1 hereto and incorporated herein by reference.
(a)(2)	The following Exhibits are filed as part of this Report as required by Regulation S-K. The Exhibits designated by an asterisk (*) are to be filed by amendment.

Exhibit Number	Description
3.1	Merger Instrument, dated July 29, 2003, relating to the merger of Telecom Italia S.p.A. into Olivetti S.p.A.
3.2	Coordinated Articles of Incorporation of Telecom Italia Capital.
3.3	Bylaws of Telecom Italia S.p.A. (Incorporated by Reference to Exhibit 1.1 of the Annual Report on Form 20-F of Telecom Italia S.p.A. for the fiscal year ended December 31, 2003 filed with the SEC on June 10, 2004 (File No. 1-13882)).
4.1	Registration Rights Agreement, dated October 22, 2003, among Telecom Italia Capital, as Issuer, Telecom Italia S.p.A., as Guarantor, Citigroup Global Markets Inc., J.P. Morgan Securities Inc. and Lehman Brothers Inc., for themselves and on behalf of the several Initial Purchasers named on Schedule 1 thereto.
4.2	Purchase Agreement, dated October 22, 2003, among Telecom Italia Capital, as Issuer, Telecom Italia S.p.A., as Guarantor, Citigroup Global Markets Inc., J.P. Morgan Securities Inc. and Lehman Brothers Inc., for themselves and on behalf of the several Initial Purchasers named on Schedule 1 thereto.
4.3	Indenture, dated as of October 29, 2003, among Telecom Italia Capital, as Issuer, Telecom Italia S.p.A., as Guarantor, and JPMorgan Chase Bank, as Trustee.
4.4	First Supplemental Indenture, dated as of October 29, 2003, among Telecom Italia Capital, as Issuer, Telecom Italia S.p.A., as Guarantor, and JPMorgan Chase Bank, as Trustee.
4.5	Form of Series A 4% Guaranteed Senior Note Due 2008.
4.6	Form of Series B 5.25% Guaranteed Senior Note Due 2013.
4.7	Form of Series C 6.375% Guaranteed Senior Note Due 2033.
5.1	Opinion of Morgan, Lewis & Bockius LLP.
5.2	Opinion of Linklaters Loesch.

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5.3	Opinion of Gianni, Origoni, Grippo & Partners.
13.1	Annual Report on Form 20-F of Telecom Italia S.p.A. for the fiscal year ended December 31, 2003 filed with the SEC on June 10, 2004 (File No. 1-13882) (Incorporated by reference).
21.1	List of subsidiaries of the Company (Incorporated by reference to Exhibit 8.1 of the Annual Report on Form 20-F of Telecom Italia S.p.A. for the fiscal year ended December 31, 2003 filed with the SEC on June 10, 2004 ).
23.1	Consent of Reconta Ernst & Young S.p.A., independent accountants, dated June 4, 2004, relating to the independent audit report on the consolidated financial statements of Telecom Italia S.p.A. for the fiscal years ended December 31, 2003, 2002 and 2001.
23.2	Consent of Deloitte & Touche Sociedad de Auditores y Consultores Limitada, independent accountants, dated June 4, 2004, relating to the independent audit report on the consolidated financial statements of Empresa Nacional de Telecomunicaciones S.A. (Chile) for the fiscal years ended December 31, 2003, 2002 and 2001.
23.3	Consent of PricewaterhouseCoopers S.p.A., independent accountants, dated June 4, 2004, relating to the independent audit report on the consolidated financial statements of Finsiel Consulenza e Applicazioni Informatiche S.p.A. for the fiscal years ended December 31, 2003, 2002 and 2001.
23.4	Consent of KPMG Alpen-Treuhand GmbH, independent accountants, dated June 4, 2004, relating to the independent audit report on the consolidated financial statements of Telekom Austria A.G. for the fiscal year ended December 31, 2003.
23.5	Consent of Grant Thornton, independent accountants, dated June 4, 2004, relating to the independent audit report on the consolidated financial statements of Mobilkom Austria AG & Co KG and Mobilkom Austria AG for the fiscal year ended December 31, 2003.
23.6	Consent of KPMG Austria GmbH and Grant Thornton—Jonasch & Platzer, independent accountants, dated June 4, 2004, relating to the independent audit report on the combined consolidated financial statements of Mobilkom Austria A.G. & Co KG and Mobilkom Austria A.G. for the fiscal year ended December 31, 2001.
23.7	Consent of KPMG Austria GmbH and Grant Thornton—Jonasch & Platzer, independent accountants, dated June 4, 2004, relating to the independent audit report on the consolidated financial statements of Telekom Austria A.G. for the fiscal year ended December 31, 2001.
23.8	Consent of PricewaterhouseCoopers, Independent Accountants, dated June 4, 2004, relating to the independent audit report on the financial statements of Is—TIM Telekomunikasyon Hizmetleri A.S. for the fiscal year ended December 31, 2001.
23.9	Consent of Morgan, Lewis & Bockius LLP (included in Exhibit 5.1).
23.10	Consent of Linklaters Loesch (included in Exhibit 5.2).
23.11	Consent of Gianni, Origoni, Grippo & Partners (included in Exhibit 5.3).
23.12	Consent of Maisto e Associati.
25.1	Statement of eligibility of Trustee on Form T-1 with respect to Exhibit 4.3 above.
99.1	Form of Letter of Transmittal.
99.2	Form of Notice of Guaranteed Delivery.
99.3	Form of Letter of Instruction to Registered Holders and/or Participants or Account Holders in the Depository Trust Company, Euroclear or Clearstream.
99.4	Form of Letter to Clients.

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Item 22. Undertakings

The undersigned registrants hereby undertake:

(1) to file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i) to include any prospectus required by section 10(a)(3) of the Securities Act of 1933;

(ii) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information in the registration statement (or the most recent post-effective amendment thereof). Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

(iii) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

(2) that, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof;

(3) to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering;

(4) to file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A of Form 20-F at the start of any delayed offering or throughout a continuous offering;

(5)(i) to respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 of this Form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means; and

(ii) to arrange or provide for a facility in the U.S. for the purpose of responding to such requests.

The undertaking in subparagraph (i) above includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request;

(6) to supply by means of a post-effective amendment all information concerning a transaction and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective;

(7) insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrants will, unless in the opinion of their counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by them is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Luxembourg on the 10th day of June, 2004.

TELECOM ITALIA CAPITAL
By:	/s/    Adriano Trapletti
	Name: Adriano Trapletti Title:   Managing Director

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed on the 10th day of June, 2004, by the following persons in their capacities indicated.

Signature	Title	Date
/s/    Francesco Tanzi Francesco Tanzi	Chairman	June 10, 2004

/s/    Adriano Trapletti Adriano Trapletti Managing Director (Principal Executive Officer) June 10, 2004

/s/    Jaques Loesch Jaques Loesch Director June 10, 2004

/s/    Alex Bolis Alex Bolis Director June 10, 2004

/s/    Stefania Saini Stefania Saini Director and Financial Officer (Principal Financial and Accounting Officer) June 10, 2004

AUTHORIZED REPRESENTATIVE

Pursuant to the requirements of the Securities Act of 1933, the Registration Statement has been signed below on June 10, 2004 in New York, New York by the undersigned as the fully authorized representative of Telecom Italia Capital in the United States.

TELECOM ITALIA OF NORTH AMERICA, INC.
By:	/s/    Sal J. De Rosa
	Name: Sal J. De Rosa
	Title: President and Chief Executive Officer

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Milan, Italy on the 10th day of June, 2004.

TELECOM ITALIA S.P.A.
By:	/s/    Carlo Orazio Buora
	Carlo Orazio Buora Managing Director

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed on the 10th day of June, 2004, by the following persons in their capacities indicated.

Signature	Title	Date
/s/    Marco Tronchetti Provera Marco Tronchetti Provera	Executive Chairman	June 10, 2004
/s/    Carlo Orazio Buora Carlo Orazio Buora	Managing Director (Principal Executive Officer)	June 10, 2004
/s/    Enrico Parazzini Enrico Parazzini	Chief Financial Officer (Principal Financial and Accounting Officer)	June 10, 2004
/s/    Gilberto Benetton Gilberto Benetton	Deputy Chairman of the Board of Directors	June 10, 2004
/s/    Riccardo Ruggiero Riccardo Ruggiero	Managing Director—General Manager	June 10, 2004
/s/    Paolo Baratta Paolo Baratta	Director	June 10, 2004
John Robert Sotheby Boas	Director
/s/    Giovanni Consorte Giovanni Consorte	Director	June 10, 2004
Domenico De Sole	Director
/s/    Francesco Denozza Francesco Denozza	Director	June 10, 2004
/s/    Luigi Fausti Luigi Fausti	Director	June 10, 2004
/s/    Guido Ferrarini Guido Ferrarini	Director	June 10, 2004

/s/    Jean Paul Fitoussi Jean Paul Fitoussi	Director	June 10, 2004
Gianni Mion	Director
Massimo Moratti	Director
/s/    Marco Onado Marco Onado	Director	June 10, 2004
/s/    Renato Pagliaro Renato Pagliaro	Director	June 10, 2004
/s/    Pasquale Pistorio Pasquale Pistorio	Director	June 10, 2004
/s/    Carlo Alessandro Puri Negri Carlo Alessandro Puri Negri	Director	June 10, 2004
/s/    Luigi Roth Luigi Roth	Director	June 10, 2004

AUTHORIZED REPRESENTATIVE

Pursuant to the requirements of the Securities Act of 1933, the Registration Statement has been signed below on June 10, 2004 in New York, New York by the undersigned as the fully authorized representative of Telecom Italia S.p.A. in the United States.

TELECOM ITALIA OF NORTH AMERICA, INC.
By:	/s/    Sal J. De Rosa
	Name: Sal J. De Rosa
	Title: President and Chief Executive Officer

EX-3.1

EXHIBIT 3.1

Register No. 17586 Dossier No. 5336

MERGER INSTRUMENT

ITALIAN REPUBLIC

In the year 2003 (two thousand and three) on the 29th (twenty-ninth) day of the month of July In Milan, in the building at Via Agnello no. 18

Before me Prof. Piergaetano Marchetti, notary public in Milan, registered with the Milan College of Notaries, appeared, without witnesses having the parties mutually agreed to waive them with my consent:

—Mr. Antonio TESONE, lawyer, born in Ancona on 20 July 1923, domiciled for the purposes of his position in Ivrea, at Via Jervis no. 77, who declares that he is signing this instrument not on his own account but as Chairman of the Board of Directors and as such as the legal representative of the listed public limited company:

“Olivetti S.p.A.” with registered office in Ivrea, at Via Jervis no. 77, paid-up share capital of EUR 8,856,601,372, registration number in the Turin Company Register and tax code: 00488410010, entered in the Turin Economic-Administrative Register at no. 27115 (hereinafter also the “Absorbing Company”), in implementation of the resolution adopted by the shareholders’ meeting of such company on 26 May 2003 as per the minutes of the same date, no. 17530/5296 of my register, filed with the Milan I Tax Receipts Agency on 13 June 2003;

—Mr. Marco TRONCHETTI PROVERA, born in Milan on 18 January 1948, domiciled for the purposes of his position in Milan, at Piazza degli Affari no. 2, businessman, who declares that he is signing this instrument not on his own account but as Chairman of the Board of Directors and as such as the legal representative of the listed public limited company:

“Telecom Italia S.p.A.” with registered office in Milan, at Piazza degli Affari no. 2, paid-up share capital EUR 4,023,833,058.30, registration number in the Milan Company Register and tax code: 00471850016, entered in the Milan Economic-Administrative Register at no. 1108188 (hereinafter also the “Company to be Absorbed” or the “Absorbed Company”), in execution of the resolution adopted by the shareholders’ meeting of such company on 24 May 2003 as per the minutes of the same date, no. 17529/5295 of my register, filed with the Milan I Tax Receipts Agency on 13 June 2003; (such companies, also referred to jointly hereinafter as the “Companies Participating in the Merger”.

The parties, of whose identity I notary am certain, in the above-mentioned representative capacities premise that

a) the directors of the companies Olivetti S.p.A. and Telecom Italia S.p.A. prepared a merger plan for the absorption of Telecom Italia S.p.A. into Olivetti S.p.A.;

b) the merger plan, drawn up pursuant to Article 2501-bis of the Civil Code, was filed, for Olivetti S.p.A., with the Turin Company Register on 22 April 2003, and for Telecom Italia S.p.A., with the Milan Company Register on 18 April 2003;

c) the documents referred to in Article 2501-sexies of the Civil Code were made available at the registered offices of the Companies Participating in the Merger within the time limits laid down by law;

d) the Information Document, drawn up in accordance with Consob Regulation 11971/1999 as amended, was also made available in good time at the registered offices of the Companies Participating in the Merger and at Borsa Italiana S.p.A.;

e) the above-mentioned documentation was also posted on the websites of Olivetti S.p.A. and Telecom Italia S.p.A.;

f) the fairness reports on the exchange ratio referred to in Article 2501-quinquies of the Civil Code were prepared:

(i) for Olivetti S.p.A. by the auditing firm Deloitte & Touche Italia S.p.A., appointed by the Chairman of the Ivrea Court in a decree issued on 18 March 2003

(ii) for Telecom Italia S.p.A. by the auditing firm Reconta Ernst & Young S.p.A., pursuant to Article 158 of Legislative Decree 58/1998 and annexed to the minutes of the respective shareholders’ meetings of the Companies Participating in the Merger referred to above;

g) with the resolutions adopted in the shareholders’ meetings of 26 May 2003 (Olivetti S.p.A.) and 24 May 2003 (Telecom Italia S.p.A.) the Companies Participating in the Merger approved the merger plan, duly filed as described above (and attached to the minutes of the meetings), for the absorption of Telecom Italia S.p.A. into Olivetti S.p.A.;

h) the resolutions in question were entered:

—for Olivetti S.p.A., in the Turin Company Register on 28 May 2003;

—for Telecom Italia S.p.A., in the Milan Company Register on 28 May 2003;

i) with the resolutions adopted in the above-mentioned shareholders’ meeting of 26 May 2003 the Absorbing Company, Olivetti S.p.A., also approved, as of the date on which the merger becomes effective:

* the recalculation of the maximum remaining amount of the increase in share capital already approved by the Olivetti S.p.A. extraordinary shareholder’s meeting of 4 October 2000 for the part to be used for the exercise of “Warrant Azioni Olivetti ex Tecnost 1999-2004” warrants (Point 3 of the resolution approving the merger plan);

* a divisible increase in the share capital—by reiterating, updating and, where necessary, renewing earlier resolutions to increase the share capital adopted by the shareholders’ meeting and the Board of Directors of Olivetti S.p.A., insofar as they are still effective and to take account of the assignment ratio for Olivetti shareholders in the context of the present merger—for the stock option plans and convertible bond loans of Olivetti S.p.A. (Point 4 of the resolution approving the merger plan);

* a further divisible increase in the share capital—to take account of the assignment ratio for Telecom Italia shareholders in the context of the present merger—in various divisible tranches for the outstanding stock option plans of Telecom Italia S.p.A. (Point 5 of the resolution approving the merger plan);

* the adoption of new bylaws basically consistent with those of the Company to be Absorbed, which, in addition to the amendments consequent on the resolutions referred to in point i) of this premise, providing, among other things, for the adoption of the new name “Telecom Italia S.p.A.”, the transfer of the registered office to Milan, at Piazza degli Affari no. 2 and the opening of headquarters in Rome, at Corso d’Italia no. 41, the adoption of the corporate purpose of the Company to be Absorbed, the rules for the savings shares (to be issued by the Absorbing Company in the context of the present merger); these bylaws were annexed to the minutes of the shareholders’ meeting referred to above in the version amended following the indications of the competent governmental authorities regarding the special powers of the Minister for the Economy and Finance under Article 2(1) of Decree Law 332/1994, ratified with amendments by Law 474/1994 (Point 6 of the resolution approving the merger plan);

* authorization, as of the date on which the merger becomes effective, of the Board of Directors, under Article 2443, second paragraph, of the Civil Code, to increase the share capital by means of the issue

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for cash of shares up to a maximum of EUR 48,644,750, with the exclusion of the right of pre-emption pursuant to the combined effects of Article 2441, last paragraph, of the Civil Code and Article 134 of Legislative Decree 58/1998 (resolution concerning Item 3 of the agenda of the extraordinary part of the shareholder’s meeting);

l) the merger plan approved by the shareholders’ meetings of both the companies established that, applying the principles and methods described in the plan itself, at the conclusion of the merger the exchange ratio and the post-merger amount of the Absorbing Company’s share capital would be announced;

m) the above-mentioned resolutions do not appear to have been challenged within the time limits referred to in Article 2503 of the Civil Code, so that the merger may be concluded; they also premise, among other things for the purpose of calculating the assignment ratios referred to in Point 2 below, that

n) the share capital of Olivetti S.p.A., which at the date of filing of the merger plan amounted to EUR 8,845,537,520, today amounts to EUR 8,856,601,372, divided into 8,856,601,372 shares with a par value of EUR 1 each, following the conversion of Olivetti S.p.A. bonds into a total of 11,063,852 ordinary shares;

o) the share capital of Olivetti S.p.A. at the date on which the merger becomes effective will amount to EUR 8,845,643,315 divided into 8,845,643,315 shares with a par value of EUR 1 each, following the redemption of 10,958,057 shares withdrawn under Article 2437 of the Civil Code in consequence of the change in the corporate purpose of Olivetti S.p.A. as of the date on which the merger becomes effective (Point 6 of the resolution approving the merger plan);

p) therefore, as provided for in the merger plan (Point 4), the exchange will be carried out by redistributing the share capital of the Absorbing Company, after changing the par value of its shares from EUR 1 to EUR 0.55 and without prejudice to the necessary roundings, since it is not necessary for the Absorbing Company to allot additional newly-issued shares, although this possibility is envisaged in the merger plan;

q) the share capital of Telecom Italia S.p.A. amounts today to EUR 4,023,833,058,30 divided into 5,262,938,081 ordinary shares and 2,053,122,025 savings shares of which, partly in consequence of the Tender Offer made by Olivetti S.p.A. for shares of Telecom Italia S.p.A., 3,403,937,004 ordinary shares and 242,936,252 savings shares are owned by the Absorbing Company, Olivetti S.p.A., and 6,195,500 ordinary shares and 54,309,500 savings shares by Telecom Italia S.p.A.; lastly, they premise that

r) the newly issued savings shares of the Absorbing Company were admitted to listing on the MTA electronic share market operated by Borsa Italiana S.p.A. in the latter’s Decision No. 2992 of 21 July 2003, so that the condition for the effectiveness of the merger referred to in Point 6 of the merger plan has been satisfied.

In view of all that is premised above the parties, in implementation of the above-mentioned resolutions of the shareholders’ meetings of 26 and 24 May 2003 and in their above-mentioned representative capacities, agree what follows.

IMPLEMENTATION OF THE MERGER

1.) (Implementation of the merger)—In implementation of the merger plan (attached hereto as Annex “A”) approved by the respective shareholders’ meetings, the companies Olivetti S.p.A. and Telecom Italia S.p.A. declare and recognize themselves as merged by means of the absorption into Olivetti S.p.A. with registered office in Ivrea, at Via Jervis no. 77 of Telecom Italia S.p.A. with registered office in Milan, at Piazza degli Affari no. 2

2.) (Share cancellation – Redistribution – Assignment Ratio)—The merger is implemented on the basis of the respective financial statements for the year ended 31 (thirty-one) December 2002 (two thousand and

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two) for both the companies taking part in the merger, according to the procedures that are all indicated in the merger plan and thus, among other things, with the cancellation of 8,856,601,372 (eight billion eight hundred and fifty-six million six hundred and one thousand three hundred and seventy-two) outstanding Olivetti S.p.A. ordinary shares with a par value of EUR 1 (one) each and the contemporaneous issue by the Absorbing Company itself of new shares with a par value of EUR 0.55 (zero point five five) each and regular dividend entitlement to be redistributed and assigned to the shareholders of Olivetti S.p.A. and the shareholders of Telecom Italia S.p.A. other than Olivetti S.p.A.—according to the exchange ratio of 7 (seven) Olivetti (ordinary or savings) shares with a par value of EUR 1 each for each Telecom Italia (ordinary or savings) shares with a par value of EUR 0.55 each—in accordance with the assignment ratios—calculated in accordance with the provisions of the merger plan and the accompanying explanatory reports, rounded down to the sixth decimal place—given below:

(i) for each Olivetti S.p.A. share with a par value of EUR 1 (one) withdrawn and cancelled (except for the 10,958,057 (ten million nine hundred and fifty-eight thousand and fifty-seven) shares cancelled following the exercise of the right of withdrawal) 0.471553 (zero point four seven one five five three) newly-issued ordinary shares of the Absorbing Company with a par value of EUR 0.55 (zero point five five) each;

(ii) for each Telecom Italia S.p.A. ordinary share with a par value of 0.55 (zero point five five) withdrawn and cancelled 3.300871 (three point three zero zero eight seven one) newly-issued ordinary shares of the Absorbing Company with a par value of EUR 0.55 (zero point five five) each will be assigned;

(iii) for each Telecom Italia S.p.A. savings share with a par value of 0.55 (zero point five five) withdrawn and cancelled 3.300871 (three point three zero zero eight seven one) newly-issued savings shares of the Absorbing Company with a par value of EUR 0.55 (zero point five five) each will be assigned;

The ratios referred to above under points (i), (ii) and (iii) are defined as the “assignment ratios”.

Specifically, it is acknowledged that, for the purpose of the overall squaring of the transaction, Banca Akros S.p.A. has waived the right to be assigned a fraction of an ordinary share equal to 0.875762 and a fraction of a savings share equal to 0.133783. so that the Absorbing Company:

—in order to satisfy the above-mentioned assignment ratios will issue—to repeat: in complete accordance with the provisions of the merger plan and therefore, among other things, following the rounding down of the assignment ratios to the sixth decimal place—a total of 10,287,061,839 (ten billion two hundred and eighty-seven million sixty-one thousand eight hundred and thirty-nine) ordinary shares and 5,795,921,069 (five billion seven hundred and ninety-five million nine hundred and twenty-one thousand and sixty-nine) savings shares, all with a par value of EUR 0.55 (zero point five five) each, with the allocation to the legal reserve of a total of EUR 2,715.60 (two thousand seven hundred and fifteen point six zero);

—will therefore have, as of the date the merger becomes effective, a subscribed and paid-up share capital of EUR 8,845,640,599.40 (eight billion eight hundred and forty five million six hundred and forty thousand five hundred and ninety-nine point four zero) divided into 10,287,061,839 (ten billion two hundred and eighty-seven million sixty-one thousand eight hundred and thirty-nine) ordinary shares and 5,795,921,069 (five billion seven hundred and ninety-five million nine hundred and twenty-one thousand and sixty-nine) savings shares.

It is also acknowledged, again in accordance with the merger plan, that:

—a service will be provided to the shareholders of the Companies Participating in the Merger to handle fractions of shares at market prices and at no cost in terms of expenses, stamp duty or commissions, so as to permit the rounding of the number of newly-issued shares to which they are entitled down or up to nearest whole number;

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—in the event that the shares of the Absorbing Company held do not entitle the holder to receive, in accordance with the assignment mechanism referred to above, even one newly-issued share of the Absorbing Company, maintenance of the position of shareholder will be ensured by assigning, free of charge, one share of the Absorbing Company made available by Olivetti International S.A. to the shareholder in question.

3.) (Share assignment)—Olivetti S.p.A. and Telecom Italia S.p.A. will inform interested parties, by publishing a notice in at least one Italian daily newspaper with national circulation, of the procedures to be followed to exchange their shares upon completion of the merger.

As of the date on which the merger becomes effective the ordinary and savings shares assigned in exchange will be listed in the same way as the Olivetti S.p.A. ordinary shares currently outstanding.

4.) (Date as of which the newly-issued Olivetti S.p.A. shares will participate in the profits)—The ordinary and savings shares of the Absorbing Company newly-issued for the exchange will have regular dividend entitlement.

5.) (Savings shares, warrants, bonds and stock options)—No provision has been made in connection with the merger for any special treatment of specific classes of shareholders or of holders of financial instruments other than the shares of the Companies Participating in the Merger, except that:

a) the number of shares obtainable by exercising warrants (Olivetti S.p.A.) and stock options (Olivetti S.p.A. and Telecom Italia S.p.A.) and the conversion ratios of the convertible bond loans issued by Olivetti S.p.A. will be changed when the merger becomes effective to take account of the assignment ratio referred to in Point 2 above, with a corresponding updating of all the respective rules. It is also acknowledged that the maximum amounts of the increases in share capital for the warrants, convertible bonds and stock options referred to in Article 5 of the bylaws that the Absorbing Company will adopt as of the date on which the merger becomes effective and annexed to the merger plan approved by the shareholders’ meetings of the Companies Participating in the Merger is consequently reset, in accordance with the resolution adopted by the Absorbing Company approving the merger plan, in the amount established in the same Article 5 of the bylaws, attached hereto.

b) The savings shares issued by the Absorbing Company in exchange for the savings shares of the Absorbed Company will have the same rights and features as the latter, specified in more detail in the bylaws.

c) The Absorbing Company will succeed to the outstanding bond loans already issued by the Absorbed Company and adopt their rules.

6.) (Effects vis-à-vis third parties, accounting and tax effects)—The merger will become effective, after the registrations referred to in Article 2504-bis of the Civil Code, on 4 (four) August 2003 (two thousand and three).

The transactions of the Absorbed Company will be recorded in the accounts of the Absorbing Company starting from 1 (one) January 2003 (two thousand and three). The tax effects of the merger will also start from the same date.

7.) (Termination of the mandates of the governing bodies of the Absorbed Company)—From the time the merger becomes effective vis-à-vis third parties, the Absorbed Company will cease to exist and so will its governing bodies, without prejudice to the effectiveness of every action taken up to that time in the name and on behalf of the Absorbed Company, even if implemented after the resolutions referred to in the premises or the date of the balance sheets adopted for the purposes of the merger.

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SUCCESSOR EFFECTS

8.) (Succession of the Absorbing Company)—In consequence of the merger, Olivetti S.p.A. (under its new name of Telecom Italia S.p.A., tax code 00488410010) will lawfully succeed, pursuant to Article 2504-bis of the Civil Code, to all the real and movable property, tangible and intangible assets (including equity interests in Italian and foreign companies and entities), possessory and de facto situations, rights, legitimate interests, expectations, privileges, claims, reasons, actions, activities in general, including those pending or in preparation, of the Absorbed Company by way of legal ownership, beneficial ownership, availability or to which it is legitimated vis-à-vis any person including persons in the public sector and whatever the basis may be and even if they were acquired or arose at a date subsequent to the resolutions referred to in the premises or the date of the balance sheets adopted for the purposes of the merger.

All the goods and rights are to be understood as acquired by the Absorbing Company with every appurtenance or accessory, with every accompanying privilege and guarantee, including real security (which will keep its existing validity and priority), right, encumbrance, lien, active or passive servitude, with the movable property and intangible assets of the Absorbed Company transferred in consequence of the merger to the Absorbing Company consisting, merely as an example, of public and private-sector securities, financial assets and products in general, deposits, including bank and postal deposits, security bonds.

Again in consequence of the merger, and correspondingly, the Absorbing Company succeeds ipso jure to all the liabilities, debts, obligations, commitments, charges, encumbrances, personal and real security granted, and liability positions in general of the Absorbed Company and all the legal relationships, conventions, policies, deposits, contracts and final and preliminary agreements (obviously including in the first place the existing contracts and income and expense relationships of the Absorbed Company for the performance of its activities, employment contracts, collaboration contracts, including continuous collaboration, agency agreements, insurance and banking contracts, rental agreements, utility contracts and contracts with suppliers and customers, etc.), including those pending or in preparation, disputes of any kind and in any jurisdiction involving any person and whatever their origin and even if they were acquired or arose at a date subsequent to the resolutions referred to in the premises or the date of the balance sheets adopted for the purposes of the merger.

In particular, the Absorbing Company succeeds and must succeed, vis-à-vis central and local governmental authorities and entities, to all the concessions, registrations, authorizations, permits, licences, exemptions, facilitations and recognitions possessed by the Absorbed Company or that are in the process of being issued or examined, with every consequent right, interest, expectation and, but not limited to, to the licences and authorizations listed in Annex “B”.

The Absorbing Company will therefore continue without interruption in every activity and relationship in Italy and abroad of the Absorbed Company, in the same way as it will succeed, inter alia, to all the principles, procedures and rules of corporate governance of the Absorbed Company.

All the above shall refer both to Italy and abroad.

9.) (Particular assets)—In particular, it is expressly acknowledged (inter alia for the purpose of performing every necessary formal act) that the assets of the Absorbed Company acquired in consequence of the merger also comprise:

a) the equity interests in the limited liability companies listed in Annex “C”;

b) the trademarks and patents listed in the dossier contained in Annex “D”.

It should be noted, however, that the descriptions given in the above-mentioned annexed dossiers and lists are not final, so that the Absorbing Company definitely acquires, without the need for any supplementary acts, which, however, the representatives of the Absorbing Company are authorized to adopt at any time, all and every

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right, even if not mentioned, insofar as it is part of the assets of the Absorbing Company, and in particular the parties reserve the right to draw up an act acknowledging the real property, motor vehicles, registered movable property, logos, patents, intellectual and industrial property rights and the like already included in the patrimony of the Absorbed Company at the date the merger becomes effective vis-à-vis third parties.

10.) (Authorizations)—As of now the representatives and appointees of the Absorbing Company—under its new name of Telecom Italia S.p.A., tax code 00488410010—are expressly authorized to make all the transfers, annotations, transcriptions, changes of name, entries, etc. in favour of the Absorbing Company at or in every local authority office, public register in general, record, private or public-sector office, required in consequence of this instrument for any good, right, licence, permit, concession, authorization, contract, application and anything else already in the name of or referable to the Absorbed Company at the date the merger becomes effective vis-à-vis third parties. In all this the competent keepers of the registers and records and the heads of the respective offices are exonerated from any responsibility for the execution of the merger instrument.

To these ends, it is understood that any indication of goods, rights, assets or liabilities of the Absorbed Company, notwithstanding omissions or inexact data and regardless of any reference thereto, will be, wherever or however made, merely indicative and the Absorbing Company may at any time enforce its rights under this instrument and, for whatever may be necessary, identify in a formal act any relationships or assets of any kind included in the patrimony of the Absorbed Company.

BYLAWS—DIRECTORS

11.) (Bylaws of the Absorbing Company)—When the merger becomes effective as specified in Point 6, the following will become effective:

(i) the amendments to the bylaws (specifically indicated in fact as due to become effective at the time the merger becomes effective) approved by the aforementioned Olivetti S.p.A. shareholders’ meeting of 26 May 2003 (recorded in the minutes with the same date, No. 17530/5296 of my register) and referred to in premise i), and thus, among other things, as stated earlier: the adoption by the Absorbing Company of the new name of “Telecom Italia S.p.A.”, the transfer of the registered office to Milan, at Piazza degli Affari no. 2, and the opening of headquarters in Rome, at Corso d’Italia no. 41, it being acknowledged that the text of the bylaws of the Absorbing Company effective from 4 August 2003 is that (which also specifies the share capital following the assignment transactions referred to in Point 2 above and the updating of the amounts of the share issues for stock options, convertible bonds and warrants) in Annex “E”;

(ii) the appointment as directors of the Absorbing Company for one financial year, and therefore until the approval of the financial statements for 2003 (two thousand and three), and with a total remuneration of EUR 1,860,000 (one million eight hundred and sixty thousand) of:

Marco TRONCHETTI PROVERA, born in Milan on 18 January 1948;

Gilberto BENETTON, born in Treviso on 19 June 1941;

Carlo Orazio BUORA, born in Milan on 26 May 1946;

Umberto COLOMBO, born in Livorno on 20 December 1927;

Giovanni CONSORTE, born in Chieti on 16 April 1948;

Francesco DENOZZA, born in Turin on 5 October 1946;

Luigi FAUSTI, born in Ancona on 9 March 1929;

Guido FERRARINI, born in Genoa on 8 August 1950;

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Natalino IRTI, born in Avezzano (AQ) on 5 April 1936;

Gianni MION, born in Vò (PD) on 6 September 1943;

Pietro MODIANO, born in Milan on 3 November 1951;

Massimo MORATTI, born in Bosco Chiesanuova (VR) on 16 May 1945;

Carlo Alessandro PURI NEGRI, born in Genoa on 11 July 1952;

Riccardo RUGGIERO, born in Napoli on 26 August 1960;

Pier Francesco SAVIOTTI, born in Alessandria on 16 June 1942.

12.) (Registrations and transcriptions concerning the Absorbing Company)—The Absorbing Company is authorized to register, transcribe and enter in the company’s new name of Telecom Italia S.p.A., with registered office in Milan, at Piazza degli Affari no. 2, all real property, registered movable property, security, financial instruments and every other right belonging to the Absorbing Company for which such or analogous formal acts are necessary, to this end the parties reserve the right to draw up an act acknowledging the real property, registered movable property, logos, patents, intellectual and industrial property rights and the like, and any other right included in the patrimony of the Absorbing Company.

All the above shall refer both to Italy and abroad.

EXPENSES AND FEES

13.) Exclusively for the purpose of the receipt of the notary fees, as shown in the balance sheet adopted for the merger, it is acknowledged that the capital and reserves of the Absorbed Company amount to a total of EUR 10,955,275,593 (ten billion nine hundred and fifty-five million two hundred and seventy-five thousand five hundred and ninety-three).

I have read this instrument to the parties, who approve it and sign it together with me, with the reading of the annexes omitted in agreement with them.

It consists of six pages typewritten by a person I trust and completed by me by hand for a total of twenty-two pages and part of the twenty-third.

signed Antonio Tesone

signed Marco Tronchetti Provera

signed Piergaetano Marchetti notary public

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EX-3.2

EXHIBIT 3.2

TELECOM ITALIA CAPITAL

société anonyme

registered office: L-1330 Luxembourg,

12-14, boulevard Grande-Duchesse Charlotte

R.C.S. Luxembourg, section B, number B 77.970

COORDINATED ARTICLES

- INCORPORATION on 27 September 2000, pursuant to a deed of Me Jean-Joseph WAGNER, notary, residing in Sanem, published in the Mémorial C, Recueil des Sociétés et Associations, number 755 of 13 October 2000;

- EXTRAORDINARY GENERAL MEETING of 5 March 2001, pursuant to a deed of Me Jean-Joseph WAGNER, notary, residing in Sanem, published in the Mémorial C, Recueil des Sociétés et Associations, number 222 of 26 March 2001;

- EXTRAORDINARY GENERAL MEETING of 20 December 2002, pursuant to a deed of Me Paul DECKER, notary, residing in Luxembourg-Eich, published in the Mémorial C, Recueil des Sociétés et Associations, number 184 of 20 February 2003.

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Chapter I. Form, Name, Registered Office, Object, Duration

Art. 1. Form, Name.

There is hereby established among the subscribers and all those who may become owners of the shares hereafter created, a company in the form of a société anonyme which will be governed by the laws of the Grand Duchy of Luxembourg and by the present articles of incorporation.

The company will exist under the name of TELECOM ITALIA CAPITAL.

Art. 2. Registered Office.

The company will have its registered office in the City of Luxembourg.

The registered office may be transferred to any other place within the Grand Duchy of Luxembourg by a resolution of the board of directors.

In the event that extraordinary political, economic or social developments occur or are imminent that would interfere with the normal activities of the company at its registered office or with the ease of communication with such office or between such office and persons abroad, the registered office may be temporarily transferred abroad, until the complete cessation of these abnormal circumstances; such temporary measures will have no effect on the nationality of the company, which, notwithstanding the temporary transfer of the registered office, will remain a Luxembourg company. Such declaration of transfer of the registered office shall be made and brought to the attention of third parties by one of the company’s executive bodies having the capacity to bind it with respect to any act of current and daily management.

Art. 3. Object.

The object of the company consists of the financing, in the broadest fashion, of companies and undertakings forming part of the TELECOM ITALIA GROUP.

For this purpose, it may raise funds by issuing bonds, notes and any other instruments and by entering into loan agreements in any kind with other companies of its group, with banks and institutional investors and borrow funds in any other form, the above enumeration being purely enumerative and non exhaustive.

It may also acquire and hold interests in Luxembourg or in foreign companies, as well as administer, manage and develop its portfolio.

It may accomplish all operations of any kind and form, including commercial and financial operations as well as operations with respect to movable property or real estate, which are directly or indirectly in relation with its object.

In a general fashion, the company may carry out any operation which it may deem useful in the accomplishment and development of its object.

Art. 4. Duration.

The company is formed for an unlimited duration.

It may be dissolved at any time by a decision of the general meeting voting with the quorum and majority rules provided by law.

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Chapter II. Capital, Shares

Art. 5. Corporate Capital

The company’s corporate capital is set at two million three hundred thirty-six thousand euro (EUR 2,336,000) divided into one hundred thousand (100,000) shares with a nominal value of twenty-three euro and thirty-six cent (EUR 23.36) per share.

The company’s authorized capital is set at nine million nine hundred ninety-eight thousand and eighty euro (EUR 9,998,080) divided into four hundred twenty-eight thousand (428,000) shares with a nominal value of twenty-three euro and thirty-six cent (EUR 23.36) per share.

Consequently, the board of directors is authorized and empowered to:

- realize any increase of the corporate capital in one or several successive tranches by the issuing of new shares against payments in cash or contributions in kind, by conversion of claims or by acquisition of reserves or share premium; the board of directors may also issue convertible bonds or bonds reimbursable by shares, preferential subscription rights or securities entitling to shares at maturity;

- determine the place and date of the issue or of the successive issues, the issue price including any share premium, the terms and conditions of the subscription of and paying up on the new shares;

- remove or limit the preferential subscription right of the shareholders in case of issue of shares against payment in cash.

This authorization is valid for a period of five years from the date of publication of the minutes of the extraordinary general meeting of 20 December 2002 and it may be renewed by decision of a general meeting of shareholders for those shares of the authorized corporate capital which up to then will not have been issued by the board of directors. Following each increase of the corporate capital, realized and duly documented in the forms provided for by law, the first paragraph of the present article will be modified so as to reflect the actual increase; such modification will be recorded in authentic form by the board of directors or by any person authorized by it for this purpose.

Art. 6. Shares.

The shares are and remain in the form of registered shares.

Chapter III. Board of directors, Supervision

Art. 7. Board of directors.

The company will be administered by a board of directors composed of at least three members who need not be shareholders.

The Directors will be elected by the shareholders’ general meeting, which will determine their number, for a period not exceeding six years, and they will hold office until their successors are elected. They are re-eligible, but they may be removed at any time, with or without cause, by a resolution of the general meeting.

In the event of a vacancy or several vacancies on the board of directors, temporary replacement may be provided for in accordance with the conditions of the law. In this case, the general meeting definitely resolves on the election during its next assembly. The director elected in accordance with the above conditions is nominated for the time needed to reach the term of office of the director he replaces.

Art. 8. Meetings of the board of directors.

The board of directors will appoint from among its members a chairman.

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The board of directors will meet upon call by the chairman. A meeting of the board of directors must be convened if any two directors so require.

The chairman will preside at all general meetings and all meetings of the board of directors, except that in his absence the general meeting or the board of directors shall appoint by a majority vote another director to preside such meeting.

At least eight days’ written notice of each board of directors’ meeting shall be given to each director, except in cases of urgency, the nature and the reasons of such urgency being indicated in the convening notice. The convening notice shall specify the time and place of the meeting as well as the agenda. The notice may be waived by the consent in writing or by telegram of each director. No separate notice is required for meetings held at times and places specified in a schedule previously adopted by resolution of the board of directors.

If all of the directors are present or represented, the meeting may be held without prior notice.

Any director may act at any meeting of the board of directors by appointing in writing or by telegram another director as his proxy.

The board of directors may only deliberate and act validly if the majority of the directors is present or represented.

Decisions will be taken by a majority of the votes of the directors present or represented at such meeting.

In case of urgency, a written decision, signed by all the directors, is proper and valid as though it had been adopted at a meeting of the board of directors which was duly convened and held. Such a decision can be documented in a single document or in several separate documents having the same content and each of them signed by one or several directors.

A meeting of the board of directors may be held by videoconference or by means of a conference call, subject to the conditions that a majority of the board members takes part at such meeting, that the participants may be identified and may intervene and that, in case of a videoconference, they are able to consider the documents and to communicate with each other. In this case, the meeting of the board of directors is considered to be held at the registered office if a director is present at the registered office. In the absence of such meeting at the registered office, the meeting is considered to be held at the place where the president of the board of directors or the person replacing the president is located.

Art. 9. Minutes of meetings of the board of directors.

The minutes of any meeting of the board of directors will be signed by the chairman of the meeting and by any other director. The proxies will remain attached to the minutes.

Copies or extracts of such minutes which are to be produced in judicial proceedings or otherwise will be signed by a director.

Art. 10. Powers of the board of directors.

The board of directors is vested with the powers to perform all acts necessary or useful for accomplishing the company’s object.

All powers not expressly reserved to the general meeting by law or by the present articles of incorporation are in the competence of the board of directors.

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Art. 11. Delegation of powers.

The board of directors may delegate the daily management of the company and the representation of the company within such daily management to one or more directors, officers, executives, employees or other agents who may but need not be shareholders of the company, or delegate special powers or proxies, or entrust determined permanent or temporary functions to persons or agents chosen by it.

Delegation to a director is subject to previous authorisation by the general meeting of shareholders.

Art. 12. Representation of the company.

The company will be bound towards third parties by the joint signature of the president of the board of directors, or of the director to whom the daily management of the company has been delegated, and of any other director, or by the signatures of any persons to whom such signatory power has been delegated by the board of directors, but only within the limits of such power.

Art. 13. Statutory auditors.

The supervision of the company is entrusted to one or several auditors who need not be shareholders.

They will be elected by the general meeting of shareholders, which will determine their number, for a period not exceeding six years, and they will hold office until their successors are elected. They shall be eligible for re-election, but they may be removed at any time, with or without cause, by a resolution of the general meeting.

The mission and the powers of the auditors are those conferred to them by law.

Chapter IV. General meeting of shareholders

Art. 14. Powers of the general meeting.

Any regularly constituted general meeting of shareholders represents the entire body of shareholders.

It has the powers conferred upon it by law or by the present articles of incorporation.

Art. 15. Annual general meeting.

The annual general meeting will be held in the City of Luxembourg at the registered office of the company or at such other place as may be specified in the notice convening the meeting on the first Wednesday of the month of March of each year, at 4:00 p.m..

If such day is a public holiday, the meeting will be held on the next following business day.

Art. 16. Other general meetings.

The board of directors or the statutory auditor may convene other general meetings. Such meetings must be convened if shareholders representing at least one fifth of the company’s capital so require.

General meetings, including the annual general meeting, may be held abroad if, in the judgment of the board of directors, which is final, circumstances of force majeure so require.

Art. 17. Procedure, Vote.

General meetings will meet upon call made in compliance with the law.

If all the shareholders are present or represented and if they state that they have been informed of the agenda of the meeting, the meeting may be held without prior notice.

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Each shareholder may act at any meeting of the shareholders by appointing in writing or telegram as his proxy another person who needs not be a shareholder.

The board of directors may determine all other conditions that must be fulfilled in order to take part in general meetings.

One vote is attached to each share.

Except as otherwise required by law, resolutions will be taken by a simple majority of votes irrespective of the number of shares represented.

Copies or extracts of the minutes of the meeting to be produced in judicial proceedings or otherwise will be signed by the president of the board of directors or by two directors.

Chapter V. Financial year, Distribution of profits

Art. 18. Financial year.

The company’s financial year begins on the first day of January and ends on the last day of December in every year.

Art. 19. Appropriation of profits.

From the annual net profits of the company, five per cent shall be allocated to the reserve required by law. That allocation will cease to be required as soon and as long as such reserve amounts to ten per cent of the subscribed capital of the company.

Upon recommendation of the board of directors, the general meeting of shareholders shall determine how the remainder of the annual net profits will be disposed of. It may decide to allocate the whole or part of the remainder to one or several reserve or provision accounts, to carry it forward to the next following financial year or to distribute it to the shareholders as dividends.

Subject to the conditions fixed by law, the board of directors may pay out an advance payment on dividends. The board of directors fixes the amount and the date of payment of any such advance payment.

Chapter VI. Dissolution, Liquidation

Art. 20. Dissolution, Liquidation.

The company may be dissolved at any time by a decision of the general meeting voting with the same quorum and majority as for the amendment of the articles of incorporation, unless otherwise provided by law.

Should the company be dissolved, the liquidation will be carried out by one or more liquidators appointed by the general meeting of shareholders, which will determine their powers and their compensation.

Chapter VII. Applicable law

Art. 21. Applicable law.

All matters not governed by these articles of incorporation shall be determined in accordance with the law of August 10th, 1915, as amended.

Coordinated articles

Luxembourg-Eich, 16 January 2003

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[signed Paul Decker, notary at Luxembourg-Eich]

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EX-4.1

Exhibit 4.1

CONFIDENTIAL

EXECUTION COPY

TELECOM ITALIA S.P.A.,

as Guarantor

TELECOM ITALIA CAPITAL,

as Issuer

$1,000,000,000 4.000% Series A Guaranteed Senior Global Notes due 2008

$2,000,000,000 5.250% Series B Guaranteed Senior Global Notes due 2013

$1,000,000,000 6.375% Series C Guaranteed Senior Global Notes due 2033

REGISTRATION RIGHTS AGREEMENT

October 22, 2003

Citigroup Global Markets Inc.;

J.P. Morgan Securities Inc.; and

Lehman Brothers Inc.

  each for itself and on behalf of the

  several Initial Purchasers listed

  in Schedule 1 to the Purchase Agreement

c/o J.P. Morgan Securities Inc.

270 Park Avenue

New York, New York 10017

Ladies and Gentlemen:

THIS REGISTRATION RIGHTS AGREEMENT (the “Agreement”) is made and entered into as of October 22, 2003 by and among Telecom Italia S.p.A., a joint stock company (Società per Azioni) organized under the laws of the Republic of Italy (“Telecom Italia” or “Guarantor”), Telecom Italia Capital, a company with limited liability (Société Anonyme) organized under the laws of the Grand Duchy of Luxembourg (“TI Capital” or “Issuer”), on the one hand, and Citigroup Global Markets Inc. (“Citigroup”), J.P. Morgan Securities Inc. (“J.P. Morgan”) and Lehman Brothers Inc. (“Lehman”), for themselves and on behalf of the several initial purchasers listed in Schedule 1 to the Purchase Agreement (as defined below) (the “Initial Purchasers”), on the other hand.

TI Capital proposes, among other things, to issue and sell to the Initial Purchasers $1,000,000,000 aggregate principal amount of its 4.000% Series A Guaranteed Senior Global Notes due 2008, $2,000,000,000 aggregate principal amount of its 5.250% Series B Guaranteed Senior Global Notes due 2013 and $1,000,000,000 aggregate principal amount of its 6.375% Series C Guaranteed Senior Global Notes due 2033 (the “Notes”) upon the terms set forth in a purchase agreement dated of even date herewith (the “Purchase

Agreement”) relating to the initial placement of the Notes (the “Initial Placement”). TI Capital’s obligations under the Notes will be guaranteed (the “Guarantee”) on an unsecured basis by Telecom Italia and the Notes and the Guarantee will be issued pursuant to an indenture to be dated as of October 29, 2003 among Telecom Italia, TI Capital and JP Morgan Chase Bank, as Trustee (the “Indenture”). References herein to the “Securities” refer to the Notes and the Guarantee. To induce the Initial Purchasers to enter into the Purchase Agreement, Telecom Italia and TI Capital hereby agree with Citigroup, J.P. Morgan and Lehman, for the benefit of the Initial Purchasers and the benefit of the registered holders from time to time of Securities and Exchange Securities (as defined below) under the Indenture (each a “Holder” and, together, the “Holders” for as long as such Person holds Securities), as follows:

1. Definitions. As used in this Agreement, the following defined terms shall have the following respective meanings:

“Act” shall mean the Securities Act of 1933, as amended.

“Additional Interest” shall have the meaning set forth in Section 3(c) hereof.

“Affiliate” of or Person “affiliated” with, any specified Person shall mean any Person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such specified Person. For purposes of this definition, “control” of a Person shall mean the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled by” and “under common control with” shall have meanings correlative to the foregoing.

“Broker-Dealer” shall mean any broker or dealer registered as such under the Exchange Act.

“Business Day” shall have the meaning set forth in the Indenture.

“Closing Date” shall mean October 29, 2003.

“Commission” shall mean the United States Securities and Exchange Commission.

“Conduct Rules” shall have the meaning set forth in Section4(s) hereof.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

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“Exchange Offer Registration Period” shall mean the up to 180-day period following the consummation of the Registered Exchange Offer, exclusive of any period during which any stop order shall be in effect suspending the effectiveness of the Exchange Offer Registration Statement.

“Exchange Offer Registration Statement” shall mean an exchange offer registration statement of Issuer and Guarantor on an appropriate form under the Act with respect to the Registered Exchange Offer, all amendments and supplements to such registration statement, including post-effective amendments thereto, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein.

“Exchange Securities” shall mean debt securities of Issuer identical in all material respects to the Securities to be issued under the Indenture, except that: Additional Interest will not be payable in respect of the Exchange Securities; the Exchange Securities will not be entitled to registration rights under this Agreement; interest on the Exchange Securities will accrue from the last day on which interest was paid on the Securities; the non-call period for any optional call could be extended; and the Exchange Securities will not be subject to the restrictions on transfer applicable to the Securities, subject to certain exceptions.

“Exchanging Dealer” shall mean any Holder that is a Broker-Dealer and elects to exchange any Securities that it acquired for its own account as a result of market-making activities or other trading activities (but not directly from Guarantor or Issuer or any Affiliate of Guarantor or Issuer) for Exchange Securities.

“Guarantee” shall have the meaning set forth in the preamble hereto.

“Guarantor” shall have the meaning set forth in the preamble hereto.

“Holder(s)” shall have the meaning set forth in the preamble hereto.

“Indemnified Party” shall have the meaning set forth in Section 7(a) hereof.

“Indemnifying Party” shall have the meaning set forth in Section 7(b) hereof.

“Indenture” shall have the meaning set forth in the preamble hereto.

“Initial Placement” shall have the meaning set forth in the preamble hereto.

“Initial Purchasers” shall have the meaning set forth in the preamble hereto.

“Issuer” shall have the meaning set forth in the preamble hereto.

“Losses” shall have the meaning set forth in Section6(d) hereof.

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“Majority Holders” shall mean, at any given time, the Holders of a majority of the aggregate principal amount of Securities and Exchange Securities, as the case may be, outstanding and registered under a Registration Statement at such time, provided that, for purposes of this Agreement, and in accordance with Section 16 hereof, whenever the consent or approval of Holders of a specified percentage of Securities of a series is required hereunder, Securities held by Issuer, Guarantor or any Affiliates of Issuer or Guarantor shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage or amount.

“Managing Underwriters” shall mean the investment banker or investment bankers and manager or managers that shall administer an underwritten offering.

“Notes” shall have the meaning set forth in the preamble hereto.

“Offering Memorandum “ shall have the meaning set forth in the Purchase Agreement.

“Person” shall mean an individual, trustee, corporation, partnership, limited liability company, joint stock company, trust, unincorporated association, union, business association, firm or other legal entity.

“Prospectus” shall mean the prospectus included in any Registration Statement (including, without limitation, a prospectus that discloses information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A under the Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Securities or the Exchange Securities covered by such Registration Statement, and all amendments and supplements thereto and all material incorporated by reference therein.

“Purchase Agreement” shall have the meaning set forth in the preamble hereto.

“Registered Exchange Offer” shall mean the proposed offer of Issuer and Guarantor to issue and deliver to the Holders of the Securities that are not prohibited by any law or policy of the Commission from participating in such offer a like aggregate principal amount of Exchange Securities in exchange for the Securities.

“Registration Default” shall have the meaning set forth in Section 3(c).

“Registration Default Period” shall have the meaning set forth in Section 3(c).

“Registration Expenses” shall mean any and all expenses incident to performance of or compliance by Issuer and Guarantor with this Agreement, including without limitation: (a) all Commission and any NASD registration, filing and review fees and

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expenses including fees and disbursements of counsel for the placement or sales agent or underwriters in connection with such registration, filing and review, (b) all fees and expenses in connection with the qualification of the Securities and Exchange Securities for offering and sale under the State securities and blue sky laws referred to in Section 4(h) hereof and determination of their eligibility for investment under the laws of such jurisdictions as any Managing Underwriters or the Holders may designate, including any fees and disbursements of counsel for the Holders or underwriters in connection with such qualification and determination, (c) all expenses relating to the preparation, printing, production, distribution and reproduction of each Registration Statement required to be filed hereunder, each Prospectus included therein or prepared for distribution pursuant hereto, each amendment or supplement to the foregoing, the expenses of preparing the Securities and Exchange Securities for delivery and the expenses of printing or producing any underwriting agreements, agreements among underwriters, selling agreements and blue sky or legal investment memoranda and all other documents in connection with the offering, sale or delivery of Securities and Exchange Securities to be disposed of (including certificates representing the Securities and Exchange Securities), (d) messenger, telephone and delivery expenses relating to the offering, sale or delivery of Securities and Exchange Securities and the preparation of documents referred to in clause (c) above, (e) fees and expenses of the Trustee under the Indenture, any agent of the Trustee and any counsel for the Trustee and of any collateral agent or custodian, (f) internal expenses (including all salaries and expenses of Issuer’s and Guarantor’s officers and employees performing legal or accounting duties), (g) fees, disbursements and expenses of counsel and independent certified public accountants of Issuer and Guarantor (including the expenses of any opinions or “cold comfort” letters required by or incident to such performance and compliance), (h) fees, disbursements and expenses of any “qualified independent underwriter” engaged pursuant to Section4(s) hereof, (i) fees, disbursements and expenses of one counsel for the Majority Holders retained in connection with a Shelf Registration, as selected by the Majority Holders (which counsel shall be counsel to the Initial Purchasers unless another nationally recognized law firm is selected by Issuer and Guarantor and is reasonably acceptable to the Majority Holders), (j) any fees charged by securities rating services for rating the Securities and Exchange Securities, and (k) fees, expenses and disbursements of any other persons, including special experts, retained by Issuer and Guarantor in connection with such registration

“Registration Statement” shall mean any Exchange Offer Registration Statement or Shelf Registration Statement that covers any of the Securities or the Exchange Securities pursuant to the provisions of this Agreement, any amendments and supplements to such registration statement, including post-effective amendments (in each case including the Prospectus contained therein), all exhibits thereto and all material incorporated by reference therein.

“Securities” shall mean the Notes and the Guarantees.

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“Shelf Registration” shall mean a registration effected pursuant to Section 3 hereof.

“Shelf Registration Period” shall have the meaning set forth in Section 3(b)(ii) hereof.

“Shelf Registration Statement” shall mean a “shelf” registration statement of Issuer and Guarantor pursuant to the provisions of Section 3 hereof which covers some or all of the Securities or Exchange Securities, as applicable, on an appropriate form under Rule 415 under the Act, or any similar Rule that may be adopted by the Commission, amendments and supplements to such registration statement, including post-effective amendments, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein.

“Telecom Italia” shall have the meaning set forth in the preamble hereto.

“TI Capital” shall have the meaning set forth in the preamble hereto.

“TIA” shall mean the Trust Indenture Act of 1939, as amended.

“Trustee” shall have the meaning set forth in the preamble hereto.

“underwriter” shall mean any Person deemed an “underwriter,” under the Act, of Securities or Exchange Securities in connection with an offering thereof under a Shelf Registration Statement.

“Underwritten Offering” shall mean a registration in which Securities are sold to an underwriter for reoffering to the public.

2. Registered Exchange Offer. (a) To the extent not prohibited by any applicable law or applicable interpretation of the Staff of the Commission, Issuer and Guarantor shall use their respective reasonable best efforts to consummate the Registered Exchange Offer with respect to each series of Securities on or prior to the date that is 365 days after the Closing Date (or, if such 365^th day is not a Business Day, the next succeeding Business Day). For purposes hereof, “consummate” shall mean, with respect to a series of Securities, that the Exchange Offer Registration Statement shall have been declared effective, the period of the Registered Exchange Offer provided in accordance with clause 2(c)(ii) below shall have expired and all Securities of such series validly tendered and not withdrawn in connection with such Registered Exchange Offer shall have been exchanged for Exchange Securities.

(b) Upon the effectiveness of the Exchange Offer Registration Statement, Issuer and Guarantor shall promptly commence the Registered Exchange Offer, it being the

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objective of such Registered Exchange Offer to enable each Holder electing to exchange Securities for Exchange Securities (assuming that such Holder is not an Affiliate of Issuer and Guarantor, acquires the Exchange Securities in the ordinary course of such Holder’s business, is not engaged in and does not intend to engage in and has no arrangements or understandings with any Person to participate in the distribution of the Exchange Securities, is not a Broker-Dealer tendering Securities directly acquired from Guarantor or Issuer for its own account and is not prohibited by any law or policy of the Commission from participating in the Registered Exchange Offer) to trade such Exchange Securities from and after their receipt without any limitations or restrictions under the Act and under state securities or blue sky laws.

(c) In connection with the Registered Exchange Offer, Issuer and Guarantor shall:

(i) mail to each Holder a copy of the Prospectus forming part of the Exchange Offer Registration Statement, together with an appropriate letter of transmittal and related documents, which states, in addition to such other disclosures as are required by applicable law:

(1) that the Registered Exchange Offer is being made pursuant to this Agreement and that all Securities of such series validly tendered and not withdrawn will be accepted for exchange;

(2) the dates of acceptance for exchange (which shall be a period of at least 20 business days from the date such notice is mailed);

(3) that any Security of such series not tendered will remain outstanding and continue to accrue interest, but will not retain any rights under this Agreement, unless the Holder of such Security delivers a notice pursuant to Section 3(a) hereof; and

(4) that Holders electing to have a Security exchanged pursuant to the Registered Exchange Offer will be required to surrender, or make book- entry delivery of, such Security and deliver (including via an agent’s message) the enclosed letters of transmittal to the institution and at the address specified in the notice prior to the close of business on the last day for acceptance of the Registered Exchange Offer.

(ii) keep the Registered Exchange Offer open for not less than 20 business days after the date notice thereof is mailed to the Holders (or longer if required by applicable law);

(iii) if Issuer and Guarantor receive notice from an Exchanging Dealer that such Exchanging Dealer holds Securities acquired for the account of such Exchanging

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Dealer as a result of market making or other trading activities, use their respective reasonable efforts to keep the Exchange Offer Registration Statement continuously effective under the Act, supplemented and amended as required under the Act to ensure that it is available for sales of Exchange Securities by Exchanging Dealers during the Exchange Offer Registration Period;

(iv) utilize the services of a depositary for the Registered Exchange Offer with an address in the Borough of Manhattan in New York City, which may be the Trustee or an Affiliate of the Trustee;

(v) permit Holders to withdraw tendered Securities at any time prior to the close of business, New York City time, on the last Business Day on which the Registered Exchange Offer is open by sending to the entity specified in the Prospectus, a facsimile or letter setting forth the name of such Holder, the principal amount of the Securities delivered for exchange and a statement that such Holder is withdrawing such Holder’s election to have such Securities exchanged;

(vi) prior to effectiveness of the Exchange Offer Registration Statement, if requested by the Commission, provide a supplemental letter to the Commission (A) stating that Issuer and Guarantor are conducting the Registered Exchange Offer in reliance on the position of the Commission in Exxon Capital Holdings Corporation (pub. avail. May 13, 1988) and Morgan Stanley and Co. Incorporated (pub. avail. June 5, 1991); and (B) including a representation that Issuer and Guarantor have not entered into any arrangement or understanding with any Person to distribute the Exchange Securities to be received in the Registered Exchange Offer and that, to the best of Issuer and Guarantor’s information and belief, each Holder participating in the Registered Exchange Offer is acquiring the Exchange Securities in the ordinary course of business and has no arrangement or understanding with any Person to participate in the distribution of the Exchange Securities;

(vii) comply in all respects with all applicable laws relating to the Registered Exchange Offer; and

(viii) prior to effectiveness of the Exchange Offer Registration Statement, shall have caused the Exchange Securities to be fully eligible for holding and trading through the clearing facilities of the Depositary Trust Company.

(d) Promptly after the close of the Registered Exchange Offer, Issuer and Guarantor shall:

(i) accept for exchange all Securities duly tendered and not validly withdrawn pursuant to the Registered Exchange Offer in accordance with the terms of

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the Exchange Offer Registration Statement and letter of transmittal, which shall be an exhibit thereto;

(ii) deliver to the Trustee for cancellation in accordance with sub-Section 4(q) hereof all Securities so accepted for exchange; and

(iii) cause the Trustee promptly to authenticate and deliver to each Holder of Securities a principal amount of Exchange Securities equal to the principal amount of the Securities of such Holder so accepted for exchange.

(e) Issuer and Guarantor shall use their reasonable best efforts to consummate the Registered Exchange Offer with respect to each series as provided in this Section2 and shall comply with the applicable requirements of the Act, the Exchange Act and other applicable laws and regulations in connection with the Registered Exchange Offer. The Registered Exchange Offer shall not be subject to any conditions, other than that the Registered Exchange Offer shall not violate applicable law or any applicable interpretation of the staff of the Commission

(f) Each Holder, by tendering Securities for exchange for Exchange Securities, acknowledges and agrees that any Broker-Dealer and any such Holder using the Registered Exchange Offer to participate in a distribution of the Exchange Securities (x) could not under the Commission’s policy as in effect on the date of this Agreement rely on the position of the Commission in Morgan Stanley and Co. Incorporated (pub. avail. June 5, 1991) and Exxon Capital Holdings Corporation (pub. avail. May 13, 1988), as interpreted in Shearman & Sterling (pub. avail. July 2, 1993) and similar no-action letters; and (y) must comply with the registration and prospectus delivery requirements of the Act in connection with any secondary resale transaction and must be covered by an effective registration statement containing the selling security holder information required by Item 507 and 508 of Regulation S-K, as applicable, under the Act if the resales are of Exchange Securities obtained by such Holder in exchange for Securities acquired by such Holder directly from Issuer and Guarantor or one of its Affiliates. Accordingly, each Holder participating in the Registered Exchange Offer shall be required to represent to Issuer and Guarantor that, at the time of the consummation of the Registered Exchange Offer:

(i) any Exchange Securities received by such Holder will be acquired in the ordinary course of business;

(ii) such Holder will have no arrangement or understanding with any Person to participate in the distribution of the Securities or the Exchange Securities within the meaning of the Act; and

(iii) such Holder is not an Affiliate of Issuer and Guarantor or a Broker-Dealer tendering Securities acquired directly from Guarantor or Issuer.

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(g) If any Initial Purchaser determines, based on an opinion of counsel for the Initial Purchasers, that it is not eligible to participate in the Registered Exchange Offer with respect to the exchange of Securities constituting any portion of an unsold allotment, at the request of such Initial Purchaser, Issuer and Guarantor shall issue and deliver to such Initial Purchaser or the Person purchasing Exchange Securities registered under a Shelf Registration Statement as contemplated by Section 3 hereof from such Initial Purchaser, in exchange for such Securities, a like principal amount of Exchange Securities. Issuer and Guarantor shall use their respective reasonable best efforts to cause the CUSIP Service Bureau to issue the same CUSIP number for such Exchange Securities as for Exchange Securities issued pursuant to the Registered Exchange Offer.

3. Shelf Registration. (a) In the event that (i) Issuer and Guarantor determine that the Registered Exchange Offer provided for in Section 2(a) above is not available or may not be consummated as soon as practicable after the last date for acceptance of the Registered Exchange Offer because it would violate applicable law or the applicable interpretations of the staff of the Commission, (ii) the Registered Exchange Offer is not for any other reason consummated within 365 days after the Closing Date (other than failure of a Holder to tender under circumstances other than those described in the following clause (iii)) or (iii) any Holder or Securities shall notify Issuer and Guarantor prior to the consummation of the Registered Exchange Offer that (A) such Holder was prohibited by law or Commission policy from participating in the applicable Registered Exchange Offer and provides an opinion of counsel to Issuer and Guarantor to that effect or (B) such Holder is a Broker-Dealer and holds Securities or Exchange Securities acquired directly from Issuer and Guarantor or any of its Affiliates, Issuer and Guarantor shall cause to be filed as soon as reasonably practicable after such determination (based on the opinion of counsel referred to in sub-Section 2(g) hereof, date or notice is give to Issuer and Guarantor, as the case may be, a Shelf Registration Statement providing for sale by the Holders of all the Securities or Exchange Securities (except as provided in the next succeeding sentence) and use their reasonable best efforts to have such Shelf Registration Statement declared effective by the Commission. In the event Issuer and Guarantor are required to file a Shelf Registration Statement solely as a result of the matters referred to in clause (iii) of the preceding sentence, Issuer and Guarantor shall file and use their reasonable best efforts to have declared effective by the Commission both an Exchange Offer Registration Statement pursuant to Section 2(a) with respect to all Securities not held by Holders who delivered the notice and a Shelf Registration Statement (which may be a combined Registration Statement with the Exchange Offer Registration Statement or may be a separate Registration Statement) with respect to offers and sales of their Securities or Exchange Securities held by the Holders who delivered the notice.

(b) (i) Nothing in this Section 3 shall require the declaration of effectiveness of a Shelf Registration Statement prior to the deadline for consummating the Registered Exchange Offer set forth in Section2(a) hereof. No Holder shall be entitled to

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have the Securities held by it covered by such Shelf Registration Statement unless such Holder agrees in writing to be bound by all of the provisions of this Agreement applicable to such Holder. With respect to Exchange Securities received by an Initial Purchaser in exchange for Securities constituting any portion of an unsold allotment, Issuer and Guarantor may, if permitted by current interpretations by the Commission’s Staff, file a post-effective amendment to the Exchange Offer Registration Statement containing the information required by Item 507 and 508 of Regulation S-K, as applicable, in satisfaction of their obligations under this sub section with respect thereto, and any such Exchange Offer Registration Statement, as so amended, shall be referred to herein as, and governed by the provisions herein applicable to, a Shelf Registration Statement.

(ii) Issuer and Guarantor shall use their respective reasonable best efforts to keep the Shelf Registration Statement continuously effective, supplemented and amended as required by the Act, in order to permit the Prospectus forming part thereof to be usable by Holders for a period of two years from the original issuance date of the Securities or Exchange Securities or such shorter period that will terminate when all the Securities or Exchange Securities, as applicable, covered by the Shelf Registration Statement have been sold pursuant to the Shelf Registration Statement or cease to be outstanding (in any such case, such period being called the “Shelf Registration Period”). Issuer and Guarantor further agree to supplement or amend the Shelf Registration Statement if required by the rules, regulations or instructions applicable to the registration form used by Issuer and Guarantor for such Shelf Registration Statement or by the Act or by any other rules and regulations thereunder for shelf registration or if reasonably requested by a Holder with respect to information relating solely to such Holder, and to use their respective reasonable best efforts to cause any such amendment to become effective and such Shelf Registration Statement to become usable as soon as practicable thereafter. Issuer and Guarantor agree to furnish to the Holders of Securities copies of any such supplement or amendment promptly after it being used or filed with the Commission.

(iii) No Holder of Securities may include any of its Securities in any Shelf Registration Statement pursuant to this Agreement unless and until such Holder furnishes to Issuer and Guarantor in writing, within 20 days after receipt of a request therefor, the information specified in Item 507 or 508 of Regulation S-K, as applicable, of the Act for use in connection with any Shelf Registration Statement or Prospectus or preliminary Prospectus included therein. No Holder of Securities shall be entitled to additional interest pursuant to Section 3(c) hereof unless and until such Holder shall have provided all such information which is required by rules of the Commission to be included in the Shelf Registration Statement prior to the time it is declared effective. Each selling Holder agrees to promptly furnish additional information required to be disclosed in order to make the information previously furnished to Issuer and Guarantor by such Holder not materially misleading.

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(c) In the event that:

(i) if a Shelf Registration Statement is required to be filed in response to a change in applicable law or the applicable interpretations of the Staff of the Commission, the Shelf Registration Statement is not declared effective within 365 days after the later to occur of publication of the change in law or interpretation and the Closing Date,

(ii) the Registered Exchange Offer is not consummated on or prior to the date that is 365 days after the Closing Date unless applicable law or the applicable interpretations of the staff of the Commission do not permit Issuer and Guarantor to effect the Registered Exchange Offer, or

(iii) after either the Exchange Offer Registration Statement or the Shelf Registration Statement has been declared effective, such Registration Statement thereafter ceases to be effective or usable in connection with the resales of Securities or Exchange Securities in accordance with and during the periods specified in this Agreement

(each such event, a “Registration Default”, and each period during which a Registration Default has occurred and is continuing, a “Registration Default Period”), then, as liquidated damages for such Registration Default, additional interest will accrue on the aggregate principal amount of the Securities and Exchange Securities (in addition to the stated interest on the Securities and Exchange Securities) at a rate of 0.50% per annum from and including the date on which any such Registration Default has occurred to but excluding the date on which all Registration Defaults have been cured (the “Additional Interest”). Such Additional Interest will cease accruing on such Securities or Exchange Securities (x) upon the effectiveness of, if applicable, the Shelf Registration Statement, in the case of clause (i) above, or (y) upon consummation of the Registered Exchange Offer, in the case of clause (ii) above. Notwithstanding the existence of more than one Registration Default with respect to any series of Securities or Exchange Securities, the interest rate applicable to the Securities or Exchange Securities of such series shall not be increased by more than the annual rate of 0.50%.

4. Additional Registration Procedures. In connection with any Shelf Registration Statement and, to the extent applicable, any Exchange Offer Registration Statement, the following provisions shall apply:

(a) Issuer and Guarantor shall:

(i) not less than two Business Days prior to the filing of any Registration Statement or any Prospectus, and not less than one Business Day prior to the filing of any amendment to a Registration Statement or amendment or supplement to a

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Prospectus or any document which is to be incorporated by reference into a Registration Statement or Prospectus after the initial filing of a Registration Statement, provide copies of such document to the Initial Purchasers and their counsel (and, in the case of a Shelf Registration Statement, one counsel on behalf of all of the Holders) and make such representatives of Issuer and Guarantor as shall be reasonably requested by the Initial Purchasers or their counsel (and, in the case of a Shelf Registration Statement, one counsel on behalf of all of the Holders) available for discussion of such document, and shall not at any time file or make any amendment to the Registration Statement, any Prospectus or any amendment of or supplement to a Registration Statement or a Prospectus or any document which is to be incorporated by reference into a Registration Statement or a Prospectus, of which the Initial Purchasers and their counsel (and, in the case of a Shelf Registration Statement, one counsel on behalf of all of the Holders) shall not have previously been advised and furnished a copy or to which the Initial Purchasers or their counsel (and, in the case of a Shelf Registration Statement, one counsel on behalf of all of the Holders) shall reasonably object within one business day of their receipt of such copy; provided that the requirements of this paragraph shall not apply to Guarantor’s documents filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act (“Exchange Act Documents”), or any supplement to any Prospectus based on Exchange Act Documents;

(ii) in the case of an Exchange Offer Registration Statement, to the extent permitted by the Act, include the information in substantially the form set forth in Annex A hereto on the facing page of the Exchange Offer Registration Statement, in substantially the form set forth in Annex B hereto in the forepart of the Exchange Offer Registration Statement in a Section setting forth details of the Exchange Offer, in substantially the form set forth in Annex C hereto in the underwriting or plan of distribution Section of the Prospectus contained in the Exchange Offer Registration Statement, and in substantially the form set forth in Annex D hereto in the letter of transmittal delivered pursuant to the Registered Exchange Offer; and

(iii) in the case of a Shelf Registration Statement, include the names of the Holders that propose to sell Securities or Exchange Securities pursuant to the Shelf Registration Statement as selling security holders and the applicable information required by Item 507 of Regulation S-K as provided by the Holders.

(b) Issuer and Guarantor shall promptly notify the Initial Purchasers, the Holders of Securities or Exchange Securities covered by any Shelf Registration Statement and any Exchanging Dealer under any Exchange Offer Registration Statement that has provided in writing to Issuer and Guarantor a telephone or facsimile number and address for notices, and, if requested by the Initial Purchasers or any such Holder or Exchanging Dealer, shall confirm such advice in writing (which notice pursuant to clauses (ii)-(v) hereof shall be accompanied

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by an instruction to suspend the use of the Prospectus until Issuer and Guarantor shall have remedied the basis for such suspension):

(i) when a Registration Statement or any amendment thereto has been filed with the Commission and when the Registration Statement or any post-effective amendment thereto has become effective;

(ii) of any request by the Commission or any state securities authority for any amendment or supplement to the Registration Statement or the Prospectus or for additional information;

(iii) of the issuance by the Commission or any state securities authority of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose;

(iv) of the receipt by Issuer and Guarantor of any notification with respect to the suspension of the qualification of the securities included therein for sale in any jurisdiction or the initiation of any proceeding for such purpose; and

(v) of the happening of any event that requires any change in the Registration Statement or the Prospectus so that, as of such date, the statements therein are not misleading and do not omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case of the Prospectus, in the light of the circumstances under which they were made) not misleading.

In the case of a Shelf Registration Statement, each Holder and Exchanging Dealer agrees that, upon receipt of any notice from Guarantor or Issuer (a) of the happening of any event of the kind described in paragraph (iii), (iv) or (v) hereof or (b) that they have determined that the continued effectiveness and use of the Shelf Registration Statement would require the disclosure of confidential information or interfere with any equity or debt financing, acquisition, reorganization or other material transaction involving Guarantor, such Holder or Exchanging Dealer will forthwith discontinue disposition of the Securities or Exchange Securities pursuant to a Registration Statement until such Holder’s or Exchanging Dealer’s receipt of the copies of the supplemented or amended Prospectus contemplated by Section 4(a)(i) hereof or of a notice permitting the resumption of disposition of Securities or Exchange Securities, and, if so directed by the Issuer and Guarantor (at Guarantor’s and Issuer’s expense) or destroy all copies in its possession, other than permanent file copies then in its possession, of the Prospectus covering such Securities or Exchange Securities current at the time of receipt of such notice.

If Issuer and Guarantor shall give any such notice to suspend the disposition of Securities or Exchange Securities pursuant to a Registration Statement, Issuer and Guarantor shall extend the period during which the Registration Statement shall be maintained effective

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pursuant to this Agreement by the number of days during the period from and including the date of the giving of such notice to and including the date when the Holders shall have received copies of the supplemented or amended Prospectus necessary to resume such dispositions or advice from Issuer and Guarantor that delivery may be resumed. Issuer and Guarantor may give any such notice only three times during any 365 day period and any such suspensions may not exceed 30 days for each suspension and there may not be more than three suspensions in effect during any 365 day period.

(c) Issuer and Guarantor shall use their respective reasonable best efforts to obtain the withdrawal of any order suspending the effectiveness of any Registration Statement or the qualification of the securities therein for sale in any jurisdiction at the earliest possible time.

(d) Issuer and Guarantor shall (i) use their respective reasonable best efforts to list the Exchange Securities on the Luxembourg Stock Exchange as soon as practicable after consummation of the Registered Exchange Offer; and (ii) file with the relevant authorities such documents and materials as may be required to establish and maintain the listing of the Exchange Securities on the Luxembourg Stock Exchange.

(e) Issuer and Guarantor shall, during the Shelf Registration Period, deliver to each Holder of Securities or Exchange Securities covered by any Shelf Registration Statement, without charge, as many copies of the Prospectus (including each preliminary Prospectus) included in such Shelf Registration Statement and any amendment or supplement thereto as such Holder may reasonably request. Issuer and Guarantor consent to the use of the Prospectus or any amendment or supplement thereto by each of the selling Holders of securities in connection with the offering and sale of the securities covered by the Prospectus, or any amendment or supplement thereto, included in the Shelf Registration Statement.

(f) Issuer and Guarantor shall furnish to each Exchanging Dealer which so requests, without charge, at least one copy of the Exchange Offer Registration Statement and any post-effective amendment thereto, including, upon written request, all material incorporated by reference therein, and all exhibits thereto (including exhibits incorporated by reference therein).

(g) Issuer and Guarantor shall promptly deliver to each Initial Purchaser, each Exchanging Dealer and each other Person required to deliver a Prospectus during the Exchange Offer Registration Period, without charge, as many copies of the Prospectus included in such Exchange Offer Registration Statement and any amendment or supplement thereto as any such Person may reasonably request. Issuer and Guarantor consent to the use of the Prospectus or any amendment or supplement thereto by any Initial Purchaser, any Exchanging Dealer and any such other Person that may be required to deliver a Prospectus following the Registered Exchange Offer in connection with the offering and sale of the

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Exchange Securities covered by the Prospectus, or any amendment or supplement thereto, included in the Exchange Offer Registration Statement.

(h) Prior to the Registered Exchange Offer or any other offering of Securities or Exchange Securities pursuant to any Registration Statement, Issuer and Guarantor shall: (i) arrange, if necessary, for the qualification of the Securities or the Exchange Securities for sale under the laws of such jurisdictions as any Holder or the Managing Underwriters shall reasonably request and will maintain such qualification in effect so long as required, and do any and all other acts and things which may be reasonably necessary or advisable to enable such Holder to consummate the disposition in each such jurisdiction of such Securities owned by such Holder; and (ii) cooperate with such Holders in connection with any filings required to be made with the National Association of Securities Dealers, Inc.; provided that in no event shall Guarantor or Issuer be obligated to qualify to do business in any jurisdiction where it is not then so qualified or to take any action that would subject it to taxation or service of process in suits, other than those arising out of the Initial Placement, the Registered Exchange Offer or any offering pursuant to a Shelf Registration Statement, in any such jurisdiction where it is not then so subject.

(i) Issuer and Guarantor shall cooperate with the Holders to facilitate the timely preparation and delivery of certificates representing Exchange Securities or Securities to be issued or sold pursuant to any Registration Statement free of any restrictive legends and in such denominations (consistent with the Indenture) and registered in such names as Holders may request at least one business day prior to the closing of any Securities.

(j) Upon the occurrence of any event contemplated by subsections (b)(ii) through (v) above, Issuer and Guarantor shall promptly prepare a post-effective amendment to the applicable Registration Statement or an amendment or supplement to the related Prospectus or file any other required document so that, as thereafter delivered to Initial Purchasers, the Prospectus will not include an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. In such circumstances, the period of effectiveness of the Exchange Offer Registration Statement provided for in Section2 hereof and the Shelf Registration Statement provided for in Section3(b) hereof shall each be extended by the number of days from and including the date of the giving of a notice of suspension pursuant to sub-Section 4(b) hereof to and including the date when the Initial Purchasers, the Holders and any known Exchanging Dealer shall have received such amended or supplemented Prospectus pursuant to this Section4; provided that in no event shall Issuer and Guarantor be required to maintain the effectiveness of any Exchange Offer Registration Statement or Shelf Registration Statement beyond the second anniversary of the original issue date of the Securities. As soon as practicable following receipt of notice from Issuer and Guarantor in accordance with Section 4(b) hereof, each Holder and Exchange Dealer agrees to suspend use of the Prospectus until such Holder and Exchange Dealer

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receive copies of the amended or supplemented Prospectus or until it receives written notice from Issuer and Guarantor that the use of the applicable Prospectus may be resumed.

(k) Not later than the effective date of any Registration Statement, Issuer and Guarantor shall provide a CUSIP number for the Securities or the Exchange Securities, as the case may be, registered under such Registration Statement and provide the Trustee with printed certificates for such Securities or Exchange Securities, in a form eligible for deposit with The Depository Trust Company.

(l) Issuer and Guarantor shall comply with all applicable rules and regulations of the Commission and make generally available to its security holders as soon as practicable after the effective date of the applicable Registration Statement an earnings statement satisfying the provisions of Section 11(a) of the Act.

(m) Issuer and Guarantor shall cause the Indenture to be qualified under the TIA in a timely manner in connection with the registration of the Exchange Securities or Securities, as the case may be, and cooperate with the Trustee and the Holders to effect such changes to the Indenture (including, without limitation, changing the Trustee) as may be required for the Indenture to be so qualified in accordance with the terms of the TIA and execute, and use its reasonable best efforts to cause the Trustee to execute, all documents as may be required to effect such changes and all other forms and documents required to be filed with the Commission to enable the Indenture to be so qualified in a timely manner.

(n) Issuer and Guarantor may require each Holder of securities to be sold pursuant to any Shelf Registration Statement to furnish to Issuer and Guarantor such information regarding the Holder and the distribution of such securities as Issuer and Guarantor may from time to time reasonably require for inclusion in such Registration Statement in accordance with Section3(b)(iii) hereof. Issuer and Guarantor may exclude from such Shelf Registration Statement the Securities or Exchange Securities of any Holder that unreasonably fails to furnish such information in accordance with Section 3(b)(iii) hereof.

(o) In the case of any Shelf Registration Statement, Issuer and Guarantor shall enter into such and take all other appropriate actions (including if requested an underwriting agreement in customary form) in order to expedite or facilitate the registration or the disposition of the Securities or Exchange Securities, and in connection therewith, if an underwriting agreement is entered into pursuant to Section 8 hereof, cause the same to contain indemnification provisions and procedures no less favorable than those set forth in Section 7 hereof (or such other provisions and procedures acceptable to the Majority Holders and the Managing Underwriters, if any, with respect to all parties to be indemnified pursuant to Section7 hereof). Any Underwritten Offering shall be conducted pursuant to Section 8 hereof.

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(p) Issuer and Guarantor shall use their respective reasonable best efforts to obtain any consent or approval of each governmental agency or authority, whether federal, state or local, even if not expressly provided for herein, which may be required to effect the Registration Statement, the Exchange Offer and the offering and sale of Exchange Securities by Broker-Dealers during the Exchange Offer Registration Period.

(q) If a Registered Exchange Offer is to be consummated, upon delivery of the Securities by Holders to Issuer and Guarantor (or to such other Person as directed by Issuer and Guarantor) in exchange for the Exchange Securities, Issuer and Guarantor shall mark, or caused to be marked, on the Securities so exchanged that such Securities are being canceled in exchange for the Exchange Securities. In no event shall the Securities be marked as paid or otherwise satisfied.

(r) Intentionally omitted/reserved.

(s) In the event that any Broker-Dealer shall underwrite any Securities or Exchange Securities or participate as a member of an underwriting syndicate or selling group or “assist in the distribution” (within the meaning of the Conduct Rules of the National Association of Securities Dealers, Inc. (the “Conduct Rules”)) thereof, whether as a Holder or as an underwriter, a placement or sales agent or a broker or dealer in respect thereof, or otherwise, Issuer and Guarantor shall assist such Broker-Dealer in complying with the requirements of such Conduct Rules, including, without limitation, by:

(i) if such Conduct Rules shall so require, engaging a “qualified independent underwriter” (as defined in such rules) to participate in the preparation of the Registration Statement, to exercise usual standards of due diligence with respect thereto and, if any portion of the offering contemplated by such Registration Statement is an underwritten offering or is made through a placement or sales agent, to recommend the yield of such Securities or Exchange Securities;

(ii) indemnifying any such qualified independent underwriter to the extent of the indemnification of underwriters provided in Section 7 hereof; and

(iii) providing such information to such Broker-Dealer as may be required in order for such Broker-Dealer to comply with the requirements of such Conduct Rules.

(t) Issuer and Guarantor shall prepare and file with the Commission a Registration Statement on the appropriate form under the Act, which Registration Statement shall (x) be on a form selected by Issuer and Guarantor, (y) in the case of a Shelf Registration, be on a form available for the sale of the Registrable Securities by the selling Holders thereof and (z) comply as to form in all material respects with the requirements of the applicable form and include all financial statements required by the Commission to be filed therewith, and use

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its reasonable best efforts to cause such Registration Statement to become effective and remain effective in accordance with Sections 2 and 3 hereof;

(u) Issuer and Guarantor shall prepare and file with the Commission such amendments and post-effective amendments to each Registration Statement as may be necessary to keep such Registration Statement effective for the applicable period set forth herein and cause each Prospectus to be supplemented by any required prospectus supplement and, as so supplemented, to be filed pursuant to Rule 424 under the Act; and to keep each Prospectus current during the period described under Section 4(3) and Rule 174 under the Act that is applicable to transactions by Broker-Dealers with respect to the Securities or Exchange Securities;

(v) If reasonably requested by any Holder of Securities covered by a Registration Statement, Issuer and Guarantor shall (i) promptly incorporate in a Prospectus supplement or post-effective amendment such information with respect to such Holder as such Holder reasonably requests to be included therein and (ii) make all required filings of such Prospectus supplement or such post-effective amendment as soon as reasonably practicable following the receipt by Issuer and Guarantor of notification of the matters to be incorporated in such filing.

(w) Until the issuance of the Exchange Securities, Issuer and Guarantor shall not, and shall not permit any of their respective Affiliates to, resell any of the Securities that have been acquired by any of them, except for Securities purchased by Issuer, Guarantor or any of their Affiliates and resold in a transaction registered under the Act.

(x) Issuer and Guarantor shall use their respective reasonable best efforts to take all other steps necessary to effect the registration of the Securities or the Exchange Securities, as the case may be, covered by a Registration Statement.

5. Exchanging Dealers. (a) Issuer and Guarantor understand that the Staff of the Commission has taken the position that any Exchanging Dealer may be deemed to be an “underwriter” within the meaning of the Act in connection with any resale of such Exchange Securities.

Issuer and Guarantor understand that it is the position of the Staff of the Commission that if the Prospectus contained in the Exchange Offer Registration Statement includes a plan of distribution containing a statement to the above effect and the meaning by which Exchanging Dealers may resell the Exchange Securities, without naming the Exchanging Dealers or specifying the amount of Exchange Securities owned by them, such Prospectus may be delivered by Exchanging Dealers to satisfy its prospectus delivery obligation under the Act in connection with resales of Exchange Securities for their own accounts, so long as the Prospectus otherwise meets the requirements of the Act.

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(b) In light of the above, notwithstanding the other provisions of this Agreement, Issuer and Guarantor agree that the provisions of this Agreement as they relate to a Shelf Registration shall also apply to an Exchange Offer, and with such reasonable modifications thereto as may be reasonably requested by the Initial Purchasers or one or more Exchanging Dealers pursuant to clause 5(b)(ii) below in order to expedite or facilitate the disposition of any Exchange Securities by Exchanging Dealers consistent with the positions of the Staff recited in Section 5(a) above; provided that:

(i) Issuer and Guarantor shall not be required to amend or supplement the Prospectus contained in the Exchange Offer Registration Statement, as would otherwise be contemplated by Section 3(i), for a period exceeding the Exchange Registration Offer Period and Exchanging Dealers shall not be authorized to deliver, and shall not deliver, such Prospectus after such period in connection with the resales contemplated by this Section; and

(ii) the application of the Shelf Registration procedures set forth in Sections 3 and 4 of this Agreement to a Registered Exchange Offer, to the extent not required by the positions of the Staff of the Commission or the Act and the rules and regulations thereunder, will be in conformity with the reasonable request to Issuer and Guarantor by the Initial Purchasers or with the reasonable request in writing to Issuer and Guarantor by the Broker-Dealers who certify to the Initial Purchasers and in writing that they anticipate that they will be Exchanging Dealers; and provided further that, in connection with such application of the Shelf Registration procedures set forth in Sections 3 and 4 hereof to a Registered Exchange Offer, Issuer and Guarantor shall be obligated (x) to deal only with a single representative of the Exchanging Dealers, which shall be J.P. Morgan Securities Inc., unless it elects not to act as such representative, in which case, the representative shall be selected by a majority of the Exchanging Dealers (y) to pay the reasonable fees and expenses of only one counsel representing the Exchanging Dealers, which shall be counsel to the Initial Purchasers unless another nationally recognized law firm is selected by Exchanging and is reasonably acceptable to the Majority Holders, and (z) to cause to be delivered only one, if any, “cold comfort” letter with respect to the Prospectus in the form existing on the last day of acceptance of the Registered Exchange Offer and with respect to each amendment or supplement thereof, if any, effected during the Exchange Offer Registration Period.

6. Registration Expenses. Issuer and Guarantor shall bear all of the Registration Expenses. To the extent that any Registration Expenses are incurred, assumed or paid by any Holder or any placement or sales agent therefor or underwriter thereof, Issuer and Guarantor shall reimburse such person for the full amount of the Registration Expenses so incurred, assumed or paid promptly after receipt of a request therefor. Notwithstanding the foregoing, the Holders of the Securities and Exchange Securities being registered shall pay all

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agency fees and commissions and underwriting discounts and commissions attributable to the sale of such Securities and Exchange Securities and the fees and disbursements of any counsel or other advisors or experts retained by such Holders (severally or jointly), other than the counsel and experts specifically referred to in the definition of Registration Expenses set forth in Section 1 hereof, whose fees and disbursements shall be borne by Issuer and Guarantor pursuant to the first sentence of this Section 6.

7. Indemnification and Contribution. (a) Issuer and Guarantor jointly and severally agree to indemnify and hold harmless each Holder of Securities or Exchange Securities, as the case may be, covered by any Registration Statement, each Initial Purchaser and, with respect to any Prospectus delivery as contemplated in Section4(g) hereof, each Exchanging Dealer (each, an “Indemnified Party”), the directors, officers, employees and agents of each such Indemnified Party and each Person who controls any such Indemnified Party within the meaning of either the Act or the Exchange Act against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Act, the Exchange Act or other Federal, state or foreign statutory law or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) (A)(i) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in (1) the Registration Statement as originally filed or in any amendment thereof, (2) in any preliminary prospectus or the Prospectus, or in any amendment thereof or supplement thereto, or (3) in any “wrapped” version thereof constituting an offering memorandum under applicable Canadian securities laws, or (ii) arise out of or are based upon the omission or alleged omission to state in any of the documents referred to in clauses (l)-(3) above a material fact required to be stated therein or necessary to make the statements therein not misleading, and (B) result from a final non-appealable judgment of a competent court or a settlement which is made in accordance with sub-section (c) of this Section 7, and jointly and severally agree to reimburse each such Indemnified Party, for any legal or other expenses duly documented and reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred; provided, however, that neither Issuer nor Guarantor will be liable in any case to the extent that any such loss, claim, damage or liability arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to Issuer and Guarantor by or on behalf of any such Indemnified Party relating to such Indemnified Party specifically for inclusion therein; and provided further that, with respect to any untrue statement or alleged prospectus relating to a Shelf Registration Statement, the foregoing indemnity agreement shall not in ure to the benefit of any Indemnified Party (and any Person controlling such Indemnified Party), who failed to deliver a Prospectus to the Person asserting any losses, claims, or damages or liabilities to the extent that any loss, claim, damage or liability resulted from the fact that there was not given or sent to such Person, at or prior to the time of written confirmation of sale of such Securities or Exchange Securities to such person, a copy of the Prospectus (so long as such Prospectus was

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previously provided by Guarantor and or Issuer to the Indemnified Parties) that corrects the misstatement or omission, unless, in each case, such failure to deliver a Prospectus was a result of non-compliance by Issuer or Guarantor with the provisions hereof or of the applicable underwriting or similar agreement, if any. This indemnity agreement will be in addition to any liability which Issuer and Guarantor may otherwise have.

Issuer and Guarantor also jointly and severally agree to indemnify or contribute as provided in Section 7(d) to Losses of each underwriter of Securities or Exchange Securities, as the case may be, registered under a Shelf Registration Statement, their directors, officers, employees or agents and each Person who controls such underwriter on substantially the same basis as that of the indemnification of the Initial Purchasers and the selling Holders provided in this Section 7(a) and shall, if requested by any Holder, enter into an underwriting agreement reflecting such agreement, as provided in Section 4(o) hereof.

(b) Each Holder of securities covered by a Registration Statement, each Initial Purchaser and, with respect to any Prospectus delivery as contemplated in Section 4(g) hereof, each Exchanging Dealer (each, an “Indemnifying Party”) (including, for the avoidance of doubt, each Indemnifying Party that is an underwriter of Securities or Exchange Securities, as the case may be, registered under a Shelf Registration Statement) severally and not jointly agrees to indemnify and hold harmless Issuer and Guarantor, each of their respective directors, each of their respective officers who signs such Registration Statement, and each Person who controls Issuer and Guarantor (if any) within the meaning of either the Act or the Exchange Act any losses, claims, damages or liabilities to which Issuer or Guarantor may become subject, insofar as such losses, damages or liabilities (or actions in respect thereof) (A)(i) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in (1) the Registration Statement as originally filed or in any amendment thereof, (2) in any preliminary prospectus or Prospectus, or in any amendment thereof or supplement thereto, or (3) in any “wrapped” version thereof constituting an offering memorandum under applicable Canadian Securities laws, or (ii) arise out of or are based upon the omission or alleged omission to state in any of the documents referred to in clauses (l)-(3) above a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made therein, in reliance upon and in conformity with written information furnished to Issuer or Guarantor by such Indemnifying Party expressly for use therein and (B) result from a final non-appealable judgment of a competent court or a settlement which is made in accordance with sub-section(c) of this Section 7, and will reimburse Issuer and Guarantor for any legal or other expenses duly documented and reasonably incurred in connection with investigating or defending any such action or claim as such expenses are incurred. This indemnity agreement will be in addition to any liability which any such Indemnifying Party may otherwise have.

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(c) Promptly after receipt by an indemnified party under this Section 7 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 7, notify the indemnifying party in writing of the commencement thereof; but the failure so to notify the indemnifying party will not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided in paragraph (a) or (b) above. In any case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defence thereof, with counsel satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and, after notice from the indemnifying party to such indemnified party of its election so to assume the defence thereof, the indemnifying party shall not be liable to such indemnified party under such subsection for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without the written consent of the indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability arising out of such action or claim and (ii) does not include a statement as to, or an admission of, fault, culpability or a failure to act, by or on behalf of any indemnified party;

(d) In the event that the indemnity provided in paragraph (a) or (b) of this Section is unavailable to or insufficient to hold harmless an indemnified party for any reason, then each applicable indemnifying party shall have a joint and several obligation to contribute to the aggregate losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in connection with investigating or defending same) (collectively “Losses”) to which such indemnified party may be subject in such proportion as is appropriate to reflect the relative benefits received by such indemnifying party, on the one hand, and such indemnified party, on the other hand, from the Initial Placement and the Registration Statement which resulted in such Losses; provided, however, that in no case shall any Initial Purchaser or any subsequent Holder of any Security or Exchange Security be responsible, in the aggregate, for any amount in excess of the purchase discount or commission applicable to such Security, or in the case of a Exchange Security, applicable to the Security that was exchangeable into such Exchange Security, as set forth on the cover page of the Offering Memorandum, nor shall any underwriter be responsible for any amount in excess of the underwriting discount or commission applicable to the securities purchased by such underwriter under the Registration Statement which resulted in such Losses. If the allocation provided by the immediately preceding sentence is unavailable for any reason, the

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indemnifying party and the indemnified party shall contribute in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of such indemnifying party, on the one hand, and such indemnified party, on the other hand, in connection with the statements or omissions which resulted in such Losses as well as any other relevant equitable considerations. Benefits received by Issuer and Guarantor shall be deemed to be equal to the total net proceeds from the Initial Placement (before deducting expenses) as set forth on the cover page of the Offering Memorandum. Benefits received by the Initial Purchasers shall be deemed to be equal to the total purchase discounts and commissions as set forth on the cover page of the Offering Memorandum and benefits received by any other Holders shall be deemed to be equal to the value of receiving Securities or Exchange Securities, as applicable, registered under the Act. Benefits received by any underwriter shall be deemed to be equal to the total underwriting discounts and commissions, as set forth on the cover page of the Prospectus forming a part of the Registration Statement which resulted in such Losses. Relative fault shall be determined by reference to, among other things, whether any alleged untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading relates to information provided by the indemnifying party, on the one hand, or by the indemnified party, on the other hand, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such untrue statement or omission.

(e) The parties agree that it would not be just and equitable if contribution were determined by pro rata allocation (even if the Holders were treated as one entity for such purpose) or any other method of allocation which does not take account of the equitable considerations referred to above. The amount paid or payable by an indemnified party as a result of the Losses referred to in sub-section 7(d) above shall be deemed to include, subject to the limitations set forth above, any legal or other expenses incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of the Section, no Holder shall be required to indemnify or contribute any amount in excess of the amount by which the total price at which Securities or Exchange Securities were sold by such Holder exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. Notwithstanding the provisions of this paragraph (e), no Person guilty of fraudulent misrepresentation (within the meaning of Section 1 l(f) of the Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. The Holders’ obligations to contribute pursuant to this Section are several in proportion to the aggregate principal amount of Securities or Exchange Securities sold by them pursuant to such Registration Statement. The remedies provided for in this sub-Section (e) are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity. For purposes of this Section 7, each Person who controls a Holder, an Initial Purchaser or, with respect to any Prospectus delivery as contemplated in Section 4(g) hereof, each Exchanging Dealer within

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the meaning of either the Act or the Exchange Act and each director, officer, employee and agent of such Holder, Initial Purchaser or Exchanging Dealer shall have the same rights to contribution as such Holder, Initial Purchaser or Exchanging Dealer and each Person who controls Guarantor (if any) or Issuer within the meaning of either the Act or the Exchange Act, each officer of Guarantor or Issuer who shall have signed the Registration Statement and each director of Issuer and Guarantor shall have the same rights to contribution as Issuer and Guarantor, subject in each case to the applicable terms and conditions of this paragraph (e).

(f) The provisions of this Section 7 will remain in full force and effect, regardless of any investigation made by or on behalf of any Holder, Guarantor or Issuer or any of the officers, directors or controlling Persons referred to in this Section 7 hereof, and will survive acceptance of any Exchange Securities, any termination of this Agreement and the sale by a Holder of securities covered by a Registration Statement.

8. Underwritten Offerings and Certain Other Resales. Issuer and Guarantor shall enter into one or more underwriting agreements, engagement letters, agency agreements, “best efforts” underwriting agreements or similar agreements, as appropriate, and take such other actions in connection therewith if any of the Securities or Exchange Securities, as the case may be, covered by any Shelf Registration Statement are to be sold in an Underwritten Offering or if the Majority Holders so request (unless such Holders are permitted to sell pursuant to Rule 144(K) within 90 days thereof) in order to expedite or facilitate the disposition of such Securities or Exchange Securities. The Managing Underwriter(s) shall be selected by the Majority Holders and, if other than one or more of the Initial Purchasers, shall be reasonably satisfactory to Issuer and Guarantor.

(a) In the case of any Underwritten Offering, Issuer and Guarantor shall provide written notice to the Holders of all Securities covered by the applicable Shelf Registration Statement of such Underwritten Offering at least 20 days prior to the filing of a prospectus supplement for such Underwritten Offering. Such notice shall (x) offer each such Holder the right to participate in such Underwritten Offering, (y) specify a date, which shall be no earlier than 10 days following the date of such notice, by which such Holder must inform Issuer and Guarantor of its intent to participate in such Underwriting Offering and (z) include the instructions such Holder must follow in order to participate in such Underwritten Offering. No Holder may participate in any Underwritten Offering under the Agreement unless such Holder (a) agrees to sell such Holder’s Securities or Exchange Securities on the basis provided in any underwriting arrangements approved by the Persons entitled under this Agreement to approve such arrangements and (b) completes and executes all questionnaires, powers of attorneys, confidentiality agreements (if appropriate), indemnities, underwriting agreements, lock-up letters and other documents reasonably required under the terms of such underwriting arrangements.

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(b) Whether or not an agreement of the type referred to in sub-Section (a) of this Section 8 is entered into and whether or not any portion of the offering contemplated by the Shelf Registration is an Underwritten Offering or is made through a placement or sales agent or any other entity, Issuer and Guarantor shall enter into such customary agreements to indemnify any underwriters and their control persons and take all such other customary actions in connection therewith (including those requested by counsel for the Holders) in order to expedite or facilitate the disposition of Securities, as the case may be, and, in such connection, (i) furnish such customary covenants, representations and warranties to the Holders of Securities or Exchange Securities, as the case may be (but such covenants, representations and warranties shall be no more onerous than those set forth in the purchase agreement for the initial placement of the Notes, except as appropriate in light of the nature of the offering), any placement or sales agent therefor and any underwriters of such Securities or Exchange Securities with respect to the business of Issuer and Guarantor and its subsidiaries, the Registration Statement, Prospectus and documents incorporated by reference or deemed incorporated by reference, if any, in each case in substance similar to those set forth in Sections 3 and 4 of the Purchase Agreement but conformed in form, substance and scope to, or supplemented by, the covenants, representations and warranties customarily furnished in connection with an offering of debt securities pursuant to any appropriate agreement or to a registration statement filed in the form applicable to the Shelf Registration, (ii) obtain opinions of counsel to Issuer and Guarantor covering matters similar to those set forth in Section 5 of the Purchase Agreement as well as any other matter that is customarily covered by Issuer’s and Guarantor’s counsel in connection with an offering of debt securities pursuant to a registration statement in the form applicable to the Shelf Registration, addressed to each selling Holder, the placement or sales agents therefor, if any, and the underwriters of Securities or Exchange Securities, if any, (iii) obtain “cold comfort” letters from the independent certified public accountants of Issuer and Guarantor (and, if necessary, any other certified public accountant of any subsidiary of Issuer and Guarantor or any business acquired by Issuer and Guarantor for which financial statements and financial data are or are required to be included in the Registration Statement) addressed to each selling Holder and, the placement or sales agents, if any, therefor and the underwriters of Securities or Exchange Securities, if any, such letters to be in customary form and covering matters of the type customarily covered in “cold comfort” letters in connection with underwritten offerings, (iv) deliver such documents and certificates as may be reasonably requested by counsel for the Majority Holders, the placement or sales agents, if any, therefor or the underwriters, if any, to evidence the continued validity of the representations and warranties of Issuer and Guarantor made pursuant to clause (i) above and to evidence compliance with any customary conditions in an underwriting or similar agreement, and (v) (1) make available for inspection by the Holders of Securities or Exchange Securities to be registered thereunder, the placement or sales agents, if any, therefor or the underwriters, if any, participating in any disposition pursuant to such Shelf Registration Statement, and any attorney retained by the Holders, any such placement or sales agent or any such underwriter all relevant financial and other records, pertinent corporate documents and properties of Issuer and Guarantor during normal business

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hours at the offices where such information is typically kept, and (2) cause the officers, directors and employees of Issuer and Guarantor to supply all relevant information reasonably requested by the Holders, any such placement or sales agent or any such underwriter or attorney in connection with any such Shelf Registration Statement as is customary for similar due diligence examinations during normal business hours at the offices where such information is typically kept, subject to the execution by the Holders or any such underwriter of a reasonable and customary form of confidentiality agreement, that is substantially similar to that entered into by Guarantor in connection with Underwritten Offerings and reasonably satisfactory to Guarantor.

9. No Inconsistent Agreements. Neither Guarantor nor Issuer has, as of the date hereof, entered into, nor shall it, on or after the date hereof, enter into, any agreement with respect to its securities that is inconsistent with the rights granted to the Holders herein or otherwise conflicts with the provisions hereof.

10. Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, qualified, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless Issuer and Guarantor have obtained the written consent of the Majority Holders; provided that, with respect to any matter that directly or indirectly affects the rights of any Initial Purchaser hereunder, Issuer and Guarantor shall obtain the written consent of each of the Initial Purchasers against which such amendment, qualification, supplement, waiver or consent is to be effective. Notwithstanding the foregoing (except the foregoing proviso), a waiver or consent to departure from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders whose Securities or Exchange Securities, as the case may be, are being sold pursuant to a Registration Statement and that does not directly or indirectly affect the rights of other Holders may be given by the Majority Holders, determined on the basis of Securities or Exchange Securities, as the case may be, being sold rather than registered under such Registration Statement.

11. Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, first-class mail, telex, telecopier or air courier guaranteeing overnight delivery:

(a) if to a Holder, at the most current address given by such holder to Issuer and Guarantor in accordance with the provisions of this Section 10, which address initially is, with respect to each Holder, the address of such Holder maintained by the Registrar under the Indentures, with a copy in like manner to the Initial Purchasers;

(b) if to the Initial Purchasers, initially at the respective addresses set forth in the Purchase Agreement; and

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(c) if to Issuer and Guarantor, initially at their address set forth in the Purchase Agreement.

All such notices and communications shall be deemed to have been duly given at the time delivered personally, if personally delivered; two business days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt is acknowledged, if telecopied; and on the next business day, if timely delivered to a nationally recognized air courier guaranteeing overnight delivery.

The Initial Purchasers, Issuer and Guarantor by notice to the other parties may designate additional or different addresses for subsequent notices or communications.

12. Successors and Third Party Beneficiary. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties hereto, including, without the need for an express assignment or any consent by Issuer and Guarantor thereto, subsequent Holders of Securities and the Exchange Securities. Issuer and Guarantor hereby agree to extend the benefits of this Agreement to any Holder of Securities or the Exchange Securities, and any such Holder may specifically enforce the provisions of this Agreement as if an original party hereto.

13. Counterparts. This Agreement may be in signed counterparts, each of which shall be an original and all of which together shall constitute one and the same agreement.

14. Headings. The headings used herein are for convenience only and shall not affect the construction hereof.

15. Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed in the State of New York.

16. Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstances, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired or affected thereby, it being intended that all of the rights and privileges of the parties shall be enforceable to the fullest extent permitted by law.

17. Securities Held by Guarantor or Issuer, etc. Whenever the consent or approval of Holders of a specified percentage of principal amount of Securities or Exchange Securities is required hereunder, Securities or Exchange Securities, as applicable, held by Guarantor or Issuer or their Affiliates (other than subsequent Holders of Securities or Exchange Securities if such subsequent Holders are deemed to be Affiliates solely by reason

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of their holdings of such Securities or Exchange Securities) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage.

18. Submission to Jurisdiction. By the execution and delivery of this Agreement, Issuer and Guarantor submits to the non-exclusive jurisdiction of any federal or state court in the State of New York in any suit or proceeding arising out of or relating to this Agreement or brought under federal or state securities laws. By receiving the rights and benefits under this Agreement, each Holder also submits to the non-exclusive jurisdiction of any federal or state court in the State of New York in any suit or proceeding arising out of or relating to this Agreement or brought under federal or state securities laws. Each of Issuer and Guarantor irrevocably appoints Telecom Italia North America Inc., 745 Fifth Avenue, 27^th Floor, New York, NY 10151, as its authorized agent in the Borough of Manhattan in The City of New York upon which process may be served in any suit or proceeding, and agrees that service of process upon such agent, and written notice of said service to Issuer and Guarantor, by the person serving the same to the address provided in Section 10, shall be deemed in every respect effective service of process upon Issuer and Guarantor in any such suit or proceeding.

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If the foregoing is in accordance with your understanding, please indicate your acceptance of this Agreement by signing in the space provided below.

Very truly yours
TELECOM ITALIA CAPITAL
By:	/S/    ADRIANO TRAPLETTI
	Title: Managing Director

TELECOM ITALIA S.p.A.
By:	/S/    FRANCESCO TANZI
	Title: Attorney-in-Fact

Sch. I-1

Accepted October 22, 2003
CITIGROUP GLOBAL MARKETS INC. J.P. MORGAN SECURITIES INC. LEHMAN BROTHERS INC.
For themselves and on behalf of the several Initial Purchasers listed in Schedule 1 to the Purchase Agreement
Citigroup Global Markets Inc.
By:	/S/    ILLEGIBLE
	Title: Managing Director
J.P. Morgan Securities Inc.
By:	/S/    ILLEGIBLE
	Title: Vice President
Lehman Brothers Inc.
By:	/S/    MARTIN GOLDBERG
	Title: Senior Vice President

Sch. I-2

ANNEX A

Each Broker-Dealer that receives Exchange Securities for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a Broker-Dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Act. This Prospectus, as it may be amended or supplemented from time to time, may be used by a Broker-Dealer in connection with resales of Exchange Securities received in exchange for Securities where such Securities were acquired by such Broker-Dealer as a result of market-making activities or other trading activities. Issuer and Guarantor have agreed that, starting on the Expiration Date (as defined herein) and ending on the close of business 180 days after the Expiration Date, they will make this Prospectus available to any Broker-Dealer for use in connection with any such resale. See “Plan of Distribution.”

A-1

ANNEX B

Each Broker-Dealer that receives Exchange Securities for its own account in exchange for Securities, where such Securities were acquired by such Broker-Dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities. See “Plan of Distribution.”

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ANNEX C

Plan of Distribution

Each Broker-Dealer that receives Exchange Securities for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities. This Prospectus, as it may be amended or supplemented from time to time, may be used by a Broker-Dealer in connection with resales of Exchange Securities received in exchange for Securities where such Securities were acquired as a result of market-making activities or other trading activities. Issuer and Guarantor have agreed that, starting on the Expiration Date and ending on the close of business 180 days after the Expiration Date, they will make this Prospectus, as amended or supplemented, available to any Broker-Dealer for use in connection with any such resale. In addition, until                     , 200    , all dealers effecting transactions in the Exchange Securities may be required to deliver a prospectus.

Issuer and Guarantor will not receive any proceeds from any sale of Exchange Securities by Broker-Dealers. Exchange Securities received by Broker-Dealers for their own account pursuant to the Exchange Offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the Exchange Securities or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such Broker-Dealer and/or the purchasers of any such Exchange Securities. Any Broker-Dealer that resells Exchange Securities that were received by it for its own account pursuant to the Exchange Offer and any broker or dealer that participates in a distribution of such Exchange Securities may be deemed to be an “underwriter” within the meaning of the Act and any profit of any such resale of Exchange Securities and any commissions or concessions received by any such Persons may be deemed to be underwriting compensation under the Act. The Letter of Transmittal states that by acknowledging that it will deliver and by delivering a prospectus, a Broker-Dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Act.

For a period of 180 days after the Expiration Date, Issuer and Guarantor will promptly send additional copies of this Prospectus and any amendment or supplement to this Prospectus to any Broker-Dealer that requests such documents in the Letter of Transmittal. Issuer and Guarantor have agreed to pay all expenses incident to the Exchange Offer (including the expenses of one counsel for the holder of the Securities) other than commissions or concessions of any brokers or dealers and will indemnify the holders of the Securities (including any Broker-Dealers) against certain liabilities, including liabilities under the Act.

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ANNEX D

¨ CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.

Name:                ____________________________________________

Address:            ____________________________________________

                          ____________________________________________

If the undersigned is not a Broker-Dealer, the undersigned represents that it acquired the Exchange Securities in the ordinary course of its business, it is not engaged in, and does not intend to engage in, a distribution of Exchange Securities and it has no arrangements or understandings with any Person to participate in a distribution of the Exchange Securities. If the undersigned is a Broker-Dealer that will receive Exchange Securities for its own account in exchange for Securities, it represents that the Securities to be exchanged for Exchange Securities were acquired by it as a result of market-making activities or other trading activities and acknowledges that it will deliver a prospectus in connection with any resale of such Exchange Securities; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an “underwriter” within the meaning of the Act.

D-1

EX-4.2

Exhibit 4.2

CONFIDENTIAL

EXECUTION COPY

$ 4,000,000,000

TELECOM ITALIA CAPITAL

$1,000,000,000 4.000% Series A Senior Global Notes due 2008

$2,000,000,000 5.250% Series B Senior Global Notes due 2013

$1,000,000,000 6.375% Series C Senior Global Notes due 2033

guaranteed by

TELECOM ITALIA S.P.A.

Purchase Agreement

October 22, 2003

Citigroup Global Markets Inc.;

J.P. Morgan Securities Inc.; and

Lehman Brothers Inc.

  each for itself and on behalf of the

  several Initial Purchasers listed

  in Schedule 1 hereto

c/o J.P. Morgan Securities Inc.

270 Park Avenue

New York, New York 10017

Ladies and Gentlemen:

Telecom Italia Capital, a company with limited liability (Société Anonyme) organized under the laws of the Grand-Duchy of Luxembourg (“Luxembourg”), registered office 12-14, boulevard Grande-Duchesse Charlotte, L-1330

Luxembourg, Register of Commerce and Companies Luxembourg B-77.970 (the “Company”), proposes to issue and sell to the several Initial Purchasers listed in Schedule 1 hereto (the “Initial Purchasers”), $1,000,000,000 principal amount of its 4.000% Series A Senior Global Notes due 2008 (the “Series A Senior Notes”), $2,000,000,000 principal amount of its 5.250% Series B Senior Global Notes due 2013 (the “Series B Senior Notes”), and $1,000,000,000 principal amount of its 6.375% Series C Senior Global Notes due 2033 (the “Series C Senior Notes” and, together with the Series A Senior Notes, and the Series B Senior Notes, the “Securities”). The Securities will be issued pursuant to a base indenture to be dated as of October 29, 2003 and a supplemental indenture, to be dated as of October 29, 2003 (together, such base indenture and such supplemental indenture, the “Indenture”) among the Company, Telecom Italia S.p.A., a joint stock company (Società per Azioni) organized under the laws of the Republic of Italy (the “Guarantor”), and JP Morgan Chase Bank, as trustee (the “Trustee”), and will be guaranteed on an unsecured basis by the Guarantor (the “Guarantee”). The Guarantor was formerly called Olivetti S.p.A. (“Olivetti”). The Guarantor changed its name on August 4, 2003 upon effectiveness of the merger of Telecom Italia S.p.A. (“Old Telecom Italia”), a subsidiary of the Guarantor, with and into the Guarantor.

The Securities will be sold to the Initial Purchasers without being registered under the Securities Act of 1933, as amended (the “Securities Act”), in reliance upon exemptions therefrom. The Company and the Guarantor have prepared a preliminary offering memorandum dated October 17, 2003 (the “Preliminary Offering Memorandum”) and will prepare an offering memorandum dated the date hereof (the “Offering Memorandum”) setting forth information concerning the Company, the Guarantor and the Securities. Copies of the Preliminary Offering Memorandum have been, and copies of the Offering Memorandum will be, delivered by the Company and the Guarantor to the Initial Purchasers pursuant to the terms of this Agreement. The Company and the Guarantor hereby confirm that they have authorized the use of the Preliminary Offering Memorandum and the Offering Memorandum in connection with the offering and resale of the Securities by the Initial Purchasers in the manner contemplated by this Agreement. Capitalized terms used but not defined herein shall have the meanings given to such terms in the Offering Memorandum. References herein to the Preliminary Offering Memorandum and the Offering Memorandum shall be deemed to refer to and include any document incorporated by reference therein, including the annual report of the Guarantor for the fiscal year ended December 31, 2002 filed with the United States Securities and Exchange Commission (the “Commission”) pursuant to Section 13(a) or 15(d) of the United States Exchange Act of 1934, as amended (the “Exchange Act”) and any supplement or amendment thereto.

Holders of the Securities and the Initial Purchasers and their direct and indirect transferees will be entitled to the benefits of a Registration Rights

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Agreement, dated as of the date hereof (the “Registration Rights Agreement”), pursuant to which the Company and the Guarantor have agreed to file one or more registration statements with the Commission providing for the registration under the Securities Act of the Securities or the Exchange Securities referred to (and as defined) in the Registration Rights Agreement.

The Securities, the Exchange Securities and the Guarantee are more fully described in the Preliminary Offering Memorandum and the Offering Memorandum as defined in Section 3(a) hereof. The Securities and the Exchange Securities will be issued in accordance with the Indenture.

Application has been made to list the Securities on the Luxembourg Stock Exchange (the “Exchange”) as soon as practicable after the Closing Date. As soon as practicable after consummation of the exchange of the Securities for the Exchange Securities, application will be made to list the Exchange Securities issued in accordance with the Registration Rights Agreement on the Exchange.

The Company and the Guarantor hereby confirm their agreement with the several Initial Purchasers concerning the purchase and resale of the Securities, as follows:

1. Purchase and Resale of the Securities, (a) The Company agrees to issue and sell the Securities to the several Initial Purchasers as provided in this Agreement, and each Initial Purchaser, on the basis of the representations, warranties and agreements set forth herein and subject to the conditions set forth herein, agrees, severally and not jointly, to purchase from the Company the respective principal amount of Securities set forth opposite such Initial Purchaser’s name in Schedule 1 hereto at a price equal to 99.603% of the principal amount of Series A Senior Notes (issue price of 99.953% of the principal amount less a management and underwriting commission and selling concession of 0.350% of the principal amount), 99.292% of the principal amount of Series B Senior Notes (issue price of 99.742% of the principal amount less a management and underwriting commission and selling concession of 0.450% of the principal amount) and 98.683% of the principal amount of Series C Notes (issue price of 99.558% of the principal amount less a management and underwriting commission and selling concession of 0.857% of the principal amount), in each case plus accrued interest, if any, from October 29, 2003 to the Closing Date (as defined in section 2(a) hereof). The Company will not be obligated to deliver any of the Securities except upon payment for all the Securities to be purchased as provided herein.

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(b) The Company understands that the Initial Purchasers intend to offer the Securities for resale on the terms set forth in the Offering Memorandum. Each Initial Purchaser, severally and not jointly, represents, warrants and agrees that:

(i) Each Initial Purchaser (and any affiliate of such Initial Purchaser that participates in the offer of the Securities for resale contemplated hereby pursuant to sub-section (d) hereof) is a qualified institutional buyer within the meaning of Rule 144A under the Securities Act (a “QIB”) and an accredited investor (“Al”) within the meaning of Rule 501 (a) of Regulation D under the Securities Act (“Regulation D”) or is located outside the United States and will resell any Securities in the United States through an affiliate that is a QIB which is also an At,

(ii) Neither such Initial Purchaser nor any of the affiliates of such Initial Purchaser that participate in the offer of the Securities for resale contemplated hereby pursuant to sub-section (d) hereof has solicited offers for, or offered or sold, and will not solicit offers for, or offer or sell, the Securities by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) of Regulation D or in any manner involving a public offering within the meaning of Section 4(2) of the Securities Act; and

(iii) Neither such Initial Purchaser nor any of the affiliates of such Initial Purchaser that participate in the offer of the Securities for resale contemplated hereby pursuant to sub-section (d) hereof has solicited offers for, or offered or sold, and will not solicit offers for, or offer or sell, the Securities as part of their initial offering except:

(A) within the United States to persons whom such Initial Purchaser or affiliate reasonably believes to be QIBs in transactions pursuant to Rule 144A under the Securities Act (“Rule 144A”) and in connection with each such sale, such Initial Purchaser and such affiliate has taken or will take reasonable steps to ensure that the purchaser of the Securities is aware that such sale is being made in reliance on Rule 144A; or

(B) in accordance with the restrictions set forth in Annex A hereto.

(c) Each Initial Purchaser and each affiliate of such Initial Purchaser that participates in the offer of the Securities for resale contemplated hereby pursuant to sub-section (d) hereof acknowledges and agrees that the Company and the Guarantor and, for purposes of the opinions to be delivered to the Initial Purchasers pursuant to Sections 5(b) and 5(g), counsel for the Initial Purchasers and counsel for the Company and the Guarantor, respectively, may rely upon the accuracy of the

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representations and warranties of the Initial Purchasers and the affiliates of such Initial Purchasers that participate in the offer for resale contemplated hereby pursuant to sub-section (d) hereof, and compliance by the Initial Purchasers and such affiliates with their agreements, contained in paragraph (b) above (including Annex A hereto), and such Initial Purchaser and such affiliate hereby consents to such reliance.

(d) The Company acknowledges and agrees that the Initial Purchasers may offer and sell Securities to or through any affiliate of an Initial Purchaser and that any such affiliate may offer and sell Securities purchased by it to or through any Initial Purchaser.

2. Payment and Delivery. (a) Payment for and delivery of the Securities will be made at the offices of Sullivan & Cromwell LLP, 1 New Fetter Lane, London EC4A 1AN, England at 10:00 A.M., New York City time, on October 29, 2003, or at such other time or place on the same or such other date, not later than the fifth business day thereafter, as the Initial Purchasers and the Company may agree upon in writing. The time and date of such payment and delivery is referred to herein as the “Closing Date”.

(b) Payment for the Securities shall be made by wire transfer in immediately available funds to the account(s) specified by the Company to the Initial Purchasers against delivery to the nominee of The Depository Trust Company, for the account of the Initial Purchasers, of one or more global notes representing the Securities (collectively, the “Global Notes”), with any transfer taxes payable in connection with the sale of the Securities duly paid by the Company. The Global Notes will be made available for inspection by the Initial Purchasers not later than 1:00 P.M., New York City time, on the business day prior to the Closing Date.

3. Representations and Warranties of the Company and the Guarantor. Each of the Company and the Guarantor jointly and severally represents and warrants to, and agrees with, each Initial Purchaser that, as of the date hereof and as of the Closing Date:

(a) General. The Preliminary Offering Memorandum, as of its date, did not, and the Offering Memorandum, in the form first used by the Initial Purchasers to confirm sales of the Securities and as of the Closing Date, will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company or the Guarantor by any

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Initial Purchaser expressly for use in the Preliminary Offering Memorandum and the Offering Memorandum;

(b) Document Incorporated by Reference into the Preliminary Offering Memorandum or the Offering Memorandum. The annual report (the “Annual Report”) of Old Telecom Italia on Form 20-F for the year ended December 31, 2002 (File No. 1-3882), incorporated by reference in the Offering Memorandum, when it was filed with the Commission on June 26, 2003, conformed in all material respects to the requirements of the Exchange Act and the rules and regulations of the Commission thereunder. The Annual Report did not as of its date contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;

(c) Certain Changes. Since June 30, 2003: (i) neither the Guarantor nor its Material Subsidiary (as defined in sub-section (d) below) has sustained any loss or interference with its business, which loss or interference is material to the Guarantor and its Material Subsidiary taken as a whole, from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth in the Offering Memorandum; (ii) except as otherwise disclosed in the Offering Memorandum there has not been any material change in the share capital of the Guarantor or consolidated long -term debt of the Guarantor and its Material Subsidiary; (iii) there has not been any material adverse change or, to the best of the Issuer’s or the Guarantor’s knowledge, any development involving a prospective material adverse change, in or affecting the business, the current or future financial position, shareholders’ equity or results of operations of the Guarantor and its Material Subsidiary taken as whole (a “Material Adverse Effect”) otherwise than as set forth in the Offering Memorandum;

(d) Due Incorporation, Valid Existence and Good Standing. The Guarantor is a joint stock company (Società per Azioni) duly organized and validly existing under the laws of the Republic of Italy; the Company is a company with limited liability for an unlimited duration (Societè Anonyme) duly organized and validly existing under the laws of Luxembourg; each of the Company and the Guarantor has the power and authority to own, lease and operate its properties and to conduct its business; each of the Company and the Guarantor has been duly qualified as a foreign corporation for the transaction of business and, to the extent applicable, is in good standing under the laws of each other jurisdiction in which it owns, leases or operates properties or conducts business so as to require such qualification except where the failure to be so qualified or be

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in good standing would not have a Material Adverse Effect. Telecom Italia Mobile S.p.A., a subsidiary of the Guarantor (the “Material Subsidiary”), is a company duly organized and validly existing under the laws of Italy; the Material Subsidiary has the power and authority to own, lease and operate its properties and to conduct its business;

(e) Due Authorization, Execution and Delivery. Each of the Company and the Guarantor has the corporate power to enter into and perform, and has taken all necessary action to authorize the entry into, performance and delivery of, this Agreement, the Registration Rights Agreement, the Indenture and the transactions contemplated hereby and thereby. Each of this Agreement, the Registration Rights Agreement and the Indenture has been duly and validly authorized, executed and delivered by the Company and the Guarantor, and constitutes a valid and binding obligation of the Company and the Guarantor enforceable in accordance with its terms, subject as to enforcement to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles (collectively, the “Enforceability Exceptions”);

(f) Capitalization. Each of the Guarantor and the Company has an authorized capitalization as set forth in the Offering Memorandum, and all of the issued shares of capital stock of each of the Guarantor and the Company have been duly and validly issued and are fully paid;

(g) No Transfer Restrictions. Except as described in the Offering Memorandum under the captions “Plan of Distribution - Selling Restrictions - Luxembourg”, there are no restrictions on transfers of the Securities and the Exchange Securities under the laws of Luxembourg.

(h) Validity of the Securities, the Guarantee and the Indenture. The Securities have been duly authorized by the Company, and (assuming the due authentication by the Trustee) when issued, executed by any duly authorized representative of the Company and delivered pursuant to this Agreement, such Securities will have been duly executed, authenticated, issued and delivered and will constitute valid and legally binding obligations of the Company, entitled to the benefits provided by the Indenture; the Guarantee has been duly authorized by the Guarantor, and, when Securities are issued and delivered by the Company pursuant to this Agreement, the Guarantee will have been duly endorsed thereon and will constitute a valid and legally binding obligation of the Guarantor with respect to such Securities, enforceable in accordance with its terms, subject as to enforcement to the Enforceability Exceptions; each of the Indenture, the Securities and the Guarantee conforms to the respective descriptions thereof contained in the Offering Memorandum;

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(i) The Exchange Securities. On the Closing Date: (a) the Exchange Securities will have been duly authorized by the Company and, when duly executed, authenticated, issued and delivered as contemplated by the Registration Rights Agreement, will be duly and validly issued and outstanding and will constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms, subject as to enforcement to the Enforceability Exceptions, and will be entitled to the benefits of the Indenture; and (b) the guarantee with respect to the Exchange Securities will have been duly authorized by the Guarantor, and, when the Exchange Securities are issued and delivered by the Company pursuant to the Registration Rights Agreement, the guarantee will have been duly endorsed thereon and will constitute a valid and legally binding obligation of the Guarantor with respect to the Exchange Securities, enforceable in accordance with its terms, subject as to enforcement to the Enforceability Exceptions. The Exchange Securities will conform to the descriptions thereof contained in the Offering Memorandum and will be identical in all material respects to the Securities issued under the Indenture except as set forth in the Registration Rights Agreement.

(j) Descriptions of the Registration Rights Agreement. The Registration Rights Agreement conforms in all material respects to the description thereof contained in the Offering Memorandum;

(k) No Conflicts. The issue and sale of the Securities and the Exchange Securities by the Company and the compliance by the Guarantor and the Company with all of the provisions of the Securities and the Exchange Securities issued by the Company, the Guarantee, the Indenture, the Registration Rights Agreement and this Agreement, and the consummation of the transactions herein and therein contemplated:

(i) will not conflict with, or result in a violation of the provisions of, or constitute a default under, any agreement or instrument to which the Guarantor and the Company or the Material Subsidiary is a party or by which any of them is bound or to which any of their assets is subject, or any license, permit or authorization held by or issued to the Guarantor and the Company or the Material Subsidiary except for any such conflict, violation or default that would not have a Material Adverse Effect, or impair the ability of the Guarantor and the Company to consummate, or otherwise materially adversely affect, the transactions contemplated hereby;

(ii) will not result in any violation of (A) the Articles of Association or Articles of Incorporation of the Guarantor and the Company or any of the Material Subsidiary or (B) any provision of

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law, judgment or decree of any Governmental Authority (as defined below) except for any such violation under (B) that would not have a Material Adverse Effect, or impair the ability of the Guarantor and the Company to consummate, or otherwise materially adversely affect, the transactions contemplated hereby; and

(iii) do not require any consent, authorization, order or registration or qualification (each a “Governmental Authorization”) of or with any court, governmental, regulatory or stock exchange authority having jurisdiction over the Guarantor and the Company or the Material Subsidiary or any of their respective assets, or over the offer and sale of the Securities and, if applicable, the Guarantee (each a “Governmental Authority”), except such Governmental Authorizations (A) as may be required with respect to the Exchange Securities (including the related guarantee) under (i) the Securities Act and applicable state securities or Blue Sky laws, as contemplated by the Registration Rights Agreement, or (ii) applicable Luxembourg law and (B) that have been duly obtained and which are in full force and effect or are not required to consummate the transactions contemplated hereby and copies of which have been furnished to the Initial Purchasers;

(l) No Default. None of the Guarantor and the Company or the Material Subsidiary is (A) in violation of its Articles of Association or Articles of Incorporation or (B) in default in the performance or observance of any obligation contained in any agreement or instrument to which it is a party or by which it or any of its assets may be bound except for any such default under (B) that would not have a Material Adverse Effect or impair the ability of the Guarantor and the Company to consummate, or otherwise materially adversely affect, the transactions contemplated hereby;

(m) Certain Statements in the Offering Memorandum. The statements set forth in the Offering Memorandum under the caption “Description of Notes and Guarantees”, insofar as they purport to constitute a summary of the terms of the Securities, the Exchange Securities and the Guarantee and under the captions “Taxation” and “Plan of Distribution” in the Offering Memorandum insofar as they purport to describe the provisions of the laws and documents referred to therein, are accurate and complete in all material respects;

(n) Legal and Governmental Proceedings. Other than as set forth in the Offering Memorandum, there are no, and during the period from the last audited financial statements contained, attached or incorporated by reference in the Offering Memorandum to the date hereof

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there have not been, any legal or governmental proceedings pending to which the Company, the Guarantor or the Material Subsidiary is a party or of which any asset of the Company, the Guarantor or the Material Subsidiary is the subject which, if determined adversely to the Company, the Guarantor or the Material Subsidiary, as the case may be, would individually or in the aggregate have a Material Adverse Effect; and, to the best of the Guarantor’s knowledge, no such proceedings are threatened in writing by any Governmental Authority or threatened in writing by others;

(o) Investment Company Act. Neither the Company nor the Guarantor is and, after giving effect to the offering and sale of the Securities and after application of the proceeds therefrom, will be required to register as an “investment company”, as such term is defined in the United States Investment Company Act of 1940, as amended (the “Investment Company Act”);

(p) Governmental Authorization. No Governmental Authorization of or with any Governmental Authority is required to effect payments of principal, premium, if any, and interest on the Securities and the Exchange Securities;

(q) No Currency Restrictions; No Withholding Taxes. All interest on the Securities, the Exchange Securities or the Guarantee (if applicable) may under the current laws or regulations applicable in Luxembourg and the Republic of Italy, as the case may be, be paid in any currency in which a particular issuance of Securities is denominated, and may be freely transferred out of Luxembourg and the Republic of Italy; except as described in the Offering Memorandum, such interest will not be subject to withholding or other taxes under the laws and regulations applicable in Luxembourg, for non Luxembourg residents for tax purposes, and/or the Republic of Italy and is otherwise free of any other tax, withholding or deduction in Luxembourg, for non Luxembourg residents for tax purposes, and/or the Republic of Italy and without the necessity of obtaining any Governmental Authorization in Luxembourg or the Republic of Italy;

(r) No Stamp or Other Taxes. Other than as set forth in the Offering Memorandum, no stamp or other issuance or transfer taxes or duties are payable by or on behalf of the Initial Purchasers to Luxembourg or the Republic of Italy or any political subdivision or taxing authority thereof or therein in connection with (A) the issuance, sale and delivery by either the Guarantor or the Company to or for the respective accounts of the Initial Purchasers of the Securities and the Guarantee or (B) the sale and delivery outside Luxembourg and the Republic of Italy by the Initial Purchasers of the Securities and the Guarantee;

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(s) Licenses, Approvals and Patents. The Guarantor and the Material Subsidiary have all licenses, permits, authorizations, approvals and orders and other concessions (collectively the “Licenses”), including those of and from all Governmental Authorities, that are material to the Guarantor and the Material Subsidiary taken as a whole with respect to owning or leasing their properties and conducting their respective business as described in the Offering Memorandum, except to the extent that the failure to possess any such Licenses would not have a Material Adverse Effect;

(t) No Labor Dispute. Other than as set forth in the Offering Memorandum, no labor dispute, strike or other collective bargaining measure currently exists or is currently threatened by any employees of the Guarantor or the Material Subsidiary, or any representative of such employees, which, if resolved to the detriment of the Guarantor or the Material Subsidiary, carried out or implemented, would have a Material Adverse Effect;

(u) No Stabilization. None of the Company, the Guarantor or the Material Subsidiary has taken, directly or indirectly, any action which was designed to or which has constituted or which might reasonably be expected to cause or result in stabilization or manipulation of the price of any security of the Company or the Guarantor to facilitate the sale or resale of the Securities;

(v) Financial Statements. The consolidated financial statements of the Guarantor included in the Offering Memorandum present fairly the consolidated financial position and consolidated results of operations of the Guarantor and its subsidiaries as at the respective dates or for the respective periods to which they apply and such financial statements have been prepared in accordance with generally accepted accounting principles in the Republic of Italy (“Italian GAAP”) applied on a consistent basis throughout the respective periods involved, except to the extent, if any, otherwise stated therein; the consolidated financial statements of Old Telecom Italia included, attached or incorporated by reference in the Offering Memorandum present fairly the consolidated financial position and consolidated results of operations of Old Telecom Italia and its subsidiaries as at the respective dates or for the respective periods to which they apply and such financial statements have been prepared in accordance with generally accepted accounting principles in the Republic of Italy (“Italian GAAP”) applied on a consistent basis throughout the respective periods involved, except to the extent, if any, otherwise stated therein; the discussion of material differences between Italian GAAP and the accounting principles, practices and methods generally accepted in the United States (“U.S. GAAP”) and the reconciliation of the consolidated

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financial statements of each of the Guarantor and Old Telecom Italia to U.S. GAAP, as set forth in the Offering Memorandum, comply in all material respects with the requirements of the rules and regulations of the Commission relating thereto and present fairly the material variations between Italian GAAP and U.S. GAAP required to be so presented; the other financial information (but not including any pro forma financial information or statistical or operating data) included in the Offering Memorandum has been derived from the accounting records of the Guarantor and Old Telecom Italia and their respective subsidiaries and presents fairly the information shown thereby; and the pro forma financial information and related notes thereto incorporated by reference in the Offering Memorandum have been prepared in accordance with the Commission’s rules and guidance with respect to pro forma financial information, and the assumptions underlying the pro forma financial information included or incorporated by reference in the Offering Memorandum are reasonable and are set forth in the Offering Memorandum or incorporated by reference therein;

(w) Independent Public Accountants. Ernst & Young S.p.A. and PriceWaterhouseCoopers S.p.A., who have certified the consolidated financial statements of the Guarantor and Old Telecom Italia, respectively, are, independent public accountants within the meaning of the Securities Act and Rule 2-01 of Regulation S-X thereunder;

(x) Regulation S. None of the Company, the Guarantor nor any of their affiliates, nor any person acting on its or their behalf (other than the Initial Purchasers or any affiliates thereof) or any such affiliate’s behalf have engaged or will engage in any directed selling efforts within the meaning of Rule 903 of Regulation S under the Securities Act (“Regulation S”) with respect to the Securities and each of them has complied and will comply with the offering restrictions requirement of such Regulation;

(y) Rule 144A Eligibility. On the Closing Date, the Securities will not be of the same class as securities listed on a national securities exchange registered under Section 6 of the Exchange Act or quoted in an automated inter-dealer quotation system; and the Offering Memorandum, contains or will contain all the information that, if requested by a prospective purchaser of the Securities, would be required to be provided to such prospective purchaser pursuant to Rule 144A(d)(4) under the Securities Act;

(z) No Integration. None of the Company, the Guarantor or any of its affiliates (as defined in Rule 501(b) of Regulation D) has, directly or through any agent, sold, offered for sale, solicited offers to buy or otherwise negotiated in respect of, any security (as defined in the

12

Securities Act), that is or will be integrated with the sale of the Securities in a manner that would require registration of the Securities under the Securities Act;

(aa) No General Solicitation. None of the Company, the Guarantor or any of its affiliates or any other person acting on its or their behalf (other than the Initial Purchasers, as to which no representation is made) has solicited offers for, or offered or sold, the Securities by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) of Regulation D or in any manner involving a public offering within the meaning of Section 4(2) of the Securities Act;

(bb) Securities Law Exemptions. Assuming the accuracy of the representations and warranties of the Initial Purchasers and their affiliates contained in Section 1(b) (including Annex A hereto) and their compliance with their agreements set forth therein, it is not necessary, in connection with the issuance and sale of the Securities to the Initial Purchasers and the offer, resale and delivery of the Securities by the Initial Purchasers and their affiliates in the manner contemplated by this Agreement and the Offering Memorandum, to register the Securities under the Securities Act or to qualify the Indenture under the United States Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”); and

(cc) Forward-Looking Statements. No forward-looking statement (within the meaning of Section 27(a) of the Securities Act and Section 21(e) of the Exchange Act) contained or incorporated by reference in the Offering Memorandum has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith.

4. Further Agreements of the Company and the Guarantor. The Company and the Guarantor jointly and severally covenant and agree with each Initial Purchaser that:

(a) Delivery of Copies. The Company and the Guarantor will deliver to the Initial Purchasers as many copies of the Preliminary Offering Memorandum (including all amendments and supplements thereto) as the Initial Purchasers may reasonably request and, for a period of 90 days following the initial completion of the distribution of Securities, as many copies of the Offering Memorandum (including all amendments and supplements thereto) as the Initial Purchasers may reasonably request;

(b) Amendments or Supplements. Before making or distributing any amendment or supplement to the Preliminary Offering Memorandum or the Offering Memorandum, the Company and the Guarantor will furnish to the Initial Purchasers and counsel for the Initial Purchasers a copy of the proposed amendment or supplement for review, and will not distribute

13

any such proposed amendment or supplement which the Initial Purchasers reasonably disapprove;

(c) Notice to the Initial Purchasers. The Company and the Guarantor will advise the Initial Purchasers promptly, and confirm such advice in writing, (i) of the issuance by any Governmental Authority of any order preventing or suspending the use of the Preliminary Offering Memorandum or the Offering Memorandum or the initiation or threatening of any proceeding for that purpose; (ii) of the occurrence of any event at any time prior to the completion of the initial offering of the Securities as a result of which the Preliminary Offering Memorandum or the Offering Memorandum would include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing when the Preliminary Offering Memorandum or the Offering Memorandum is delivered to a purchaser, not misleading; (iii) at any time prior to the completion of the initial offering of the Securities, of any downgrading in the rating accorded or placement on negative outlook of the Securities or any other debt securities or preferred stock issued or guaranteed by the Company or the Guarantor or of the Guarantee or any other guarantee of the Guarantor, or any proposal to downgrade the rating of the Securities or any other debt securities issued or guaranteed by the Company or the Guarantor or of the Guarantee or any other guarantee of the Guarantor, by “a nationally recognized statistical rating organization”, as that term is defined by the Commission for purposes of Rule 436(g)(2) under the Securities Act (a “Rating Organization”), or any public announcement that any such organization has under surveillance or review its rating of any debt securities, including the Securities of the Company or debt securities of the Guarantor or of any guarantees, including the Guarantee, of the Guarantor (other than an announcement with positive implications of a possible upgrading, and no implication of a possible downgrading, of such rating) as soon as the Company or the Guarantor learns of any such downgrading, placement on negative outlook, proposal to downgrade or public announcement; (iv) of any breach of the representations and warranties, conditions, covenants or other material obligations of the Company or the Guarantor under this Agreement; and (v) of the receipt by the Company or the Guarantor of any notice with respect to any suspension of the qualification of the Securities for offer and sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and the Company and the Guarantor will use their reasonable best efforts to prevent the issuance of any such order preventing or suspending the use of the Preliminary Offering Memorandum or the Offering Memorandum or suspending any such qualification of the Securities and, if any such order is issued, will obtain as soon as possible the withdrawal thereof;

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(d) Ongoing Compliance of the Offering Memorandum. If at any time prior to the completion of the initial offering of the Securities (i) any event shall occur or condition shall exist as a result of which the Offering Memorandum would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances existing when the Offering Memorandum is delivered to a purchaser, not misleading or (ii) it is necessary to amend or supplement the Offering Memorandum to comply with law, the Company and the Guarantor will immediately notify the Initial Purchasers thereof and forthwith prepare and, subject to paragraph (b) above, furnish to the Initial Purchasers such amendments or supplements to the Offering Memorandum as may be necessary so that the statements in the Offering Memorandum as so amended or supplemented (or including such document to be incorporated by reference therein) will not, in the light of the circumstances existing when the Offering Memorandum is delivered to a purchaser, be misleading or so that the Offering Memorandum will comply with law;

(e) Blue Sky Compliance. The Company and the Guarantor will cooperate with the Initial Purchasers to qualify the Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions as the Initial Purchasers shall reasonably request and will continue such qualifications in effect so long as required for the offering and resale of the Securities; provided that neither the Company nor the Guarantor shall be required to (i) qualify as a foreign corporation or other entity or as a Initial Purchaser in securities in any such jurisdiction where it would not otherwise be required to so qualify, (ii) file any general consent to service of process in any such jurisdiction or (iii) subject itself to taxation in any such jurisdiction if it is not otherwise so subject;

(f) Clear Market. During the period from the date hereof through and including the Closing Date, the Company and the Guarantor will not, without the prior written consent of the Initial Purchasers, offer, sell, contract to sell or otherwise dispose of any debt securities issued or guaranteed by the Company or the Guarantor, having a tenor of more than one year after such Closing Date, substantially similar to the Securities and offered primarily in the same market as such Securities are primarily offered, without the prior written consent of the Initial Purchasers;

(g) Use of Proceeds. The Company will apply the net proceeds from the sale of the Securities as described in the Offering Memorandum under the heading “Use of Proceeds”;

(h) Supplying Information. While the Securities remain outstanding and are “restricted securities” within the meaning of Rule

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144(a)(3) under the Securities Act, the Company and the Guarantor will, during any period in which the Guarantor is not subject to and in compliance with Section 13 or 15(d) of the Exchange Act, furnish to holders of the Securities and prospective purchasers of the Securities designated by such holders, upon the request of such holders or such prospective purchasers, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act;

(i) DTC. The Company and the Guarantor will assist the Initial Purchasers in arranging for the Securities to be eligible for clearance and settlement through The Depository Trust Company (“DTC”);

(j) No Resales by the Company and the Guarantor. Until the issuance of the Exchange Securities, the Company and the Guarantor will not, and will not permit any of their affiliates (as defined in Rule 144 under the Securities Act) to, resell any of the Securities that have been acquired by any of them, except for Securities purchased by the Company, the Guarantor or any of their affiliates and resold in a transaction registered under the Securities Act;

(k) No Integration. None of the Company, the Guarantor or any of their affiliates (as defined in Rule 501 (b) of Regulation D) will, directly or through any agent, sell, offer for sale, solicit offers to buy or otherwise negotiate in respect of, any security (as defined in the Securities Act), that is or will be integrated with the sale of the Securities in a manner that would require registration of the Securities under the Securities Act;

(l) No General Solicitation or Directed Selling Efforts. None of the Company, the Guarantor or any of its affiliates or any other person acting on their behalf (other than the Initial Purchasers, as to which no covenant is given) will (i) solicit offers for, or offer or sell, the Securities by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) of Regulation D or in any manner involving a public offering within the meaning of Section 4(2) of the Securities Act or (ii) engage in any directed selling efforts within the meaning of Regulation S, and all such persons will comply with the offering restrictions requirement of Regulation S;

(m) No Stabilization. Neither the Company nor the Guarantor will take, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in any stabilization or manipulation of the price of the Securities;

(n) Filing of Exchange Act Documents. The Company will file promptly all reports and any definitive proxy or information statements

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required to be filed by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act; and

(o) Exchange Listing. The Company and the Guarantor: (i) will use their reasonable best efforts to list (1) the Securities on the Exchange as soon as practicable after the Closing Date and (2) the Exchange Securities on the Exchange as soon as practicable after consummation of the Registered Exchange Offer (as this term is defined in the Registration Rights Agreement); and (ii) shall file with the Exchange such documents and materials as may be required to establish and maintain the listing of the Securities and the Exchange Securities on the Exchange.

5. Conditions of Initial Purchasers’ Obligations. The obligation of each Initial Purchaser to purchase Securities on the Closing Date as provided herein is subject to the performance by the Company and the Guarantor of their respective covenants and other obligations hereunder, to the delivery of the documents referred to herein substantially in the form agreed upon herein, and to the following additional conditions:

(a) Representations and Warranties. The representations and warranties of the Company and the Guarantor contained herein shall be true and correct in all material respects on the date hereof and on and as of the Closing Date; and the statements of the Company, the Guarantor and their respective officers made in any certificates delivered pursuant to this Agreement shall be true and correct on and as of the Closing Date;

(b) Opinions of U.S. Counsel and Italian Counsel for the Initial Purchasers. (1) Sullivan & Cromwell LLP, U.S. counsel for the Initial Purchasers, shall have furnished to the Initial Purchasers such written opinion or opinions, dated the Closing Date, with respect to the matters covered in paragraphs (i), (ii), (iii), (vi) and (x) (except with respect to the matter covered in sub-paragraph (1) therein) of subsection (g) below as well as such other related matters as such Initial Purchasers may reasonably request; (2) Chiomenti Studio Legale, Italian counsel for the Initial Purchasers, if so requested by such Initial Purchasers, shall have furnished to such Initial Purchasers such written opinion or opinions, dated the Closing Date, with respect to such matters of Italian law and/or non-factual matters as such Initial Purchasers may reasonably request; and (3) each of the U.S. counsel and the Italian counsel for the Initial Purchasers shall have received such documents and information as they may reasonably request to enable them to pass upon such matters;

(c) Opinion of Luxembourg Counsel for the Company. Linklaters Loesch, Luxembourg counsel for the Company, shall have furnished to the Initial Purchasers its written opinion, dated the Closing

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Date, in form and substance satisfactory to the Initial Purchasers, to the effect that:

(i) Telecom Italia Capital is a company with limited liability (Société Anonyme) duly organized and validly existing under the laws of Luxembourg, with power to enter into and perform its obligations under the Indenture, the Registration Rights Agreement and this Agreement relating to the Securities and the Exchange Securities, and to issue the Securities and the Exchange Securities and to perform its obligations under such Securities and Exchange Securities;

(ii) This Agreement and the Registration Rights Agreement, relating to the Securities and the Exchange Securities, have been duly authorized, executed and delivered by the Company and constitute valid and binding agreements of the Company;

(iii) Assuming the Indenture constitutes a valid and binding instrument of the Company under the laws of the State of New York, the Indenture has been duly authorized, executed and delivered by the Company and constitutes a valid and legally binding instrument of the Company enforceable in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights;

(iv) The Securities and the Exchange Securities to be issued by the Company have been duly authorized by the Company and the Securities and the Exchange Securities, when executed manually by any duly authorized representative of the Company, issued and delivered by the Company pursuant to this Agreement and the Registration Rights Agreement relating to the Securities and the Exchange Securities, will be duly executed, issued and delivered and constitute the valid and legally binding obligations of the Company enforceable in accordance with their terms, subject as to enforcement to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights;

(v) The issue and sale of the Securities and the Exchange Securities and the compliance by the Company with all of the provisions of the Securities and the Exchange Securities (including without limitation the payment of principal, premium, if any, and interest thereon), the Indenture, the Registration Rights

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Agreement and this Agreement relating to the Securities and the Exchange Securities, and the consummation of the transactions herein and therein contemplated:

(A) will not result in any violation of the Articles of Incorporation or other governing documents of the Company or any applicable provision of Luxembourg law; and

(B) do not require any Governmental Authorization of or with any Governmental Authority of Luxembourg;

(vi) The statements in the Offering Memorandum under the caption “Taxation - Luxembourg Tax Considerations”, to the extent such statements relate to matters of law or regulation or to the provisions of documents therein described, provide a fair summary of such provisions in all material respects, as of the date of the Offering Memorandum and as of the Closing Date;

(vii) No stamp or other issuance or transfer taxes or duties and no capital gains, income, withholding or other taxes are payable by or on behalf of non-Luxembourg resident Initial Purchasers to Luxembourg or to any political subdivision or taxing authority thereof or therein in connection with (A) the issuance, sale and delivery by the Company of the Securities and the Exchange Securities to or for the respective account of the Initial Purchaser, or (B) the sale and delivery outside Luxembourg by the Initial Purchaser of the Securities to the purchasers thereof in the manner contemplated herein;

(viii) the Company’s agreement to the choice of law provisions set forth in Section 16 hereof, in the Registration Rights Agreement and in the Indenture will be recognized by the courts of Luxembourg; the Company can sue and be sued in its own name under the laws of Luxembourg; the irrevocable submission of the Company to the non-exclusive jurisdiction of a New York Court, the waiver by the Company of any objection to the venue of a proceeding of a New York Court and the agreement of the Company that this Agreement and the Registration Rights Agreement shall be governed by and construed in accordance with the laws of the State of New York are legal, valid and binding; service of process effected in the manner set forth in Section 11 hereof will be effective, insofar as the law of Luxembourg is concerned, to confer valid personal jurisdiction over the Company; and a judgment obtained in a New York Court arising out of or in relation to the obligations of the Company under this Agreement

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and the Registration Rights Agreement would be enforceable against the Company in the courts of Luxembourg, subject to applicable exequatur proceedings;

(ix) The Company is not entitled to any immunity on the basis of sovereignty or otherwise in respect of its obligations under this Agreement and the Registration Rights Agreement and could not successfully interpose any such immunity as a defense to any suit or action brought or maintained in respect of its obligations under this Agreement and the Registration Rights Agreement; and the waiver by the Company of immunity to jurisdiction and immunity to pre-judgment attachment, post-judgment attachment and execution in any suit, action or proceeding against it arising out of or based on this Agreement and the Registration Rights Agreement is a valid and binding obligation of the Company under the laws of Luxembourg;

(x) The indemnification and contribution provisions set forth in Section 6 hereof and in the Registration Rights Agreement do not contravene the laws of Luxembourg; and

(xi) All interest on the Securities and the Exchange Securities may under the current law and regulations applicable in Luxembourg be paid in the currency in which the Securities and the Exchange Securities is denominated and may be freely transferred out of Luxembourg; except as described in the Offering Memorandum, such interest will not be subject to withholding or other taxes under the laws applicable in Luxembourg and is otherwise free of any other tax, withholding or deduction in Luxembourg, except for taxes payable by Luxembourg residents for tax purposes, and without the necessity of obtaining any Governmental Authorization in Luxembourg;

(d) Opinions of Italian Counsel for the Guarantor. Gianni, Origoni, Grippo & Partners, Italian Counsel for the Guarantor, shall have furnished to the Initial Purchasers its written opinion, dated the Closing Date, in form and substance satisfactory to the Initial Purchasers, substantially to the effect that:

(i) The Guarantor has been duly incorporated and is validly existing as a joint stock company (Società per Azioni) under the laws of Italy; no order or resolution for the winding up of the Guarantor has been made or passed; no judgment has been rendered, declaring the Guarantor bankrupt or in concordato

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preventivo, amministrazione controllata, amministrazione straordinaria or liquidazione;

(ii) The Guarantor has corporate power to own, lease and operate its properties, and to conduct its business as described in the Offering Memorandum, to enter into and perform its obligations under this Agreement, the Registration Rights Agreement, the Indenture, the Guarantee relating to the Securities and the Exchange Securities and to issue the Guarantee;

(iii) This Agreement and the Registration Rights Agreement relating to the Securities and the Exchange Securities have been duly authorized, executed and delivered by the Guarantor and constitute valid and binding agreements of the Guarantor;

(iv) The Indenture has been duly authorized, executed and delivered by the Guarantor and (assuming the due authorization, execution, and delivery insofar as the laws of the State of New York are concerned) constitutes a valid and binding agreement of the Guarantor;

(v) The Guarantee to be issued by the Guarantor has been duly authorized by the Guarantor and, when the Securities and the Exchange Securities issued by the Company are duly issued and authenticated in accordance with the terms of the Indenture and delivered pursuant to this Agreement and the Registration Rights Agreement, will be duly endorsed on the issuance of Securities and Exchange Securities, will be duly executed, issued and delivered and will constitute valid and legally binding obligations of the Guarantor enforceable in accordance with their terms, except as (a) the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors rights generally and (b) rights of acceleration, if any, and the availability of equitable remedies may be limited by equitable principles of general applicability;

(vi) The performance by the Guarantor of its obligations under the Guarantees, the Indenture, the Registration Rights Agreement and this Agreement relating to the Securities and the Exchange Securities do not require any Governmental Authorization of or with any Governmental Authority in the Republic of Italy, except such Governmental Authorizations that have been duly obtained and which are in full force and effect and copies of which have been furnished to such Initial Purchasers;

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(vii) The Guarantor’s choice of law in this Agreement, the Registration Rights Agreement and the Indenture will be recognized by the courts of the Republic of Italy and the Guarantor can sue and be sued in its own name under the laws of the Republic of Italy;

(viii) The irrevocable submission of the Guarantor to the non-exclusive jurisdiction of a New York Court, the waiver by the Guarantor of any objection to the venue of a proceeding of a New York Court (as defined below) and the agreement of the Guarantor that this Agreement, the Registration Rights Agreement and the Indenture shall be governed by and construed in accordance with the laws of the State of New York are legal, valid and binding; there is no provision of Italian law that would render service of process in the manner set forth in the Agreement, the Registration Rights Agreement and the Indenture invalid; the judgment obtained in a New York Court arising out of or in relation to the obligations of the Guarantor under the Agreement, the Registration Rights Agreement and the Indenture would be enforceable against the Guarantor in the courts of the Republic of Italy subject to the provisions of foreign judgments contained in Articles 64 to 71 of Law No. 218 of May 3,1995;

(ix) The Guarantor is not entitled to any immunity on the basis of sovereignty or otherwise in respect of its obligations under this Agreement, the Registration Rights Agreement and the Indenture;

(x) The indemnification and contribution provisions set forth in Section 6 hereof and in the Registration Rights Agreement do not contravene the public policy or laws of the Republic of Italy;

(xi) Interest on the Securities and the Exchange Securities may under the current law and regulations applicable in the Republic of Italy be paid (with the exception of the payment of interest on overdue interest which is not allowed under Italian law) in any currency in which the Securities and the Exchange Securities are denominated which may be converted into foreign currency that may be freely transferred out of the Republic of Italy; and

(xii) No Governmental Authorization of or with any Governmental Authority is required to effect payments of principal, premium, if any, and interest on the Securities and the Exchange Securities;

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(e) Opinion of Italian Tax Counsel for the Guarantor. Maisto e Associati, Italian Tax Counsel for the Guarantor, shall have furnished to the Initial Purchasers its written opinion, dated the Closing Date, in the form and substance satisfactory to the Initial Purchasers, to the effect that:

(i) The statements in the Offering Memorandum under the captions “Taxation - Italian Tax Considerations” insofar as such statements purport to summarize certain provisions of law or regulation or of documents therein described, constitute a fair summary of such provisions in all material respects, as of the date of the Offering Memorandum, and as of the date hereof;

(ii) Except as described in the Offering Memorandum, no stamp or other issuance or transfer taxes or duties are payable by or on behalf of the Initial Purchasers to the Republic of Italy or to any political subdivision or taxing authority thereof or therein in connection with (A) the issuance, sale and delivery by the Company of the Securities and the Exchange Securities to or for the respective accounts of the Initial Purchasers or (B) the sale and delivery outside the Republic of Italy by the Initial Purchasers of the Securities to the purchasers thereof in the manner contemplated herein; and

(iii) Except as described in the Offering Memorandum, all interest in the Securities and the Exchange Securities will not be subject to withholding or other taxes under the laws applicable in the Republic of Italy;

(iv) The issue and sale of the Securities with the Guarantee endorsed thereon and the Exchange Securities (including the related guarantee) and the compliance by the Guarantor with the provisions of the Securities, the Exchange Securities, the Guarantee, the Indenture and this Agreement relating to the Securities and the Exchange Securities, and the consummation of the transactions herein and therein contemplated will not result in a violation of any Italian tax statute, rule, regulation or decree of any Italian tax Governmental Authority having jurisdiction over the Guarantor or the Material Subsidiary or any of their material property;

(f) (1) Opinion of General Counsel of the Guarantor. The General Counsel of the Guarantor shall have furnished to the Initial Purchasers his written opinion, dated the Closing Date, in form and substance satisfactory to the Initial Purchasers, to the effect that:

(i) All of the issued shares in capital stock of the Guarantor have been duly and validly issued and are fully paid;

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(ii) The Material Subsidiary is a company duly organized and validly existing under the laws of Italy and has the corporate power to own, lease and operate its properties and conduct its business;

(iii) To the best of such counsel’s knowledge, and other than as set forth in the Offering Memorandum, there are no legal or governmental proceedings pending to which the Guarantor or the Material Subsidiary is a party or of which any of their material properties is the subject which, if determined adversely to the Guarantor or the Material Subsidiary, would, individually or in the aggregate, have a Material Adverse Effect; and, no such proceedings are threatened in writing by any Governmental Authority or threatened in writing by others;

(iv) To the best of such counsel’s knowledge, (a) the Guarantor is not in violation of the deed of merger which became effective as of August 4, 2003 (the “Deed of Merger”) or the by-laws that became effective as of August 4, 2003; (b) the Material Subsidiary is not in violation of its Articles of Association or by-laws; and (c) the Guarantor and the Material Subsidiary are not in default in the performance or observance of any material agreement or instrument to which they are a party or by which they or any of their material assets are subject which would have a Material Adverse Effect or impair the ability of the Company or the Guarantor to consummate or materially adversely affect, the transactions contemplated hereby;

(v) The issue and sale of the Securities and of the Exchange Securities with the Guarantee endorsed thereon and the compliance by the Guarantor with the provisions of the Securities, the Exchange Securities, the Guarantee, the Indenture, the Registration Rights Agreement and this Agreement relating to the Securities and the Exchange Securities, and the consummation of the transactions herein and therein contemplated:

(A) will not conflict with, or result in a violation of the Deed of Merger or Bylaws of the Guarantor and the Articles of Association or Bylaws of the Material Subsidiary;

(B) to the best of such counsel’s knowledge, will not result in a violation of any statute, rule, regulation, judgment or decree of any Governmental Authority having

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jurisdiction over the Guarantor or the Material Subsidiary or any of their material property except where any such violation would not have a Material Adverse Effect; and

(C) to the best of such counsel’s knowledge, (i) will not conflict with or result in a violation of the provisions of or constitute a default under any material agreement or instrument to which the Guarantor or its Material Subsidiary is a party or (ii) will not conflict with or result in a violation of any material license, permit or authorization held by or issued to the Guarantor or the Material Subsidiary, in each case under (i) or (ii) hereby, which would have a Material Adverse Effect or impair the ability of the Guarantor to consummate, or materially adversely affect, the transactions contemplated in this Agreement; and

(vi) The Guarantor and the Material Subsidiary have all licenses, permits, authorizations and approvals from all Governmental Authorities that are necessary to own or lease their properties and conduct their respective businesses and that are material to the Guarantor or the Material Subsidiary, except for such licenses, permits, authorizations, orders and approvals the failure to obtain which will not have a Material Adverse Effect;

(2) The Head of the Corporate and Legal Affairs department of the Guarantor shall have furnished to the Initial Purchasers his written opinion, dated the Closing Date, in form and substance satisfactory to the Initial Purchasers, to the effect that:

(i) The statements set forth in the Offering Memorandum under the captions “Regulation” (and any related regulatory development sections in the Offering Memorandum), insofar as such statements purport to summarize certain provisions of law or regulation or of documents therein described, constitute a fair summary of such law, regulation or documents in all material respects.

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(g) Opinion of U.S. Counsel for the Company and the Guarantor. Davis Polk & Wardwell, U.S. Counsel for the Company and the Guarantor, shall have furnished to the Initial Purchasers its written opinion, dated the Closing Date, in form and substance satisfactory to the Initial Purchasers to the effect that:

(i) Assuming (a) the Indenture has been duly authorized, executed and delivered by the Company and the Guarantor insofar as the laws of Luxembourg and the Republic of Italy are concerned, (b) the Indenture has been duly authorized, executed and delivered by the Trustee, and (c) the Company and the Guarantor each have the full power, authority and legal right to enter into and perform their respective obligations under the Indenture, the Indenture has been duly executed and delivered by the Guarantor and the Company and constitutes a valid and binding agreement of each of the Guarantor and the Company, enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles;

(ii) Assuming the Securities and the Guarantee have been duly authorized, executed, authenticated, issued and delivered by the Company and the Guarantor, as applicable and the Exchange Securities and related guarantee, when authorized, executed, authenticated, issued and delivered by the Company and the Guarantor, as applicable, will be duly authorized, executed, authenticated, issued and delivered by the Company and the Guarantor, as applicable, insofar as the laws of Luxembourg and Italy are concerned, to any Initial Purchasers against payment therefore as provided by this Agreement or issued in accordance with the Registration Rights Agreement, the Securities, Exchange Securities and the Guarantee will be duly executed, authenticated, issued and delivered by, and shall constitute a valid and binding obligation of, each of the Company and the Guarantor, as applicable, enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles;

(iii) Assuming this Agreement and the Registration Rights Agreement relating to the Securities and the Exchange Securities have been duly authorized, executed and delivered by each of the Company and the Guarantor insofar as the laws of Luxembourg and the Republic of Italy are concerned, this Agreement and the Registration Rights Agreement have been duly executed and delivered by each of the Company and the Guarantor;

(iv) It is not necessary, in connection with the offer, sale and delivery of the Securities to the Initial Purchasers under this Agreement or any resales thereof by the Initial Purchasers in the

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manner contemplated by this Agreement and the Offering Memorandum, to register the Securities under the Securities Act, it being understood that we express no opinion as to any other offer or resale of any of the Securities. In addition, it is not necessary to qualify an indenture under the Trust Indenture Act in connection with the offer, sale and delivery of the Securities;

(v) No Governmental Authorization of or with any such Governmental Authority of the United States or the State of New York is required for the issue and sale of the Securities or the execution and delivery by the Guarantor, of this Agreement, the Registration Rights Agreement, the Indenture, and the Guarantee relating to the issuance of the Securities and Exchange Securities except for such Governmental Authorizations as may be required (i) with respect to any Blue Sky laws on which we are not required to opine and (ii) with respect to the Exchange Securities (including the related guarantee) under the Securities Act and applicable state securities laws as contemplated by the Registration Rights Agreement;

(vi) The statements set forth in the Offering Memorandum under the captions “Description of the Debt Securities and Guarantees We May Offer” insofar as they purport to summarize certain provisions of the Indenture, the Securities, the Exchange Securities and the Guarantee, provide a fair summary of such provisions in all material respects;

(vii) The statements set forth in the Offering Memorandum under the caption “Tax Considerations – United States Federal Income Tax Considerations”, insofar as they purport to describe certain federal income tax laws of the United States, constitute a fair summary of the principal U.S. federal income tax consequences of an investment in such Securities;

(viii) Neither the Company nor the Guarantor is required to register as an “investment company” as such term is defined in the Investment Company Act; and

(ix) Assuming that each of this Agreement and the Registration Rights Agreement has been duly authorized, executed and delivered by the Company and the Guarantor insofar as the laws of Luxembourg or the Republic of Italy are concerned, under the laws of the State of New York relating to submission to personal jurisdiction, each of the Company and the Guarantor has, pursuant to Section 11 of this Agreement and the Registration Rights

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Agreement, validly and irrevocably submitted to the non-exclusive personal jurisdiction of any state or federal court located in the Borough of Manhattan, The City of New York, New York (each a “New York Court”) in any action arising out of or relating to this Agreement and the Registration Rights Agreement or the transactions contemplated hereby and thereby, has validly and irrevocably waived any objection to the venue of a proceeding in any such court, and has validly and irrevocably appointed the Authorized Agent (as defined in Section 11) as its Authorized Agent for the purpose described in Section 11 hereof and the Registration Rights Agreement; and service of process effected on such Agent in the manner set forth in Section 11 hereof and the Registration Rights Agreement will be effective to confer valid personal jurisdiction over each of the Company and the Guarantor;

(x) Such counsel will state that it has considered the matters required to be stated in the Offering Memorandum and the information contained therein but that such counsel has not checked the accuracy, completeness or fairness of, or otherwise verified, the information furnished in the Offering Memorandum, except for the matters described in paragraph (vi) and (vii) above. Such counsel will have generally reviewed and discussed with the Initial Purchasers, and with certain officers and employees of, and Luxembourg and Italian counsel and independent public accounts for, the Company and the Guarantor the information furnished, whether or not subject to such counsel’s check and verification. On the basis of such consideration, review and discussion, but without independent check or verification except as stated above, nothing has come to such counsel’s attention that causes it to believe that (1) the document incorporated by reference in the Offering Memorandum (except for the financial statements and financial schedules and other financial data included therein, as to which such counsel expresses no belief), when it was filed with the Commission, did not comply as to form in all material respects with the requirements of the Securities Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder or (2) the Offering Memorandum, as of its date and as of the Closing Date (except for the financial statements and financial schedules and other financial data included therein, as to which such counsel expresses no belief) contained or contains an untrue statement or material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading;

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(h) Letter of Independent Certified Public Accountants of the Guarantor. Not later than 10:00 a.m. London time, on the date hereof and on the Closing Date, the independent certified public accountants who have certified the consolidated financial statements of the Guarantor, Old Telecom Italia and Finsiel S.p.A. included or incorporated by reference in the Offering Memorandum shall have furnished to the Initial Purchasers a letter or letters, dated the Closing Date or such applicable date, as the case may be, in form and substance satisfactory to such Initial Purchasers;

(i) Additional Conditions. Subsequent to the execution and delivery of this Agreement, (i) none of the Company, the Guarantor or the Material Subsidiary shall have sustained since June 30, 2003 any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than set forth or contemplated in the Offering Memorandum, and (ii) since the respective dates as of which information is given in the Offering Memorandum, there shall not have been any Material Adverse Effect otherwise than as set forth or contemplated in the Offering Memorandum, the effect of which, in any such case described in clause (i) or (ii), is in the reasonable judgment of the Initial Purchasers so material and adverse as to make it impracticable or inadvisable to proceed with the offering, sale or delivery of the Securities on the terms or in the manner contemplated by this Agreement and the Offering Memorandum;

(j) No Downgrading. Subsequent to the execution and delivery of this Agreement, and prior to the Closing Date (i) no downgrading shall have occurred in the rating accorded the debt securities issued or guaranteed by the Guarantor or any guarantee of the Guarantor by any Rating Organization, and (ii) no such Rating Organization shall have publicly announced that it has under surveillance or review, with possible negative implications, its rating of any of the debt securities of the Guarantor or any guarantee of the Guarantor;

(k) Market Out. There shall not have occurred any of the following: (i) a suspension or material limitation in trading in the securities of the Guarantor; (ii) the imposition of the proposal of exchange controls by any Governmental Authority in the country or jurisdiction in the currency of which the Securities or any security underlying the Securities may be denominated; (iii) trading in securities generally on the New York Stock Exchange, NASDAQ, the American Stock Exchange, the Mercato Telematico Azionario or the Luxembourg Stock Exchange shall have been suspended or limited minimum prices shall have been established on any such exchange or market by the Commission, the Commissione

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Nazionale per la Società e la Borsa or the Commission de Surveillance du Secteur Financier, by any such exchange or market or by any other Governmental Authority having jurisdiction; (iv) a general moratorium on commercial banking activities shall have been declared by the Italian, Luxembourg, United States Federal or New York State authorities; or (v) the occurrence of any outbreak or escalation of hostilities, or any material adverse change in national or international financial, political, industrial or economic conditions or any calamity or crises, whether within or outside the United States, if the effect of any event specified in this subsection (v) in the sole judgment of the Initial Purchasers, after consultation with the Issuer and the Guarantor to the extent practicable, makes it impracticable or inadvisable to proceed with the offering, sale or the delivery of the Securities on the terms and in the manner contemplated in this Agreement and the Offering Memorandum;

(l) Offering Memorandum Delivery. Each of the Guarantor and the Company shall have complied with the provisions of Section 4(a) hereof with respect to the furnishing of the Offering Memorandum on the second business day next succeeding the date of this Agreement, or such other date as the parties hereto may agree upon;

(m) Delivery of Officer’s Certificate of the Company and the Guarantor. Each of the Company and the Guarantor shall have furnished or caused to be furnished to the Initial Purchasers certificates of officers of the Company and the Guarantor, in such form and executed by such officers of each of the Company and the Guarantor as shall be satisfactory to the Initial Purchasers, as to the accuracy of the representations and warranties of the Company and the Guarantor herein at and as of the Closing Date, as to the performance by the Company and the Guarantor of all of their respective obligations hereunder to be performed at or prior to the Closing Date, and as to such other matters as the Initial Purchasers may reasonably request;

(n) No Legal Impediment to Issuance. No action shall have been taken and no statute, rule, regulation or order shall have been enacted, adopted or issued by any Governmental Authority that would, as of the Closing Date, prevent the issuance or sale of the Securities or the issuance of the Guarantee; and no injunction or order of any federal, state or foreign court shall have been issued that would, as of the Closing Date, prevent the issuance or sale of the Securities or the issuance of the Guarantee;

(o) Registration Rights Agreement. The Initial Purchasers shall have received a counterpart of the Registration Rights Agreement that

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shall have been executed and delivered by a duly authorized officer of the Company and the Guarantor;

(p) DTC. The Securities shall be eligible for clearance and settlement through DTC; and

(q) Additional Documents. On or prior to the Closing Date, the Company and the Guarantor shall have furnished to the Initial Purchasers such further certificates and documents as the Initial Purchasers may reasonably request.

6. Indemnification and Contribution. (a) Indemnification of the Initial Purchasers. Each of the Company and the Guarantor will jointly and severally indemnify and hold harmless each Initial Purchaser, the directors, officers, employees and agents of each such Initial Purchaser, and each such person who controls any such Initial Purchaser within the meaning of either the Securities Act or the Exchange Act against any losses, claims, damages or liabilities, joint or several, to which such Initial Purchaser may become subject, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Preliminary Offering Memorandum or the Offering Memorandum, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading and such losses, claims, damages or liabilities result from a final non-appealable judgment of a competent court or a settlement which is made in accordance with clause (c) below, and will reimburse each Initial Purchaser for any legal or other expenses duly documented and reasonably incurred by it in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that neither the Guarantor nor the Company shall be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in the Preliminary Offering Memorandum or the Offering Memorandum, in reliance upon and in conformity with written information furnished to the Guarantor or the Company by such Initial Purchaser expressly for use therein, and that with respect to any such untrue statement in or omission from the Preliminary Offering Memorandum, the indemnity agreement contained in this paragraph (a) shall not inure to the benefit of any Initial Purchaser to the extent that the sale to the person asserting any such loss, claim, damage or liability was an initial resale by such Initial Purchaser and any such loss, claim, damage or liability of or with respect to such Initial Purchaser results from the fact that both (i) to the extent required by law outside of the United States, a copy of the Offering Memorandum (excluding the Annual Report incorporated by reference therein) was not sent or given to such person at or prior to the written confirmation of the sale of such Securities to such person and (ii) the untrue

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statement in or omission from such Preliminary Offering Memorandum was corrected in the Offering Memorandum unless, in either case, such failure to deliver the Offering Memorandum was a result of non-compliance by the Company and the Guarantor with the provisions hereof;

(b) Indemnification of the Guarantor and the Company. Each Initial Purchaser will indemnify, severally and not jointly, and hold harmless each of the Company and the Guarantor, the directors, officers, employees and agents of each of the Company and the Guarantor, and each such person who controls the Company and the Guarantor (if any) against any losses, claims, damages or liabilities to which the Company or Guarantor may become subject, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Preliminary Offering Memorandum or the Offering Memorandum, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading and such losses, claims, damages or liabilities result from a final non-appealable judgment of a competent court or a settlement which is made in accordance with clause (c) below, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in the Preliminary Memorandum or the Offering Memorandum, in reliance upon and in conformity with written information furnished to the Company or the Guarantor by such Initial Purchaser expressly for use therein; and will reimburse the Company and the Guarantor for any legal or other expenses duly documented and reasonably incurred in connection with investigating or defending any such action or claim as such expenses are incurred;

(c) Notice and Procedures. Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof; but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to any indemnified party otherwise than under such subsection. In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defence thereof, with counsel satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and, after notice from the indemnifying party to such

32

indemnified party of its election so to assume the defence thereof, the indemnifying party shall not be liable to such indemnified party under such subsection for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without the written consent of the indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability arising out of such action or claim and (ii) does not include a statement as to, or an admission of, fault, culpability or a failure to act, by or on behalf of any indemnified party;

(d) Contribution. If the indemnification provided for in this Section 6 is unavailable or insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Guarantor and the Company on the one hand and each Initial Purchaser on the other from the offering of the Securities to which such loss, claim, damage or liability (or action in respect thereof) relates. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Guarantor and the Company, on the one hand and such Initial Purchaser, on the other hand, in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Guarantor and the Company, on the one hand, and such Initial Purchaser, on the other hand, shall be deemed to be in the same proportion as the total net proceeds from the sale of Securities (before deducting expenses) to which such loss, claim, damage or liability relates received by the Guarantor and the Company bear to the total commissions or discounts received by such Initial Purchaser in respect thereof. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact required to be stated therein or necessary in order to make

33

the statements therein not misleading relates to information supplied by the Guarantor and the Company, on the one hand, or by any Initial Purchaser, on the other hand, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Guarantor and each Initial Purchaser agree that it would not be just and equitable if contribution pursuant to this subsection (d) were determined by per capita allocation (even if all Initial Purchasers were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (d), an Initial Purchaser shall not be required to contribute any amount in excess of the amount by which the total issue price at which the Securities to which such loss, claim, damage or liability relates purchased by or through it were sold exceeds the amount of any damages which such Initial Purchaser has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11 (f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The obligations of each of the Initial Purchasers under this subsection (d) to contribute are several in proportion to the respective purchases made by or through it to which such loss, claim, damage or liability (or action in respect thereof) relates and are not joint; and

(e) Additional Liability. The obligations of the Company and the Guarantor under this Section 6 shall be in addition to any liability that the Company and the Guarantor may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Initial Purchaser within the meaning of the Act; and the obligations of each Initial Purchaser under this Section 6 shall be in addition to any liability which such Initial Purchaser may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls each of the Company or the Guarantor within the meaning of the Act.

7. Defaulting Initial Purchaser. (a) If, on the Closing Date, any Initial Purchaser defaults on its obligation to purchase the Securities that it has agreed to purchase hereunder, the non-defaulting Initial Purchasers may in their discretion arrange for the purchase of such Securities by other persons satisfactory to the Company and the Guarantor on the terms contained in this Agreement. If, within 36 hours after any such default by any Initial Purchaser,

34

the non-defaulting Initial Purchasers do not arrange for the purchase of such Securities, then the Company and the Guarantor shall be entitled to a further period of 36 hours within which to procure other persons satisfactory to the non-defaulting Initial Purchasers to purchase such Securities on such terms. If other persons become obligated or agree to purchase the Securities of a defaulting Initial Purchaser, either the non-defaulting Initial Purchasers or the Company and the Guarantor may postpone the Closing Date for up to five full business days in order to effect any changes that in the opinion of counsel for the Company and the Guarantor or counsel for the Initial Purchasers may be necessary in the Offering Memorandum or in any other document or arrangement, and the Company and the Guarantor agree to promptly prepare any amendment or supplement to the Offering Memorandum that effects any such changes. As used in this Agreement, the term “Initial Purchaser” includes, for all purposes of this Agreement unless the context otherwise requires, any person not listed in Schedule 1 hereto that, pursuant to this Section 7, purchases Securities that a defaulting Initial Purchaser agreed but failed to purchase.

(b) If, after giving effect to any arrangements for the purchase of the Securities of a defaulting Initial Purchaser or Initial Purchasers by the non-defaulting Initial Purchasers and the Company and the Guarantor as provided in paragraph (a) above, the aggregate principal amount of such Securities that remains unpurchased does not exceed one-eleventh of the aggregate principal amount of all the Securities, then the Company and the Guarantor shall have the right to require each non-defaulting Initial Purchaser to purchase the principal amount of Securities that such Initial Purchaser agreed to purchase hereunder plus such Initial Purchaser’s pro rata share (based on the principal amount of Securities that such Initial Purchaser agreed to purchase hereunder) of the Securities of such defaulting Initial Purchaser or Initial Purchasers for which such arrangements have not been made.

(c) If, after giving effect to any arrangements for the purchase of the Securities of a defaulting Initial Purchaser or Initial Purchasers by the non-defaulting Initial Purchasers and the Company and the Guarantor as provided in paragraph (a) above, the aggregate principal amount of such Securities that remains unpurchased exceeds one-eleventh of the aggregate principal amount of all the Securities, or if the Company and the Guarantor shall not exercise the right described in paragraph (b) above, then this Agreement shall terminate without liability on the part of the non-defaulting Initial Purchasers. Any termination of this Agreement pursuant to this Section 7 shall be without liability on the part of the Company or the Guarantor, except that the Company and the Guarantor will continue to be liable for the payment of expenses as set forth in Section 8 hereof and except that the provisions of Section 6 hereof shall not terminate and shall remain in effect.

35

(d) Nothing contained herein shall relieve a defaulting Initial Purchaser of any liability it may have to the Company, the Guarantor or any non-defaulting Initial Purchaser for damages caused by its default.

8. Payment of Fees and Expenses. (a) Whether or not the transactions contemplated by this Agreement and the Registration Rights Agreement are consummated or this Agreement or the Registration Rights Agreement is terminated, each of the Company and the Guarantor jointly and severally covenants and agrees with each Initial Purchaser to pay or cause to be paid the following: (i) the fees, disbursements and expenses of the counsel and accountants to the Company and the Guarantor in connection with the preparation, printing and filing of the Preliminary Offering Memorandum and the Offering Memorandum and all other amendments and supplements thereto and the mailing and delivery of copies thereof to each Initial Purchaser; (ii) the cost of printing, producing or reproducing this Agreement the Registration Rights Agreement, any agreement entered into or document issued hereunder, the Indenture, closing documents (including any compilations thereof) and any other documents in connection with the offering, purchase, sale and delivery of the Securities and registration of the Exchange Securities; (iii) any fees charged by securities rating services for rating the Securities (if applicable); (iv) the cost of preparing the Securities; (v) fees and expenses, if any, incident to listing and/or trading of the Securities and the Exchange Securities on the Exchange or any other stock exchange on which the Securities and the Exchange Securities are listed; (vi) the fees and expenses of any Trustee and any agent of any Trustee and any transfer or paying agent of the Company and the Guarantor and the fees and disbursements of counsel for any Trustee or such agent in connection with the Indenture and the Securities; (vii) the fees and expenses incurred in connection with the registration or qualification and determination of eligibility for investment of the Securities under the laws of such jurisdictions as the Initial Purchasers may designate and the preparation, printing and distribution of a Blue Sky Memorandum (excluding the related fees and expenses of counsel for the Initial Purchasers); (viii) all expenses and application fees incurred in connection with the approval of the Securities for book-entry transfer by DTC; and (ix) all expenses incurred by the Company and the Guarantor in connection with any “road show” presentation to potential investors. Except as provided in this Section and Section 6 hereof, each Initial Purchaser shall pay all other fees, costs and expenses it incurs.

(b) If (1)(i) the Company for any reason fails to tender the Securities for delivery to the Initial Purchasers or (ii) the Initial Purchasers decline to purchase the Securities for any reason permitted under this Agreement other than pursuant to Section 7 hereof, and (2) the transactions contemplated hereby shall not otherwise be completed within 180 days from the Closing Date, the Company and the Guarantor jointly and severally agree to reimburse the Initial Purchasers for all out-of-pocket

36

costs and expenses (including the fees and expenses of their counsel) reasonably incurred by the Initial Purchasers in connection with this Agreement and the offering contemplated hereby; provided, however, that the aggregate amount of such out-of-pocket costs and expenses (including the fees and expenses of their counsel) to be reimbursed pursuant to the preceding sentence of this sub-section 8(b) shall not exceed $350,000.

9. Notices. Except as otherwise specifically provided herein, all statements, requests, notices, agreements and advices hereunder shall be delivered as set forth in Annex B hereto. Any such statements, requests, notices, agreements or advices shall take effect upon receipt thereof.

10. Successors and Assigns. This Agreement shall be binding upon, and inure solely to the benefit of, each Initial Purchaser, the Guarantor and the Company and any person who controls any Initial Purchaser or the Company, and their respective personal representatives, heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement. No purchaser of any of the Securities through or from any Initial Purchaser hereunder shall be deemed a successor or assign by reason merely of such purchase.

11. Consent to Jurisdiction and Service. Each of the Company and the Guarantor irrevocably (i) agrees that any legal suit, action or proceeding against the Company or the Guarantor brought by any Initial Purchaser or by any person who controls any Initial Purchaser arising out of or based upon this Agreement or the transactions contemplated hereby may be instituted in any New York Court, (ii) waives, to the fullest extent it may effectively do so, any objection which it may now or hereafter have to the laying of venue of any such proceeding and (iii) submits to the non-exclusive jurisdiction of such courts in any such suit, action or proceeding. Each of the Company and the Guarantor irrevocably waives any immunity to jurisdiction to which it may otherwise be entitled or becomes entitled (including sovereign immunity, immunity to pre-judgment attachment, post-judgment attachment and execution) in any legal suit, action or proceeding against it arising out of or based on the Agreement or the transactions contemplated hereby which is instituted in any New York Court or in any competent court in Luxembourg or the Republic of Italy. Each of the Company and the Guarantor has appointed Telecom Italia North America Inc., 745 Fifth Avenue, 27^th Floor, New York, NY 10151, as its authorized agent (the “Authorized Agent”) upon whom process may be served in any such action arising out of or based on this Agreement or the transactions contemplated hereby which may be instituted in any New York Court by any Initial Purchaser or by any person who controls any Initial Purchaser, expressly consents to the jurisdiction of any such court in respect of any such action, and waives any other requirements of or objections to personal jurisdiction with respect thereto. Such

37

appointment shall be irrevocable. Each of the Company and the Guarantor represents and warrants that the Authorized Agent has agreed to act as such agent for service of process and agrees to take any and all actions, including the filing of any and all documents and instruments, that may be necessary to continue such appointment in full force and effect as aforesaid. Service of process upon the Authorized Agent and written notice of such service to the Company or the Guarantor shall be deemed, in every respect, effective service of process upon the Company or the Guarantor, as applicable.

12. Indemnification of Judgment Currency. In respect of any judgment or order given or made for any amount due hereunder in U.S. dollars that is expressed and paid in a currency (the “Judgment Currency”) other than U.S. dollars, each of the Guarantor and the Company will jointly and severally indemnify each Initial Purchaser against any loss incurred by such Initial Purchaser as a result of any variation as between (i) the rate of exchange at which the U.S. dollar amount is converted into the Judgment Currency for the purpose of such judgment or order and (ii) the rate of exchange at which an Initial Purchaser is able to purchase U.S. dollars with the amount of Judgment Currency actually received by such Initial Purchaser. The foregoing indemnity shall constitute a separate and independent obligation of the Company and the Guarantor and shall continue in full force and effect notwithstanding any such judgment or order as aforesaid. The term “rate of exchange” shall include any premiums and costs of exchange payable in connection with the purchase of or conversion into U.S dollars.

13. Time. Time shall be of the essence in this Agreement.

14. Survival. The respective indemnities, rights of contribution, representations, warranties and agreements of the Company, the Guarantor and the Initial Purchasers contained in this Agreement or made by or on behalf of the Company, the Guarantor or the Initial Purchasers pursuant to this Agreement or any certificate delivered pursuant hereto shall survive the delivery of and payment for the Securities and shall remain in full force and effect, regardless of any termination of this Agreement or any investigation made by or on behalf of the Company, the Guarantor or the Initial Purchasers.

15. Certain Defined Terms. For purposes of this Agreement, (a) except where otherwise expressly provided, the term “affiliate” has the meaning set forth in Rule 405 under the Securities Act; (b) the term “business day” means any day other than a day on which banks are permitted or required to be closed in New York City, Milan and Luxembourg; and the term “subsidiary” has the meaning set forth in Rule 405 under the Securities Act.

16. Miscellaneous. (a) Authority of the Initial Purchasers. Any action by the Initial Purchasers hereunder may be taken by Citigroup Global Markets Inc.,

38

J.P. Morgan Securities Inc. and Lehman Brothers Inc. acting jointly on behalf of the Initial Purchasers, and any such action jointly taken by Citigroup Global Markets Inc., J.P. Morgan Securities Inc. and Lehman Brothers Inc. shall be binding upon the Initial Purchasers.

(b) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

(c) Counterparts. This Agreement may be signed in counterparts (which may include counterparts delivered by any standard form of telecommunication), each of which shall be an original and all of which together shall constitute one and the same instrument.

(d) Amendments or Waivers. No amendment or waiver of any provision of this Agreement, nor any consent or approval to any departure therefrom, shall in any event be effective unless the same shall be in writing and signed by the parties hereto.

(e) Headings. The headings herein are included for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation of, this Agreement.

[Signature Pages to Follow]

39

If the foregoing is in accordance with your understanding, please indicate your acceptance of this Agreement by signing in the space provided below.

Very truly yours,
TELECOM ITALIA CAPITAL
By:	/S/    ADRIANO TRAPLETTI
	Title: Managing Director
TELECOM ITALIA S.p.A.
By:	/S/    FRANCESCO TANZI
	Title: Attorney-in-Fact

SP-1

Accepted: October 22, 2003
CITIGROUP GLOBAL MARKETS INC. J.P. MORGAN SECURITIES INC. LEHMAN BROTHERS INC.
For themselves and on behalf of the several Initial Purchasers listed in Schedule 1 hereto
Citigroup Global Markets Inc.
By:	/s/    Illegible
	Title: Managing Director
J.P. Morgan Securities Inc.
By:	/s/    Illegible
	Title: Vice President
Lehman Brothers Inc.
By:	/S/    MARTIN GOLDBERG
	Title: Senior Vice President

SP-2

Schedule 1

Initial Purchaser	Principal Amount of Series A Senior Global Notes due 2008		Principal Amount of Series B Senior Global Notes due 2013		Principal Amount of Series C Senior Global Notes due 2033
Banc of America Securities LLC	$	142,858,000	$	285,715,000	$	142,858,000
Citigroup Global Markets Inc.	$	142,857,000	$	285,715,000	$	142,857,000
Credit Suisse First Boston (Europe) Limited	$	142,857,000	$	285,714,000	$	142,857,000
J.P. Morgan Securities Inc.	$	142,857,000	$	285,714,000	$	142,857,000
Lehman Brothers Inc.	$	142,857,000	$	285,714,000	$	142,857,000
Merrill Lynch International	$	142,857,000	$	285,714,000	$	142,857,000
Morgan Stanley & Co. Incorporated	$	142,857,000	$	285,714,000	$	142,857,000
Total	$	1,000,000,000	$	2,000,000,000	$	1,000,000,000

S-1

ANNEX A

Restrictions on Offers and Sales Outside the United States

For purposes of this Annex A, any reference to an Initial Purchaser shall mean such Initial Purchaser and the affiliates of such Initial Purchaser that participate in the offer of the Securities for resale contemplated hereby pursuant to Section 1(d) of the Purchase Agreement. In connection with offers and sales of Securities outside the United States:

(a) Each Initial Purchaser acknowledges that the Securities have not been registered under the Securities Act and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons except pursuant to an exemption from, or in transactions not subject to, the registration requirements of the Securities Act.

(b) Each Initial Purchaser, severally and not jointly, represents, warrants and agrees that:

(i) Such Initial Purchaser will, to the best of its knowledge, comply with all relevant laws, regulations and directives in each jurisdiction in which it purchases, offers, sells or delivers Securities or has in its possession or distributes the Offering Memorandum or any amendment or supplement thereto, in so far as such laws, regulations and directives relate to the purchase, offer, sale or delivery of the Securities or the possession or distribution of the Offering Memorandum or any amendment or supplement thereto.

(ii) Each Initial Purchaser has represented and agreed that it will only offer, sell or deliver any notes or distribute copies of this Offering Memorandum or any other document relating to the notes in the countries (the “Permitted Countries”) listed in the Decree of the Ministry of Finance of Italy of September 4, 1996, as amended, with the exception of the countries which are also listed in the Decree of the Ministry of Finance of Italy of January 23, 2002, as amended. A list of countries other than the Permitted Countries (the “Prohibited Countries”) is attached as Annex C hereto.

(iii) Such Initial Purchaser has offered, sold or delivered the Securities, and will offer and sell the Securities, (A) as part of their distribution at any time and (B) otherwise until 40 days after the later of the commencement of the offering of the Securities and the Closing Date, only in accordance with Regulation S (“Regulation S”) or Rule 144A under the

A-1

Securities Act or any other available exemption from registration under the Securities Act.

(iv) None of such Initial Purchaser or any of its affiliates or any other person acting on its or their behalf has engaged or will engage in any directed selling efforts (as defined in Regulation S) with respect to the Securities, and all such persons have complied and will comply with the offering restrictions requirement of Regulation S.

(v) At or prior to the confirmation of sale of any Securities sold in reliance on Regulation S, such Initial Purchaser will have sent to each distributor, dealer or other person receiving a selling concession, fee or other remuneration that purchases Securities from it during the distribution compliance period (as defined in Regulation S)a confirmation or notice to substantially the following effect:

“The Securities covered hereby have not been registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons (i) as part of their distribution at any time or (ii) otherwise until 40 days after the later of the commencement of the offering of the Securities and the date of original issuance of the Securities, except in either case in accordance with Regulation S or Rule 144A or any other available exemption from registration under the Securities Act. Terms used above have the meanings given to them by Regulation S.”

(vi) Such Initial Purchaser has not and will not enter into any contractual arrangement with any distributor with respect to the distribution of the Securities, except with its affiliates or with the prior written consent of the Company and the Guarantor.

Terms used in paragraph (a) and this paragraph (b) and not otherwise defined in this Agreement have the meanings given to them by Regulation S.

(c) Each Initial Purchaser, severally and not jointly, represents, warrants and agrees that:

(i) It has not offered or sold and prior to the date six months after the Closing Date will not offer or sell any Securities to persons in the United Kingdom except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses or otherwise in circumstances which have not resulted and will not result in an offer to the

A-2

public in the United Kingdom within the meaning of the Public Offers of Securities Regulations 1995 of the United Kingdom;

(ii) It has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of Section 21 of the United Kingdom Financial Services and Markets Act 2000 of the United Kingdom (the “FSMA”)) received by it in connection with the issue or sale of any Securities in circumstances in which Section 21(1) of the FSMA does not apply to the Company or the Guarantor; and

(iii) It has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Securities in, from or otherwise involving the United Kingdom.

(d) Each Initial Purchaser represents, warrants and agrees that it has not offered, sold or delivered, and will not offer, sell or deliver, any Securities in Italy.

(e) Each Initial Purchaser represents, warrants and agrees that no public offerings or sales of Securities or Exchange Securities or any distribution of the Preliminary Offering Memorandum and the Offering Memorandum or any other offering material relating to the Securities or Exchange Securities will be made to the public in or from Luxembourg, except for the Securities or the Exchange Securities in respect of which the requirements of Luxembourg law concerning a public offering of securities in Luxembourg have been fulfilled.

(f) Each Initial Purchaser acknowledges that no action has been or will be taken by the Company and the Guarantor that would permit a public offering of the Securities, or possession or distribution of the Preliminary Offering Memorandum, the Offering Memorandum or any other offering or publicity material relating to the Securities, in any country or jurisdiction where action for that purpose is required.

A-3

ANNEX B

Notices

Except as otherwise specifically provided in the Purchase Agreement, all statements, requests, notices and advices under the Purchase Agreement shall be in writing, or by telephone if promptly confirmed in writing, and if to the Company shall be sufficient in all respects when delivered or sent by facsimile transmission or registered mail to Telecom Italia Capital, 12-14, boulevard Grand-Duchesse Charlotte, L-1330 Luxembourg, Facsimile Transmission No. ++ 352 456060444; Attention: Mr. Adriano Trapletti and if to the Guarantor, shall be sufficient in all respects when delivered or sent by facsimile transmission or registered mail to Telecom Italia S.p.A., Direzione Finanza, Piazza degli Affari 2, 20123 Milan, Italy, Facsimile Transmission No. ++39 02 85954729; Attention: Mr. Alex Bolis, and if to the Initial Purchasers shall be sufficient in all respects when delivered or sent by facsimile transmission or registered mail to addresses, telex numbers and facsimile transmission numbers of other Initial Purchasers as set out below:

Banc of America Securities LLC

9 West 57^th Street

NY1/301/2M/01

New York, NY 10019

Att: Transaction Management

Fax: ++1 212 847 5184

Citigroup Global Markets Inc.

388 Greenwich Street

New York, NY 10013

USA

Attn: Martha Bailey

Tel:   ++1 212 816 5831

Credit Suisse First Boston (Europe) Limited

One Cabot Square

London E14 4AJ

United Kingdom

Attn: New Issuers/Syndicate

Fax:   ++44(0)207 905 6128

J.P. Morgan Securities Inc.

270 Park Avenue

New York, New York 10017

B-1

U.S.A.

Attn: High Grade Syndicate Desk (8^th Floor)

Tel: ++1 212 834 4533

Fax: ++1 212 834 6081

Lehman Brothers Inc.

745 Seventh Ave.

New York, NY 10019

U.S.A.

Attn: Martin Goldberg

Tel: ++1 212 526 7430

Fax: ++1 646 758 5027

Merrill Lynch International

Merrill Lynch Financial Centre

2 King Edward Street

London, EC1A 1HQ

United Kingdom

Attn: High Grade Syndicate Desk

Tel: ++44 (0) 20 7995 3966

Fax: ++44 (0) 207995 2968

Morgan Stanley & Co. Incorporated

1585 Broadway

New York, NY 10036

A-2

ANNEX C

List of Prohibited Countries

The following is the current list of Prohibited Countries: Andorra, Anguilla, Aruba, the Bahamas, Barbados, Barbuda, Belize, Bermuda, the British Virgin Islands, Brunei, the Cayman Islands, the Channel Islands, Cyprus, Djibouti, French Polynesia, Gibraltar, Grenada, Guatemala, Hong Kong, the Isle of Man, Kiribati, Lebanon, Liberia, Liechtenstein, Macau, Malaysia, the Maldives, the Marshall Islands, Montserrat, Nauru, the Netherlands Antilles, Nevis, New Caledonia, Niue, the Philippines, Oman, the Solomon Islands, St. Kitts, St. Lucia, St. Vincent and the Grenadines, the Seychelles, Singapore, Tonga, the Turks and Caicos Islands, Tuvalu, Vanuatu and Samoa.

The following countries and territories are either considered (under Italian tax law) as having a privileged tax regime subject to activity specific exemptions or are not considered (under Italian tax law) as having a privileged tax regime but are deemed to be tax havens with regard to certain activities: Angola, Antigua, Bahrain, Costa Rica, Dominica, Ecuador, Jamaica, Kenya, Korea (Rep.), Kuwait, Malta, Mauritius, Monaco, Panama, Puerto Rico, Switzerland, United Arab Emirates and Uruguay.

C-1

EX-4.3

Exhibit 4.3

TELECOM ITALIA CAPITAL

SOCIÉTÉ ANONYME,

Issuer

TELECOM ITALIA S.p.A.,

Guarantor

TO

JPMORGAN CHASE BANK,

Trustee

INDENTURE

Dated as of October 29, 2003

Guaranteed Debt Securities

Telecom Italia Capital Société Anonyme

Telecom Italia S.p.A.

Certain Sections of this Indenture relating to

Sections 310 through 318, inclusive, of the

Trust Indenture Act of 1939:

Trust Indenture Act Section		Indenture Section
§310	(a)(l)	609
	(a)(2)	609
	(a)(3)	Not Applicable
	(a)(4)	Not Applicable
	(b)	608
		610
§311	(a)	613
	(b)	613
§312	(a)	701
		702
	(b)	702
	(c)	702
§313	(a)	703
	(b)	703
	(c)	703
	(d)	703
§314	(a)	704
	(a)(4)	101
		1008
	(b)	Not Applicable
	(c)(l)	102
	(c)(2)	102
	(c)(3)	Not Applicable
	(d)	Not Applicable
	(e)	102
§315	(a)	601
	(b)	602
	(c)	601
	(d)	601
	(e)	514
§316	(a)	101
	(a)(l)(A)	502
		512
	(a)(l)(B)	513
	(a)(2)	Not Applicable
	(b)	508
	(c)	104
§317	(a)(l)	503
	(a)(2)	1003
§318	(a)	108

TABLE OF CONTENTS

	PAGE
PARTIES	1
RECITALS	1
ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101. Definitions	2
Act	2
Additional Amounts	2
Affiliate	2
Authenticating Agent	3
Authorized Newspaper	3
Bearer Security	3
Board of Directors	3
Board Resolution	3
Business Day	3
Capital Market Indebtedness	3
Certification Date	4
Clearstream	4
Commission	4
Common Depositary	4
Corporate Trust Office	4
Corporation	4
Coupon	4
Defaulted Interest	4
Depositary	4
DTC	4
Encumbrance	4
Euroclear	5
Event of Default	5
Exchange Act	5
Exchange Date	5
Expiration Date	5
Global Legend	5
Global Security	5
Global Registered Security	5
Group	5
Guarantees	5
Guarantor	5
Holder	5
Noteholder	5

i

Indenture	5
Initial Purchasers	6
Interest Payment Date	6
Issuer	6
Maturity	6
Notice of Default	6
Officer’s Certificate	6
Opinion of Counsel	6
Order	6
Original Issue Discount Security	6
Outstanding	7
Owner	8
Paying Agent	8
Permanent Global Bearer Security	8
Permitted Encumbrance	8
Permitted Leasing Transaction	10
Person	10
Place of Payment	10
Predecessor Security	11
Project Finance Indebtedness	11
Redemption Date	11
Redemption Price	11
Registered Security	11
Regular Record Date	12
Regulation S	12
Relevant Jurisdiction	12
Responsible Officer	12
Restricted Legend	12
Restricted Securities	12
Securities	12
Securities Act	12
Securities Act Legend	12
Security Register	12
Security Registrar	12
Special Record Date	12
Stated Maturity	12
Subsidiary	12
Temporary Global Securities	13
Temporary Global Bearer Securities	13
Trust Indenture Act	13
Trustee	13
United States	13
U.S. Government Obligations	13
U.S. Person	14
Section 102. Compliance Certificates and Opinions	14

ii

Section 103.	Form of Documents Delivered to Trustee	14
Section 104.	Acts of Holders of Securities; Record Dates	15
Section 105.	Notices, Etc., to Trustee, Issuer and Guarantor	18
Section 106.	Notice to Holders of Securities; Waiver	19
Section 107.	Language of Notices, Etc	20
Section 108.	Conflict with Trust Indenture Act	20
Section 109.	Effect of Headings and Table of Contents	20
Section 110.	Successors and Assigns	20
Section 111.	Separability Clause	20
Section 112.	Benefits of Indenture	21
Section 113.	Governing Law	21
Section 114.	Saturday, Sundays and Legal Holidays	21
Section 115.	Consent to Service; Jurisdiction	21
	ARTICLE TWO SECURITY AND GUARANTEE FORMS
Section 201.	Forms Generally	22
Section 202.	Form of Registered Security	23
Section 203.	Form of Bearer Security	36
Section 204.	Form of Coupon	50
Section 205.	Form of Legends for Global Registered Securities	53
Section 206.	Form of Trustees Certificate of Authentication	57
Section 207.	Guarantee by Guarantor; Form of Guarantee	57
Section 208.	Form of Transfer Notice	62
Section 209.	Form of Rule 144A Certificate	63
Section 210.	Form of Regulation S Certificate	66
Section 211.	Form of Institutional Accredited Investor Certificate	70
	ARTICLE THREE THE SECURITIES AND GUARANTEES
Section 301.	Amount Unlimited; Issuable in Series	74
Section 302.	Denominations	78
Section 303.	Ranking	78
Section 304.	Execution, Authentication, Delivery And Dating	78
Section 305.	Temporary Securities	80
Section 306.	Registration, Registration of Transfer and Exchange	84
Section 307.	Book-Entry Provisions for Global Registered Securities	88
Section 308.	Special Transfer Provisions	89
Section 309.	Mutilated, Destroyed, Lost and Stolen Securities and Coupons	90
Section 310.	Payment of Interest; Interest Rights Preserved	91
Section 311.	Persons Deemed Owners	93
Section 312.	Cancellation	93
Section 313.	Computation of Interest	94
Section 314.	CUSIP Numbers	94

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Section 315.	Forms of Certification	94
	ARTICLE FOUR SATISFACTION AND DISCHARGE
Section 401.	Satisfaction and Discharge of Indenture	99
Section 402.	Application of Trust Money	100
Section 403.	Defeasance and Discharge of Securities of a Series	100
Section 404.	Reinstatement	102
	ARTICLE FIVE REMEDIES
Section 501.	Events of Default	103
Section 502.	Acceleration of Maturity; Rescission and Annulment	104
Section 503.	Collection of Indebtedness and Suits for Enforcement by Trustee	105
Section 504.	Trustee May File Proofs of Claim	106
Section 505.	Trustee May Enforce Claims Without Possession of Securities	107
Section 506.	Application of Money Collected	107
Section 507.	Limitation on Suits	107
Section 508.	Unconditional Right of Holders to Receive Principal, Premium and Interest	108
Section 509.	Restoration of Rights and Remedies	108
Section 510.	Rights and Remedies Cumulative	108
Section 511.	Delay or Omission Not Waiver	109
Section 512.	Control by Holders	109
Section 513.	Waiver of Past Defaults	109
Section 514.	Undertaking for Costs	110
Section 515.	Waiver of Stay or Extension Laws	110
	ARTICLE SIX THE TRUSTEE
Section 601.	Certain Duties and Responsibilities	111
Section 602.	Notice of Defaults	111
Section 603.	Certain Rights of Trustee	111
Section 604.	Not Responsible for Recitals or Issuance of Securities	113
Section 605.	May Hold Securities	113
Section 606.	Money Held in Trust	113
Section 607.	Compensation and Reimbursement	113
Section 608.	Conflicting Interests	114
Section 609.	Corporate Trustee Required; Eligibility	115
Section 610.	Resignation and Removal; Appointment of Successor	115
Section 611.	Acceptance of Appointment by Successor	117
Section 612.	Merger, Conversion, Consolidation or Succession to Business	118

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Section 613.	Preferential Collection of Claims Against the Issuer or the Guarantor	118
Section 614.	Appointment of Authenticating Agent	119
Section 615.	Trustee’s Application for Instructions from the Issuer	121
	ARTICLE SEVEN HOLDERS’ LISTS AND REPORTS BY TRUSTEE, ISSUER AND GUARANTOR
Section 701.	Issuer and the Guarantor to Furnish Trustee Names and Addresses of Holders	122
Section 702.	Preservation of Information; Communications to Holders	122
Section 703.	Reports by Trustee	123
Section 704.	Reports by the Issuer and the Guarantor	123
Section 705.	Calculation of Original Issue Discount	124
Section 706.	Reports by the Security Registrar	124
	ARTICLE EIGHT CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 801.	Issuer or Guarantor May Consolidate, Etc., Only on Certain is Terms	125
Section 802.	Successor Substituted	126
Section 803.	Assumption by Guarantor or Subsidiary of Issuer’s Obligations	127
	ARTICLE NINE SUPPLEMENTAL INDENTURES
Section 901.	Supplemental Indentures Without Consent of Holders	130
Section 902.	Supplemental Indentures with Consent of Holders	131
Section 903.	Execution of Supplemental Indentures	133
Section 904.	Effect of Supplemental Indentures	133
Section 905.	Conformity with Trust Indenture Act	133
Section 906.	Reference in Securities to Supplemental Indentures	133
	ARTICLE TEN COVENANTS
Section 1001.	Payment of Principal, Premium and Interest	134
Section 1002.	Maintenance of Office or Agency	134
Section 1003.	Money for Securities Payments to Be Held in Trust	135
Section 1004.	Additional Amounts	137
Section 1005.	Statement by Officers as to Default	139
Section 1006.	Payment of Taxes and Other Claims	140
Section 1007.	Limitation on Liens	140
Section 1008.	Waiver of Certain Covenants	140

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	ARTICLE ELEVEN REDEMPTION OF SECURITIES
Section 1101.	Applicability of Article	141
Section 1102.	Election to Redeem; Notice to Trustee	141
Section 1103.	Selection by Trustee of Securities to Be Redeemed	141
Section 1104.	Notice of Redemption	142
Section 1105.	Deposit of Redemption Price	143
Section 1106.	Securities Payable on Redemption Date	144
Section 1107.	Securities Redeemed in Part	145
Section 1108.	Optional Redemption Due to Changes in Tax Treatment	145
	ARTICLE TWELVE SINKING FUNDS
Section 1201.	Applicability of Article	147
Section 1202.	Satisfaction of Sinking Fund Payments with Securities	147
Section 1203.	Redemption of Securities for Sinking Fund	147
	ARTICLE THIRTEEN MEETINGS OF HOLDERS OF SECURITIES
Section 1301.	Purposes for Which Meetings May Be Called	148
Section 1302.	Call, Notice and Place of Meetings	148
Section 1303.	Persons Entitled to Vote at Meetings	148
Section 1304.	Quorum; Action	149
Section 1305.	Determination of Voting Rights; Conduct and Adjournment of Meetings	149
Section 1306.	Counting Votes and Recording Action of Meetings	150

vi

INDENTURE, dated as of October 29, 2003, among TELECOM ITALIA CAPITAL, SOCIÉTÉ ANONYME, a company with limited liability incorporated under the laws of the Grand-Duchy of Luxembourg in the form of a société anonyme (the “Issuer”), having its principal office at 12-14, Boulevard Grande-Duchesse Charlotte, L-1330 Luxembourg, registered with the Register of Commerce and Companies in Luxembourg under number B-77.970, TELECOM ITALIA S.p.A., a joint stock company established under the laws of the Republic of Italy (the “Guarantor”), having its registered office at Piazza degli Affari 2, 20123 Milan, Italy, and JPMorgan Chase Bank, a banking corporation duly organized and existing under the laws of the State of New York, as Trustee hereunder (the “Trustee”).

RECITALS

The Issuer has duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of its unsecured debentures or other evidences of indebtedness (the “Securities”), to be issued in one or more series as in this Indenture provided.

The Guarantor has duly authorized the execution and delivery of this Indenture to provide for the Guarantees by it with respect to the Securities as set forth in this Indenture.

All things necessary to make this Indenture a valid agreement of the Issuer and the Guarantor, in accordance with its terms, have been done.

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NOW, THEREFOR, THIS INDENTURE WITNESSETH:

For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually agreed, for the equal and proportionate benefit of all Holders of the Securities or of any series thereof, as follows:

ARTICLE ONE

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

Section 101. Definitions.

For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires:

(1) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular;

(2) all other terms used herein which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein;

(3) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles, and, except as otherwise herein expressly provided, the term “generally accepted accounting principles,” or “GAAP,” with respect to any computation required or permitted hereunder shall mean such accounting principles as are generally accepted in the Republic of Italy at the date of such computation and as applied by the Guarantor;

(4) unless the context otherwise requires, any reference to an “Article” or a “Section” refers to an Article or a Section, the case may be, of this Indenture; and

(5) the words “herein”, “hereof” and “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, or other subdivision.

“Act”, when used with respect to any Holder, has the meaning specified in Section 104.

“Additional Amounts” means additional amounts payable pursuant to Section 1004.

“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

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“Authenticating Agent” means any Person authorized by the Trustee pursuant to Section 614 to act on behalf of the Trustee to authenticate Securities of one or more series.

“Authorized Newspaper” means a newspaper, in the English language or in an official language of the country of publication, customarily published on each Business Day, whether or not published on Saturdays, Sundays or holidays, and of general circulation in the place in connection with which the term is used or in the financial community of such place. Where successive publications are required to be made in Authorized Newspapers, the successive publications may be made in the same or in different newspapers in the same city meeting the foregoing requirements and in each case on any Business Day.

“Bearer Security” means any Security issued in the form set forth in Section 203 or established pursuant to Section 201 which is payable to the bearer.

“Board of Directors”, when used with reference to the Issuer or the Guarantor, means the board of directors, or any committee of such board of the Issuer or the Guarantor, as the case may be, duly authorized to act for such board hereunder.

“Board Resolution”, when used with reference to the Issuer or the Guarantor, means a copy of a resolution or a declaration attesting the exact content of a resolution, certified by any member of the Board of Directors or the Secretary or any person duly appointed by the Board of Directors to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, and in each case delivered to the Trustee.

“Business Day”, when used with respect to any Place of Payment, means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in that Place of Payment are authorized or obligated by law or executive order to close.

“Capital Market Indebtedness” means any obligation for the payment of borrowed money which is in the form of, or represented or evidenced by, a certificate of indebtedness or in the form of, or represented or evidenced by, bonds, notes or other securities which are listed or traded on a stock exchange or other recognized securities market. For the purposes of avoiding any doubt in respect of asset-backed financings originated by the Issuer or the Guarantor, the expressions “assets” and “obligations for the payment of borrowed money” as used in this definition do not include assets and obligations of the Issuer or the Guarantor which, pursuant to the requirements of law and accounting principles generally accepted in the Grand-Duchy of Luxembourg or the Republic of Italy, as the case may be, as of the date of this Indenture need not, and are not, reflected in the balance sheet of the Issuer or the Guarantor, as the case may be.

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“Certification Date” shall mean with respect to Securities of any series (i) if Bearer Securities of such series are not to be initially represented by a Temporary Global Bearer Security, the date of delivery of the definitive Bearer Security and (ii) if Bearer Securities of such series are initially represented by a Temporary Global Bearer Security, the earlier of (A) the Exchange Date with respect to Securities of such Series and (B) if the first Interest Payment Date with respect to Securities of such series is prior to such Exchange Date, such Interest Payment Date.

“Clearstream” means Clearstream Banking, société anonyme and its successors.

“Commission” means the United States Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act, or, if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time.

“Common Depositary” has the meaning specified in Section 305.

“Corporate Trust Office” means the principal office of the Trustee at which at any time its corporate trust business shall be administered, which office at the date hereof is located at 4 New York Plaza, 15^th Floor, New York, New York 10004, or such other address as the Trustee may designate from time to time by notice to the Holders, the Issuer and the Guarantor, or the principal corporate trust office of any successor Trustee (or such other address as a successor Trustee may designate from time to time by notice to the Holders, the Issuer and the Guarantor).

“Corporation” means a corporation, association, company (including without limitation a limited liability company), joint-stock company or business trust.

“Coupon” means any interest coupon appertaining to a Bearer Security.

“Defaulted Interest” has the meaning specified in Section 310.

“Depositary” means, with respect to Securities of any series issuable or issued in whole or in part in the form of one or more Global Securities, a clearing agency registered under the Exchange Act that is designated to act as Depositary for such Securities as contemplated by Section 301.

“DTC” means The Depository Trust Company, a New York Corporation.

“Encumbrance” means any (i) mortgage, charge, pledge, lien or other encumbrance securing any obligation of any Person, and (ii) any arrangement

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providing a creditor with a prior right to an asset, or its proceeds of sale, over other creditors in a liquidation.

“Euroclear” means Euroclear Bank, S.A./N.V. and its successors.

“Event of Default” has the meaning specified in Section 501.

“Exchange Act” means the United States Securities Exchange Act of 1934 and any statute successor thereto, in each case as amended from time to time.

“Exchange Date” has the meaning specified in Section 305.

“Expiration Date” has the meaning specified in Section 104.

“Global Legend” has the meaning specified in Section 205.

“Global Security” means a Security evidencing all or part of the Securities of any series substantially in the form set forth in Section 202.

“Global Registered Security” means a Registered Security that evidences all or part of the Securities of any series and bears the legends set forth in Section 205 (or such legend as may be specified as contemplated by Section 301 for such Securities).

“Group” means the Guarantor and its consolidated Subsidiaries and Affiliates.

“Guarantees” means any Guarantees of the Guarantor issued on Securities authenticated and delivered pursuant to this Indenture and shall be substantially in the form of Guarantee set forth in Section 207.

“Guarantor” means the Person named as the “Guarantor” in the first paragraph of this instrument until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Guarantor” shall mean such successor Person.

“Holder” or “Noteholder” means (i) in the case of a Registered Security, a Person in whose name a Security is registered in the Security Register, (ii) in the case of a Bearer Security, the bearer thereof, and (iii) in the case of a coupon, the bearer thereof.

“Indenture” means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof, including, for all purposes of this instrument, and any such supplemental

5

indenture, the provisions of the Trust Indenture Act that are deemed to be a part of and govern this instrument and any such supplemental indenture, respectively. The term “Indenture” shall also include the terms of particular series of Securities established as contemplated by Section 301.

“Initial Purchasers” means the initial purchasers party to a purchase agreement with the Issuer and Guarantor relating to the sale of the Securities or Further Issuance by the Issuer.

“Interest Payment Date”, when used with respect to any Security, means the Stated Maturity of an installment of interest on such Security.

“Issuer” means the Person named as “Issuer” in the first paragraph of this Indenture until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Issuer” shall mean such successor Person. Issuer shall also mean any new issuer of Securities under this Indenture as contemplated by Section 901(1).

“Maturity”, when used with respect to any Security, means the date on which the principal of such Security or an installment of principal becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise.

“Notice of Default” means a written notice of the kind specified in Section 501(4).

“Officer’s Certificate” means a certificate signed by any director or the Secretary or any person duly appointed in a Board Resolution of the Issuer or the Guarantor, as the case may be, in each case delivered to the Trustee. The officers signing an Officer’s Certificate given pursuant to Sections 704 and 1005 shall be the principal executive, financial or accounting officer of the Issuer and the Guarantor.

“Opinion of Counsel” means a written opinion of counsel, who may be counsel for the Issuer or the Guarantor, or other counsel.

“Order” means a written request or order signed in the name of the Issuer or the Guarantor by any director of the Issuer or the Guarantor or the Secretary of the Guarantor or any person duly appointed by the Board of Directors of the Issuer or the Guarantor, as the case may be, in each case delivered to the Trustee.

“Original Issue Discount Security” means any Security which provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 502.

6

“Outstanding”, when used with respect to Securities, means, as of the date of determination, all Securities theretofore authenticated and delivered under this Indenture, except:

(i) Securities theretofore cancelled by the Trustee or delivered to the Trustee for cancellation;

(ii) Securities for whose payment or redemption money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Issuer) in trust or set aside and segregated in trust by the Issuer (if the Issuer shall act as its own Paying Agent) for the Holders of such Securities and any coupons appertaining thereto; provided that, if such Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made;

(iii) Securities as to which Defeasance has been effected pursuant to Section 1402 and

(iv) Securities which have been paid pursuant to Section 306 or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Securities are held by a protected purchaser in whose hands such Securities are valid obligations of the Issuer; provided, however, that in determining whether the Holders of the requisite principal amount of the Outstanding Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder, (i) the principal amount of an Original Issue Discount Security that shall be deemed to be Outstanding shall be the amounts of the principal thereof that would be due and payable as of the date of such determination upon acceleration of the Maturity thereof pursuant to Section 502, (ii) the principal amount of a Security denominated in one or more foreign currencies or currency units shall be the U.S. dollar equivalent, determined in the manner provided as contemplated by Section 301 on the date of original issuance of such Security, of the principal amount (or, in the case of an Original Issue Discount Security, the U.S. dollar equivalent on the date of original issuance of such Security of the amount determined as provided in (i) above) of such Security, (iii) if the principal amount payable at Stated Maturity of any Security is not determinable upon original issuance, the principal amount of such Security that shall be deemed to be Outstanding shall be the amount as specified or determined as contemplated by Section 301, and (iv) Securities owned by the Issuer, the Guarantor or any other obligor upon the Securities or any Affiliate of the Issuer, the Guarantor or of such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Securities which a Responsible Officer of the Trustee actually knows to be so

7

owned shall be so disregarded. Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Securities and that the pledgee is not the Issuer, the Guarantor or any other obligor upon the Securities or any Affiliate of the Issuer, the Guarantor or of such other obligor.

“Owner” means any beneficial owner of the Securities.

“Paying Agent” means any Person authorized by the Issuer to pay the principal of or any premium or interest on any Securities on its behalf.

“Permanent Global Bearer Security” has the meaning specified in Section 305

“Permitted Encumbrance” means:

(i) any Encumbrance existing on the date of issuance of any Securities under this Indenture;

(ii) any Encumbrance over or affecting any asset acquired by the Issuer or the Guarantor after the date hereof and subject to which such asset is acquired, if:

(a) such Encumbrance was not created in contemplation of the acquisition of such asset by the Issuer or the Guarantor;

(b) the amount thereby secured has not been increased in contemplation of, or since the date of, the acquisition of such asset by the Issuer or the Guarantor;

(iii) any Encumbrance over or affecting any asset of any company which becomes an obligor after the date hereof, where such Encumbrance is created prior to the date on which such company becomes an obligor, if:

(a) such Encumbrance was not created in contemplation of that company becoming an obligor; and

(b) the amount thereby secured has not been increased in contemplation of, or since the date of, that company becoming an obligor;

(iv) any netting or set-off arrangement entered into by any member of the Group in the normal course of its banking arrangements for the purpose of netting debit and credit balances;

8

(v) any title transfer or retention of title arrangement entered into by any member of the Group in the normal course of its trading activities on the counterparty’s standard or usual terms;

(vi) Encumbrances created in substitution for any Encumbrance permitted under sub-paragraphs (ii) and (iii) over the same or substituted assets. This sub-paragraph only applies if:

(a) the principal amount secured by the substitute Encumbrance does not exceed the principal amount outstanding and secured by the initial Encumbrance; and

(b) in the case of substituted assets, if the market value of the substituted assets at the time of the substitution does not exceed the market value of the assets replaced;

(vii) Encumbrances created to secure (a) loans provided, supported or subsidized by a governmental agency, national or multinational investment guarantee agency, export credit agency or a lending organization established by the United Nations, the European Union or other international treaty organization, including, without limitation the European Investment Bank, the European Bank for Reconstruction and Development and the International Finance Corporation, or (b) Project Finance Indebtedness. This sub-paragraph (vii) will, however, only apply if the Encumbrance is created on an asset of the project being financed by such loans (and/or on the shares in, and/or shareholder loans made to, the company conducting such project) or as the case may be, such Project Finance Indebtedness and remains confined to that asset (and/or shares and/or shareholder loans);

(viii) Encumbrances arising out of the refinancing of any Capital Market Indebtedness secured by any Encumbrance permitted by sub-paragraphs (i) to (vii). This sub-paragraph will, however, only apply if the amount of such Capital Market Indebtedness is not increased and is not secured by an Encumbrance over any additional assets;

(ix) any Encumbrance arising by operation of law;

(x) any Encumbrance created in connection with convertible or exchangeable bonds or notes where the Encumbrance is created over the assets into which the convertible or exchangeable bonds or notes may be converted or exchanged and secures only the obligation of the Issuer to effect the conversion or exchange of the bonds or notes into such assets;

(xi) any Encumbrance created in the ordinary course of business to secure Capital Market Indebtedness under hedging transactions put in place to

9

manage risks arising under funded debt obligations including, without limitation, credit support annexes or agreements;

(xii) any Encumbrance over or affecting any asset of the Guarantor to secure Capital Markets Indebtedness under a Permitted Leasing Transaction; provided that the aggregate Capital Markets Indebtedness secured by all such Encumbrances does not exceed euro 1 billion;

(xiii) any Encumbrance created on short-term receivables used in any asset-backed financing;

(xiv) any Encumbrance on real estate assets of the Guarantor, any Subsidiary, or any Person (including any entity resulting from any corporate reorganization of such Person and/or the successors thereof) to which such real estate assets may be contributed by the Guarantor or any Subsidiary in connection with the issuance of any indebtedness, whether such indebtedness is secured or unsecured by such real estate assets or any other assets of such Person to which such real estate assets have been contributed by the Guarantor or any Subsidiary; and

(xv) any other Encumbrance securing Capital Market Indebtedness of an aggregate amount not exceeding 10% of the total net worth of the Guarantor (as disclosed in the most recent audited consolidated balance sheet of the Group);

“Permitted Leasing Transaction” means one or more transactions or a series of transactions as a result of which the Guarantor disposes of or otherwise transfers (including, without limitation, by way of sale of title or grant of a leasehold or other access, utilization and/or possessory interest(s)) its rights to possess, use and/or exploit all or a portion of a particular asset or particular assets owned, used and/or operated by the Guarantor (or its rights and/or interests in respect thereof) to one or more other persons in circumstances where the Guarantor or an affiliate shall have the right to obtain or retain possession, use and/or otherwise exploit the asset or assets (or rights and/or interests therein) so disposed of or otherwise transferred.

“Person” means any individual, corporation, partnership, joint venture, limited liability company, trust, unincorporated organization or government or any agency or political subdivision thereof.

“Place of Payment”, when used with respect to the Securities of any series, means the place or places where the principal of and any premium and interest on the Securities of that series are payable as specified as contemplated by Section 301.

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“Predecessor Security” of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 309 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security or a Security to which a mutilated, destroyed, lost or stolen coupon appertains shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security or the Security to which the mutilated, destroyed, lost or stolen coupon appertains, as the case may be.

“Project Finance Indebtedness” means any indebtedness incurred by a debtor to finance the ownership, acquisition, construction, development and/or operation of an asset in respect of which the person or persons to whom such indebtedness is, or may be, owed have no recourse whatsoever for the repayment of or payment of any sum relating to such indebtedness other than:

(a) recourse to such debtor for amounts limited to the cash flow from such asset; and/or

(b) recourse to such debtor generally, which recourse is limited to a claim for damages (other than liquidated damages and damages required to be calculated in a specified way) for breach of an obligation, representation or warranty (not being a payment obligation, representation or warranty or an obligation, representation or warranty to procure payment by another or an obligation, representation or warranty to comply or to procure compliance by another with any financial ratios or other test of financial condition) by the person against whom such recourse is available; and/or

(c) if such debtor has been established specifically for the purpose of constructing, developing, owning and/or operating the relevant asset and such debtor owns no other significant assets and carries on no other business, recourse to all of the assets and undertaking of such debtor and the shares in the capital of such debtor and shareholder loans made to such debtor.

“Redemption Date”, when used with respect to any Security to be redeemed, means the date fixed for such redemption by or pursuant to this Indenture.

“Redemption Price”, when used with respect to any Security to be redeemed, means the price at which it is to be redeemed pursuant to this Indenture.

“Registered Security”, means any Security issued in the form set forth in Section 202 or established pursuant to Section 201 which is registered in the Security Register. A Global Registered Security is a Registered Security.

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“Regular Record Date” for the interest payable on any Interest Payment Date on the Registered Securities of any series means the date specified for that purpose as contemplated by Section 301.

“Regulation S” means Regulation S under the Securities Act of 1933 as amended.

“Relevant Jurisdiction” has the meaning specified in Section 1004.

“Responsible Officer” means, when used with respect to the Trustee, any officer within the corporate trust department of the Trustee, with direct responsibility for the administration of this Indenture, or any other officer to whom any corporate trust matter is referred because of such person’s knowledge of and familiarity with the particular subject.

“Restricted Legend” has the meaning set forth in Section 205.

“Restricted Securities” has the meaning set forth in Section 205.

“Securities” has the meaning stated in the first recital of this Indenture and more particularly means any Securities authenticated and delivered under this Indenture.

“Securities Act” means the United States Securities Act of 1933 and any statute successor thereto, in each case as amended from time to time.

“Securities Act Legend” has the meaning set forth in Section 205.

“Security Register” and “Security Registrar” have the respective meanings specified in Section 306. J.P. Morgan Chase Bank Luxembourg S.A. shall act as Security Registrar in Luxembourg and JPMorgan Chase Bank shall act as Security Registrar in the United States.

“Special Record Date” for the payment of any Defaulted Interest on the Registered Securities of any series means a date fixed by the Trustee pursuant to Section 310.

“Stated Maturity”, when used with respect to any Security or any installment of principal thereof or interest thereon, means the date specified in such Security or a coupon representing such installment of interest as the fixed date on which the principal of such Security or such installment of principal or interest is due and payable.

“Subsidiary” of any Person means a corporation in respect of which more than 50% of the outstanding voting stock or equity interest having by the terms thereof ordinary voting power to elect a majority of the board of directors of such

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corporation (irrespective of whether at the time stock of any other class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time directly or indirectly owned or controlled by the Guarantor or by one or more of its Subsidiaries, or by the Guarantor and one or more Subsidiaries.

“Temporary Global Securities” has the meaning specified in Section 305.

“Temporary Global Bearer Securities” has the meaning specified in Section 305.

“Trust Indenture Act” means the United States Trust Indenture Act of 1939, as amended, as in force at the date as of which this instrument was executed (except as provided in Section 905 provided, however, that in the event the Trust Indenture Act of 1939 is amended after such date, “Trust Indenture Act” means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended.

“Trustee” means the Person named as the “Trustee” in the first paragraph of this Indenture until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Trustee” shall mean or include each Person who is then a Trustee hereunder, and if at any time there is more than one such Person, “Trustee” as used with respect to the Securities of any series shall mean the Trustee with respect to Securities of that series.

“United States” means the United States of America (including the States and the District of Columbia) and its possessions (including Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands).

“U.S. Government Obligations” means securities which are (i) direct obligations of the United States for the payment of which its full faith and credit is pledged or (ii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States, which, in either case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depository receipt issued by a bank or trust company as custodian with respect to any such U.S. Government Obligation or a specific payment of interest on or principal of any such U.S. Government Obligation held by such custodian for the account of the holder of a depository receipt; provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the U.S.

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Government Obligation or the specific payment of interest on or principal of the U.S. Government Obligation evidenced by such depository receipt.

“U.S. Person” means a person who is defined as a U.S. Person under Regulation S.

Section 102. Compliance Certificates and Opinions.

Upon any application or request by the Issuer or the Guarantor to the Trustee to take any action under any provision of this Indenture, the Issuer or the Guarantor shall furnish to the Trustee such certificates and opinions as may be required under the Trust Indenture Act. Each such certificate or opinion shall be given in the form of an Officer’s Certificate, if to be given by an officer of the Issuer or the Guarantor, or an Opinion of Counsel, if to be given by counsel, and shall comply with the requirements of the Trust Indenture Act and any other requirements set forth in this Indenture.

Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include:

(1) a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;

(2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

(3) a statement that such individual has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and

(4) a statement as to whether such condition or covenant has been complied with.

Section 103. Form of Documents Delivered to Trustee.

In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

Any certificate or opinion of an officer of the Issuer or the Guarantor may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or

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representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or opinion of counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Issuer or the Guarantor stating that the information with respect to such factual matters is in the possession of the Issuer or the Guarantor, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous.

Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.

Section 104. Acts of Holders of Securities; Record Dates.

(a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders of Securities may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by agent duly appointed in writing. If Securities of a series are issuable as Bearer Securities, any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders of Securities of such series may, alternatively, be embodied in and evidenced by the record of Holders of Securities of such series voting in favor thereof, either in person or by proxies duly appointed in writing, at any meeting of Holders of Securities of such series duly called and held in accordance with the provisions of Article Thirteen or a combination of such instruments and any such record. Except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments or record or both are delivered to the Trustee and, where it is hereby expressly required, to the Issuer and the Guarantor. Such instrument or instruments and any such record (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Holders of Securities signing such instrument or instruments and so voting at such meeting. Proof of execution of any such instrument or of a writing appointing any such agent or proxy, or of the holding by any person of a Security shall be sufficient for any purpose of this Indenture and (subject to Section 601) conclusive in favor of the Trustee and the Issuer and the Guarantor, if made in the manner provided in this Section. The record of any meeting of Holders of Securities shall be proved in the manner provided in Section 1306.

(b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such

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execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which the Trustee deems sufficient.

(c) The Issuer or the Guarantor may set any day as a record date for the purpose of determining the Holders of Outstanding Securities of any series entitled to give, make or take any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Indenture to be given, made or taken by Holders of Securities of such series, provided that the Issuer or the Guarantor may not set a record date for, and the provisions of this paragraph shall not apply with respect to, the giving or making of any notice, declaration, request or direction referred to in the next paragraph. If any record date is set pursuant to this paragraph, the Holders of Outstanding Securities of the relevant series on such record date, or their duly designated proxies, and no other Holders, shall be entitled to take the relevant action, whether or not such Holders remain Holders after such record date; provided that no such action shall be effective hereunder unless taken on or prior to the applicable Expiration Date by Holders, or duly designated proxies, of the requisite principal amount of Outstanding Securities of such series on such record date. Nothing in this paragraph shall be construed to prevent the Issuer or the Guarantor from setting a new record date for any action for which a record date has previously been set pursuant to this paragraph (whereupon the record date previously set shall automatically and with no action by any Person be cancelled and of no effect), and nothing in this paragraph shall be construed to render ineffective any action taken by Holders, or their duly designated proxies, of the requisite principal amount of Outstanding Securities of the relevant series on the date such action is taken. Promptly after any record date is set pursuant to this paragraph, the Issuer or the Guarantor, at their own expense, shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Trustee in writing and to each Holder of Securities of the relevant series in the manner set forth in Section 106.

The Trustee may set any day as a record date for the purpose of determining the Holders of Outstanding Securities of any series entitled to join in the giving or making of (i) any Notice of Default, (ii) any declaration of acceleration referred to in Section 502, (iii) any request to institute proceedings referred to in Section 507(2) or (iv) any direction referred to in Section 512 in each case with respect to Securities of such series. If any record date is set pursuant to this paragraph, the Holders of Outstanding Securities of such series on such record date, or their duly designated proxies, and no other Holders, shall be

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entitled to join in such notice, declaration, request or direction, whether or not such Holders remain Holders after such record date; provided that no such action shall be effective hereunder unless taken on or prior to the applicable Expiration Date by Holders, or their duly designated proxies, of the requisite principal amount of Outstanding Securities of such series on such record date. Nothing in this paragraph shall be construed to prevent the Trustee from setting a new record date for any action for which a record date has previously been set pursuant to this paragraph (whereupon the record date previously set shall automatically and with no action by any Person be cancelled and of no effect), and nothing in this paragraph shall be construed to render ineffective any action taken by Holders, or their duly designated proxies, of the requisite principal amount of Outstanding Securities of the relevant series on the date such action is taken. Promptly after any record date is set pursuant to this paragraph, the Trustee, at the expense of the Issuer or the Guarantor, shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Issuer or the Guarantor in writing and to each Holder of Securities of the relevant series in the manner set forth in Section 106.

With respect to any record date set pursuant to this Section, the party hereto which sets such record date may designate any day as the “Expiration Date” and from time to time may change the Expiration Date to any earlier or later day; provided that no such change shall be effective unless notice of the proposed new Expiration Date is given to the other party or parties hereto in writing, and to each Holder of Securities of the relevant series in the manner set forth in Section 106, on or prior to the existing Expiration Date. Notwithstanding the foregoing, no Expiration Date shall be later than the 180th day after the applicable record date and, if an Expiration Date is not designated with respect to any record date set pursuant to this Section, the party or parties hereto which set such record date shall be deemed to have designated the 180th day after such record date as the Expiration Date with respect thereto.

Without limiting the foregoing, a Holder of outstanding securities entitled hereunder to take any action hereunder with regard to any particular Security may do so with regard to all or any part of the principal amount of such Security or by one or more duly appointed agents or proxies each of which may do so pursuant to such appointment with regard to all or any part of such principal amount.

(d) The principal amount and serial numbers of Registered Securities (including a Temporary Global Security in registered form) held by any Person, and the date of holding the same, shall be proved by the Security Register. The principal amount and serial numbers of Bearer Securities held by any Person, and the date of holding the same, may be proved by the production of such Bearer Securities or by a certificate executed, as depositary, by any trust company, bank, banker or other depositary, wherever situated, if such certificate shall be deemed by the Trustee to be satisfactory, showing that at the date therein mentioned such

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Person had on deposit with such depositary, or exhibited to it, the Bearer Securities therein described; or such facts may be proved by the certificate or affidavit of the person holding such Bearer Securities, if such certificate or affidavit is deemed by the Trustee to be satisfactory; provided that with respect to any Temporary Global Bearer Security or Permanent Global Bearer Security, the principal amount represented by any beneficial interest in such Temporary Global Bearer Security or Permanent Global Bearer Security, and the date of holding the same, shall be determined by reference to the records of the relevant clearing system. The Trustee and the Issuer or the Guarantor may assume that such ownership of any Bearer Security continues until (1) another certificate or affidavit bearing a later date issued in respect of the same Bearer Security is produced, or (2) such Bearer Security is produced to the Trustee by some other Person, or (3) such Bearer Security is surrendered in exchange for a Registered Security, or (4) such Bearer Security is no longer Outstanding. The principal amount and serial numbers of Bearer Securities held by any Person, and the date of holding the same, may also be proved in any other manner which the Trustee deems sufficient.

(e) Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefore or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee, the Issuer or the Guarantor in reliance thereon, whether or not notation of such action is made upon such Security.

(f) The provisions of this Section 104 are subject to the provisions of Section 1305.

Section 105. Notices, Etc., to Trustee, Issuer and Guarantor.

Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders of Securities or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with,

(1) the Trustee by any Holder of Securities or by the Issuer or the Guarantor shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing (or sent by facsimile and confirmed in writing) to or with the Trustee at its Corporate Trust Office, Attention: Institutional Trust Services, or

(2) the Issuer or the Guarantor by the Trustee or by any Holder of Securities shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed (or sent by facsimile and confirmed in writing) international air-mail postage prepaid and addressed to its principal

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office specified in the first paragraph of this instrument to the attention of its Secretary, or at any other address previously furnished in writing to the Trustee by the Issuer or the Guarantor, as the case may be.

Section 106. Notice to Holders of Securities; Waiver.

Unless otherwise herein expressly provided, where this Indenture provides for notice to Holders of any event,

(1) such notice shall be sufficiently given to Holders of Registered Securities if in writing and mailed, first-class postage prepaid, to each Holder of a Registered Security affected by such event, at his address as it appears in the Security Register, not later than the latest date (if any), and not earlier than the earliest date (if any), prescribed for the giving of such notice; and

(2) such notice shall be sufficiently given to Holders of Bearer Securities if published in an Authorized Newspaper in such city or cities as may be specified in such Securities on a Business Day not later than the latest date prescribed for the giving of such notice; except that in the case where Bearer Securities of a series are held in their entirety by a Permanent Global Bearer Security and such Bearer Securities are not listed on the Luxembourg Stock Exchange, there may be substituted for such publication delivery of the relevant notice to the relevant clearing systems for communication by them to the beneficial owners of such Bearer Securities. Any such notice will be deemed to have been given to the Holders of such Bearer Securities on the seventh day after the day on which such notice was given to the Depositary or Depositaries.

In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice to Holders of Registered Securities by mail, then such notification as shall be given with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder. In any case where notice to Holders of Registered Securities is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder of a Registered Security shall affect the sufficiency of such notice with respect to other Holders of Registered Securities or the sufficiency of any notice to Holders of Bearer Securities given as provided herein.

In case by reason of the suspension of publication of any Authorized Newspaper or Authorized Newspapers or by reason of any other cause it shall be impracticable to publish any notice to Holders of Bearer Securities as provided above, then such notification to Holders of Bearer Securities as shall be given with the approval of the Trustee shall constitute sufficient notice to such Holders for every purpose hereunder. Neither the failure to give notice by publication to Holders of Bearer Securities as provided above, nor any defect in any notice so

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published, shall affect the sufficiency of any notice to Holders of Registered Securities given as provided herein.

Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.

Section 107. Language of Notices, Etc.

Any request, demand, authorization, direction, notice, consent or waiver required or permitted under this Indenture shall be in the English language, except that any published notice may be in an official language of the country of publication.

Section 108. Conflict with Trust Indenture Act.

If any provision hereof limits, qualifies or conflicts with a provision of the Trust Indenture Act that is mandatory under such Act to be a part of and govern this Indenture, the latter provision shall control. If any provision of this Indenture modifies or excludes any provision of the Trust Indenture Act that may be so modified or excluded, the latter provision shall be deemed to apply to this Indenture as so modified or to be excluded, as the case may be.

Section 109. Effect of Headings and Table of Contents.

The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.

Section 110. Successors and Assigns.

All covenants and agreements in this Indenture by the Issuer or the Guarantor shall bind their respective successors and assigns, whether so expressed or not.

Section 111. Separability Clause.

In case any provision in this Indenture, the Securities, the coupons or the Guarantees shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

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Section 112. Benefits of Indenture.

Nothing in this Indenture or in the Securities, the coupons or the Guarantees, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder and the Holders of Securities and coupons, any benefit or any legal or equitable right, remedy or claim under this Indenture.

Section 113. Governing Law.

This Indenture, the Securities and the coupons and the Guarantees shall be governed by and construed in accordance with the laws of the State of New York. For the avoidance of doubt, the provisions of Articles 86 to 94-8 of the Luxembourg law on Commercial companies of August 10, 1915, as amended, are hereby excluded and shall not be applicable.

Section 114. Saturday, Sundays and Legal Holidays.

In any case where any Interest Payment Date, Redemption Date or Stated Maturity of any Security shall not be a Business Day at any Place of Payment, then (notwithstanding any other provision of this Indenture, of the Securities or coupons (other than a provision of any Security which specifically states that such provision shall apply in lieu of this Section) payment of interest or principal (and premium, if any) need not be made at such Place of Payment on such date, but may be made on the next succeeding Business Day at such Place of Payment with the same force and effect as if made on the Interest Payment Date or Redemption Date, or at the Stated Maturity. If any scheduled Interest Payment Date, other than the Stated Maturity or any earlier Redemption Date, for any floating rate Security falls on a day that is not a Business Day, it will be postponed to the following Business Day, except that, in the case of a EURIBOR Security or a LIBOR Security, if that Business Day falls in the next calendar month, the Interest Payment Date will be the immediately preceding Business Day. If the scheduled Stated Maturity or any earlier Redemption Date of a floating rate Security falls on a date that is not a Business Day, the payment of principal, premium, if any, and interest, if any, will be made on the next succeeding Business Day, but interest on that payment will not accrue during the period from and after the Stated Maturity or Redemption Date.

Section 115. Consent to Service; Jurisdiction.

By the execution and delivery of this Indenture, each of the Issuer and the Guarantor hereby appoints Telecom Italia North America Inc. 745 Fifth Avenue, 27^th Floor, New York, NY 10151 as its agent upon which process may be served in any legal action or proceeding which may be instituted in any Federal or State court in the Borough of Manhattan, the City of New York, arising out of or relating to the Securities, the Guarantees or this Indenture, but for that purpose only. Service of process upon such agent at 745 Fifth Avenue, 27^th Floor, New York, NY 10151 and written notice of said service to the Issuer or the Guarantor by the Person servicing the same addressed as provided by Section 105 shall be deemed in every respect effective service of process upon the Issuer or the Guarantor, respectively, in any such legal action or proceeding, and each of the Issuer and the Guarantor hereby submits to the nonexclusive jurisdiction of any such court in which any such legal action or proceeding is so instituted. Such appointment shall be irrevocable so long as the Holders of Securities shall have any rights pursuant to the terms thereof or of this Indenture until the appointment of a successor by the Issuer or the Guarantor with the consent of the Trustee and such successor’s acceptance of such appointment. Each of the Issuer and the Guarantor further agrees to take any and all action, including the execution and filing of any and all such documents and instruments, as may be necessary to continue such designation and appointment of such agent or successor.

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ARTICLE TWO

SECURITY AND GUARANTEE FORMS

Section 201. Forms Generally.

The Securities of each series shall be in substantially the form set forth in this Article, or in such other form as shall be established by or pursuant to a Board Resolution of the Issuer or in one or more indentures supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or Depository therefore or as may, consistently herewith, be determined by the directors executing such Securities, as evidenced by their execution thereof. If Temporary Global Securities or Permanent Global Bearer Securities are issued as permitted by Section 305, the form thereof shall be established as provided in the preceding sentence. If the forms of Securities or coupons of any series (or any such Temporary Global Security or Permanent Global Bearer Security) are established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified by any member of the Board of Directors of the Issuer delivered to the Trustee at or prior to the delivery of the Order contemplated by Section 305 for the authentication and delivery of such Securities.

The Guarantee by the Guarantor to be issued on the Securities of each series shall be in substantially the form set forth in Section 207 or in such other form as shall be established by or pursuant to a Board Resolution of the Guarantor, or in one or more indentures supplemental hereto, pursuant to Section 301 in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or Depositary therefor or as may, consistently herewith, be determined by the directors or officers delivering such Guarantees, all as evidenced by such delivery.

The definitive Securities shall be printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the directors executing such Securities, as evidenced by their execution of such Securities.

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Section 202. Form of Registered Security.

[Form of Face of Registered Security]

[Insert any legend required by the Internal Revenue Code and the regulations thereunder.]

[Insert the Securities Act Legend, the Global Legend and Restricted Legend, if applicable]

TELECOM ITALIA CAPITAL

société anonyme

subscribed corporate capital of Euro 2,336,000 represented by

100,000 shares, nominal value of 23.36 per share, all fully paid,

its Articles of Incorporation were published on October 13, 2000

in the Mémorial, Journal Officiel of the Grand Duchy of Luxembourg,

Recueil des Sociétés et Associations

12-14 Boulevard Grande-Duchesse Charlotte L-1330, Luxembourg

R.C.S. Luxembourg B-77.970

[PRINCIPAL AMOUNT]

· $··% SERIES GUARANTEED SENIOR GLOBAL NOTES

DUE                          

Payment of Principal [, Premium, if any,]

and Interest Fully and Unconditionally Guaranteed by

TELECOM ITALIA S.p.A.

No.                    

CUSIP No. ·

ISIN No. ·

Common Code: ·

TELECOM ITALIA CAPITAL, a company with limited liability (société anonyme) incorporated on September 27, 2000 for an unlimited duration under the laws of the Grand-Duchy of Luxembourg (herein called the “Issuer”, which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to                                                   , or registered assigns, the principal sum of ____________________on                                                                      , and to pay interest thereon from __________________, 20         or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually in arrears on ··, and ·· in each year, commencing                                 , 20         , [if fixed rate securities, insert — at the rate of         % per annum] [if floating rate securities, insert formula

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for determining the interest rate], until the principal hereof is paid or made available for payment [if applicable, insert —, provided that any principal and premium, and any such installment of interest, which is overdue shall bear interest at the rate of         % per annum (to the extent that the payment of such interest shall be legally enforceable), from the dates such amounts are due until they are paid or made available for payment, and such interest shall be payable on demand]. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be the [fifteen day] [or                 ] (whether or not a Business Day)[, as the case may be,] next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture].

[If applicable, insert — As at the date of this Definitive Registered Security, the outstanding amounts for each of the previous debt securities issued by the Issuer are as follows, and such debt securities are guaranteed as follows:

Outstanding Amount Guaranteed By:

[Insert — Names/Addresses of Paying Agents]

The Issuer shall pay Additional Amounts as provided in Section 1004 of the Indenture.

Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof, directly or through an Authenticating Agent,

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by manual signature of an authorized signatory, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed manually or in facsimile.

Dated:

TELECOM ITALIA CAPITAL SOCIÉTÉ ANONYME
By:
Name:
Title:	Director

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CERTIFICATE OF AUTHENTICATION

This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.

JPMorgan Chase Bank

As Trustee

By:
	Authorized Officer

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[Form of Reverse of Registered Security]

This Security is one of a duly authorized issue of securities of the Issuer (the “Securities”), issued and to be issued in one or more series under an Indenture, dated as of October ·, 2003 (the “Indenture” which term shall have the meaning assigned to it in such instrument), among the Issuer, Telecom Italia S.p.A., a joint stock company established under the laws of the Republic of Italy (herein called the “Guarantor”, which term includes any successor Person under the Indenture referred to herein), and JPMorgan Chase Bank, as Trustee (the “Trustee”, which term includes any other successor trustee under the Indenture), and reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Issuer, the Guarantor, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. This Security is one of the series designated on the face hereof [, initially limited in aggregate principal amount to [insert currency and amount]].

[If further issues are contemplated, insert — The Issuer may from time to time, without the consent of the Holders, create and issue further securities having the same terms and conditions as the Securities in all respects (or in all respects except for the issue date, the first payment of interest thereon and/or issue price), so that such further issue shall be consolidated and form a single series with the outstanding Securities or upon such terms as the Issuer may determine at the time of their issue.]

[If applicable, insert — The Securities of this series are subject to redemption upon not less than 30 days’ notice by mail, [if applicable, insert — (1) on                      in any year commencing with the year              and ending with the year              through operation of the sinking fund for this series at a Redemption Price equal to [insert formula for determining amount] (with the amount in excess of 100% of the principal amount being additional interest), and (2)] at any time [if applicable, insert — on or after             , 20        ], as a whole or in part, at the election of the Issuer, at the following Redemption Prices (expressed as percentages of the principal amount): If redeemed [if applicable, insert — on or before                 ,         %, and if redeemed] during the 12-month period beginning                  of the years indicated,

Year Redemption Price Year Redemption Price

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and thereafter at a Redemption Price equal to             % of the principal amount, together in the case of any such redemption [if applicable, insert — (whether through operation of the sinking fund or otherwise)] with accrued interest to the Redemption Date, but interest installments whose Stated Maturity is on or prior to such Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, of record at the close of business on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture.]

[If applicable, insert — The Securities of this series are subject to redemption upon not less than 30 days’ notice by mail, (1) on                      in any year commencing with the year                      and ending with the year                     , through operation of the sinking fund for this series at the Redemption Prices for redemption through operation of the sinking fund (expressed as percentages of the principal amount) set forth in the table below, and (2) at any time [if applicable, insert — on or after             , 20        ], as a whole or in part, at the election of the Issuer, at the Redemption Prices for redemption otherwise than through operation of the sinking fund (expressed as percentages of the principal amount, with the amount in excess of 100% of the principal amount being additional interest) set forth in the table below: If redeemed during the 12-month period beginning                      of the years indicated,

Year Redemption Price For Redemption Through Operation of the Sinking Fund Redemption Price For Redemption Otherwise Than Through Operation of the Sinking Fund

and thereafter at a Redemption Price equal to             % of the principal amount, together in the case of any such redemption (whether through operation of the sinking fund or otherwise) with accrued interest to the Redemption Date, but interest installments whose Stated Maturity is on or prior to such Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, of record at the close of business on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture.]

[If applicable, insert — Notwithstanding the foregoing, the Issuer may not, prior to                      , redeem any Securities of this series as contemplated by [If applicable, insert — Clause (2) of] the preceding paragraph as a part of, or in anticipation of, any refunding operation by the application, directly or indirectly, of moneys borrowed having an interest cost to the Issuer (calculated in accordance with generally accepted financial practice) of less than              % per annum.]

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[If applicable, insert — The sinking fund for this series provides for the redemption on                      in each year beginning with the year                      and ending with the year                      of [if applicable, insert — not less than [insert currency and amount] (“mandatory sinking fund”) and not more than [insert currency and amount] aggregate principal amount of Securities of this series. Securities of this series acquired or redeemed by the Issuer otherwise than through [if applicable, insert — mandatory] sinking fund payments may be credited against subsequent [if applicable, insert — mandatory] sinking fund payments otherwise required to be made [if applicable, insert — in the inverse order in which they become due].]

[If applicable, insert — The Securities may be redeemed at the option of the Issuer or the Guarantor, in whole but not in part, upon not less than 30 nor more than 60 days’ notice given as provided in the Indenture, at any time at a Redemption Price equal to the principal amount thereof plus accrued interest to the date fixed for redemption if as a result of any change in or amendment to the laws or any regulations or rulings promulgated thereunder of the jurisdiction (or of any political subdivision or taxing authority thereof or therein) in which the Issuer or the Guarantor is incorporated (or in the case of a successor Person to the Issuer or the Guarantor, of the jurisdiction in which such successor Person is organized or any political subdivision or taxing authority thereof or therein) or any change in the official application or interpretation of such laws, regulations or rulings, or any change in the official application or interpretation of, or any execution of or amendment to, any treaty or treaties affecting taxation to which such jurisdiction or such political subdivision or taxing authority (or such other jurisdiction or political subdivision or taxing authority) is a party, which change, execution or amendment becomes effective on or after                      (or, in the case of a successor Person to the Issuer or the Guarantor, the date on which such successor Person became such pursuant to the applicable provisions of the Indenture) (i) the Issuer or the Guarantor (or such successor Person) is or would be required to pay Additional Amounts with respect to the Securities or the Guarantees, respectively, on the next succeeding Interest Payment Date as set forth below or in the Guarantee endorsed hereon or (ii) the Guarantor or any Subsidiary of the Guarantor is or would be required to deduct or withhold tax on any payment to the Issuer to enable the Issuer to make any payment of principal or interest in respect of the Securities and, in each case, the payment of such Additional Amounts in the case of (i) above or such deduction or withholding in the case of (ii) above cannot be avoided by the use of any reasonable measures available to the Issuer, the Guarantor or the Subsidiary.]

[If applicable, insert — The Securities may also be redeemed in whole but not in part upon not less than 30 nor more than 60 days’ notice given as provided in the Indenture at any time at a Redemption Price equal to the principal amount thereof plus accrued interest to the date fixed for redemption if the Person formed by a consolidation of the Issuer or the Guarantor or into which the Issuer or the

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Guarantor is merged or to which the Issuer or the Guarantor conveys, transfers or leases its properties and assets substantially as an entirety is required to pay a Holder additional amounts in respect of any tax, assessment or governmental charge imposed on any such Holder or required to be withheld or deducted from any payment to such Holder as a consequence of such consolidation, merger, conveyance, transfer or lease. However, the Securities may not be redeemed if the sole purpose of such a merger would be to permit such redemption.]

[If applicable, insert — The Redemption Price of the Securities shall be equal to the applicable percentage of the principal amount at Stated Maturity set forth below:

If Redemption During the 12-Month Period Commencing Redemption Price

together with, in each case (except if the Redemption Date shall be a                     ), an amount equal to the applicable Redemption Price multiplied by a fraction the numerator of which is the number of days from but not including the preceding                      to and including the Redemption Date multiplied by the difference between the Redemption Price applicable during the 12 months beginning on the                      following the Redemption Date (or, in the case of a Redemption Date after                     , 100%) and the Redemption Price applicable on the Redemption Date and the denominator of which is the total number of days from but not including the                      preceding the Redemption Date to and including the next succeeding                     . The Issuer will also pay to each eligible Holder, or make available for payment to each such Holder, on the Redemption Date any additional interest (as set forth [on the face hereof or] in the Guarantee endorsed hereon) resulting from the payment of such Redemption Price.]

[If applicable insert — The Redemption Price of the Securities either in the event of certain changes in the tax treatment or in any event of default would include, in addition to the face amount of the Security, an amount equal to the Original Issue Discount accrued since the issue date. Original Issue Discount (the difference between the Issue Price and the Principal Amount at Maturity of the Security), in the period during which a Security remains outstanding, shall accrue at             % per annum, on a semi-annual bond equivalent basis using a 360-day year composed of twelve 30 day months, commencing on the Issue Date of this Security.]

Notice of redemption will be given by mail to Holders of Securities, not less than 30 nor more than 60 days prior to the date fixed for redemption, all as provided in the Indenture.

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In the event of redemption of this Security in part only, a new Security or Securities of this series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.

[If applicable, insert — The Indenture contains provisions for defeasance at any time of the [entire indebtedness of this Security] [or] [certain restrictive covenants and Events of Default with respect to this Security] [, in each case] upon compliance by the Issuer or the Guarantor with certain conditions set forth therein, which provisions apply to this Security.]

[Insert if not an OID Security] If an Event of Default with respect to Securities of this series shall occur and be continuing, the principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture.

[Insert if not an OID Security] If an Event of Default with respect to Securities of this series shall occur and be continuing, an amount of principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture. Such amount shall be equal to — insert formula for determining the amount. Upon payment (i) of the amount of principal so declared due and payable and (ii) of interest on any overdue principal, premium and interest (in each case to the extent that the payment of such interest shall be legally enforceable), all of the applicable Issuer’s obligations in respect of the payment of the principal of and interest, if any, on the Securities of this series shall terminate.

If any deduction or withholding for any present or future taxes or other governmental charges of the Relevant Jurisdiction shall at any time be required by the Relevant Jurisdiction in respect of any amounts to be paid by the Issuer under the Securities, the Issuer will pay to the Holder of this Security, such additional amounts as may be necessary in order that the net amounts paid to such Holder of such Security shall be not less than the amounts specified in such Security to which such Holder is entitled; provided, however, that the Issuer shall not be required to make any payment of additional amounts for or on account of:

(1) any tax or other governmental charge which would not have been imposed but for the existence of any present or former connection between such Holder and the Relevant Jurisdiction (other than the mere holding of a Security and the receipt of payments thereon), including, without limitation, such Holder being or having been a citizen or resident thereof or being or having been present or engaged in trade or business therein or having or having had a permanent establishment therein;

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(2) The application of European Directive 2003/48/EC of June 3, 2003, on the taxation of income from savings, as well as any equivalent measure adopted according to such directive;

(3) any tax or other governmental charge that would not have been imposed but for a failure to comply with any applicable certification, information, identification, documentation or other reporting requirements concerning the nationality, residence, identity or connection with the Relevant Jurisdiction if such compliance is required as a precondition to relief or exemption from such tax or other governmental charge (including without limitation a certification that such Holder is not resident in the Relevant Jurisdiction or an individual resident in a member state of the European Union);

(4) any tax or other governmental charge which would not have been imposed but for a change in law that becomes effective more than 30 days after a payment by the Issuer under the Securities becomes due and payable, or is duly provided for and notice thereof is duly published, whichever occurs later;

(5) any tax or other governmental charge required to be withheld by any Paying Agent from a payment on a Security, if such payment can be made without such deduction or withholding by any other Paying Agent;

(6) any tax or other governmental charge on Holders not resident in Italy imposed pursuant to Italian Law No. 239 of April 1, 1996, as amended, and as supplemented by the Decree of the Ministry of Finance dated January 23, 2002, as amended, listing the states of territories deemed to have a “privileged tax regime” or any superseding Decree replacing or modifying such list of states or territories; or

(7) any combination of items (1), (2), (3), (4), (5) and (6) above.

The foregoing provisions shall apply mutatis mutandis to any withholding or deduction for or on account of any present or future taxes or governmental charges of whatever nature of any jurisdiction in which any successor Person to the Issuer is organized, or any political subdivision or taxing authority thereof or therein. In addition, neither the Issuer nor the Guarantor shall have any obligation to pay Additional Amounts to a Holder that is a fiduciary or partnership or an entity that is not the sole beneficial owner of the payment of the principal or interest on a Security to the extent that the laws of the Relevant Jurisdiction require the payment to be included in the income of a beneficiary or settlor for tax purposes with respect to such fiduciary, a member of such partnership or the beneficial owner who would not have been entitled to the Additional Amounts had such beneficiary, settlor, member or beneficial owner been the Holder of such Security.

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[Upon request, the Issuer shall provide the Trustee with documentation (which may consist of certified copies of such documentation) satisfactory to the Trustee evidencing the payment of Luxembourg taxes with respect to payment on the Securities. Copies of such documentation shall be made available to the Owners of the Securities or the Paying Agent, as applicable, upon request therefor.]

[The Issuer shall pay all stamp and other duties, if any, and all documentary stamp or similar taxes, if any, which may be imposed by The Grand Duchy of Luxembourg, or any other governmental entity or political subdivision therein or thereof or any taxing authority of or in any of the foregoing, with respect to the Indenture, the initial issuance of this Security, any transfer of this Security or payment orders relating to this Security. The Issuer shall not assert or claim any exemption available to it in respect of any stamp or other duties, or documentary stamp or similar taxes, which it has agreed to pay under the preceding sentence, if, after the assertion or claiming of such exemption, Holders or Owners of this Security would be liable for such duty or tax.]

All references in this Security to principal, premium or interest in respect of any Security shall be deemed to mean and include all Additional Amounts, if any, payable in respect of such principal, premium or interest, unless the context otherwise requires, and express mention of the payment of Additional Amounts in any provision hereof shall not be construed as excluding reference to Additional Amounts in those provisions hereof where such express mention is not made.

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the Guarantor and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Issuer, the Guarantor and the Trustee with the consent of the Holders of a majority in principal amount of the Securities at the time Outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Issuer or the Guarantor with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.

As set forth in, and subject to, the provisions of the Indenture, no Holder of any Security of this series will have any right to institute any proceeding with respect to the Indenture, the Guarantee endorsed hereon, this Security or for any remedy thereunder, unless such Holder shall have previously given to the Trustee

33

written notice of a continuing Event of Default with respect to the Securities of this series, the Holders of not less than 25% in principal amount of the Outstanding Securities of this series shall have made written request, and offered reasonable indemnity, to the Trustee to institute such proceeding as trustee, and the Trustee shall not have received from the Holders of a majority in principal of the Outstanding Securities of this series a direction inconsistent with such request and shall have failed to institute such proceeding within 60 days; provided, however, that such limitations do not apply to a suit instituted by the Holder hereof for the enforcement of payment of the principal [(and premium, if any)] or [any] interest on this Security on or after the respective due dates expressed herein. [If applicable insert — or to a suit instituted by the Holder hereof for the enforcement of the right to convert this Security in accordance with the Indenture]

No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and any premium and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed or to convert this security as provided in the Indenture.

[Insert if only Registered Securities may be issued — The Securities of this series are issuable only in registered form without coupons in denominations of                  [insert currency and amount] and any integral multiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registerable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Issuer in any place where the principal of and any premium and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Issuer and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.]

[Insert if Securities of the series may be in registered or bearer form — Title to Bearer Securities and coupons shall pass by delivery. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of Registered Securities is registerable in the Security Register, upon surrender of a Registered Security for registration of transfer at the office or agency of the Issuer in any place where the principal of and any premium and interest on a Registered Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Issuer and the Security Registrar duly

34

executed by, the Holder thereof or his attorney duly authorized in writing, and thereupon one or more new Registered Securities of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.]

No service charge shall be made for any such registration of transfer or exchange, but the Issuer or the Trustee may require from the Holder hereof payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

Prior to due presentment of this Security for registration of transfer, the Issuer, the Guarantor, the Trustee and any agent of the Issuer, the Guarantor or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and none of the Issuer, the Guarantor, the Trustee nor any such agent shall be affected by notice to the contrary.

The Indenture and the Securities shall be governed by and construed in accordance with the laws of the State of New York. For the avoidance of doubt, the provisions of Articles 86 to 94-8 of the Luxembourg law on Commercial companies of August 10,1915, as amended, are hereby excluded and shall not be applicable.

All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

35

Section 203. Form of Bearer Security.

ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287 (a) OF THE INTERNAL REVENUE CODE.

[Insert any other legend required by the Internal Revenue Code and the regulations thereunder.] [Make any conforming changes from Registered Form.]

[Insert the Securities Act Legend, the Global Legend and Restricted Legend, if applicable]

TELECOM ITALIA CAPITAL

société anonyme

subscribed corporate capital of Euro 2,336,000 represented by

100,000 shares, nominal value of Euro 23.36 per share, all fully paid,

its Articles of Incorporation were published on October 13, 2000

in the Memorial, Journal Officiel of the Grand Duchy of Luxembourg,

Recueil des Sociétés et Associations

12-14 Boulevard Grande-Duchesse Charlotte L-1330, Luxembourg

R.C.S. Luxembourg B-77.970

[PRINCIPAL AMOUNT]

$ ··% GUARANTEED SENIOR GLOBAL NOTES

DUE                          , 20        

Payment of Principal [, Premium, if any,]

and Interest Fully and Unconditionally Guaranteed by

TELECOM ITALIA S.p.A.

No.                          ISIN NO.

TELECOM ITALIA CAPITAL, a company with limited liability (société anonyme) incorporated on September 27, 2000 for an unlimited duration under the laws of the Grand-Duchy of Luxembourg (the “Issuer”, which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to bearer upon presentation and surrender of this Security the principal sum of                              on                                                                       [if the Security is to bear interest prior to Maturity, insert – , and to pay interest thereon from                        , 20         or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually in arrears on                              and

36

                     in each year] [annually in arears on                      in each year], commencing                     , 20         , at the rate of          % per annum, [If floating rate securities, insert formula for determining the interest rate] until the principal hereof is paid or made available for payment [if applicable, insert —, provided that any principal and premium, and any such installment of interest, which is overdue shall bear interest at the rate of         % per annum (to the extent that the payment of such interest shall be legally enforceable), from the dates such amounts are due until they are paid or made available for payment, and such interest shall be payable on demand]. [If the Security is not to bear interest prior to Maturity, insert          The principal of this Security shall not bear interest except in the case of a default in payment of principal upon acceleration, upon redemption or at Stated Maturity, and in such case the overdue principal and any overdue premium shall bear interest at the rate of         % per annum (to the extent that the payment of such interest shall be legally enforceable), from the date such amounts are due until they are paid or made available for payment. Interest on any overdue principal shall be payable on demand. Any such interest on any overdue principal or premium which is not so paid on demand shall bear interest at the rate of         % per annum (to the extent that the payment of such interest on interest shall be legally enforceable), from the date of such demand until the amount so demanded is paid or made available for payment, to the extent permitted under applicable law. Interest on overdue interest shall be payable on demand.] Such payments [(including premium, if any)] shall be made, subject to any laws or regulations applicable thereto and to the right of the Issuer (limited as provided in the Indenture) to rescind the designation of any such Paying Agent, at the [main] offices of         , in         , in         ,          in         ,          in          and          in         , or at such other offices or agencies outside the United States (as defined below) as the Issuer may designate, at the option of the Holder, by United States dollar check drawn on a bank in The City of New York or by transfer of United States dollars to an account maintained by the payee with a bank located outside the United States.] Interest in this Security due on or before Maturity shall be payable only upon presentation and surrender at such an office or agency of the interest coupons hereto attached as they severally mature. No payment of principal of [, premium, if any] or interest on, this Security shall be made at any office or agency of the Issuer in the United States or by check mailed to any address in the United States or by transfer to an account maintained with a bank located in the United States [If Security is denominated and payable in United States dollars, insert —; provided, however, that payment of principal of [(and premium, if any)] and [if applicable, insert — any such] interest on this Security shall be made at the office of the Issuer’s Paying Agent in the Borough of Manhattan, The City of New York, if (but only if) payment in United States dollars of the full amount of such principal, [premium, if any,] or interest as the case may be, at all offices or agencies outside the United States maintained for the purpose by the Issuer in accordance with the Indenture is illegal or effectively precluded by exchange controls or other similar restrictions on the full repayment or receipt of such amounts in United States dollars, as determined by the Issuer.]

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[If applicable, insert — As at the date of this Definitive Bearer Security, the outstanding amounts for each of the previous debt securities issued by the Issuer are as follows, and such debt securities are guaranteed as follows:

Outstanding Amount Guaranteed By:

Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof, directly or through an Authenticating Agent, by manual signature of an authorized signatory, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

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IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed.

Dated:

TELECOM ITALIA CAPITAL SOCIÉTÉ ANONYME
By:
Name:
Title:	Director

TELECOM ITALIA CAPITAL SOCIÉTÉ ANONYME
By:
Name:
Title:	Director

39

CERTIFICATE OF AUTHENTICATION

This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.

JPMorgan Chase Bank

As Trustee

By:
	Authorized Officer

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[Form of Reverse of Bearer Security]

This Security is one of a duly authorized issue of securities of the Issuer (herein called the “Securities”), issued and to be issued in one or more series under an Indenture, dated as of October ·, 2003, (herein called the “Indenture” which term shall have the meaning assigned to it in such instrument), among the Issuer, Telecom Italia S.p.A., a joint stock company established under the laws of the Republic of Italy (the “Guarantor”), and JPMorgan Chase Bank, as Trustee (herein called the “Trustee”, which term includes any other trustee under the Indenture), and the other parties thereto and reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Issuer, the Guarantor, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. This Security is one of the series designated on the face hereof [, limited initially in aggregate principal amount to [U.S.$]                    ]. The Securities of this series are issuable as Bearer Securities, with interest coupons attached, in the denomination of [U.S. $]                  [, and as Registered Securities, without coupons, in denominations of [U.S. $]                  and any integral multiple thereof]. [As provided in the Indenture and subject to certain limitations therein set forth, Bearer Securities and Registered Securities of this series are exchangeable for a like aggregate principal amount of Registered Securities of this series and of like tenor of any authorized denominations, as requested by the Holder surrendering the same, upon surrender of the Security or Securities to be exchanged, with all unmatured coupons and all matured coupons in default thereto appertaining, at any office or agency described below where Registered Securities of this series may be presented for registration of transfer; provided, however, that Bearer Securities surrendered in exchange for Registered Securities between a Record Date and the relevant Interest Payment Date shall be surrendered without the coupon relating to such Interest Payment Date. Bearer Securities may not be issued in exchange for Registered Securities.]

The Issuer may from time to time, without the consent of the Holders, create and issue further securities having the same terms and conditions as the Securities in all respects (or in all respects except for the issue date, the first payment of interest thereon and/or issue price), so that such further issue shall be consolidated and form a single series with the outstanding Securities or upon such terms as the Issuer may determine at the time of their issue.

[If applicable, insert — The Securities of this series are subject to redemption [if applicable, insert — (1) on                  in any year commencing with the year              and ending with the year              through operation of the sinking fund for this series at a Redemption Price equal to [insert formula for determining amount] (with the amount in excess of 100% of the principal amount being additional interest), and (2)] at any time [if applicable, insert — on or after                 , 20         ], as a whole or in part, at the election of the Issuer, at the

41

following Redemption Prices (expressed as percentages of the principal amount): If redeemed [if applicable, insert — on or before                     ,         %, and if redeemed] during the 12-month period beginning                  of the years indicated,

Year Redemption Price Year Redemption Price

and thereafter at a Redemption Price equal to             % of the principal amount, together in the case of any such redemption [if applicable, insert — (whether through operation of the sinking fund or otherwise)] with accrued interest to the Redemption Date, but interest installments whose Stated Maturity is on or prior to such Redemption Date will be payable only upon presentation and surrender of coupons for such interest (at an office or agency located outside the United States, except as herein provided otherwise).]

[If applicable, insert — The Securities of this series are subject to redemption (1) on                      in any year commencing with the year              and ending with the year         , through operation of the sinking fund for this series at the Redemption Prices for redemption through operation of the sinking fund (expressed as percentages of the principal amount) set forth in the table below, and (2) at any time [if applicable, insert — on or after                     , 20        ], as a whole or in part, at the election of the Issuer or the Guarantor, at the Redemption Prices for redemption otherwise than through operation of the sinking fund (expressed as percentages of the principal amount, with the amount in excess of 100% of the principal amount being additional interest) set forth in the table below: If redeemed during the 12-month period beginning                  of the years indicated,

Year Redemption Price For Redemption Through Operation of the Sinking Fund Redemption Price For Redemption Otherwise Than Through Operation of the Sinking Fund

and thereafter at a Redemption Price equal to             % of the principal amount, together in the case of any such redemption (whether through operation of the sinking fund or otherwise) with accrued interest to the Redemption Date, but interest installments whose Stated Maturity is on or prior to such Redemption Date will be payable only upon presentation and surrender of coupons for such

42

interest (at an office or agency located outside the United States, except as herein provided otherwise).]

[If applicable, insert — Notwithstanding the foregoing, the Issuer may not, prior to                                     , redeem any Securities of this series as contemplated by [If applicable, insert — Clause (2) of] the preceding paragraph as a part of, or in anticipation of, any refunding operation by the application, directly or indirectly, of moneys borrowed having an interest cost to the Issuer (calculated in accordance with generally accepted financial practice) of less than                 % per annum.]

[If applicable, insert — The sinking fund for this series provides for the redemption on                              in each year beginning with the year              and ending with the year              of [if applicable, insert — not less than U.S.$                     (“mandatory sinking fund”) and not more than] U.S.$                     aggregate principal amount of Securities of this series. Securities of this series acquired or redeemed by the Issuer or the Guarantor otherwise than through [if applicable, insert — mandatory] sinking fund payments may be credited against subsequent [if applicable, insert — mandatory] sinking fund payments otherwise required to be made [if applicable, insert — in the inverse order in which they become due].]

[If applicable, insert — The Securities may be redeemed at the option of the Issuer or the Guarantor, in whole but not in part, upon not less than 30 nor more than 60 days’ notice given as provided in the Indenture, at any time at a Redemption Price equal to the principal amount thereof plus accrued interest to the date fixed for redemption if as a result of any change in or amendment to the laws or any regulations or rulings promulgated thereunder of the jurisdiction (or of any political subdivision or taxing authority thereof or therein) in which the Issuer or the Guarantor is incorporated (or in the case of a successor Person to the Issuer or the Guarantor, of the jurisdiction in which such successor Person is organized or any political subdivision or taxing authority thereof or therein) or any change in the official application or interpretation of such laws, regulations or rulings, or any change in the official application or interpretation of, or any execution of or amendment to, any treaty or treaties affecting taxation to which such jurisdiction or such political subdivision or taxing authority (or such other jurisdiction or political subdivision or taxing authority) is a party, which change, execution or amendment becomes effective on or after                              (or, in the case of a successor Person to the Issuer or the Guarantor, the date on which such successor Person became such pursuant to the applicable provision of the Indenture) (i) the Issuer or the Guarantor (or such successor Person) is or would be required to pay Additional Amounts with respect to the Securities or the Guarantees, respectively, on the next succeeding Interest Payment Date as set forth below or in the Guarantee endorsed hereon or (ii) the Guarantor or any Subsidiary of the Guarantor is or would be required to deduct or withhold tax on

43

any payment to the Issuer to enable the Issuer to make any payment of principal or interest in respect of the Securities and, in each case, the payment of such Additional Amounts in the case of (i) above or such deduction or withholding in the case of (ii) above cannot be avoided by the use of any reasonable measures available to the Issuer, the Guarantor or the Subsidiary.]

[If applicable, insert — The Securities may also be redeemed in whole but not in part upon not less than 30 nor more than 60 days’ notice given as provided in the Indenture at any time at a Redemption Price equal to the principal amount thereof plus accrued interest to the date fixed for redemption if the Person formed by a consolidation of the Issuer or the Guarantor or into which the Issuer or the Guarantor is merged or to which the Issuer or the Guarantor conveys, transfers or leases its properties and assets substantially as an entirety is required to pay a Holder additional amounts in respect of any tax, assessment or governmental charge imposed on any such Holder or required to be withheld or deducted from any payment to such Holder as a consequence of such consolidation, merger, conveyance, transfer or lease. However, the Securities may not be redeemed if the sole purpose of such a merger would be to permit such redemption.]

[If applicable, insert — The Redemption Price of the Securities shall be equal to the applicable percentage of the principal amount at Stated Maturity set forth below:

If Redemption During the 12-Month Period Commencing Redemption Price

together with, in each case (except if the Redemption Date shall be a                             ), an amount equal to the applicable Redemption Price multiplied by a fraction the numerator of which is the number of days from but not including the preceding                              to and including the Redemption Date multiplied by the difference between the Redemption Price applicable during the 12 months beginning on the                              following the Redemption Date (or, in the case of a Redemption Date after                             , 100%) and the Redemption Price applicable on the Redemption Date and the denominator of which is the total number of days from but not including the                              preceding the Redemption Date to and including the next succeeding                             . The Issuer will also pay to each eligible Holder, or make available for payment to each such Holder, on the Redemption Date any additional interest (as set forth [on the face hereof or] in the Guarantee endorsed hereon) resulting from the payment of such Redemption Price.]

[If applicable insert – The Redemption Price of the Securities either in the event of certain changes in the tax treatment or in an event of default would

44

include, in addition to the face amount of the Security, an amount equal to the Original Issue Discount accrued since the issue date. Original Issue Discount (the difference between the Issue Price and the Principal amount at Maturity of the Security), in the period during which a Security remains outstanding, shall accrue at         % per annum, on a semi-annual bond equivalent basis using a 360 day year composed of twelve 30 day months, commencing on the Issue Date of this Security.]

[If applicable, insert — Notice of redemption will be given by publication in an Authorized newspaper in London and, if the Securities of this series are then listed on the Luxembourg Stock Exchange or any other stock exchange located outside the United States and such stock exchange shall so require, in [London] Luxembourg or in any other required city outside the United States or, if not practicable, elsewhere in Europe, and by mail to Holders of Registered Securities, not less than 30 nor more than 60 days prior to the date fixed for redemption, all as provided in the Indenture.]

— In the event of redemption of this Security in part only, a new Security of this series and of like tenor for the unredeemed portion hereof will be issued to the Bearer hereof upon the cancellation hereof.

[If applicable, insert — The Indenture contains provisions for defeasance at any time of [the entire indebtedness on this Security] [or] [certain restrictive covenants and Events of Default with respect to this Security] [, in each case] upon compliance by the Issuer and the Guarantor with certain conditions set forth therein, which provisions apply to this Security.]

[If applicable, insert – The Redemption Price of the Securities either in the event of certain changes in the tax treatment or in an event of default would include, in addition to the face amount of the Security, an amount equal to the Original Issue Discount accrued since the issue date. Original Issue Discount (the difference between the Issue Price and the Principal Amount or Maturity of the Security), in the period during which a Security remains outstanding, shall accrue at         % per annum, on a semi-annual bond equivalent basis using a 360 day year composed of twelve 30 day months, commencing on the Issue Date of this Security.]

[If applicable insert – Subject to and upon compliance with the provisions of the Indenture, the Holder of this Security is entitled, at his option, at any time after                             , to convert this Security into [Describe Securities and conversion mechanics].]

[If applicable insert – In the event of conversion of this Security in part only, a new Security or Securities of this series and of like tenor for the

45

unconverted portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.]

If an Event of Default with respect to Securities of this series shall occur and be continuing, the principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture.

If any deduction or withholding for any present or future taxes or other governmental charges of the Relevant Jurisdiction shall at any time be required by the Relevant Jurisdiction in respect of any amounts to be paid by the Issuer under the Securities, the Issuer will pay to the Holder of this Security, such additional amounts as may be necessary in order that the net amounts paid to such Holder of such Security shall be not less than the amounts specified in such Security to which such Holder is entitled; provided, however, that the Issuer shall not be required to make any payment of additional amounts for or on account of:

(1) any tax or other governmental charge which would not have been imposed but for the existence of any present or former connection between such Holder and the Relevant Jurisdiction (other than the mere holding of a Security and the receipt of payments thereon), including, without limitation, such Holder being or having been a citizen or resident thereof or being or having been present or engaged in trade or business therein or having or having had a permanent establishment therein;

(2) The application of European Directive 2003/48/EC of June 3, 2003, on the taxation of income from savings, as well as any equivalent measure adopted according to such directive;

(3) any tax or other governmental charge that would not have been imposed but for a failure to comply with any applicable certification, information, identification, documentation or other reporting requirements concerning the nationality, residence, identity or connection with the Relevant Jurisdiction if such compliance is required as a precondition to relief or exemption from such tax or other governmental charge (including without limitation a certification that such Holder is not resident in the Relevant Jurisdiction or an individual resident in a member state of the European Union);

(4) any tax or other governmental charge which would not have been imposed but for a change in law that becomes effective more than 30 days after a payment by the Issuer under the Securities becomes due and payable, or is duly provided for and notice thereof is duly published, whichever occurs later;

(5) any tax or other governmental charge required to be withheld by any Paying Agent from a payment on a Security, if such payment can be made without such deduction or withholding by any other Paying Agent;

46

(6) any tax or other governmental charge on Holders not resident in Italy imposed pursuant to Italian Law No. 239 of April 1, 1996, as amended, and as supplemented by the Decree of the Ministry of Finance dated January 23, 2002, as amended, listing the states of territories deemed to have a “privileged tax regime” or any superseding Decree replacing or modifying such list of states or territories; or

(7) any combination of items (1), (2), (3), (4), (5) and (6) above.

The foregoing provisions shall apply mutatis mutandis to any withholding or deduction for or on account of any present or future taxes or governmental charges of whatever nature of any jurisdiction in which any successor Person to the Issuer is organized, or any political subdivision or taxing authority thereof or therein. In addition, neither the Issuer nor the Guarantor shall have any obligation to pay Additional Amounts to a Holder that is a fiduciary or partnership or an entity that is not the sole beneficial owner of the payment of the principal or interest on a Security to the extent that the laws of the Relevant Jurisdiction require the payment to be included in the income of a beneficiary or settlor for tax purposes with respect to such fiduciary, a member of such partnership or the beneficial owner who would not have been entitled to the Additional Amounts had such beneficiary, settlor, member or beneficial owner been the Holder of such Security.

[Upon request, the Issuer shall provide the Trustee with documentation (which may consist of certified copies of such documentation) satisfactory to the Trustee evidencing the payment of Luxembourg taxes with respect to payments on the Securities or any coupon appertaining thereto. Copies of such documentation shall be made available to the Owners of the Securities or the Paying Agent, as applicable, upon request therefor.]

[Insert — Names/Addresses of Paying Agents]

[The Issuer shall pay all stamp and other duties, if any, or documentary stamp or similar taxes, if any, which may be imposed by The Grand-Duchy of Luxembourg or any other governmental entity or political subdivision therein or thereof, or any taxing authority of or in any of the foregoing, with respect to this Indenture, the issuance of the Securities of any series and any coupons appertaining thereto, any transfer of a Security or payment orders relating to a Security and any coupons appertaining thereto. The Issuer shall not assert or claim any exemption available to it in respect of any stamp or other duties, or documentary stamp or similar taxes, which it has agreed to pay under the preceding sentence, if, after the assertion or claiming of such exemption, Holders or Owners of such Security would be liable for such duty or tax.]

47

All references in this Security to principal, premium or interest in respect of any Security shall be deemed to mean and include all Additional Amounts, if any, payable in respect of such principal or interest, unless the context otherwise requires, and express mention of the payment of Additional Amounts in any provision hereof shall not be construed as excluding reference to Additional Amounts in those provisions hereof where such express mention is not made.

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the Guarantor and the rights of the Holders of the Securities of each series to be affected and any related coupons under the Indenture at any time by the Issuer, the Guarantor and the Trustee with the consent of the Holders of a majority in principal amount of the Securities at the time Outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series and any related coupons, to waive compliance by the Issuer and the Guarantor with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and any coupon appertaining thereto and of any Security issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.

As set forth in, and subject to, the provisions of the Indenture, no Holder of any Security of this series or any related coupon will have any right to institute any proceeding with respect to the Indenture, this Security or for any remedy thereunder, unless such Holder shall have previously given to the Trustee written notice of a continuing Event of Default with respect to the Securities of this series, the Holders of not less than 25% in principal amount of the Outstanding Securities of this series shall have made written request, and offered reasonable indemnity, to the Trustee to institute such proceeding as trustee, and the Trustee shall not have received from the Holders of a majority in principal of the Outstanding Securities of this series a direction inconsistent with such request and shall have failed to institute such proceeding within 60 days; provided, however, that such limitations do not apply to a suit instituted by the Holder hereof for the enforcement of payment of the principal [(and premium, if any)] or [any] interest on this Security or payment on such coupon or any related coupon on or after the respective due dates expressed herein or in such coupon.

No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and any premium and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed or to convert this Security as provided in the Indenture.

48

Title to Bearer Securities and coupons shall pass by delivery. [As provided in the Indenture and subject to certain limitations therein set forth, the transfer of Registered Securities is registerable in the Security Register, upon surrender of a Registered Security for registration of transfer at the office or agency of the Issuer or the Guarantor in any place where the principal of and any premium and interest on a Registered Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Issuer and the Security Registrar duly executed by, the Holder thereof or his attorney duly authorized in writing, and thereupon one or more new Registered Securities of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.]

No service charge shall be made for any such registration of transfer or exchange, but the Issuer, the Guarantor or the Trustee may require from the Holder hereof payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

The Issuer, the Guarantor, the Trustee and any agent of the Issuer, the Guarantor or the Trustee may treat the bearer of a Bearer Security and any coupon appertaining thereto, and prior to due presentation of a Registered Security for registration of transfer the Person in whose name a Registered Security is registered, as the owner thereof for all purposes, whether or not the Security or coupon be overdue, and neither the Issuer, the Guarantor, the Trustee nor any such agent shall be affected by notice to the contrary.

The Indenture, the Securities and any coupons appertaining thereto shall be governed by and construed in accordance with the laws of the State of New York. For the avoidance of doubt, the provisions of Articles 86 to 94-8 of the Luxembourg law on Commercial companies of August 10, 1915, as amended, are hereby excluded and shall not be applicable.

All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

49

Section 204. Form of Coupon.

[Form of Face of Coupon]

ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.

[Insert any other legend required by the Internal Revenue Code and the regulations thereunder.]

TELECOM ITALIA CAPITAL

société anonyme

12-14 Boulevard Grande-Duchesse Charlotte L-1330, Luxembourg

R.C.S. Luxembourg B-77.970

$··% GUARANTEED SENIOR GLOBAL NOTES

DUE                      , 20    

Payment of Principal [, Premium, if any,]

and Interest Fully and Unconditionally Guaranteed by

TELECOM ITALIA S.p.A.

R*

No.                                               

Unless the Security to which this coupon appertains shall have been called for previous redemption and payment thereof duly provided for on the date set forth hereon, Telecom Italia Capital (herein called the “Issuer”) will pay to bearer, upon surrender hereof, the amount shown hereon (together with any additional amounts in respect thereof which the Issuer may be required to pay according to the terms of said Security and the Indenture referred to therein) at the Paying Agents set out on the reverse hereof or at such other offices or agencies (which, except as otherwise provided in the Security to which this coupon appertains, shall be located outside the United States of America (including the States and the District of Columbia), and its possessions (including Puerto Rico, the U.S. Virgin Islands, Guam American Samoa Wake Island and the Northern Mariana Islands) (the “United States”)) as the Issuer may designate from time to time, at the option of the Holder, by United States dollar check drawn on a bank in The City of New York or by transfer of United States dollars to an account maintained by the payee with a bank located outside the United States, being [one year’s] interest then payable on said Security.

Dated:

50`

TELECOM ITALIA CAPITAL SOCIÉTÉ ANONYME
By:
Name:
Title:	Director

TELECOM ITALIA CAPITAL SOCIÉTÉ ANONYME
By:
Name:
Title:	Director

51

[Reverse of Coupon]*

____________________________________________________________________________________

____________________________________________________________________________________

____________________________________________________________________________________

____________________________________________________________________________________

* Insert names and addresses of initial Paying Agents located outside the United States.

52

Section 205. Form of Legends for Global Registered Securities.

Unless otherwise specified as contemplated by Section 301 for the Securities evidenced thereby, every Global Registered Security authenticated and delivered hereunder shall bear a legend in substantially the following form:

(a) Each Global Registered Security and each Temporary Global Security shall bear substantially the following legend (the “Securities Act Legend”) on the face thereof:

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) THAT IS [IN THE CASE OF RULE 144A NOTES: TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY),] [IN THE CASE OF REGULATION S NOTES: 40 DAYS AFTER THE ORIGINAL ISSUE DATE HEREOF] ONLY (A) TO THE ISSUER, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501(a)(l), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A

53

MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT IN THE CASE OF ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (E) OR (F) ABOVE TO THE ISSUER’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/ OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.

(b) Each Global Registered Security and each Temporary Global Security shall also bear the following legend (the “Global Legend”) on the face thereof:

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THIS SECURITY IS A GLOBAL REGISTERED SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

54

(c) Each security originally sold by the Initial Purchasers in reliance upon Regulation S and which will initially be evidenced by one or more Temporary Global Bearer Securities shall bear the following legend:

THIS NOTE IS A TEMPORARY GLOBAL NOTE. PRIOR TO THE EXPIRATION OF THE RESTRICTED PERIOD APPLICABLE HERETO, BENEFICIAL INTEREST HEREIN MAY NOT BE HELD BY ANY PERSON OTHER THAN (1) A NON U.S. PERSON OR (2) A U.S. PERSON THAT PURCHASED SUCH INTEREST IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). BENEFICIAL INTERESTS HEREIN ARE NOT EXCHANGEABLE FOR PHYSICAL NOTES OTHER THAN A PERMANENT GLOBAL NOTE IN ACCORDANCE WITH THE TERMS OF THE INDENTURE. TERMS IN THIS LEGEND ARE USED AS USED IN REGULATION S UNDER THE SECURITIES ACT.

(d) During the period beginning on the date of issue of any Security and ending on the date two years from such date, any Security, including any Security issued in exchange therefor or in lieu thereof, issued in accordance with Rule 144A shall be deemed a “Restricted Security” and shall be subject to the restrictions on transfer provided in, and shall bear, the legend set forth below; provided, however, that the term “Restricted Security” shall not include any Securities as to which restrictions have been terminated in accordance with Section 309. Except as provided in Sections 301 308 and 305, the Trustee shall not issue any unlegended Security until it has received an Officers’ Certificate from the Issuer directing it to do so.

[INCLUDE IF SECURITY IS A RESTRICTED SECURITY AND DOES NOT OTHERWISE INCLUDE THE SECURITIES ACT LEGEND]

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE ACT), OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) OUTSIDE THE UNITED STATES TO PERSONS OTHER THAN U.S. PERSONS IN OFFSHORE TRANSACTIONS MEETING THE REQUIREMENTS OF RULE 904 UNDER REGULATION S UNDER THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR (E) PURSUANT TO AN EFFECTIVE REGISTRATION

55

STATEMENT UNDER THE ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED HEREIN, THE TERMS “OFFSHORE TRANSACTION”, “UNITED STATES” AND “U.S. PERSON” HAVE THE RESPECTIVE MEANINGS GIVEN TO THEM BY REGULATIONS UNDER THE SECURITIES ACT.

THIS SECURITY AND ANY RELATED DOCUMENTATION MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME TO MODIFY THE RESTRICTIONS ON AND PROCEDURES FOR RESALES AND OTHER TRANSFERS OF THIS SECURITY TO REFLECT ANY CHANGE IN APPLICABLE LAW OR REGULATION (OR THE INTERPRETATION THEREOF) OR IN PRACTICES RELATING TO THE RESALE OR TRANSFER OF RESTRICTED SECURITIES GENERALLY. THE HOLDER OF THIS SECURITY SHALL BE DEEMED BY THE ACCEPTANCE OF THIS SECURITY TO HAVE AGREED TO ANY SUCH AMENDMENT OR SUPPLEMENT.

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Section 206. Form of Trustees Certificate of Authentication.

The Trustee’s certificates of authentication shall be in substantially the following form:

CERTIFICATE OF AUTHENTICATION

This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.

[JPMorgan Chase Bank]

As Trustee

By:
	Authorized Officer

Section 207. Guarantee by Guarantor; Form of Guarantee.

The Guarantor by its execution of this Indenture hereby agrees with each Holder of a Security (other than any direct or indirect Subsidiary of the Guarantor) of each series authenticated and delivered by the Trustee and with the Trustee on behalf of such Holder (other than any direct or indirect Subsidiary of the Guarantor), to be unconditionally bound by the terms and provisions of the Guarantee set forth below or established pursuant to Section 201 and authorizes the Issuer, in the name and on behalf of the Guarantor, to confirm such Guarantee to the Holder (other than any direct or indirect Subsidiary of the Guarantor) of each such Security by its execution and delivery of each such Security, with such Guarantee endorsed thereon, authenticated and delivered by the Trustee; provided, however, that if a series of Securities are to be initially offered and sold to a direct or indirect Subsidiary of the Guarantor, the Officer’s Certificate delivered in respect of such series pursuant to Section 301 may state that the Securities of such series are not entitled to the benefit of such Guarantee and such Guarantee shall not be endorsed thereon; provided, further, if such a Subsidiary (or another direct or indirect Subsidiary of the Guarantor) offers for resale (other than to another direct or indirect Subsidiary of the Guarantor) any such Security acquired directly or indirectly from the Issuer under this Indenture, the Guarantor, acknowledging good and valuable consideration in connection with such a resale, by its execution of this Indenture, further agrees with each Holder of any such Security of each series authenticated and delivered by the Trustee and with the Trustee on behalf of each such Holder to be unconditionally bound by the terms and provisions of the Guarantee set forth below or established pursuant to Section 201 and will authorize the Issuer, pursuant to an additional Officer’s Certificate in

57

the name and on behalf of the Guarantor, to confirm such Guarantee to the Holder of each such Security at any time after its initial execution and delivery to a direct or indirect Subsidiary of the Guarantor. When delivered pursuant to the provisions of Section 304 hereof, Guarantees so set forth on the Securities (either at the time of original issuance or at the time of resale by a direct or indirect Subsidiary of the Guarantor) shall bind the Guarantor notwithstanding the fact that the Guarantee does not bear the signature of the Guarantor.

Guarantees to be endorsed on the Securities shall, subject to Section 201 be in substantially the form set forth below:

GUARANTEE

For value received, Telecom Italia S.p.A., a joint stock company established under the laws of the Republic of Italy, having its registered office at Piazza degli Affari 2, 20123 Milan, Italy (herein called the “Guarantor”, which term includes any successor Person under the Indenture referred to in the Security upon which this Guarantee is endorsed), hereby fully, unconditionally and irrevocably guarantees to the Holder of the Security upon which this Guarantee is granted and to the Trustee, in its individual and trust capacities, and on behalf of each such Holder the due and punctual payment of the principal of, premium, if any, and interest on such Security (and, if applicable, any Additional Amounts), the due and punctual payment of the sinking fund or analogous payments referred to therein, if any, when and as the same shall become due and payable, whether at the Stated Maturity, by declaration of acceleration, call for redemption or otherwise, according to the terms thereof and of the Indenture referred to therein and the other monetary obligations of the Issuer to the Trustee pursuant to Section 607. In case of the failure of Telecom Italia Capital (the “Issuer”, which term includes any successor Person under such Indenture), punctually to make any such payment of principal, premium, if any, or interest or any sinking fund or analogous payment, the Guarantor hereby agrees to cause any such payment to be made punctually when and as the same shall become due and payable, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise, and as if such payment were made by the Issuer.

58

The Guarantor hereby further agrees, subject to the limitations and exceptions set forth below, that if any deduction or withholding for any present or future taxes or other governmental charges of the Relevant Jurisdiction shall at any time be required by the Relevant Jurisdiction in respect of any amounts to be paid by the Guarantor under this Guarantee, then the Guarantor will pay to the Holder of a Security as additional interest such additional amounts as may be necessary in order that the net amounts paid to the Holder of such Security shall be not less than the amounts specified in such Security to which such Holder is entitled; provided, however, that the Guarantor shall not be required to make any payment of additional amounts for or on account of:

(a) any tax or other governmental charge which would not have been imposed but for the existence of any present or former connection between such Holder and the Relevant Jurisdiction (other than the mere holding of a Security and the receipt of payments thereon), including, without limitation, such Holder being or having been a citizen or resident thereof or being or having been present or engaged in trade or business therein or having or having had a permanent establishment therein;

(b) The application of European Directive 2003/48/EC of June 3, 2003, on the taxation of income from savings, as well as any measure adopted according or pursuant to such directive;

(c) any tax or other governmental charge that would not have been imposed but for a failure to comply with any applicable certification, information, identification, documentation or other reporting requirements concerning the nationality, residence, identity or connection with the Relevant Jurisdiction if such compliance is required as a precondition to relief or exemption from such tax or other governmental charge (including without limitation a certification that such Holder is not resident in the Relevant Jurisdiction or an individual resident in a member state of the European Union);

(d) any tax or other governmental charge which would not have been imposed but for a change in law that becomes effective more than 30 days after a payment by the Guarantor under this Guarantee becomes due and payable, or is duly provided for and notice thereof is duly published, whichever occurs later;

(e) any tax or other governmental charge required to be withheld by any Paying Agent from a payment on a Security, if such payment can be made without such deduction or withholding by any other Paying Agent;

(f) any tax or other governmental charge on Holders not resident in Italy imposed pursuant to Italian Law No. 239 of April 1, 1996, as amended, and as supplemented by the Decree of the Ministry of Finance dated January 23, 2002, as amended, listing the states of territories deemed to have a “privileged tax regime” or any superseding Decree replacing or modifying such list of states or territories; or

(g) any combination of items (a), (b), (c), (d), (e) and (f) above.

The foregoing provisions shall apply mutatis mutandis to any withholding or deduction for or on account of any present or future taxes or governmental charges of whatever nature of any jurisdiction in which any successor Person to the Guarantor is organized, or any political subdivision or taxing authority thereof or therein. In addition, neither the Issuer nor the Guarantor shall have any obligation to pay Additional Amounts to a Holder that is a fiduciary or

59

partnership or an entity that is not the sole beneficial owner of the payment of the principal or interest on a Security to the extent that the laws of the Relevant Jurisdiction require the payment to be included in the income of a beneficiary or settlor for tax purposes with respect to such fiduciary, a member of such partnership or the beneficial owner who would not have been entitled to the Additional Amounts had such beneficiary, settlor, member or beneficial owner been the Holder of such Security.

The Guarantor hereby agrees that its obligations hereunder shall be as if it were principal debtor and not merely surety, and shall be absolute, full and unconditional, irrespective of, and shall be unaffected by, any invalidity, irregularity or unenforceability of such Security or such Indenture, any failure to enforce the provisions of such Security or such Indenture, or any waiver, modification or indulgence granted to the Issuer with respect thereto, by the Holder of such Security or the Trustee or any other circumstance which may otherwise constitute a legal or equitable discharge of a surety or guarantor; provided, however, that, notwithstanding the foregoing, no such waiver, modification or indulgence shall, without the consent of the Guarantor, increase the principal amount of such Security, or increase the interest rate thereon, or increase any premium payable upon redemption thereof, or alter the Stated Maturity thereof or, increase the principal amounts of any Original Issue Discount Security that would be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 502. The Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of merger or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest or notice with respect to such Security or the indebtedness evidenced thereby or with respect to any sinking fund or analogous payment required under such Security and all demands whatsoever, and covenants that this Guarantee will not be discharged except by payment in full of the principal of, premium, if any, and interest on such Security.

The Guarantor shall be subrogated to all rights of the Holder of such Security and the Trustee against the Issuer in respect of any amounts paid to such Holder by the Guarantor pursuant to the provisions of this Guarantee; provided, however, that the Guarantor shall not be entitled to enforce, or to receive any payments arising out of or based upon such right of subrogation until the principal of, premium, if any, and interest on all outstanding Securities of the same series issued under such Indenture shall have been paid in full.

No reference herein to such Indenture and no provision of this Guarantee or of such Indenture shall alter or impair the guarantee of the Guarantor, which is absolute and unconditional, of the due and punctual payment of the principal of, premium, if any, and interest on, and any sinking fund or analogous payments with respect to, the Security upon which this Guarantee is endorsed.

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The obligations of the Guarantor under this Guarantee shall, without any further act or thing being required to be done or to occur, extend to the obligations of any successor Person who is not the Guarantor arising in respect of the Securities by virtue of a substitution pursuant to the Indenture.

This Guarantee shall not be valid or obligatory for any purpose until the certificate of authentication of such Security shall have been manually executed by or on behalf of the Trustee under such Indenture.

All terms used in this Guarantee which are defined in such Indenture shall have the meanings assigned to them in such Indenture.

The Guarantee shall be governed by and construed in accordance with the laws of the State of New York. For the avoidance of doubt, the provisions of Articles 86 to 94-8 of the Luxembourg law on Commercial companies of August 10, 1915, as amended, are hereby excluded and shall not be applicable.

Claims against the Issuer and the Guarantor for payment of principal in respect of the Indenture shall be prescribed unless made within ten years from the date of payment of the relevant series of securities.

Executed and dated the date on the face hereof.

TELECOM ITALIA S.p.A.

By:

Name:

Title:

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Section 208. Form of Transfer Notice.

[TRANSFER NOTICE]

FOR VALUE RECEIVED the undersigned registered holder hereby sell(s), assign(s) and transfer(s) unto

Insert Taxpayer Identification No.

Please print or typewrite name and address including zip code of assignee

the within Security and all rights thereunder, hereby irrevocably constituting and appointing _________________________________ attorney to transfer said Security on the books of the Company with full power of substitution in the premises.

In connection with any transfer of this Security occurring prior to the termination of the time period referred to in Rule 144(k) under the Securities Act of 1933, as amended, as in effect with respect to such transfer, the undersigned confirms that without utilizing any general solicitation or general advertising that:

[Check One]

G(a) this Security is being transferred in compliance with the exemption from registration under the Securities Act of 1933, as amended, provided by Rule 144A thereunder.

or

G(b) this Security is being transferred other than in accordance with (a) above and documents are being furnished which comply with the conditions of transfer set forth in this Security and the Indenture.

If neither of the foregoing boxes is checked, the Trustee or Security Registrar shall not be obligated to register this Security in the name of any Person other than the Holder hereof unless and until the conditions to any such transfer or registration set forth herein and in Section · of the Indenture shall have been satisfied.

Date:                                                                                                                                                 

NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within-mentioned instrument in every particular, without alteration or any change whatsoever.

By:
	Authorized Signature

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Section 209. Form of Rule 144A Certificate.

Rule 144A Certificate

To: [JPMorgan Chase Bank], as Trustee (the “Trustee”)

[Address of Trustee]

Attention: Institutional Trust Services

Re: ·% Guaranteed Senior Securities due · (the “Securities”) issued under the Indenture (the “Indenture”) dated as of October !, 2003 between Telecom Italia Capital Société Anonyme (the “Issuer”), Telecom Italia S.p.A.(the “Guarantor”) and the Trustee and pursuant to Supplemental Indenture No. ·

Ladies and Gentlemen:

This Certificate relates to:

[CHECK A OR B AS APPLICABLE.]

GA. Our proposed purchase of $             principal amount of Securities issued under the Indenture.

GB. Our proposed exchange of $             principal amount of Securities issued under the Indenture for an equal principal amount of Securities to be held by us.

We and, if applicable, each account for which we are acting, are a qualified institutional buyer within the meaning of Rule 144A (“Rule 144A”) under the Securities Act of 1933, as amended (the “Securities Act”). If we are acting on behalf of an account, we exercise sole investment discretion with respect to such account. We are aware that the transfer of Securities to us, or such exchange, as applicable, is being made in reliance upon the exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A. Prior to the date of this Certificate we have received such information regarding the Issuer as we have requested pursuant to Rule 144A(d)(4) or have determined not to request such information.

[We and, if applicable, each account for which we are acting, are, resident in countries listed in the Decree of the Ministry of Finance of Italy of September 4, 1996 as amended, with the exception of the countries which are also listed in the Decree of the Ministry of Finance of Italy of January 23, 2002, as amended. If Art. 41 of Decree Law 30 September 2003, n.269 is confirmed and converted into ordinary law, the exclusion of the countries listed in the Decree of

63

the Ministry of Finance of Italy of January 23, 2002 will expire on January 1, 2004.]¹

You and the Issuer are entitled to rely upon this Certificate and are irrevocably authorized to produce this Certificate or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby.

¹ To be included if Italian obligor on the Securities.

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Very truly yours,

[NAME OF PURCHASER (FOR TRANSFERS) OR OWNER (FOR EXCHANGES)]

By:

Name:

Title:

Address:

Date:                                                                      

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Section 210. Form of Regulation S Certificate.

Regulation S Certificate

To: JPMorgan Chase Bank, as Trustee (the “Trustee”)

[4 New York Plaza, 15^th Floor, New York, New York 10004]

Attention: Institutional Trust Services

Re: ·% Guaranteed Senior Securities due · (the “Securities”) issued under the Indenture (the “Indenture”) dated as of October !, 2003 between Telecom Italia Capital Société Anonyme (the “Issuer”) Telecom Italia S.p.A. (the “Guarantor”) and the Trustee and pursuant to Supplemental Indenture No. ·

Ladies and Gentlemen:

Terms are used in this Certificate as used in Regulation S (“Regulation S”) under the Securities Act of 1933, as amended (the “Securities Act”), except as otherwise stated herein.

[CHECK A OR B AS APPLICABLE.]

GA. This Certificate relates to our proposed transfer of $             principal amount of Securities issued under the Indenture. We hereby certify as follows:

1. The offer and sale of the Securities was not and will not be made to a person in the United States (unless such person is excluded from the definition of “U.S. person” pursuant to Rule 902(k)(2)(vi) or the account held by it for which it is acting is excluded from the definition of “U.S. person” pursuant to Rule 902(k)(2)(i) under the circumstances described in Rule 902(h)(3)) and such offer and sale was not and will not be specifically targeted at an identifiable group of U.S. citizens abroad.

2. Unless the circumstances described in the parenthetical in paragraph 1 above are applicable, either (a) at the time the buy order was originated, the buyer was outside the United States or we and any person acting on our behalf reasonably believed that the buyer was outside the United States or (b) the transaction was executed in, on or through the facilities of a designated offshore securities market, and neither we nor any person acting on our behalf knows that the transaction was pre-arranged with a buyer in the United States.

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3. Neither we, any of our affiliates, nor any person acting on our or their behalf has made any directed selling efforts in the United States with respect to the Securities.

4. The proposed transfer of Securities is not part of a plan or scheme to evade the registration requirements of the Securities Act.

5. If we are a dealer or a person receiving a selling concession, fee or other remuneration in respect of the Securities, and the proposed transfer takes place during the Restricted Period (as defined in the Indenture), or we are an officer or director of the Issuer or an Initial Purchaser (as defined in the Indenture), we certify that the proposed transfer is being made in accordance with the provisions of Rule 904(b) of Regulation S.

6. [We are residents in countries listed in the Decree of the Ministry of Finance of Italy of September 4, 1996 as amended, with the exception of the countries which are also listed in the Decree of the Ministry of Finance of Italy of January 23, 2002, as amended. If Art. 41 of Decree Law 30 September 2003, n.269 is confirmed and converted into ordinary law, the exclusion of the countries listed in the Decree of the Ministry of Finance of Italy of January 23, 2002 will expire on January 1, 2004.]¹

GB. This Certificate relates to our proposed exchange of $             principal amount of Securities issued under the Indenture for an equal principal amount of Securities to be held by us. We hereby certify as follows:

1. At the time the offer and sale of the Securities was made to us, either (i) we were not in the United States or (ii) we were excluded from the definition of “U.S. person” pursuant to Rule 902(k)(2)(vi) or the account held by us for which we were acting was excluded from the definition of “U.S. person” pursuant to Rule 902(k)(2)(i) under the circumstances described in Rule 902(h)(3); and we were not a member of an identifiable group of U.S. citizens abroad.

2. Unless the circumstances described in paragraph l(ii) above are applicable, either (a) at the time our buy order was originated, we were outside the United States or (b) the transaction was executed in, on or through the facilities of a designated offshore securities

¹ To be included if there is an Italian obligor on the Securities.

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market and we did not pre-arrange the transaction in the United States.

3. The proposed exchange of Securities is not part of a plan or scheme to evade the registration requirements of the Securities Act.

4. [We are residents in countries listed in the Decree of the Ministry of Finance of Italy of September 4, 1996 as amended, with the exception of the countries which are also listed in the Decree of the Ministry of Finance of Italy of January 23, 2002, as amended. If Art. 41 of Decree Law 30 September 2003, n.269 is confirmed and converted into ordinary law, the exclusion of the countries listed in the Decree of the Ministry of Finance of Italy of January 23, 2002 will expire on January 1, 2004.]¹

You and the Issuer are entitled to rely upon this Certificate and are irrevocably authorized to produce this Certificate or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby.

¹ To be included if there is an Italian obligor on the Securities.

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Very truly yours,

[NAME OF SELLER (FOR

TRANSFERS) OR OWNER (FOR

EXCHANGES)]

69

Section 211. Form of Institutional Accredited Investor Certificate.

Institutional Accredited Investor Certificate

To: JPMorgan Chase Bank, as Trustee (the “Trustee”)

4 New York Plaza, 15^th Floor, New York, New York 10004

Attention: Institutional Trust Services

Re: · % Securities due · (the “Securities”) issued under the Indenture (the “Indenture”) dated as of ! between Telecom Italia Capital Société Anonyme (the “Issuer”), Telecom Italia S.p.A. (the “Guarantor”) and the Trustee and pursuant to Supplemental Indenture No.·

Ladies and Gentlemen:

This Certificate relates to:

[CHECK A OR B AS APPLICABLE.]

GA. Our proposed purchase of $             principal amount of Securities issued under the Indenture.

GB. Our proposed exchange of $             principal amount of Securities issued under the Indenture for an equal principal amount of Securities to be held by us.

We hereby confirm that:

1. We are an institutional “accredited investor” within the meaning of Rule 501(a)(l), (2), (3) or (7) under the Securities Act of 1933, as amended (the “Securities Act”) (an “Institutional Accredited Investor”).

2. Any acquisition of Securities by us will be for our own account or for the account of one or more other Institutional Accredited Investors as to which we exercise sole investment discretion.

3. We have such knowledge and experience in financial and business matters that we are capable of evaluating the merits and risks of an investment in the Securities and we and any accounts for which we are acting are able to bear the economic risks of and an entire loss of our or their investment in the Securities.

4. We are not acquiring the Securities with a view to any distribution thereof in a transaction that would violate the Securities Act or the

70

securities laws of any State of the United States or any other applicable jurisdiction; provided that the disposition of our property and the property of any accounts for which we are acting as fiduciary will remain at all times within our and their control.

5. We acknowledge that the Securities have not been registered under the Securities Act and that the Securities may not be offered or sold within the United States or to or for the benefit of U.S. persons except as set forth below.

6. The principal amount of Securities to which this Certificate relates is at least equal to [$250,000] [$100,000].

7. [We are, residents in countries listed in the Decree of the Ministry of Finance of Italy of September 4, 1996 as amended, with the exception of the countries which are also listed in the Decree of the Ministry of Finance of Italy of January 23, 2002, as amended. If Art. 41 of Decree Law 30 September 2003, n.269 is confirmed and converted into ordinary law, the exclusion of the countries listed in the Decree of the Ministry of Finance of Italy of January 23, 2002 will expire on January 1, 2004.]¹

We agree for the benefit of the Issuer, on our own behalf and on behalf of each account for which we are acting, that such Securities may be offered, sold, pledged or otherwise transferred only in accordance with the Securities Act and any applicable securities laws of any State of the United States and only (a) to the Issuer, (b) pursuant to a registration statement which has become effective under the Securities Act, (c) to a qualified institutional buyer in compliance with Rule 144A under the Securities Act, (d) in an offshore transaction in compliance with Rule 904 of Regulation S under the Securities Act, (e) in a principal amount of not less than [$250,000] [$100,000], to an Institutional Accredited Investor that, prior to such transfer, delivers to the Trustee a duly completed and signed certificate (the form of which may be obtained from the Trustee) relating to the restrictions on transfer of the Securities or (f) pursuant to any exemption from registration provided by Rule 144 under the Securities Act or any other available exemption from the registration requirements of the Securities Act.

Prior to the registration of any transfer in accordance with (c) or (d) above, we acknowledge that a duly completed and signed certificate (the form of which may be obtained from the Trustee) must be delivered to the Trustee. Prior to the registration of any transfer in accordance with (e) or (f) above, we acknowledge that the Issuer reserves the right to require the delivery of such legal opinions,

¹ To be included if there is an Italian obligor on the Securities.

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certifications or other evidence as may reasonably be required in order to determine that the proposed transfer is being made in compliance with the Securities Act and applicable state securities laws. We acknowledge that no representation is made as to the availability of any Rule 144 exemption from the registration requirements of the Securities Act.

We understand that the Trustee will not be required to accept for registration of transfer any Securities acquired by us, except upon presentation of evidence satisfactory to the Company and the Trustee that the foregoing restrictions on transfer have been complied with. We further understand that the Securities acquired by us will be in the form of definitive physical certificates and that such certificates will bear a legend reflecting the substance of the preceding paragraph. We further agree to provide to any person acquiring any of the Securities from us a notice advising such person that resales of the Securities are restricted as stated herein and that certificates representing the Securities will bear a legend to that effect.

We agree to notify you promptly in writing if any of our acknowledgments, representations or agreements herein ceases to be accurate and complete.

We represent to you that we have full power to make the foregoing acknowledgments, representations and agreements on our own behalf and on behalf of any account for which we are acting.

You and the Issuer are entitled to rely upon this Certificate and are irrevocably authorized to produce this Certificate or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby.

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Very truly yours,

[NAME OF PURCHASER (FOR TRANSFERS) OR OWNER (FOR EXCHANGES)]

By:

Name:

Title:

Address:

Date:                             

Upon transfer, the Securities would be registered in the name of the new beneficial owner as follows:

By:
Date:	________________________________________
Taxpayer ID Number: _________________________

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ARTICLE THREE

THE SECURITIES AND GUARANTEES

Section 301. Amount Unlimited; Issuable in Series.

The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited.

The Securities may be issued in one or more series. There shall be established in or pursuant to a Board Resolution of the Issuer and the Guarantor, as appropriate, or pursuant to other appropriate corporate authorization, and, subject to Section 304 set forth, or determined in the manner provided, in an Officer’s Certificate, or established in one or more indentures supplemental hereto, prior to the issuance of Securities of any series,

(1) the title of the Securities of the series (which shall distinguish the Securities of the series from Securities of any other series);

(2) any limit upon the aggregate principal amount of the Securities of the series which may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series pursuant to Sections 305, 306, 309, 906 or 1107 and except for any Securities which, pursuant to Section 304 are deemed never to have been authenticated and delivered hereunder);

(3) any stock exchange on which the Securities of the series will be listed;

(4) whether Securities of the series are to be issuable as Registered Securities, Bearer Securities or both, whether any Securities of the series are to be issuable initially as Temporary Global Bearer Securities and whether any Securities of the series are to be issuable as Permanent Global Bearer Securities with or without coupons and, if so, whether beneficial owners of interests in any such Permanent Global Bearer Security may exchange such interests for Securities of such series and of like tenor of any authorized form and denomination and the circumstances under which any such exchanges may occur, if other than in the manner provided in Section 306;

(5) the Person to whom any interest on a Registered Security of the series shall be payable, if other than the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest; the manner in which, or the Person to whom, any interest on any Bearer Security of the series shall be payable, if otherwise than upon presentation and surrender of the coupons appertaining thereto as they severally mature, and the extent to which, or the manner in which,

74

any interest payable on a Temporary Global Bearer Security on an Interest Payment Date will be paid if other than in the manner provided in Section 305;

(6) the date or dates on which the principal of the Securities of the series is payable;

(7) the rate or rates at which the Securities of the series shall bear interest, if any, the date or dates from which such interest shall accrue, the Interest Payment Dates on which any such interest shall be payable and the Regular Record Date for any interest payable on any Registered Securities on any Interest Payment Date;

(8) the place or places where, subject to the provisions of Section 1002 the principal of and any premium and interest on Securities of the series shall be payable, any Registered Securities of the series may be surrendered for registration of transfer, Securities of the series may be surrendered for exchange and notices and demands to or upon the Issuer or the Guarantor in respect of the Securities of the series and this Indenture may be served;

(9) other than with respect to any redemption of Securities pursuant to Section 1108 the period or periods within which, the price or prices at which and the terms and conditions upon which Securities of the series may be redeemed, in whole or in part, at the option of the Issuer or the Guarantor (including the period following the date referred to in Section 1108) and, if other than by a Board Resolution, the manner in which any election by the Issuer or the Guarantor to redeem the Securities shall be evidenced;

(10) other than with respect to any redemption of Securities pursuant to Section 1108 the obligation, if any, of the Issuer to redeem or purchase any Securities of the series pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof and the period or periods within which, the price or prices at which and the terms and conditions upon which Securities of the series shall be redeemed or purchased, in whole or in part, pursuant to such obligation;

(11) the terms and conditions for conversion or exchange of Securities into preference shares of the Guarantor (including, if applicable, the rights, preferences and privileges of such preference shares) or ordinary shares of the Guarantor, and the terms of any additional redemption rights of the Issuer relating to such terms and conditions for conversion or exchange, whether any such preference shares or ordinary shares may be evidenced by American Depositary Receipts;

(12) the terms of the guarantees by the Guarantor of conversion of the Securities of the series into securities of the Guarantor;

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(13) the denominations in which any Securities of the series shall be issuable, if other than denominations of U.S. $1,000 and any integral multiple thereof;

(14) the currency, currencies or currency units in which payment of the principal of and any premium and interest on any Securities of the series shall be payable and the manner of determining the equivalent thereof in the currency of the United States of America and the manner of determining the equivalent thereof in the currency of the United States of America for purposes of the definition of “Outstanding” in Section 101;

(15) if the amount of principal of or any premium or interest on any Securities of the series may be determined with reference to an index, the manner in which such amounts shall be determined;

(16) if the principal of or any premium or interest on any Securities of the series is to be payable, at the election of the Issuer, the Guarantor or a Holder thereof, in one or more currencies or currency units other than that or those in which the Securities are stated to be payable, the currency, currencies or currency units in which the principal of and any premium and interest on Securities of such series as to which such election is made shall be payable, and the periods within which and the terms and conditions upon which such election is to be made and the amount so payable (or the manner in which such amount shall be determined);

(17) if other than the principal amount thereof, the portion of the principal amount of Securities of the series which shall be payable upon declaration of acceleration of the Maturity thereof pursuant to Section 502;

(18) the application, if any, of Section 403 to the Securities of the series;

(19) if Additional Amounts will not be payable by the Issuer or the Guarantor;

(20) if the Issuer may without the consent of the Holders create and issue further securities having the same terms and conditions as the Securities in all respects (or in all respects except for the issue date, the first payment of interest thereon and/or issue price), so that such further issue shall be consolidated and form a single series with the outstanding Securities of any series or upon such terms as the Issuer may determine at the time of their issue;

(21) if the Securities of the series are redeemable at the option of the Issuer, whether the adjusted treasury yield is different from the Adjusted Treasury Yield as defined and determined herein;

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(22) if the principal amount payable at the Stated Maturity of any Securities of the series is not determinable upon original issuance thereof, the amount which shall be deemed to be the principal amount of such Securities for any other purpose hereunder, including the principal amount thereof which shall be due and payable upon any Maturity other than the Stated Maturity or which shall be deemed to be Outstanding as of any date prior to the Stated Maturity (or, in any such case, the manner in which such principal amount shall be determined);

(23) if applicable, that any Securities of the series shall be issuable in whole but not in part in the form of one or more Global Registered Securities and, in such case, the respective Depositaries for such Global Registered Securities, the form of any legend or legends which shall be borne by any such Global Registered Security in addition to or in lieu of those set forth in Section 205 and, if different from those set forth in Clause (2) of the last paragraph of Section 306 any circumstances in which Securities issued upon any exchange may be registered in the name or names of Persons other than the Depositary for such Global Registered Security or a nominee thereof;

(24) any addition to or change in the Events of Default which applies to any Securities of the series and any change in the right of the Trustee or the requisite Holders of such Securities to declare the principal amount thereof due and payable pursuant to Section 502;

(25) any addition to or change in the covenants set forth in Article Ten which applies to Securities of the series; and

(26) any other terms of the series (which terms shall not be inconsistent with the provisions of this Indenture, except as permitted by Section 901(5)).

All Securities of any one series and the coupons appertaining to any Bearer Securities of such series shall be substantially identical except, in the case of Registered Securities, as to denomination, and except as may otherwise be provided in or pursuant to the Board Resolution referred to above and (subject to Section 304) set forth, or determined in the manner provided, in the Officer’s Certificate referred to above or in any such indenture supplemental hereto.

If any of the terms of the series or the guarantees thereof are established by action taken pursuant to a Board Resolution of the Issuer or the Guarantor, a copy of an appropriate record of such action shall be certified by any director, the Secretary or any person appointed by the Board of Directors of the Issuer or the Guarantor, as the case may be, each delivered to the Trustee at or prior to the delivery of the Officer’s Certificate setting forth the terms of the series or the guarantees thereof.

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Section 302. Denominations.

Any Securities of a series shall be issuable in such denominations as are established for such series pursuant to Section 301. In the absence of any such specified denomination, the Securities of the series shall be issuable in denomination of U.S.$1,000 (or 1,000 of such currency or currency units) and any integral multiple thereof.

Section 303. Ranking.

The Securities (i) are direct, unconditional, unsubordinated and unsecured obligations of the Issuer and (ii) rank at least part passu in right of payment with all other senior unsecured and unsubordinated obligations of the Issuer now or hereafter outstanding (other than obligations preferred by applicable law) and senior in priority of payment and in all other respects to all other obligations of the Issuer that are designated as subordinate or junior in right of payment to the Securities.

Section 304. Execution, Authentication, Delivery And Dating.

The Securities shall be executed on behalf of the Issuer by duly authorized representatives thereof (in the case of Bearer Securities by two directors). The signature of any such authorized representative may be manual or facsimile. Coupons shall bear the facsimile signature of any such authorized representative.

Securities, coupons or Guarantees bearing the manual or facsimile signatures of individuals who were at any time the authorized representatives of the Issuer or the Guarantor, as the case may be, shall bind the Issuer or the Guarantor, as the case may be, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities or did not hold such offices at the date of such Securities, coupons or Guarantees.

At any time and from time to time after the execution and delivery of this Indenture, the Issuer may deliver Securities of any series, together with any coupons appertaining thereto, executed by the Issuer, and if applicable, having endorsed thereon Guarantees of the Guarantor, to the Trustee for authentication, together with an Order for the authentication and delivery of such Securities and, if applicable, an Order from the Guarantor approving the delivery of the Guarantees endorsed thereon and the Trustee in accordance with the Order shall authenticate and deliver such Securities having such Guarantees endorsed thereon; provided, however, that, in connection with its original issuance, no Bearer Security shall be mailed or otherwise delivered to any location in the United States; and provided, further, that a Bearer Security (other than a Temporary Global Bearer Security) may be delivered in connection with its

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original issuance only if the Person entitled to receive such Bearer Security shall have furnished a certificate in the form set forth in Section 315(a), dated no earlier than the Certification Date.

If any Security shall be represented by a Permanent Global Bearer Security, then, for purposes of this Section 304 and Section 305, the notation of a beneficial owner’s interest therein upon original issuance of such Security or upon exchange of a portion of a Temporary Global Bearer Security shall be deemed to be delivery in connection with its original issuance of such beneficial owner’s interest in such Permanent Global Bearer Security. Except as permitted by Section 306, the Trustee shall not authenticate and deliver any Bearer Security unless all appurtenant coupons for interest then matured have been detached and cancelled. If pursuant to Section 301, the Security is to be issued initially without a Guarantee but such a Guarantee is to be endorsed at a later date, the Guarantor shall deliver an Order from the Guarantor approving the delivery of the Guarantees endorsed thereon, and the Trustee in accordance with the Order shall endorse or shall cause to be endorsed on such Securities the Guarantees and shall deliver such Securities having such Guarantees endorsed thereon. If the forms or terms of the Securities of the series and any related coupons have been established in or pursuant to one or more Board Resolutions as permitted by Sections 201 and 301, in authenticating such Securities and Guarantees, and accepting the additional responsibilities under this Indenture in relation to such Securities, coupons and Guarantees, the Trustee shall be entitled to receive, and (subject to Section 601) shall be fully protected in relying upon, an Opinion of Counsel and Officer’s Certificate stating, (a) if the form of such Securities and any related coupons or the form of such Guarantees has been established by or pursuant to Board Resolution as permitted by Section 201, that such form has been established in conformity with the provisions of this Indenture; (b) if the terms of such Securities and any related coupons or the terms of such Guarantees have been established by or pursuant to Board Resolution as permitted by Section 301, that such terms have been established in conformity with the provisions of this Indenture; and (c) that such Securities, and, if applicable, such Guarantees when authenticated and delivered by the Trustee and issued by the Issuer or the Guarantor respectively, in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute valid and legally binding obligations of the Issuer or the Guarantor, as the case may be, enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles. If such forms or terms have been so established, the Trustee shall not be required to authenticate such Securities if the issue of such Securities pursuant to this Indenture will affect the Trustee’s own rights, duties or immunities under the Securities and this Indenture or otherwise in a manner which is not reasonably acceptable to the Trustee.

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Notwithstanding the provisions of Section 301 and of the preceding paragraph, if all Securities of a series are not to be originally issued at one time, it shall not be necessary to deliver the Officer’s Certificate otherwise required pursuant to Section 301 or the Order and Opinion of Counsel otherwise required pursuant to such preceding paragraph at or prior to the time of authentication of each Security of such series if such documents (with appropriate modifications) are delivered at or prior to the authentication upon original issuance of the first Security of such series to be issued and reasonably contemplate the subsequent issuance of such Securities of such series. Each Registered Security shall be dated the date of its authentication, and each Bearer Security shall be dated as of the date of original issuance of the first Security of such series to be issued. No Security, coupon or Guarantee shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Security or the Security to which such coupon appertains (or, if applicable, the Guarantee) a certificate of authentication substantially in the form provided for herein executed by the trustee by manual or facsimile signature, and such certificate upon any Security or Guarantee shall be conclusive evidence, and the only evidence, that such Security or Guarantee has been duly authenticated and delivered hereunder. Notwithstanding the foregoing, if any Security (or, if applicable, the Guarantee) shall have been authenticated and delivered hereunder but such Security shall have been never issued and sold by the Issuer or such Guarantee shall have been never issued by the Guarantor, and the Issuer or the Guarantor shall deliver such Security to the Trustee for cancellation as provided in Section 312, for all purposes of this Indenture such Security (or, if applicable, such Guarantee) shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled to the benefits of this Indenture. The delivery of any Security by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Guarantee endorsed thereon on behalf of the Guarantor; provided, however, that a Guarantee shall not be deemed delivered if pursuant to Section 301 the Security is originally issued without a Guarantee; if the Guarantee is thereafter attached pursuant to an Order of the Guarantor, then after authentication of the Guarantee, the Guarantee shall be deemed delivered. The Trustee in accordance with the Orders shall authenticate the Guarantee and deliver such Securities.

Section 305. Temporary Securities.

Pending the preparation of definitive Securities of any series, the Issuer may execute, and upon Order the Trustee shall authenticate and deliver, temporary Securities which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Securities and, if applicable, having endorsed thereon Guarantees of the Guarantor substantially of the tenor of definitive Guarantees in lieu of which they are issued, in registered form or, if authorized, in bearer form with one

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or more coupons or without coupons, and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Securities may determine, as evidenced by their execution of such Securities. In the case of any series issuable as either Registered Securities or Bearer Securities, such temporary Securities may be in global form (“Temporary Global Securities”). A Temporary Global Security shall be delivered only in compliance with conditions set forth in Section 303 and this Section 304.

Except in the case of Temporary Global Securities, including temporary securities in global bearer form (“Temporary Global Bearer Securities”) (which shall be exchanged in accordance with the provisions of the following paragraphs) if temporary Securities of any series are issued, the Issuer will cause definitive Securities of the series to be prepared without unreasonable delay. After the preparation of definitive Securities of such series, the temporary Securities of such series shall be exchangeable for definitive Securities of such series upon surrender of the temporary Securities of such series at the office or agency of the Issuer in a Place of Payment for that series, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities of any series (accompanied by any unmatured coupons appertaining thereto), the Issuer shall execute and the Trustee shall authenticate and deliver in exchange therefor one or more definitive Securities of the same series, of any authorized denominations and of a like aggregate principal amount and tenor which have endorsed thereon the Guarantees of the Guarantor; provided, however, that no definitive Bearer Security shall be issued in exchange for a Registered Security.

If Temporary Global Securities of any series are issued, any such Temporary Global Security shall, unless otherwise provided therein, be delivered to the Common Depositary for the benefit of Euroclear and Clearstream, for credit to the respective accounts of the beneficial owners of such Securities (or to such other accounts as they may direct). Notwithstanding any other terms in this Indenture, without unnecessary delay but in any event not later than the date specified in, or determined pursuant to the terms of, any such Temporary Global Security of a series (which date may, if applicable, represent the end of a period during which the exchange of such Temporary Global Security is restricted by Regulation S under the Securities Act, and will in the case of Temporary Global Bearer Securities be the 40th day after the date of the issue of the Temporary Global Bearer Securities) (the “c vv”) the Issuer shall deliver to or to the order of the Trustee definitive Securities of that series in aggregate principal amount equal to the principal amount of such Temporary Global Security executed by the Issuer. On or after the Exchange Date such Temporary Global Security shall be surrendered by the Common Depositary to the Trustee, as the Issuer’s agent for such purpose, to be exchanged, in whole or from time to time in part, for definitive Securities of that series without charge and the Trustee shall authenticate and deliver (at an office or agency outside the United States), in exchange for each portion of such Temporary Global Security a like aggregate

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principal amount of definitive Securities of the same series of authorized denominations and of like tenor as the portion of such Temporary Global Security to be exchanged; provided, however, that in the case of a Temporary Global Bearer Security only, unless not required under U.S. Treasury Regulations Section 1.163-5(c)(2)(i)(D)(3)(iii) or unless otherwise specified in such Temporary Global Bearer Security, upon such presentation by the Common Depositary, such Temporary Global Bearer Security must be accompanied by a certificate dated the Exchange Date or a subsequent date and signed by Euroclear as to the portion of such Temporary Global Bearer Security held for its account then to be exchanged and a certificate dated the Exchange Date or a subsequent date and signed by Clearstream as to the portion of such Temporary Global Bearer Security held for its account then to be exchanged, each in the form set forth in Section 315(b). The definitive Securities to be delivered in exchange for any such Temporary Global Security shall be in or in the form of Bearer Securities, Registered Securities, Permanent Global Bearer Securities (as defined below) or Global Registered Securities, or any combination thereof, as specified as contemplated by Section 301, and, if any combination thereof is so specified, as requested by the beneficial owner thereof. Unless otherwise specified in the Temporary Global Bearer Security, the interest of a beneficial owner of Securities of a series in a Temporary Global Bearer Security shall be exchanged on the Exchange Date for interest in a permanent global bearer Security (a “Permanent Global Bearer Security”) of the same series and of like tenor unless, on or prior to the Exchange Date, such beneficial owner has not delivered to Euroclear or Clearstream, as the case may be, a certificate in the form set forth in Section 315(a) dated no earlier than the Certification Date, copies of which certificate shall be available from the office of Euroclear and Clearstream, the Trustee, and any Authenticating Agent appointed for such series of Securities and each Paying Agent and after the Exchange Date, the interest of a beneficial owner of Securities of a series in a Temporary Global Bearer Security shall be exchanged for an interest in a Permanent Global Bearer Security of the same series and of like tenor following such beneficial owner’s delivery to Euroclear or Clearstream, as the case may be, of a certificate in the form set forth in Section 315(a) dated no earlier than the Certification Date. Unless otherwise specified in such Temporary Global Bearer Security any such exchange shall be made free of charge to the beneficial owners of such Temporary Global Bearer Security. Definitive Securities in bearer form to be delivered in exchange for any portion of Temporary Global Bearer Security shall be delivered only outside the United States.

On or before the 60th day after the occurrence of one or more of the events described below, Securities represented by a Permanent Global Bearer Security shall be exchanged at the specified office of the Paying Agent, and the Issuer shall procure that the Paying Agent shall issue and deliver, in full exchange for the Permanent Global Bearer Security, definitive Securities in an aggregate

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principal amount equal to the principal amount of the Permanent Global Bearer Security exchanged therefor. The costs incurred by the Issuer in making the exchange of the Permanent Global Bearer Security for definitive Securities shall be borne by the Issuer. The events referred to above (each, an “Exchange Event”) are (i) if any of DTC, Euroclear or Clearstream are closed for business for a continuous period of 30 days (other than by reason of holiday, statutory or otherwise) or announces an intention permanently to cease business or does in fact do so and no alternative clearance system satisfactory to the Issuer is available, (ii) if a Holder requests such an exchange in writing following the occurrence of an Event of Default and (iii) if the Issuer has or will become obliged to pay Additional Amounts as provided for or referred to in Section 1004 which would not be required were the Securities represented by a Permanent Global Bearer Security in definitive form. Except for the circumstances set forth in clauses (i), (ii) and (iii) above, beneficial interests in a Permanent Global Bearer Security shall not be exchangeable for definitive Securities.

In the event of an Exchange Event, each beneficial owner of Securities will receive a definitive Security. Any definitive Security will be issued in bearer form in denominations of 1,000 principal amount or any multiple thereof in the relevant currency of the Global Bearer Securities so exchanged. If the Issuer has outstanding debt securities at the time the definitive Security is issued, the definitive Security shall state the amounts outstanding. To the extent permitted by law, the Issuer and any Paying Agent shall be entitled to treat the holder of a definitive Security as the absolute owner thereof. The principal amount of the Permanent Global Bearer Security will be decreased to reflect exchanges or issues of definitive Securities. The Trustee will request the Paying Agent to make the appropriate adjustments in the Permanent Global Bearer Security to reflect any such issues or adjustments.

Principal of and interest on, and all other amounts payable under, any definitive Securities will be payable at the corporate office of the Paying Agent maintained for such purposes and as set forth in the form of the definitive Security (against surrender of the relevant definitive Security, in the case of payments of principal). In addition, interest on definitive Securities will be paid to the holder thereof as demonstrated by the presentation of the relevant definitive Security on the record date for the Securities.

Until exchanged in full as hereinabove provided the temporary Securities of any series shall in all respects be entitled to the same benefits under this Indenture as definitive Securities of the same series and of like tenor authenticated and delivered hereunder, except that, unless not required under U.S. Treasury Regulations Section 1.163(C)(2)(i)(D)(3)(iii) or unless otherwise specified as contemplated by Section 301 interest payable on a Temporary Global Bearer Security on an Interest Payment Date for Securities of such series shall be payable to Euroclear and Clearstream on such Interest Payment Date upon delivery by

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Euroclear and Clearstream to the Trustee of a certificate or certificates in the form set forth in Section 315 (b), for credit without further interest on or after such Interest Payment Date to the respective accounts of the Persons who are the beneficial owners of such Temporary Global Bearer Security on such Interest Payment Date and who have each delivered to Euroclear or Clearstream, as the case may be, a certificate in the form set forth in Section 315 (a). Any interest so received by Euroclear and Clearstream and not paid as herein provided shall be returned to the Trustee immediately prior to the expiration of two years after such Interest Payment Date in order to be repaid to the Issuer in accordance with Section 1003.

Section 306. Registration, Registration of Transfer and Exchange.

The Issuer shall cause to be kept at the Corporate Trust Office of the Trustee a register (the register maintained in such office and in any other office or agency of the Issuer in a Place of Payment being herein sometimes collectively referred to as the “Security Register”) in which, subject to such reasonable regulations as it may prescribe, the Issuer shall provide for the registration of Registered Securities and of transfers of Registered Securities. The Trustee is hereby appointed “Security Registrar” for the purpose of registering Registered Securities and transfers of Registered Securities as herein provided.

Upon surrender for registration of transfer of any Registered Security of any series at the office or agency of the Issuer or the Security Registrar in a Place of Payment for that series, the Issuer shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Registered Securities of the same series, of any authorized denominations and of like tenor and aggregate principal amount, each such Security having endorsed thereon a Guarantee of the Guarantor.

At the option of the Holder, Registered Securities of any series may be exchanged for other Registered Securities of the same series, of any authorized denominations and of like tenor and aggregate principal amount, each such Security having endorsed thereon a Guarantee of the Guarantor upon surrender of the Securities and the Guarantees endorsed thereon to be exchanged at such office or agency. Whenever any Securities and the Guarantees endorsed thereon are so surrendered for exchange, the Issuer and the Guarantor shall execute, and the Trustee shall authenticate and deliver, the Securities and the Guarantees respectively, which the Holder making the exchange is entitled to receive. Registered Securities may not be exchanged for Bearer Securities.

At the option of the Holder, upon request confirmed in writing, Bearer Securities of any series may be exchanged for Registered Securities of the same series of any authorized denominations and of a like aggregate principal amount and tenor, each such Security having endorsed thereon a Guarantee of the

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Guarantor upon surrender of the Bearer Securities and the Guarantees endorsed thereon to be exchanged at any specified office of any Paying Agent, with all unmatured coupons and all matured coupons in default thereto appertaining. If the Holder of a Bearer Security is unable to produce any such unmatured coupon or coupons or matured coupon or coupons in default, such exchange may be effected if such Bearer Security is accompanied by payment in funds acceptable to the Issuer in an amount equal to the face amount of such missing coupon or coupons, or the surrender of such missing coupon or coupons may be waived by the Issuer and the Trustee if there is furnished to them such security or indemnity as they may require to save each of them and any Paying Agent harmless. If thereafter the Holder of such Security shall surrender to any Paying Agent any such missing coupon in respect of which such a payment shall have been made, such Holder shall be entitled to receive the amount of such payment; provided, however, that, except as otherwise provided in Section 1002, interest represented by coupons shall be payable only upon presentation and surrender of those coupons at an office or agency located outside the United States. Notwithstanding the foregoing, in case a Bearer Security of any series is surrendered at any such office or agency in exchange for a Registered Security of the same series and like tenor after the close of business at such office or agency on (i) any Regular Record Date and before the opening of business at such office or agency on the relevant Interest Payment Date, or (ii) any Special Record Date and before the opening of business at such office or agency on the related proposed date for payment of Defaulted Interest, such Bearer Security shall be surrendered without the coupon relating to such Interest Payment Date or proposed date for payment, as the case may be, and interest or Defaulted Interest, as the case may be, will not be payable on such Interest Payment Date or proposed date for payment, as the case may be, in respect of the Registered Security issued in exchange for such Bearer Security, but will be payable only to the Holder of such coupon when due in accordance with the provisions of this Indenture.

Whenever any Securities and the Guarantees endorsed thereon are so surrendered for exchange, the Issuer and the Guarantor shall execute such Securities and Guarantees, respectively, and the Trustee shall authenticate and deliver, the Securities and the Guarantees endorsed thereon which the Holder making the exchange is entitled to receive.

Notwithstanding the foregoing, except as otherwise specified as contemplated by Section 305 any Permanent Global Bearer Security shall be exchangeable only as provided in this paragraph and in accordance with Section 305. If the beneficial owners of interests in a Permanent Global Bearer Security are entitled to exchange such interests for Securities of such series and of like tenor and principal amount of another authorized form and denomination, each such Security having endorsed thereon a Guarantee of the Guarantor, as specified as contemplated by Section 301 then without unnecessary delay but in any event not later than the earliest date on which such interests may be so exchanged, the

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Issuer shall deliver to the Trustee definitive Securities of that series in aggregate principal amount equal to the entire principal amount of such Permanent Global Bearer Security, each such Security having endorsed thereon a Guarantee of the Guarantor, which the Guarantor shall execute, executed by the Issuer. On or after the earliest date on which such interests may be so exchanged, such Permanent Global Bearer Security shall be surrendered from time to time in accordance with instructions given to the Trustee and the Common Depositary (which instructions shall be in writing, but need not comply with Section 102 or be accompanied by an Opinion of Counsel) by the Common Depositary or such other depositary or Common Depositary as shall be specified in the Order with respect thereto to the Trustee, as the Issuer’s agent for such purpose, to be exchanged, in whole but not in part, for definitive Securities of the same series without charge and the Trustee shall authenticate and deliver, in exchange for each portion of such Permanent Global Bearer Security, a like aggregate principal amount of definitive Securities of the same series of authorized denominations and of like tenor each such Security having endorsed thereon a Guarantee of the Guarantor, as the portion of such Permanent Global Bearer Security to be exchanged which, unless the Securities of the series are not issuable both as Bearer Securities and as Registered Securities, as specified as contemplated by Section 301 shall be in the form of Bearer Securities or Registered Securities, or any combination thereof, as shall be specified by the beneficial owner thereof; provided, however, that, no such exchanges may occur during a period beginning at the opening of business 15 days before any selection of Securities of that series to be redeemed and ending on the relevant Redemption Date; and provided, further, that no Bearer Security delivered in exchange for a portion of a Permanent Global Bearer Security shall be mailed or otherwise delivered to any location in the United States. Promptly following any such exchange in part, such Permanent Global Bearer Security and the Guarantees endorsed thereon shall be returned by the Trustee to the Common Depositary or such other depositary or Common Depositary referred to above in accordance with the instructions of the Issuer or, in the case of the Guarantees, the Guarantor. If a Registered Security is issued in exchange for any portion of a Permanent Global Bearer Security after the close of business at the office or agency where such exchange occurs on (i) any Regular Record Date and before the opening of business at such office or agency on the relevant Interest Payment Date, or (ii) any Special Record Date and before the opening of business at such office or agency in the related proposed date for payment of Defaulted Interest, interest or Defaulted Interest, as the case may be, will not be payable on such Interest Payment Date or proposed date for payment, as the case may be, in respect of such Registered Security, but will be payable on such Interest Payment Date or proposed date for payment, as the case may be, only to the Person to whom interest in respect of such portion of such Permanent Global Bearer Security is payable in accordance with the provisions of this Indenture.

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All Securities issued upon any registration of transfer or exchange of Securities and the Guarantees endorsed thereon shall be the valid obligations of the Issuer and the Guarantor, respectively, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Securities and the Guarantees endorsed thereon surrendered upon such registration of transfer or exchange.

Every Registered Security presented or surrendered for registration of transfer or for exchange shall (if so required by the Issuer or the Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Issuer and the Security Registrar duly executed, by the Holder thereof or his attorney duly authorized in writing.

No service charge shall be made for any registration of transfer or exchange of Securities, but the Issuer or the Trustee may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Securities, other than exchanges pursuant to Section 305, 906 or 1107 not involving any transfer.

The Issuer shall not be required (i) to issue, register the transfer of or exchange Registered Securities of any series during a period beginning at the opening of business 15 days before the day of the mailings of a notice of redemption of Securities of that series selected for redemption under Section 1103 and ending at the close of business on the day of such mailing, or (ii) to register the transfer of or exchange any Registered Security so selected for redemption, in whole or in part, except the unredeemed portion of any Security being redeemed in part, or (iii) to exchange any Bearer Security so selected for redemption except that such a Bearer Security may be exchanged for a Registered Security of that series and like tenor, provided that such Registered Security shall be simultaneously surrendered for redemption.

The provisions of Clauses (1), (2), (3) and (4) below shall apply only to Global Registered Securities:

(1) Each Global Registered Security authenticated under this Indenture shall be registered in the name of the Depositary designated for such Global Registered Security or a nominee thereof and delivered to such Depositary or a nominee thereof or custodian therefor, and each such Global Registered Security shall constitute a single Security for all purposes of this Indenture.

(2) Notwithstanding any other provision in this Indenture, no Global Registered Security may be exchanged in whole or in part for Securities registered, and no transfer of a Global Registered Security (in whole or in part) may be registered, in the name of any Person other than the Depositary for such Global Registered Security or a nominee thereof unless (A) such Depositary (i) has notified the Issuer and the Guarantor that it is unwilling or unable to continue

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as Depositary for such Global Registered Security or (ii) has ceased to be a clearing agency registered under the Exchange Act, (B) there shall have occurred and be continuing an Event of Default with respect to such Global Registered Security or (C) there shall exist such other circumstances, if any, as have been specified for this purpose as contemplated by Section 301.

(3) Subject to Clause (2) above, any exchange of a Global Registered Security for other Securities may be made in whole or in part, and all Securities issued in exchange for a Global Registered Security or any portion thereof shall be registered in such names as the Depositary for such Global Registered Security shall direct.

(4) Every Security authenticated and delivered upon registration or transfer of, or in exchange for or in lieu of, a Global Registered Security or any portion thereof, whether pursuant to this Section, Section 305, 307, 906 or 1107 or otherwise, shall be authenticated and delivered in the form of, and shall be, a Global Registered Security, unless such Security is registered in the name of a Person other than the Depositary for such Global Registered Security or a nominee thereof.

Section 307. Book-Entry Provisions for Global Registered Securities.

Each Registered Security initially shall (i) be registered in the name of a nominee of the Depositary, (ii) be delivered to the Trustee, as custodian for the Depositary or its nominee and (iii) bear legends as set forth in Section 205. Interests in the Permanent Regulation S Registered Security may be held by any member of, or participants in, the Depositary, including Euroclear and Clearstream, Luxembourg (collectively, the “Agent Members”).

Agent Members shall have no rights under this Indenture with respect to any Registered Security held on their behalf by the Depositary, or the Trustee as its custodian, or under the Registered Security, and the Depositary may be treated by the Issuer, the Trustee and any agent of either of them as the absolute owner of such Registered Security for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Issuer, the Trustee or any agent of either of them, from giving effect to any written certification, proxy or other authorization furnished by the Depositary or impair, as between the Depositary and its Agent Members, the operation of customary practices governing the exercise of the rights of a Holder of any Registered Security.

Except as provided in Section 308, transfers of a Global Registered Security shall be limited to transfers of such Global Registered Security in whole, but not in part, to the Depositary, its successors or their respective nominees. Interests of beneficial owners in a Registered Security may be transferred, and transfers increasing or decreasing the aggregate principal amount of Global

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Securities may be conducted only in accordance with the rules and procedures of the Depositary and, to the extent relevant, the provisions of Section 307.

Section 308. Special Transfer Provisions.

(a) Transfers to Non-QIB Institutional Accredited Investors and Non-11. S. Persons. The following provisions shall apply with respect to the registration of any proposed transfer of a Security constituting a Restricted Security to any Institutional Accredited Investor which is not a QIB or to a person that is not a U.S. Person (a “Non-U.S. Person”) to which Securities in the form of Global Securities cannot be issued:

(i) the Security Registrar shall register the transfer of any Security constituting a Restricted Security, whether or not such Security bears the legend required by Section 205, if (x) the requested transfer is after the date two years from the date of issue of the Security or (y) (1) in the case of a transfer to an Institutional Accredited Investor which is not a QIB (excluding Non-U.S. Persons), the proposed transferee has delivered to the Security Registrar a certificate substantially in the form of Section 211 hereto or (2) in the case of a transfer to a Non-U.S. Person, the proposed transferor has delivered to the Security Registrar a certificate substantially in the form of Section 210, together in the case of clause (1) or clause (2) above with such other certifications, legal opinions or other information as the Issuer may reasonably require to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.

(a) Transfers to QIBs. The following provisions shall apply with respect to the registration of any proposed transfer of a Security constituting a Restricted Security to a QIB (excluding transfers to Non-U.S. Persons):

(i) the Security Registrar shall register the transfer if such transfer is being made by a proposed transferor who has (x) delivered to the Security Registrar a certificate substantially in the form of Section 209 or (y) checked the box provided for on the form of Security stating, or has otherwise advised the Issuer and the Security Registrar in writing, that the sale has been made in compliance with the provisions of Rule 144A to a transferee who has signed the certification provided for on the form of Security stating, or has otherwise advised the Issuer and the Security Registrar in writing, that it is purchasing the Security for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a QIB within the meaning of Rule 144A, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Issuer as it has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the

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transferor is relying upon its foregoing representations in order to claim the exemption from registration provided by Rule 144A;

(b) Private Placement Legend. Upon the registration of transfer, exchange or replacement of Securities not bearing the legends required by Section 205, the Security Registrar shall deliver Securities that do not bear such legends. Upon the registration of transfer, exchange or replacement of Securities bearing the legends required by Section 205, the Security Registrar shall deliver only Securities that bear such legends unless there is delivered to the Security Registrar an Opinion of Counsel reasonably satisfactory to the Issuer and the Trustee to the effect that neither such legend nor the related restrictions on transfer are required in order to maintain compliance with the provisions of the Securities Act.

(c) General. By its acceptance of any Security bearing the legends required by Section 205, each Holder of such a Security acknowledges the restrictions on transfer of such Security set forth in this Indenture and in such legends and agrees that it will transfer such Security only as provided in this Indenture.

The Security Registrar shall retain, in accordance with its customary procedures, copies of all letters, notices and other written communications received pursuant to this Section 311. The Issuer shall have the right to inspect and make copies of all such letters, notices or other written communications at any reasonable time upon the giving of reasonable written notice to the Security Registrar.

Section 309. Mutilated, Destroyed, Lost and Stolen Securities and Coupons.

If any mutilated Security or Security with a mutilated coupon appertaining thereto is surrendered to the Trustee, the Issuer shall execute and the Trustee shall authenticate and deliver in exchange therefor a new Security of the same series and of like tenor and principal amount having endorsed thereon a Guarantee and bearing a number not contemporaneously outstanding, with coupons corresponding to the coupons if any, appertaining to the surrendered Security, provided, however, that any Bearer Security or any coupon shall be delivered only in accordance with Section 304.

If there shall be delivered to the Issuer, the Guarantor and the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Security or coupon and (ii) such security or indemnity as may be required by them to save each of them and any agent of either of them harmless, then, in the absence of notice to the Issuer, the Guarantor or the Trustee that such Security or coupon has been acquired by a protected purchaser, the Issuer shall execute and the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or stolen

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Security, or in exchange for the Security to which a destroyed, lost or stolen, coupon appertains (with all appurtenant coupons not destroyed, lost or stolen) a new Security of the same series and of like tenor and principal amount having endorsed thereon a Guarantee and bearing a number not contemporaneously outstanding, with coupons corresponding to the coupons, if any, appertaining to such destroyed, lost or stolen Security or the Security to which such destroyed, lost or stolen coupon appertains.

In case any such mutilated, destroyed, lost or stolen Security or coupon has become or is about to become due and payable, the Issuer or the Guarantor in its discretion may, instead of issuing a new Security, pay such Security or coupon; provided, however, that principal and any premium and interest on Bearer Securities shall, except as otherwise provided in Section 1002, be payable only at an office or agency located outside the United States.

Upon the issuance of any new Security under this Section, the Issuer may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith.

Every new Security of any series, with its coupons, if any, issued pursuant to this Section in lieu of any destroyed, lost or stolen Security or in exchange for a Security to which a destroyed, lost or stolen coupon appertains, shall constitute an original additional contractual obligation of the Issuer, and any Guarantee endorsed on such new Security shall constitute an original additional contractual obligation of the Guarantor whether or not the destroyed, lost or stolen Security and its coupons, if any, or the destroyed, lost or stolen coupon shall be at any time enforceable by anyone, and any such new Security and coupons, if any, shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of that series and their coupons, if any, duly issued hereunder.

The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities or coupons.

Section 310. Payment of Interest; Interest Rights Preserved.

Except as otherwise provided as contemplated by Section 301 with respect to any series of Securities, (i) interest on any Registered Security which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest and, at the option of the Issuer, may be paid by check mailed to the address of the Person as it appears in the Security Register,

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and (ii) interest on any Bearer Security which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid upon presentation and surrender of the relevant Bearer Security or coupon, as the case may be, at the specified office of any Paying Agent outside the United States and its possessions; except that in the case of a Permanent Global Bearer Security, if no further payment is to be made in respect of such Security, payment of interest (and principal) will be made upon presentation and surrender of the Permanent Global Bearer Security to the order of the Trustee or such other Paying Agent as shall have been designated in a notice to Holders for such purpose as provided in Section 106.

Any interest on any Registered Security of any series which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date (herein called “Defaulted Interest”) shall forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue of having been such Holder, and such Defaulted Interest may be paid by the Issuer, at its election in each case, as provided in Clause (1) or (2) below:

(1) The Issuer may elect to make payment of any Defaulted Interest to the Persons in whose names the Registered Securities of such series (or their respective Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Issuer shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Registered Security of such series and the date of the proposed payment, and at the same time the Issuer shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this Clause provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Issuer of such Special Record Date and, in the name and at the expense of the Issuer, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be given to each Holder of Securities of such series the Issuer in the manner set forth in Section 106 not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been so mailed, such Defaulted Interest shall be paid to the Persons in whose names the Registered Securities of such series (or their respective Predecessor Securities) are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following Clause (2).

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(2) The Issuer may make payment of any Defaulted Interest on the Registered Securities of any series in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Issuer to the Trustee of the proposed payment pursuant to this Clause, such manner of payment shall be deemed practicable by the Trustee.

Subject to the foregoing provisions of this Section and Section 306, each Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security.

Section 311. Persons Deemed Owners.

Prior to due presentment of a Registered Security for registration of transfer, the Issuer, the Guarantor, the Trustee and any agent of the Issuer, the Guarantor or the Trustee may treat the Person in whose name such Registered Security is registered as the owner of such Registered Security for the purpose of receiving payment of principal of and any premium and (subject to Sections 305, 306 and 310) any interest on such Security and for all other purposes whatsoever, whether or not such Registered Security be overdue, and neither the Issuer, the Guarantor, the Trustee nor any agent of the Issuer, the Guarantor or the Trustee shall be affected by notice to the contrary.

Title to any Bearer Security and any coupons appertaining thereto shall pass by delivery. The Issuer, the Guarantor, the Trustee and any agent of the Issuer, the Guarantor or the Trustee may treat the bearer of any Bearer Security and the bearer of any coupon as the absolute owner of such Security or coupon for the purpose of receiving payment thereof or on account thereof and for all other purposes whatsoever, whether or not such Security or coupon be overdue, and neither the Issuer, the Guarantor, the Trustee nor any agent of the Issuer, the Guarantor or the Trustee shall be affected by notice to the contrary.

Section 312. Cancellation.

All Securities and coupons surrendered for payment, redemption, registration of transfer or exchange or for credit against any sinking fund payment shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall be promptly cancelled by it. All Bearer Securities and unmatured coupons so delivered shall be held by the Trustee or on its behalf and, upon instruction by an Order, shall be cancelled or held for reissuance. Bearer Securities and unmatured coupons held for reissuance may be reissued only in replacement of mutilated, lost, stolen or destroyed Bearer Securities of the same series and like tenor or the related coupons pursuant to Section 307. All Bearer Securities and unmatured coupons held by the Trustee pending such cancellation

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or reissuance shall be deemed to be delivered for cancellation for all purposes of this Indenture and the Securities. The Issuer or the Guarantor may at any time deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder which the Issuer or the Guarantor may have acquired in any manner whatsoever, and may deliver to the Trustee (or to any other Person for delivery to the Trustee) for cancellation any Securities previously authenticated hereunder which the Issuer or the Guarantor has not issued and sold, and all Securities so delivered shall be promptly canceled by the Trustee. No Securities shall be authenticated in lieu of or in exchange for any Securities canceled as provided in this Section 312, except as expressly permitted by this Indenture. All cancelled Securities and coupons held by the Trustee shall be disposed of in accordance with its customary procedures.

Section 313. Computation of Interest.

Except as otherwise specified as contemplated by Section 301 for Securities of any series, interest on the Securities of each series shall be computed on the basis of a 360-day year of twelve 30-day months.

Section 314. CUSIP Numbers.

The Issuer in issuing the Securities may use “CUSIP” numbers (if then generally in use), and, if so, the Trustee shall use “CUSIP” numbers in notices of redemption as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Securities, and any such redemption shall not be affected by any defect in or omission of such numbers. The Issuer shall promptly notify the Trustee in writing of any change in the “CUSIP” numbers.

Section 315. Forms of Certification.

(a) Except as otherwise specified as contemplated by Section 301, whenever any provision of this Indenture contemplates that certification be given by a beneficial owner of a portion of the Temporary Global Bearer Security to Euroclear or Clearstream, as the case may be, such certification shall be provided substantially in the form of the following certificate, with only such changes as shall be approved by the Issuer or the Guarantor:

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“CERTIFICATE

Telecom Italia Capital

(the “Issuer”)

Series ·: % Guaranteed Senior Securities due ·

(the “Securities”)

Guaranteed by Telecom Italia S.p.A.

(the “Guarantor”)

This is to certify that as of the date hereof, and except as set forth below, the above-captioned Securities held by you for our account (i) are owned by person(s) that are not citizens or residents of the United States, domestic partnerships, domestic corporations or any estate or trust the income of which is subject to United States Federal income taxation regardless of its source (“United States person(s)”), (ii) are owned by United States person(s) that (a) are foreign branches of United States financial institutions (as defined in U.S. Treasury Regulations Section 1.165-12(c)(l)(iv)) (“financial institutions”) purchasing for their own account or for resale, or (b) acquired the Securities through foreign branches of United States financial institutions and who hold the Securities through such United States financial institutions on the date hereof (and in either case (a) or (b), each such United States financial institution hereby agrees, on its own behalf or through its agent, that you may advise the Issuer, the Guarantor or their agent that it will comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as amended, and the regulations thereunder), or (iii) are owned by United States or foreign financial institutions for purposes of resale during the restricted period (as defined in U.S. Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)) and, in addition, if the owner of the Securities is a United States or foreign financial institution described in clause (iii) above (whether or not also described in clause (i) or (ii)) this is to further certify that such financial institution has not acquired the Securities for purposes of resale directly or indirectly to a United States person (as defined in Rule 902(k) of Regulation S under the Securities Act) or to a person within the United States or its possessions.

As used herein, “United States” means the United States of America (including the States and the District of Columbia); and its “possessions” include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands.

We undertake to advise you promptly by tested telex on or prior to the date on which you intend to submit your certification relating to the Securities held by you for our account in accordance with your operating procedures if any applicable statement herein is not correct on such date, and in the absence of any such notification it may be assumed that this certification applies as of such date.

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This certificate excepts and does not relate to [U.S.$            ] of such interest in the above Securities in respect of which we are not able to certify and as to which we understand exchange and delivery of definitive Securities (or, if relevant, exercise of any rights or collection of any interest) cannot be made until we do so certify.

We understand that this certificate is required in connection with certain tax laws of the United States. In connection therewith, if administrative or legal proceedings are commenced or threatened in connection with which this certification is or would be relevant, we irrevocably authorize you to produce this certification to any interested party in such proceedings.

Dated:                     (Not earlier than 15 days prior to the Certification Event to which the certification relates.)

By:                                              

As, or as agent for, the beneficial owner(s) of the Securities to which this certificate relates”;

(b) Except as otherwise specified as contemplated by Section 301, whenever any provision of this Indenture contemplates that certification be given by Euroclear or Clearstream in connection with the exchange of a Temporary Global Bearer Security for a Permanent Global Bearer Security, such certification shall be provided substantially in the form of the following certificate, with only such changes as shall be approved by the Issuer or the Guarantor:

“CERTIFICATION

Telecom Italia Capital

(the “Issuer”)

Series ·: % Guaranteed Senior Securities due ·

(the “Securities”)

Guaranteed by Telecom Italia S.p.A.

(the “Guarantor”)

This is to certify that, based solely on certifications we have received in writing, by tested telex or by electronic transmission from member organizations appearing in our records as persons being entitled to a portion of the principal amount set forth below (our “Member Organizations”) substantially to the effect set forth in the Indenture, as of the date hereof, [U.S. $    ] principal amount of the above-captioned Securities (i) is owned by persons that are not citizens or residents of the United States, domestic partnerships, domestic corporations or

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any estate or trust the income of which is subject to United States Federal income taxation regardless of its source (“United States persons”), (ii) is owned by United States persons that (a) are foreign branches of United States financial institutions (as defined in U.S. Treasury Regulations Section 1.165-12(c)(l)(iv) (“financial institutions”)) purchasing for their own account or for resale, or (b) acquired the Securities through foreign branches of United States financial institutions and who hold the Securities through such United States financial institutions on the date hereof (and in either case (a) or (b), each such United States financial institution has agreed, on its own behalf or through its agent, that we may advise the Issuer, the Guarantor or their agent that it will comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as amended, and the regulations thereunder), or (iii) is owned by United States or foreign financial institutions for purposes of resale during the restricted period (as defined in U.S. Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)) and to the further effect that United States or foreign financial institutions described in clause (iii) above (whether or not also described in clause (i) or (ii)) have certified that they have not acquired the Securities for purposes of resale directly or indirectly to a United States person (as defined in Rule 902(k) of Regulation S under the Securities Act) or to a person within the United States or its possessions.

As used herein, “United States” means the United States of America (including the States and the District of Columbia); and its “possessions” include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands.

We further certify (i) that we are not making available herewith for exchange (or, if relevant, exercise of any rights or collection of any interest) any portion of the Temporary Global Bearer Security excepted in such certifications and (ii) that as of the date hereof we have not received any notification from any of our Member Organizations to the effect that the statements made by such Member Organizations with respect to any portion of the part submitted herewith for exchange (or, if relevant, exercise of any rights or collection of any interest) are no longer true and cannot be relied upon as of the date hereof.

We understand that this certification is required in connection with certain tax laws and, if applicable, certain securities laws in the United States. In connection therewith, if administrative or legal proceedings are commenced or threatened in connection with which this certificate is or would be relevant, we irrevocably authorize you to produce this certification to any interested party in such proceedings.

Dated:                                              

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Yours faithfully, EUROCLEAR BANK S.A./N.V., as operator of the Euroclear System or Clearstream Banking, société anonyme
By:	”.

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ARTICLE FOUR

SATISFACTION AND DISCHARGE

Section 401. Satisfaction and Discharge of Indenture.

This Indenture shall upon Order of the Issuer or the Guarantor cease to be of further effect (except as to any surviving rights of registration of transfer or exchange of Securities herein expressly provided for, and any right to receive Additional Amounts as provided in Section 1004) with respect to the Issuer, the Guarantor and the Trustee, at the expense of the Issuer, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when

(1) either

(A) all Outstanding Securities of the Issuer theretofore authenticated and delivered and all coupons, if any, appertaining thereto (other than (i) coupons appertaining to Bearer Securities surrendered for exchange for Registered Securities and maturing after such exchange, whose surrender is not required or has been waived as provided in Section 306, (ii) Securities and coupons which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 309, (iii) coupons appertaining to Securities called for redemption and maturing after the relevant Redemption Date, whose surrender has been waived as provided in Section 1106, and (iv) outstanding Securities and coupons for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Issuer or the Guarantor and thereafter repaid to the Issuer or the Guarantor, as the case may be, or discharged from such trust, as provided in Section 1003) have been delivered to the Trustee for cancellation; or

(B) all such Securities and, in the case of (i) or (ii) below, any coupons appertaining thereto of the Issuer not theretofore delivered to the Trustee for cancellation

(i) have become due and payable, or

(ii) will become due and payable at their Stated Maturity within one year, or

(iii) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuer,

and the Issuer or the Guarantor, in the case of (i), (ii) or (iii) above, has deposited or caused to be deposited with the Trustee as trust funds in trust for the purpose, money in an amount sufficient to pay and discharge the entire indebtedness on such Securities and coupons not theretofore delivered to the Trustee for

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cancellation, for principal and any premium and interest to the date of such deposit (in the case of Securities which have become due and payable) or to the Stated Maturity or Redemption Date, as the case may be;

(2) the Issuer or the Guarantor has paid or caused to be paid all other sums payable hereunder by the Issuer or the Guarantor; and

(3) the Issuer has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with.

Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Issuer and the Guarantor to the Trustee under Section 607 the obligations of the Trustee to any Authenticating Agent under Section 614 and, if money shall have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of this Section, the obligations of the Trustee under Section 402 and the last paragraph of Section 1003 shall survive such satisfaction and discharge.

Section 402. Application of Trust Money.

Subject to provisions of the last paragraph of Section 1003 all money deposited with the Trustee pursuant to Section 401 shall be held in trust (without) liability for interest on investment and applied by it, in accordance with the provisions of the Securities, the coupons and this Indenture, to the payment, either directly or through any Paying Agent (including the Issuer or the Guarantor acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal and any premium and interest for whose payment such money has been deposited with or received by the Trustee or to make mandatory sinking fund payments or analogous payments as contemplated by Section 403.

Section 403. Defeasance and Discharge of Securities of a Series.

If this Section 403 is specified and the series is denominated in U.S. dollars, as contemplated by Section 301, to be applicable to Securities of such series, then notwithstanding Section 401, the Issuer and the Guarantor shall be deemed to have paid and discharged the entire indebtedness on all the Outstanding Securities of that series, the provisions of this Indenture as it relates to such Outstanding Securities (except as to the rights of Holders of Securities to receive, from the trust funds described in subparagraph (1) below, payment of the principal of (and premium, if any) and any installment of principal of (and premium, if any) or interest on such Securities on the Stated Maturity of such principal or installment of principal of (and premium, if any) or interest on or any mandatory sinking fund payments or analogous payments applicable to the Securities of that series on the day on which such payments are due and payable

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in accordance with the terms of this Indenture and of such Securities, any rights of Holders of Securities to convert such Securities, the Issuer’s and the Guarantor’s obligations with respect to such Securities and Guarantees, respectively, under Sections 305, 306, 309, 1002 and 1003, and the rights, powers, trusts, duties and immunities of the Trustee hereunder and the provisions of Section 402 and this Section 403 shall no longer be in effect (“Defeasance”), and the Trustee, at the expense of the Issuer, shall, upon the Order of the Issuer or the Guarantor, execute proper instruments acknowledging the same, provided that the following conditions have been satisfied:

(1) the Issuer or the Guarantor has deposited or caused to be deposited with the Trustee (or another trustee satisfying the requirements of Section 402 irrevocably (irrespective of whether the conditions in subparagraphs (2), (3), (4), (5) and (6) below have been satisfied, but subject to the provisions of Section 402 and the last paragraph of Section 1003), as trust funds in trust, specifically pledged as security for, and dedicated solely to, the benefit of the Holders of the Securities of that series with reference to this Section 403, in the case of a series of Securities denominated in United States dollars, United States money or U.S. Government Obligations, in an amount which, through the payment of interest and principal in respect thereof in accordance with their terms, will provide not later than the opening of business on the due date of any payment referred to in clause (A) or (B) of this subparagraph (1) money in an amount, or a combination thereof, sufficient, in the opinion of an internationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge (A) the principal of (and premium, if any) and interest on such Outstanding Securities on the Stated Maturity of such principal or installment of principal or interest and (B) any mandatory sinking fund payments or analogous payments applicable to Securities of such series on the day on which such payments are due and payable in accordance with the terms of this Indenture and of such Securities;

(2) such deposit will not result in a breach or violation of, or constitute a default under, this Indenture or any other agreement or instrument to which the Issuer or the Guarantor is a party or by which either is bound;

(3) no Event of Default or event which, with the giving of notice or lapse of time, or both, would become an Event of Default with respect to the Securities of that series shall have occurred and be continuing on the date of such deposit and no Event of Default under Section 501(6) or Section 501(7) or event which, with the giving of notice or lapse of time, or both, would become an Event of Default under Section 501(6) or Section 501(7) shall have occurred and be continuing on the 91st day after such date;

(4) the Issuer or the Guarantor has delivered to the Trustee an Opinion of Counsel that there has been a change in the United States Federal income tax

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law to the effect that, or the Issuer or the Guarantor has received from, or there has been published by, the United States Internal Revenue Service, a ruling to the effect that, Holders of the Securities of that series will not recognize income, gain or loss for United States Federal income tax purposes as a result of such deposit, defeasance and discharge and will be subject to United States Federal income tax on the same amount and in the same manner and at the same times, as would have been the case if such deposit, defeasance and discharge had not occurred;

(5) if the Securities of that series are then listed on the New York Stock Exchange, Inc. or some other exchange, the Issuer or the Guarantor shall have delivered to the Trustee an Opinion of Counsel to the effect that such deposit, defeasance and discharge will not cause such Securities to be delisted from any such exchange; and

(6) the Issuer or the Guarantor has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for relating to the defeasance and discharge of the entire indebtedness on all Outstanding Securities of any such series as contemplated by this Section have been complied with.

Section 404. Reinstatement.

If the Trustee is unable to apply any United States dollars, United States money or U.S. Government Obligations in accordance with this Article Four by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Issuer’s and the Guarantor’s obligations under this Indenture and the Securities shall be revived and reinstated as though no deposit had occurred pursuant to this Article Four until such time as the Trustee is permitted to apply all such United States dollars, United States money or U.S. Government Obligations in accordance with this Article Four; provided that, if the Issuer or the Guarantor has made any payment of principal of, premium, if any, or interest on any Securities because of the reinstatement of its obligations, the Issuer or the Guarantor shall be subrogated to the rights of the Holders of such Securities to receive such payment from the United States dollars, United States money or U.S. Government Obligations held by the Trustee.

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ARTICLE FIVE

REMEDIES

Section 501. Events of Default.

“Event of Default”, wherever used herein with respect to Securities of any series of the Issuer, means any one of the following events with respect to the Issuer or the Guarantor, as the case may be (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

(1) the Issuer fails to pay principal upon any Security within 10 days from the relevant due date or the Issuer fails to pay interest upon any security within 30 days; or

(2) the Issuer fails duly to perform any other obligation arising from any Security or the Guarantor fails to perform any obligation arising from the Guarantee which failure is not capable of remedy or, if such failure is capable of remedy, such failure continues for more than 60 days after the Trustee has received notice thereof from a Holder; or

(3) default in the deposit of any sinking fund payment, when and as due by the terms of a Security of that series or beyond any period of grace provided with respect thereto; or

(4) (i) any Capital Market Indebtedness in excess of €100,000,000 (or the equivalent thereof in any other currency) of the Issuer or the Guarantor becomes prematurely repayable as a result of a default in respect of the terms thereof; or

(ii) the Issuer fails to fulfill any payment obligation in excess of €100,000,000 (or the equivalent thereof in any other currency) under any Capital Market Indebtedness or the Guarantor fails to fulfill any payment obligation in excess of €100,000,000 (or the equivalent thereof in any other currency) under any Capital Market Indebtedness pursuant to any guarantee given for any such Capital Market Indebtedness to any Person within 30 days from its due date or, in the case of a guarantee, within 30 days after such guarantee or suretyship has been invoked, unless the Issuer or the Guarantor shall contest in good faith that such payment obligation exists or is due or that such guarantee or suretyship has been validly invoked; or

(iii) if a security granted in respect of any Capital Market Indebtedness in excess of €100,000,000 (or the equivalent thereof in any other currency) or any guarantee or suretyship therefor is enforced on behalf of or by

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the creditor(s) entitled thereto unless the Issuer or the Guarantor shall contest in good faith that such enforcement right exists or has been validly invoked or the Issuer or the Guarantor publicly announces its inability to meet its financial obligations; or

(5) a court opens insolvency or equivalent proceedings against the Issuer or the Guarantor that are not resolved within six months unless the applicable proceeding is frivolous or vexatious and is being contested in good faith and by appropriate means and has not resulted in the grant of any order in any court procedure, or the Issuer or the Guarantor applies for or institutes such proceedings or offers or makes an arrangement for the benefit of its creditors or the Issuer applies for controlled management (gestion contrôlée) or reprieve from payment (sursis de paiement); or

(6) the Issuer or the Guarantor approves a resolution pursuant to which the Issuer or the Guarantor, as applicable, goes into liquidation unless this is done in connection with a merger, or other form of combination with another company and such company assumes all obligations contracted by the Issuer or the Guarantor, as the case may be, in connection with this issue, as set forth in Sections 801 and 802 hereof.

(7) the Guarantee ceases to be valid and legally binding for any reason whatsoever; or

(8) any other Event of Default established as contemplated by Section 301 with respect to Securities of that series.

Section 502. Acceleration of Maturity; Rescission and Annulment.

If an Event of Default with respect to Securities of any series of the Issuer at the time Outstanding occurs and is continuing, then in every such case the Trustee or the Holders of not less than 25% in principal amount of the Outstanding Securities of such series of the Issuer may declare the principal amount or, if any of the Securities of that series are Original Issue Discount Securities, such portion of the principal amount of such Securities as may be specified in the terms thereof of all of the Securities of such series of the Issuer to be due and payable immediately, by a notice in writing to the Issuer and the Guarantor (and to the Trustee if given by Holders), specifying and upon any such declaration such principal amount (or specified amount) shall become immediately due and payable.

At any time after such a declaration of acceleration with respect to Securities of any series has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this

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Article provided, such declaration and its consequences shall be rescinded and annulled if:

(1) the Issuer or the Guarantor has paid or deposited with the Trustee a sum sufficient to pay:

(A) all overdue interest on all Securities of that series,

(B) the principal of (and premium, if any, on) any Securities of that series which have become due otherwise than by such declaration of acceleration and any interest thereon at the rate or rates prescribed therefor in such Securities,

(C) to the extent that payment of such interest is lawful, interest upon overdue interest at the rate or rates prescribed therefor in such Securities, and

(D) all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel;

and

(2) all Events of Default with respect to Securities of that series, other than the non-payment of the principal of Securities of that series which have become due solely by such declaration of acceleration, have been cured or waived as provided in Section 513.

No such rescission shall affect any subsequent default or impair any right consequent thereon.

Section 503. Collection of Indebtedness and Suits for Enforcement by Trustee.

The Issuer covenants that if

(1) default is made in the payment of any interest or payment of any additional interest, on any Security when such interest becomes due and payable and such default continues for a period of 30 days, or

(2) default is made in the payment of the principal of (or premium, if any, on) any Security and coupon at the Maturity thereof (and, if so provided in the applicable Officer’s Certificate, in the case of technical or administrative difficulties only if the delay persists for a period of five days),

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the Issuer will, upon demand of the Trustee, pay to it, for the benefit of the Holders of such Securities and coupons, the whole amount then due and payable on such Securities and coupons for principal and any premium and interest and, to the extent that payment of such interest shall be legally enforceable, interest on any overdue principal and premium and on any overdue interest, at the rate or rates prescribed therefor in such Securities, and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and all amounts due the Trustee under Section 607.

If an Event of Default with respect to Securities of any series occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders of Securities of such series by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy.

Section 504. Trustee May File Proofs of Claim.

In case of any judicial proceeding relative to the Issuer, the Guarantor or any other obligor upon the Securities of a series or the property of the Issuer, the Guarantor or of such other obligor or their creditors, the Trustee shall be entitled and empowered, by intervention in such proceeding or otherwise, to take any and all actions authorized under the Trust Indenture Act in order to have claims of the Holders of Securities and coupons and the Trustee allowed in any such proceeding. In particular, the Trustee shall be authorized to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder of Securities and coupons to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders of Securities and coupons, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 607.

No provision of this Indenture shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder of Securities and coupons any plan of reorganization, arrangement, adjustment or composition affecting the Securities or coupons or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding; provided, however, that the Trustee may, on behalf of the Holders of

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Securities and coupons, vote for the election of a trustee in bankruptcy or similar official and be a member of a creditors’ or other similar committee.

Section 505. Trustee May Enforce Claims Without Possession of Securities.

All rights of action and claims under this Indenture or the Securities or coupons may be prosecuted and enforced by the Trustee without the possession of any of the Securities or coupons or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of Securities and coupons in respect of which such judgment has been recovered.

Section 506. Application of Money Collected.

Any money collected by the Trustee pursuant to this Article, in respect of any series of Securities or coupons, shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal or any premium or interest, upon presentation of such Securities or coupons, or both, as the case may be, and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid:

FIRST: To the payment of all amounts due the Trustee under Section 607.

SECOND: To the payment of the amounts then due and unpaid for principal of and any premium and interest on such series of Securities and coupons in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities and coupons for principal and any premium and interest, respectively; and

THIRD: To the payment of the balance, if any, to the Issuer.

Section 507. Limitation on Suits.

No Holder of any Security of any series or coupon shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, the Guarantees, the Securities or coupons for the appointment of a receiver or trustee, or for any other remedy hereunder, unless

(1) the Holders of not less than 25% in principal amount of the Outstanding Securities of such series shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder;

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(2) such Holder or Holders have offered to the Trustee reasonable indemnity satisfactory to it against the costs, expenses and liabilities to be incurred in compliance with such request;

(3) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and

(4) no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in principal amount of the Outstanding Securities of that series;

it being understood and intended that no one or more of such Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other of such Holders, or to obtain or to seek to obtain priority or preference over any other of such Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all of such Holders.

Section 508. Unconditional Right of Holders to Receive Principal, Premium and Interest.

Notwithstanding any other provision in this Indenture, the Holder of any Security or coupon shall have the right, which is absolute and unconditional, to receive payment of the principal of and any premium and (subject to Sections 305, 306 and 310) interest on such Security on the respective Stated Maturity or Maturities expressed in such Security (or, in the case of redemption, on the Redemption Date) and to institute suit for the enforcement of any such payment.

Section 509. Restoration of Rights and Remedies.

If the Trustee or any Holder of any Security or coupon has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Issuer, the Guarantor, the Trustee and the Holders of Securities and coupons shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted.

Section 510. Rights and Remedies Cumulative.

Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities or coupons in the last paragraph of Section 309, no right or remedy herein conferred upon or reserved to the

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Trustee or to the Holders of Securities or coupons is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

Section 511. Delay or Omission Not Waiver.

No delay or omission of the Trustee or of any Holder of any Security or coupon to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article Five or by law to the Trustee or to the Holders of Securities or coupons may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders of Securities or coupons, as the case may be.

Section 512. Control by Holders.

The Holders of a majority in principal amount of the Outstanding Securities of any series shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with respect to the Securities of such series, provided that

(1) such direction shall not be in conflict with any rule of law or with this Indenture,

(2) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction, and

(3) the Trustee need not follow any such direction if doing so would in its reasonable discretion either involve it in personal liability or be unduly prejudicial to Holders not joining in such direction;

provided, further, that the Trustee shall have no obligation to make any determination with respect to any such conflict, personal liability or undue prejudice.

Section 513. Waiver of Past Defaults.

Subject to Section 503, the Holders of not less than a majority in principal amount of the Outstanding Securities of any series may on behalf of the Holders of all the Securities of such series and any related coupons waive any past default

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hereunder with respect to such series of the Issuer and its consequences, except a default

(1) in the payment of the principal of or any premium or interest on any Security of such series of the Issuer,

(2) in respect of a covenant or provision hereof which under Article Nine cannot be modified or amended without the consent of the Holder of each Outstanding Security of such series affected, or

Upon any such waiver, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon.

Section 514. Undertaking for Costs.

In any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, a court may require any party litigant in such suit to file an undertaking to pay the costs of such suit, and may assess reasonable costs (including legal fees and expenses) against any such party litigant, in the manner and to the extent provided in the Trust Indenture Act; provided that neither this Section nor the Trust Indenture Act shall be deemed to authorize any court to require such an undertaking or to make such an assessment in any suit instituted by the Issuer or the Guarantor, to any suit instituted by the Trustee, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% in principal amount of the Outstanding Securities of any series of the Issuer, or to any suit instituted by any Holder for the enforcement of the payment of the principal of or any premium or interest on any Security on or after the Stated Maturity or Maturities expressed in such Security (or, in the case of redemption, on or after the Redemption Date) or for the enforcement of any right to convert such Security pursuant to this Indenture.

Section 515. Waiver of Stay or Extension Laws.

Each of the Issuer and the Guarantor covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any usury, stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and each of the Issuer and the Guarantor (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.

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ARTICLE SIX

THE TRUSTEE

Section 601. Certain Duties and Responsibilities.

The duties and responsibilities of the Trustee shall be as provided by the Trust Indenture Act and as specifically set forth in this Indenture. Notwithstanding the foregoing, no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers. Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section.

Section 602. Notice of Defaults.

If a default occurs hereunder with respect to Securities of any series, the Trustee shall give the Holders of Securities of such series notice of such default as and to the extent provided by the Trust Indenture Act; provided, however, that in the case of any default of the character specified in Section 501(4) with respect to such Securities, no such notice to such Holders shall be given until at least 30 days after the occurrence thereof. For the purpose of this Section, the term “default” means any event which is, or after notice or lapse of time or both would become, an Event of Default with respect to Securities of such series.

Section 603. Certain Rights of Trustee.

Subject to the provisions of Section 601:

(a) the Trustee and the Paying Agent may conclusively rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, coupon, other evidence of indebtedness or other paper or document (whether in original or facsimile form) believed by it to be genuine and to have been signed or presented by the proper party or parties, whether such paper or document be delivered in original or by facsimile;

(b) any request or direction of the Issuer or the Guarantor mentioned herein shall be sufficiently evidenced by an Order and any resolution of the Board of Directors shall be sufficiently evidenced by a Board Resolution;

(c) whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence shall be

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herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officer’s Certificate;

(d) the Trustee may consult with counsel of its selection and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon;

(e) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders of Securities of any series or any related coupons pursuant to this Indenture, unless such Holders shall have offered to the Trustee reasonable security or indemnity satisfactory to it against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction;

(f) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, coupon, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Issuer or the Guarantor, personally or by agent or attorney with reasonable prior notice, at the reasonable expense of the Issuer or the Guarantor and shall incur no liability of any kind by reason of such inquiry or investigation, provided that the Trustee shall not be entitled to such information which the Issuer or the Guarantor is prevented from disclosing as a matter of law or contract;

(g) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder;

(h) the Trustee shall not be liable for any action taken or omitted by it in good faith and believed by it to be within the discretion, rights or powers conferred upon it by this Indenture;

(i) the Trustee shall not be deemed to have notice of any Default or Event of Default unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Securities and this Indenture; and

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(j) the rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and to each agent, custodian and other Person employed to act hereunder.

(k) The permissive rights of the Trustee enumerated herein shall not be construed as duties.

Section 604. Not Responsible for Recitals or Issuance of Securities.

The recitals contained herein and in the Securities, except the Trustee’s certificates of authentication, and in any coupons shall be taken as the statements of the Issuer or the Guarantor, as the case may be, and neither the Trustee nor any Authenticating Agent assumes any responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities or coupons. Neither the Trustee nor any Authenticating Agent shall be accountable for the use or application by the Issuer of Securities or the proceeds thereof.

Section 605. May Hold Securities.

The Trustee, any Authenticating Agent, any Paying Agent, any Security Registrar or any other agent of any of the Trustee, Issuer or the Guarantor, in its individual or any other capacity, may become the owner or pledgee of Securities and coupons and, subject to Sections 608 and 613, may otherwise deal with the Issuer or the Guarantor with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, Security Registrar or such other agent.

Section 606. Money Held in Trust.

Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on or investment of any money received by it hereunder except as otherwise agreed in writing with, and for the exclusive benefit of, the Issuer or the Guarantor, as the case may be.

Section 607. Compensation and Reimbursement.

Each of the Issuer and the Guarantor jointly and severally agrees:

(1) to pay to the Trustee from time to time compensation for any duly documented expenses it has properly incurred for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust);

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(2) except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except to the extent that any such expense, disbursement or advance may be attributable to its negligence or bad faith; and

(3) to indemnify the Trustee (which for purposes of this Section 607(3) shall be deemed to include its directors, officers, employees and agents acting in their official capacities) for, and to hold it harmless against, any loss, liability or expense incurred (including the fees and expenses of its agents and counsel) without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of the trust or trusts hereunder and the performance of its duties hereunder or in acting as a Paying Agent, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder.

As security for the performance of the Issuer and the Guarantor under this Section 607, the Trustee shall have a lien prior to the Holders of the Securities of any series upon all property and funds held or collected by the Trustee as such, except funds held in trust for the payment of principal of, and premium or interest on or any Additional Amounts with respect to Securities or related coupons. Any compensation or expense incurred by the Trustee after a default specified by Section 501 is intended to constitute an expense of administration under any then applicable bankruptcy or insolvency law. “Trustee” for purposes hereof includes any predecessor trustee, but the negligence or bad faith of any trustee shall not affect the rights of any other trustee hereunder.

The provisions of this Section 607 shall survive the resignation or removal of the Trustee and the termination of this Indenture.

Section 608. Conflicting Interests.

If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Indenture. To the extent permitted by such Act, the Trustee shall not be deemed to have a conflicting interest by reason of being a trustee under this Indenture with respect to Securities of more than one series.

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Section 609. Corporate Trustee Required; Eligibility.

There shall at all times be one (and only one) Trustee hereunder with respect to the Securities of each series, which may be Trustee hereunder for Securities of one or more other series. Each Trustee shall be a Person that is eligible pursuant to the Trust Indenture Act to act as such and has a combined capital and surplus of at least U.S. $50,000,000 and has its Corporate Trust Office in the Borough of Manhattan, The City of New York, New York. If such Person publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section and to the extent permitted by the Trust Indenture Act, the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee with respect to the Securities of any series shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article Six.

Section 610. Resignation and Removal; Appointment of Successor.

(a) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article Six shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 611.

(b) The Trustee may resign at any time with respect to the Securities of one or more series by giving written notice thereof to the Issuer or the Guarantor. If the instrument of acceptance by a successor Trustee required by Section 611 shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition at the reasonable expense of the Issuer or the Guarantor any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series.

(c) The Trustee may be removed at any time with respect to the Securities of any series by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series, delivered to the Trustee and to the Issuer and the Guarantor. If the instrument of acceptance by a successor Trustee required by Section 611 shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition at the reasonable expense of the Issuer or the Guarantor any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series.

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(d) If at any time:

(1) the Trustee shall fail to comply with Section 608 after written request therefor by the Issuer or the Guarantor or by any Holder who has been a bona fide Holder of a Security for at least six months, or

(2) the Trustee shall cease to be eligible under Section 609 and shall fail to resign after written request therefor by the Issuer or the Guarantor or by any such Holder, or

(3) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation,

then, in any such case, (i) the Issuer or the Guarantor by a Board Resolution may remove the Trustee with respect to all Securities, or (ii) subject to Section 514, any Holder of a Security who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee with respect to all Securities and the appointment of a successor Trustee or Trustees.

(e) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, with respect to the Securities of one or more series, the Issuer or the Guarantor, by a Board Resolution, shall promptly appoint a successor Trustee or Trustees with respect to the Securities of that or those series (it being understood that any such successor Trustee may be appointed with respect to the Securities of one or more or all of such series and that at any time there shall be only one Trustee with respect to the Securities of any particular series) and shall comply with the applicable requirements of Section 611. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee with respect to the Securities of any series shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series delivered to the Issuer and the Guarantor and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with the applicable requirements of Section 611, become the successor Trustee with respect to the Securities of such series and to that extent supersede the successor Trustee appointed by the Issuer or the Guarantor. If no successor Trustee with respect to the Securities of any series shall have been so appointed by the Issuer or the Guarantor or the Holders of Securities of such series and accepted appointment in the manner required by Section 611 any Holder of a Security who has been a bona fide Holder of a Security of such series for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series.

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(f) The Issuer or the Guarantor shall give notice of each resignation and each removal of the Trustee with respect to the Securities of any series and each appointment of a successor Trustee with respect to the Securities of any series to all Holders of Securities of such series in the manner provided in Section 106. Each notice shall include the name of the successor Trustee with respect to the Securities of such series and the address of its Corporate Trust Office.

Section 611. Acceptance of Appointment by Successor.

(a) In case of the appointment hereunder of a successor Trustee with respect to the Securities, every such successor Trustee so appointed shall execute, acknowledge and deliver to each of the Issuer, the Guarantor and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on the request of the Issuer, the Guarantor or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder.

(b) In case of the appointment hereunder of a successor Trustee with respect to the Securities of one or more (but not all) series, the Issuer, the Guarantor, the retiring Trustee and each successor Trustee with respect to the Securities of one or more series shall execute and deliver an indenture supplemental hereto wherein each successor Trustee shall accept such appointment and which (1) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates, (2) if the retiring Trustee is not retiring with respect to all Securities, shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and (3) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust and that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee; and that no Trustee shall be responsible for any notice given to or received by any other Trustee, or any act or failure to act on the part of any other Trustee hereunder and

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upon the execution and delivery of such supplemental indenture the resignation or removal of the retiring Trustee shall become effective to the extent provided therein. Such retiring Trustee shall have no further responsibility for the exercise of rights and powers or for the performance of the duties and obligations vested in the successor Trustee under this Indenture with respect to the Securities of that or those series to which the appointment of such successor Trustee, and each such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates; but, on request of the Issuer, the Guarantor or any successor Trustee, such retiring Trustee shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder with respect to the Securities of that or those series to which the appointment of such successor Trustee relates.

(c) Upon request of any such successor Trustee, the Issuer and the Guarantor shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts referred to in paragraph (a) and (b) of this Section, as the case may be.

(d) No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article Six.

Section 612. Merger, Conversion, Consolidation or Succession to Business.

Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article Six, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities.

Section 613. Preferential Collection of Claims Against the Issuer or the Guarantor.

If and when the Trustee shall be or become a creditor of the Issuer or the Guarantor (or any other obligor upon the Securities), the Trustee shall be subject

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to the provisions of the Trust Indenture Act, regarding the collection of claims against the Issuer or the Guarantor (or any such other obligor).

Section 614. Appointment of Authenticating Agent.

The Trustee may appoint an Authenticating Agent or Agents with respect to one or more series of Securities which shall be authorized to act on behalf of the Trustee to authenticate Securities of such series issued upon original issue and upon exchange, registration of transfer or partial conversion or partial redemption thereof or pursuant to Section 309, and Securities so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. Wherever reference is made in this Indenture to the authentication and delivery of Securities by the Trustee or the Trustee’s certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent shall be acceptable to the Issuer or the Guarantor and shall at all times be a corporation organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia, authorized under such laws to act as Authenticating Agent, having a combined capital and surplus of not less than U.S.$50,000,000 and subject to supervision or examination by Federal or State authority. If such Authenticating Agent publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section 614, the combined capital and surplus of such Authenticating Agent shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section 614, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section.

Any corporation into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any corporation succeeding to the corporate agency or corporate trust business of an Authenticating Agent, shall continue to be an Authenticating Agent, provided such corporation shall be otherwise eligible under this Section 614, without the execution or filing of any paper or any further act on the part of the Trustee or the Authenticating Agent.

An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee and to the Issuer and the Guarantor. The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent, the Issuer and the Guarantor. Upon receiving such a notice of resignation or upon such a termination, or in case at any

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time such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section 614, the Trustee may appoint a successor Authenticating Agent which shall be acceptable to the Issuer or the Guarantor and shall give notice of such appointment in the manner provided in Section 106 to all Holders of Securities of the series with respect to which such Authenticating Agent will serve. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section.

The Issuer agrees and the Guarantor agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section 614.

If an appointment with respect to one or more series is made pursuant to this Section, the Securities of such series may have endorsed thereon, in addition to the Trustee’s certificate of authentication, an alternative certificate of authentication in the following form:

This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.

[JPMorgan Chase Bank]

As Trustee

By:

As Authenticating Agent

By:

As Authorized Officer

If all of the Securities of a series may not be originally issued at one time, and if the Trustee does not have an office capable of authenticating Securities upon original issuance located in a Place of Payment where the Issuer or the Guarantor wishes to have Securities of such series authenticated upon original issuance, the Trustee, if so requested by the Issuer or the Guarantor in writing (which writing need not comply with Section 102 and need not be accompanied by an Opinion of Counsel), shall appoint in accordance with this Section an Authenticating Agent having an office in a Place of Payment designated by the Issuer or the Guarantor with respect of such series of Securities.

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Section 615. Trustee’s Application for Instructions from the Issuer.

Any application by the Trustee for written instructions from the Issuer or the Guarantor may, at the option of the Trustee, set forth in writing any action proposed to be taken or omitted by the Trustee under this Indenture and the date on and/or after which such action shall be taken or such omission shall be effective. The Trustee shall not be liable for any action taken by, or omission of, the Trustee in accordance with a proposal included in such application on or after the date specified in such application (which date shall not be less than three Business Days after the date any officer of the Issuer or the Guarantor actually receives such application, unless any such officer shall have consented in writing to any earlier date) unless prior to taking any such action (or the effective date in the case of an omission), the Trustee shall have received written instructions in response to such application specifying the action to be taken or omitted.

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ARTICLE SEVEN

HOLDERS’ LISTS AND REPORTS BY TRUSTEE, ISSUER AND

GUARANTOR

Section 701. Issuer and the Guarantor to Furnish Trustee Names and Addresses of Holders.

Each of the Issuer and the Guarantor will furnish or cause to be furnished to the Trustee:

(a) semi-annually, not later than 15 days after each Regular Record Date in each year, a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders of Securities as of such Regular Record Date, and

(b) at such other times as the Trustee may request in writing, within 30 days after the receipt by the Issuer or the Guarantor of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished;

excluding from any such list names and addresses received by the Trustee in its capacity as Security Registrar.

Section 702. Preservation of Information; Communications to Holders.

(a) The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders of Securities contained in the most recent list furnished to the Trustee as provided in Section 701 and the names and addresses of Holders of Securities received by the Trustee in its capacity as Security Registrar. The Trustee may destroy any list furnished to it as provided in Section 701 upon receipt of a new list so furnished.

(b) The rights of the Holders of Securities to communicate with other Holders of Securities with respect to their rights under this Indenture or under the Securities, and the corresponding rights and privileges of the Trustee, shall be as provided by the Trust Indenture Act.

(c) Every Holder of Securities, by receiving and holding the same, agrees with the Issuer, the Guarantor and the Trustee that none of the Issuer, the Guarantor, the Trustee or any agent of either of them shall be held accountable by reason of any disclosure of information as to names and addresses of Holders of Securities made pursuant to the Trust Indenture Act.

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Section 703. Reports by Trustee.

The Trustee shall submit to Holders such reports concerning the Trustee and its actions under this Indenture as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant thereto.

Reports as of May 15 so required to be transmitted at stated intervals of not more than 12 months shall be transmitted no later than July 15 in each calendar year, commencing in 2004.

A copy of each such report shall, at the time of such transmission to Holders of Securities, be filed by the Trustee with each stock exchange upon which any Securities are listed, with the Commission and with the Issuer or the Guarantor. The Issuer or the Guarantor will notify the Trustee reasonably promptly when any Securities are listed on any stock exchange or delisted therefrom.

Section 704. Reports by the Issuer and the Guarantor.

(a) Each of the Issuer and the Guarantor, as applicable, shall file with the Trustee and the Commission, and transmit to Holders of Securities, such information, documents and other reports, including financial information and statements and such summaries thereof, as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant to such Act; provided that any such information, documents or reports required to be filed with the Commission pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the Trustee within 15 days after the same is so required to be filed with the Commission.

Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Issuer’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officer’s Certificates).

(b) The Issuer or the Guarantor shall furnish to the Trustee, not less often than annually, a brief certificate from the principal executive, financial or accounting officer as to his or her knowledge of the Issuer or the Guarantor’s compliance with all conditions and covenants under this Indenture. Such compliance shall be determined without regard to any period of grace or requirement of notice provided under the Indenture.

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Section 705. Calculation of Original Issue Discount.

The Issuer shall file with the Trustee promptly at the end of each calendar year (i) written notice specifying the amount of original issue discount (including daily rate and accrual periods) accrued on Outstanding Securities as of the end of such year and (ii) such other specific information relating to such original issue discount as may then be relevant under the Internal Revenue Code of 1986, as amended from time to time.

Section 706. Reports by the Security Registrar.

The Trustee shall, in its capacity as the Security Registrar, at such time and to the extent necessary to maintain a current Security Register at the registered office of the Issuer on any such date, furnish to the Issuer a copy of the Security Register on the 1st or the 15th day of each month.

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ARTICLE EIGHT

CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

Section 801. Issuer or Guarantor May Consolidate, Etc., Only on Certain Terms.

Neither the Issuer nor the Guarantor shall consolidate with or merge (which term shall include for the avoidance of doubt a scheme of arrangement) into any other Person or convey, transfer or lease its properties and assets substantially as an entirety to any Person, and neither the Issuer nor the Guarantor shall permit any Person to consolidate with or merge into the Issuer or the Guarantor or convey, transfer or lease its properties and assets substantially as an entirety to the Issuer or the Guarantor, unless:

(1) in case the Issuer or the Guarantor shall consolidate with or merge into another Person or convey, transfer or lease its properties and assets substantially as an entirety to any Person, the Person formed by such consolidation or into which the Issuer or the Guarantor is merged or the Person which acquires by conveyance or transfer, or which leases, the properties and assets of the Issuer or the Guarantor substantially as an entirety shall be a corporation, partnership or trust, shall be organized and validly existing, under the laws of the jurisdiction of its organization shall expressly assume, by an indenture supplemental hereto executed and delivered to the Trustee in form reasonably satisfactory to the Trustee, the due and punctual payment of the principal of and any premium and interest (including all Additional Amounts and any additional amounts payable pursuant to subsection (3) below) on all the Securities and the performance or observance of every covenant of this Indenture on the part of the Issuer to be performed or observed, and, in the case of the Guarantor, the due and punctual performance of the Guarantees (including all Additional Amounts and any additional amounts payable pursuant to subsection (3) below) and the performance of every covenant of this Indenture on the part of the Guarantor to be performed or observed;

(2) immediately after giving effect to such transaction and treating any indebtedness which becomes an obligation of the Issuer or the Guarantor as a result of such transaction as having been incurred by the Issuer or the Guarantor at the time of such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have happened and be continuing;

(3) the Person formed by such consolidation or into which the Issuer or the Guarantor is merged or to whom the Issuer or the Guarantor has conveyed, transferred or leased its properties or assets (if such Person is organized and validly existing under the laws of a jurisdiction other than the United States, any State thereof, or the District of Columbia) agrees to indemnify the Holder of each

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Security against (a) any tax, assessment or governmental charge imposed on any such Holder or required to be withheld or deducted from any payment to such Holder as a consequence of such consolidation, merger, conveyance, transfer or lease; and (b) any costs or expenses of the act of such consolidation, merger, conveyance, transfer or lease; and

(4) the Issuer or the Guarantor, as the case may be, has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, reasonably satisfactory to the Trustee, each stating that such consolidation, merger, conveyance, transfer or lease and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture comply with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with.

(5) If the Issuer intends to consolidate or merge with or convey, transfer or lease its property substantially as an entirety to the Guarantor or any Persons organized under the laws of Italy, including any Italian Subsidiary of the Guarantor, any such transaction shall only be permitted if all of the conditions set forth in clauses (1) through (4) above are satisfied and the Issuer delivers to the Trustee Opinions of Counsel, reasonably satisfactory to the Trustee, from nationally recognized external Italian and U.S. law firms to the effect that the provisions of the Trust Indenture Act are not in conflict with the mandatory provisions of Italian law applicable to holders of notes issued by Persons incorporated under the laws of Italy and provided further that any supplemental indenture entered into in connection with such merger shall include a provision substantially identical to the paragraph immediately following Section 803(2)(g)

Section 802. Successor Substituted.

Upon any consolidation of the Issuer or the Guarantor with, or merger of the Issuer or the Guarantor into, any other Person or any conveyance, transfer or lease of the properties and assets of the Issuer or the Guarantor substantially as an entirety in accordance with Section 801 the successor Person formed by such consolidation or into which the Issuer or the Guarantor is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Issuer or the Guarantor, as the case may be, under this Indenture with the same effect as if such successor Person had been named as the Issuer or the Guarantor herein, as the case may be, and thereafter, except in the case of a lease, the predecessor Person shall be relieved of all obligations and covenants under this Indenture and the Securities.

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Section 803. Assumption by Guarantor or Subsidiary of Issuer’s Obligations.

The Guarantor or any Subsidiary of the Guarantor may assume the obligations of the Issuer (or any Person which shall have previously assumed the obligations of the Issuer) for the due and punctual payment of the principal of (and premium, if any), interest on and any other payments with respect to the Securities, for the due and punctual conversion of the Securities in accordance with this Indenture and for the performance of every covenant of this Indenture and the Securities on the part of the Issuer to be performed or observed, provided that:

(1) the Guarantor or such Subsidiary, as the case may be, shall expressly assume all such obligations by an indenture supplemental hereto, in form reasonably satisfactory to the Trustee, executed and delivered to the Trustee and if such Subsidiary accepts such obligations, the Guarantor shall, by such supplemental indenture, confirm that its Guarantees shall apply to all such Subsidiary’s obligations under the Securities and this Indenture, as modified by such supplemental indenture;

(2) the Guarantor or such Subsidiary, as the case may be, shall agree in such supplemental indenture, to the extent provided in the Securities and subject to the limitations and exceptions set forth below, that if any deduction or withholding for any present or future taxes or other governmental charges of the Relevant Jurisdiction shall at any time be required by the Relevant Jurisdiction in respect of any amounts to be paid by the Guarantor or such Subsidiary, as the case may be, to a Holder, the Guarantor or such Subsidiary, as the case may be, will pay to the Holder of a Security as additional interest such additional amounts as may be necessary in order that the net amounts paid to such Holder of such Security shall be not less than the amounts specified in such Security to which such Holder is entitled; provided, however, that the Guarantor or Subsidiary, as the case may be, shall not be required to make any payment of additional amounts for or on account of:

(a) any tax or other governmental charge which would not have been imposed but for the existence of any present or former connection between such Holder and the Relevant Jurisdiction (other than the mere holding of a Security and a receipt of payments thereon), including, without limitation, such Holder being or having been a citizen or resident thereof or being or having been present or engaged in trade or business therein or having or having had a permanent establishment therein;

(b) The application of European Directive 2003/48/EC of June 3, 2003, on the taxation of income from savings, as well as any measure adopted according or pursuant to such directive;

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(c) any tax or other governmental charge that would not have been imposed but for a failure to comply with any applicable certification, information, identification, documentation or other reporting requirements concerning the nationality, residence, identity or connection with the Relevant Jurisdiction if such compliance is required as a precondition to relief or exemption from such tax or other governmental charge (including without limitation a certification that such Holder is not resident in the Relevant Jurisdiction or an individual resident in a member state of the European Union);

(d) any tax or other governmental charge which would not have been imposed but for a change in law that becomes effective more than 30 days after a payment by the Guarantor or Subsidiary, as the case may be, becomes due and payable, or is duly provided for and notice thereof is duly published, whichever occurs later;

(e) any tax or other governmental charge on Holders not resident in Italy imposed pursuant to Italian Law No. 239 of April 1, 1996, as amended, and as supplemented by the Decree of the Ministry of Finance dated January 23, 2002, as amended, listing the states of territories deemed to have a “privileged tax regime” or any superseding Decree replacing or modifying such list of states or territories;

(f) any tax or other governmental charge required to be withheld by any Paying Agent from a payment on a Security, if such payment can be made without such deduction or withholding by any other Paying Agent; or

(g) any combination of items (a), (b), (c), (d), (e) and (f) above.

Notwithstanding anything to the contrary in clause (e) or clause (c) (as it relates to certifications with respect to taxes or governmental charges referred to in clause (e)) above, and provided that DTC or the Issuer, the Guarantor or, if the Guarantor or an Italian listed subsidiary of the Guarantor becomes the obligor on the Securities by assumption, such new obligor, has not already put in place or procured to put in place reasonable certification procedures allowing Holders to comply with the certification requirements of Italian Legislative Decree No. 239 of April 1, 1996, as amended, supplemented or superseded and continue to hold the Securities in the clearing system where the securities are then held, the Guarantor or such other Italian listed entity, if such Person has become the obligor on the Securities pursuant to Section 803, may not avoid the payment of additional amounts required by Section 1004 hereof, unless (i) the Issuer or the Guarantor gives written notice to such Holders setting forth in reasonable detail the procedures that such Holders should follow in order to comply with such certification requirements, if such compliance is required as a precondition to relief or exemption from such tax or governmental charge, of Italian Legislative Decree No. 239 of April 1, 1996, as amended, supplemented or superseded,

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reasonably in advance of any tax or other governmental charge required to be withheld by any Paying Agent from a payment on a Security pursuant to such Italian Legislative Decree No. 239 of April 1, 1996, as amended, supplemented or superseded (ii) the Issuer or Guarantor bears the cost for the Holders related to such certification requirements, and (iii) such certification requirements do not require the Holders to change the manner or form in which they hold a Security or require the removal of such Security from a clearing system where it was held. For the avoidance of doubt, if reasonable certification procedures are in place as described in this paragraph, neither the Issuer nor the Guarantor will have any obligation to pay additional amounts as provided in clause (e) above.

The foregoing provisions shall apply mutatis mutandis to any withholding or deduction for or on account of any present or future taxes or governmental charges of whatever nature of any jurisdiction in which any successor Person to the Guarantor or such Subsidiary is organized, or any political subdivision or taxing authority thereof or therein. In addition, neither the Issuer nor the Guarantor shall have any obligation to pay Additional Amounts to a Holder that is a fiduciary or partnership or an entity that is not the sole beneficial owner of the payment of the principal or interest on a Security to the extent that the laws of the Relevant Jurisdiction require the payment to be included in the income of a beneficiary or settlor for tax purposes with respect to such fiduciary, a member of such partnership or the beneficial owner who would not have been entitled to the Additional Amounts had such beneficiary, settlor, member or beneficial owner been the Holder of such Security.

(3) immediately after giving effect to such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have occurred and be continuing; and

(4) the Guarantor or such Subsidiary, as the case may be, shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, reasonably satisfactory to the Trustee, each stating that such assumption and such supplemental indenture comply with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with.

(5) If the Guarantor or any Italian Subsidiary of the Guarantor intends to assume the obligations of the Issuer, such assumption will only be permitted if the Issuer delivers to the Trustee an Opinion of Counsel from a nationally recognized outside Italian and U.S. law firm to the effect that the provisions of the Trust Indenture Act are not in conflict with the mandatory provisions of Italian law applicable to holders of notes of issued by Persons incorporated under the laws of Italy.

Upon any such assumption, the Guarantor or such Subsidiary shall succeed to, and be substituted for, and may exercise every right and power of, the Issuer under this Indenture with the same effect as if the Guarantor or such Subsidiary had been named as an “Issuer” herein, and the Person named as an “Issuer” in the first paragraph of this instrument or any successor Person which shall theretofore have become such in the manner prescribed in this Article Eight be released from its liability as obligor upon the Securities.

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ARTICLE NINE

SUPPLEMENTAL INDENTURES

Section 901. Supplemental Indentures Without Consent of Holders.

Without the consent of any Holders of Securities or coupons, the Issuer when authorized by a Board Resolution, the Guarantor, when authorized by a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes:

(1) to evidence the succession of another Person to the Issuer or the Guarantor and the assumption by any such successor of the covenants of the Issuer or the Guarantor herein and in the Securities or to add another Issuer to this Indenture for future issuances; or

(2) to add to the covenants of the Issuer or the Guarantor for the benefit of the Holders of all or any series of Securities (and if such covenants are to be for the benefit of less than all series of Securities, stating that such covenants are expressly being included solely for the benefit of such series) or to surrender any right or power herein conferred upon the Issuer or the Guarantor; or

(3) to add any additional Events of Default for the benefit of the Holders of all or any series of Securities (and if such additional Events of Default are to be for the benefit of less than all series of Securities, stating that such additional Events of Default are expressly being included solely for the benefit of such series); or

(4) to add to or change any of the provisions of this Indenture to provide that Bearer Securities may be registrable as to principal, to change or eliminate any restrictions on the payment of principal of or any premium or interest on Bearer Securities, to permit Bearer Securities to be issued in exchange for Registered Securities, to permit Bearer Securities to be issued in exchange for Bearer Securities of other authorized denominations or to permit or facilitate the issuance of Securities in uncertificated form, provided that any such action shall not adversely affect the interests of the Holders of Securities of any series or any related coupons in any material respect; or

(5) to add to, change or eliminate any of the provisions of this Indenture in respect of one or more series of Securities, provided that any such addition, change or elimination (i) shall neither (A) apply to any Security of any series created prior to the execution of such supplemental indenture and entitled to the benefit of such provision nor (B) modify the rights of the Holder of any such Security with respect to such provision or (ii) shall become effective only when there is no such Security Outstanding; or

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(6) to add Guarantees to the Securities of any series to which the Guarantees shall not have already been attached; or

(7) to secure the Securities pursuant to the requirements of Section 1007 or otherwise; or

(8) to establish the form or terms of Securities of any series and any related coupons, as permitted by Sections 201 and 301; or

(9) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 611(b) or

(10) to reduce the conversion price of the Securities of any series other than pursuant to this Indenture; or

(11) to cure any ambiguity, to correct or supplement any provision herein which may be defective or inconsistent with any other provision herein, or to make any other provisions with respect to matters or questions arising under this Indenture, provided that such action pursuant to this clause (11) shall not adversely affect the interests of the Holders of Securities of any series or any related coupons in any material respect.

Section 902. Supplemental Indentures with Consent of Holders.

With the consent of the Holders of not less than a majority in principal amount of the Outstanding Securities of each series affected by such supplemental indenture, by Act of said Holders delivered to the Issuer or the Guarantor and the Trustee, the Issuer, the Guarantor, when authorized by a Board Resolution or other appropriate corporate authorization, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders of Securities of such series and any related coupons under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Security affected thereby,

(1) change the Stated Maturity of the principal of, or any installment of principal of or interest on, any Security or any coupon appertaining thereto, or reduce the principal amount thereof or the rate of interest thereon or any premium payable upon the redemption thereof, or change any obligation of the Issuer or the Guarantor to pay Additional Amounts pursuant to Section 1004 and the Securities (except as contemplated by Section 801(1) and permitted by Section 901(1)) or

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reduce the amount of the principal of an Original Issue Discount Security or any other Security which would be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 502 or change any Place of Payment where, or the coin or currency in which, any Security or any premium or interest thereon is payable, or modify or affect in any manner adverse to the interests of the Holders of Securities of any series the conversion rights of such Securities, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date), or any such right of conversion, or

(2) reduce the percentage in principal amount of the Outstanding Securities of any series, the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences) provided for in this Indenture, or

(3) change any obligation of the Issuer or the Guarantor to maintain an office or agency in the places and for the purposes specified in Section 1002 or

(4) modify any of the provisions of this Section, Section 513 or Section 1008 except to increase any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived without obtaining the consent of Holders representing the requisite percentage of the Outstanding Securities of the series affected thereby; provided, however, that this clause shall not be deemed to require the consent of any Holder of a Security or coupon with respect to changes in the references to “the Trustee” and concomitant changes in this Section 1008, or the deletion of this proviso, in accordance with the requirements of Sections 611(b) and 901(8), or

(5) modify or affect in any manner adverse to the interests of the Holders of any Securities the terms and conditions of the obligations of the Guarantor in respect of the due and punctual payment of the principal thereof (and premium, if any) and interest, if any, thereon or any sinking fund payments provided in respect thereof or the obligations of the Guarantor in respect of any rights of conversion of any Securities.

A supplemental indenture which changes or eliminates any covenant or other provision of this Indenture which has expressly been included solely for the benefit of one or more particular series of Securities, or which modifies the rights of the Holders of Securities of such series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series.

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It shall not be necessary for any Act of Holders of Securities under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof.

Section 903. Execution of Supplemental Indentures.

In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, in addition to the documents required by Section 102, and (subject to Section 601) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.

Section 904. Effect of Supplemental Indentures.

Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder and of any coupons appertaining thereto shall be bound thereby, except as otherwise expressed therein.

Section 905. Conformity with Trust Indenture Act.

Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act as in effect at the time of the execution thereof.

Section 906. Reference in Securities to Supplemental Indentures.

Securities of any series authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Issuer or the Guarantor shall so determine, new Securities of any series so modified as to conform, in the opinion of the Trustee, the Issuer and the Guarantor, to any such supplemental indenture may be prepared and executed by the Issuer, the Guarantees of the Guarantor may be endorsed thereon and such Securities may be authenticated and delivered by the Trustee in exchange for Outstanding Securities of such series.

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ARTICLE TEN

COVENANTS

Section 1001. Payment of Principal, Premium and Interest.

The Issuer covenants and agrees for the benefit of each series of Securities that it will duly and punctually pay the principal of and any premium and interest on the Securities of that series in accordance with the terms of the Securities, any coupons appertaining thereto and this Indenture. Unless otherwise specified as contemplated by Section 301 with respect to any series of Securities, any interest due on Bearer Securities on or before Maturity shall be payable only upon presentation and surrender of the several coupons for such interest installments as are evidenced thereby as they severally mature.

Section 1002. Maintenance of Office or Agency.

If Securities of a series are issuable only as Registered Securities, the Issuer will maintain in each Place of Payment for such series an office or agency where Securities of that series may be presented or surrendered for payment, where Securities of that series may be surrendered for registration of transfer, exchange and where notices and demands to or upon the Issuer or the Guarantor in respect of the Securities of that series and this Indenture may be served. If Securities of a series are issuable as Bearer Securities, the Issuer will maintain (A) in the Borough of Manhattan, The City of New York, an office or agency where any Registered Securities of that series may be presented or surrendered for payment, where any Registered Securities of that series may be surrendered for registration of transfer, where Securities of that series may be surrendered for exchange, where notices and demands to or upon the Issuer in respect of the Securities of that series and this Indenture may be served and where Bearer Securities of that series and related coupons may be presented or surrendered for payment in the circumstances described in the second following paragraph (and not otherwise), (B) subject to any laws or regulations applicable thereto, in a Place of Payment for that series which is located outside the United States, an office or agency where Securities of that series and related coupons may be presented and surrendered for payment (including payment of any Additional Amounts payable on Securities of that series pursuant to Section 1004), and (C) subject to any laws or regulations applicable thereto, in a Place of Payment for that series located outside the United States, an office or agency where any Registered Securities of that series may be surrendered for registration of transfer, where Securities of that series may be surrendered for exchange and where notices and demands to or upon the Issuer in respect of the Securities of that series and this Indenture may be served.

The Issuer will give prompt written notice to the Trustee of the location, and any change in the location, of any such office or agency. If at any time the

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Issuer shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee, except that Bearer Securities of that series and the related coupons may be presented and surrendered for payment (including payment of any Additional Amounts payable on Bearer Securities of that series pursuant to Section 1004) at any Paying Agent for such series located outside the United States, and each of the Issuer and the Guarantor hereby appoints the same as its agent to receive all respective presentations, surrenders, notices and demands.

No payment of principal, premium or interest on Bearer Securities shall be made at any office or agency of the Issuer in the United States or by check mailed to any address in the United States or by transfer to an account maintained with a bank located in the United States; provided, however, that, if the Securities of a series are denominated and payable in United States dollars, payment of principal of and any premium and interest on any Bearer Security (including any Additional Amounts payable on Securities of such series pursuant to Section 1004) shall be made at the office of the Issuer’s Paying Agent in the Borough of Manhattan, The City of New York, if (but only if) payment in United States dollars of the full amount of such principal, premium, interest or additional amounts, as the case may be, at all offices or agencies outside the United States maintained for the purpose by the Issuer or the Guarantor in accordance with this Indenture is illegal or effectively precluded by exchange controls or other similar restrictions.

The Issuer may also from time to time designate one or more other offices or agencies where the Securities of one or more series of the Issuer may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Issuer of its obligation to maintain an office or agency in accordance with the requirements set forth above for Securities of any series for such purposes. The Issuer or the Guarantor will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

Section 1003. Money for Securities Payments to Be Held in Trust.

If the Issuer or the Guarantor shall at any time act as its own Paying Agent with respect to any series of Securities, it will, on or before each due date of the principal of or any premium or interest on any of the Securities of that series, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal and any premium and interest so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of its action or failure so to act.

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Whenever the Issuer shall have one or more Paying Agents for any series of Securities, it will, prior to each due date of the principal of or any premium or interest on any Securities of that series, deposit with a Paying Agent a sum sufficient to pay such amount, such sum to be held as provided by the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the Issuer will promptly notify the Trustee of its action or failure so to act.

The Issuer will cause each Paying Agent for any series of Securities other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section 1003, that such Paying Agent will (i) comply with the provisions of the Trust Indenture Act applicable to it as a Paying Agent and (ii) during the continuance of any default by the Issuer (or any other obligor upon the Securities of that series) in the making of any payment in respect of the Securities of that series, and upon the written request of the Trustee, forthwith pay to the Trustee all sums held in trust by such Paying Agent for payment in respect of the Securities of that series.

The Issuer may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Issuer or the Guarantor or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Issuer or the Guarantor or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money.

Any money deposited with the Trustee or any Paying Agent, or then held by the Issuer or the Guarantor, in trust for the payment of the principal of or any premium or interest on any Security of any series and remaining unclaimed for five years after such principal, premium or interest has become due and payable shall be paid to the Issuer or the Guarantor on its Order, or (if then held by the Issuer or the Guarantor) shall be discharged from such trust; and the Holder of such Security or any coupon appertaining thereto shall thereafter, as an unsecured general creditor, look only to the Issuer or the Guarantor for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Issuer or the Guarantor as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Issuer or the Guarantor cause to be published once, in an Authorized Newspaper in each Place of Payment, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money with accrued interest then remaining will be repaid to the Issuer or the Guarantor.

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Section 1004. Additional Amounts.

Unless otherwise specified in any Board Resolution or other appropriate corporate authorization of the Issuer or the Guarantor establishing the terms of Securities of a series or the Guarantees relating thereto in accordance with Section 301 or pursuant to any supplemental indenture, if any deduction or withholding for any present or future taxes or other governmental charges (including, for the avoidance of any doubt, any increase in the rate of the tax described in clause (e) below) of the jurisdiction (or any political subdivision or taxing authority thereof or therein) in which the Issuer or the Guarantor is incorporated, shall at any time be required by such jurisdiction (or any such political subdivision or taxing authority) (each a “Relevant Jurisdiction”) in respect of any amounts to be paid by the Issuer of principal of or interest on a Security of any series, or by the Guarantor under the Guarantees, the Issuer or the Guarantor, as the case may be, will pay to the Holder of a Security of such series such additional amounts as may be necessary in order that the net amounts paid to such Holder of such Security shall be not less than the amounts specified in such Security or coupon to which such Holder is entitled; provided, however, that the Issuer or the Guarantor, as the case may be, shall not be required to make any payment of additional amounts for or on account of:

(a) any tax or other governmental charge which would not have been imposed but for the existence of any present or former connection between such Holder and the Relevant Jurisdiction (other than the mere holding of a Security and the receipt of payments thereon), including, without limitation, such Holder being or having been a citizen or resident thereof or being or having been present or engaged in trade or business therein or having or having had a permanent establishment therein;

(b) The application of European Directive 2003/48/EC of June 3, 2003, on the taxation of income from savings, as well as any measure adopted according or pursuant to such directive;

(c) any tax or other governmental charge that would not have been imposed but for a failure to comply with any applicable certification, information, identification, documentation or other reporting requirements concerning the nationality, residence, identity or connection with the Relevant Jurisdiction if such compliance is required as a precondition to relief or exemption from such tax or other governmental charge (including without limitation a certification that such Holder is not resident in the Relevant Jurisdiction);

(d) any tax or other governmental charge which would not have been imposed but for a change in law that becomes effective more than 30 days after a payment by the Issuer on a Security of any series, or by the Guarantor under the

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Guarantees, as the case may be, becomes due and payable, or is duly provided for and notice thereof is duly published, whichever occurs later;

(e) any tax or other governmental charge on Holders not resident in Italy imposed pursuant to Italian Law No. 239 of April 1, 1996, as amended, and as supplemented by the Decree of the Ministry of Finance dated January 23, 2002, as amended, listing the states of territories deemed to have a “privileged tax regime” or any superseding Decree replacing or modifying such list of states or territories;

(f) any tax or other governmental charge required to be withheld by any Paying Agent from a payment on a Security, if such payment can be made without such deduction or withholding by any other Paying Agent; or

(g) any combination of items (a), (b), (c), (d), (e) and (f) above.

The foregoing provisions shall apply mutatis mutandis to any withholding or deduction for or on account of any present or future taxes or governmental charges of whatever nature of any jurisdiction in which any successor Person to the Issuer or the Guarantor, as the case may be, is organized, or any political subdivision or taxing authority thereof or therein; provided, however, that such payment of additional amounts may be subject to such further exceptions as may be established in the terms of such Securities established as contemplated by Section 301. In addition, neither the Issuer nor the Guarantor shall have any obligation to pay Additional Amounts to a Holder that is a fiduciary or partnership or an entity that is not the sole beneficial owner of the payment of the principal or interest on a Security to the extent that the laws of the Relevant Jurisdiction require the payment to be included in the income of a beneficiary or settlor for tax purposes with respect to such fiduciary or a member of such partnership or the beneficial owner who would not have been entitled to the Additional Amounts had such beneficiary, settlor, member or beneficial owner been the Holder of such Security. Subject to the foregoing provisions, whenever in this Indenture there is mentioned, in any context, the payment of the principal of or any premium or interest on, or in respect of, any Security of any series or the net proceeds received on the sale or exchange of any Security of any series, such mention shall be deemed to include mention of the payment of additional amounts provided for in this Section to the extent that, in such context, additional amounts are, were or would be payable in respect thereof pursuant to the provisions of this Section and express mention of the payment of additional amounts (if applicable) in any provisions hereof shall not be construed as excluding additional amounts in those provisions hereof where such express mention is not made.

If the terms of the Securities of a series established as contemplated by Section 301 do not specify that additional amounts pursuant to the Section will not be payable by the Issuer or the Guarantor, at least 10 days prior to the first

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Interest Payment Date with respect to that series of Securities (or if the Securities of that series will not bear interest prior to Maturity, the first day on which a payment of principal and any premium is made), and at least 10 days prior to each date of payment of principal and any premium or interest if there has been any change with respect to the matters set forth in the below-mentioned Officer’s Certificate, the Issuer will furnish the Trustee and the Issuer’s principal Paying Agent or Paying Agents, if other than the Trustee, with an Officer’s Certificate instructing the Trustee and such Paying Agent or Paying Agents whether such payment of principal of and any premium or interest on the Securities of that series shall be made to Holders of Securities of that series without withholding for or on account of any tax, assessment or other governmental charge described in the Securities of that series. If any such withholding shall be required, then such Officer’s Certificate shall specify by country the amount, if any, required to be withheld on such payments to such Holders of Securities and the Issuer or the Guarantor, as the case may be, will pay to the Trustee or such Paying Agent or Paying Agents the additional amounts required by this Section. Each of the Issuer and the Guarantor covenant to indemnify each of the Trustee and any Paying Agent for, and to hold each of them harmless against, any loss, liability or expense arising out of or in connection with actions taken or omitted by any of them in reliance on any Officer’s Certificate furnished pursuant to this Section, except to the extent that any such loss, liability or expense is due to its own negligence or bad faith.

Section 1005. Statement by Officers as to Default.

Each of the Guarantor and the Issuer of Outstanding Securities will deliver to the Trustee, within 120 days after the end of each fiscal year of the Guarantor ending after the date hereof, an Officer’s Certificate, stating whether or not to the best knowledge of the signers thereof the Issuer or the Guarantor, as the case may be, is in default in the performance and observance of any of the terms, provisions and conditions of this Indenture (without regard to any period of grace or requirement of notice provided hereunder) and, if the Issuer or the Guarantor shall be in default, specifying all such defaults and the nature and status thereof of which they may have knowledge.

Each of the Issuer and the Guarantor shall deliver to the Trustee, as soon as possible and in any event within ten days after the Issuer or the Guarantor becomes aware of the occurrence of any Event of Default or an event which, with notice or the lapse of time or both, would constitute an Event of Default, an Officer’s Certificate setting forth the details of such Event of Default or default and the action which the Issuer proposes to take with respect thereto.

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Section 1006. Payment of Taxes and Other Claims.

The Issuer and the Guarantor each will pay or discharge or cause to be paid or discharged, before the same shall become delinquent, (1) all material taxes, assessments and governmental charges levied or imposed upon the Issuer or the Guarantor or upon the income, profits or property of the Issuer or the Guarantor, and (2) all lawful claims for labor, materials and supplies which, if unpaid, might by law become a material lien upon the property of the Issuer, the Guarantor provided, however, that the Issuer, the Guarantor, as the case shall be, shall not be required to pay or discharge or cause to be paid or discharged any such tax, assessment, charge or claim whose amount, applicability or validity is being contested in good faith by appropriate means.

Section 1007. Limitation on Liens.

Neither the Issuer nor the Guarantor shall create or permit to subsist any Encumbrance over all or any of its present or future revenues or assets (other than Permitted Encumbrances) to secure any present or future Capital Market Indebtedness issued or guaranteed by the Issuer, the Guarantor without making effective provision whereby the Securities shall be secured equally and ratably with such Capital Market Indebtedness so long as such Capital Market Indebtedness shall be so secured.

Section 1008. Waiver of Certain Covenants.

Except as otherwise specified as contemplated by Section 301 for Securities of such series, the Issuer and the Guarantor may, with respect to the Securities of any series, omit in any particular instance to comply with any term, provision or condition set forth in a covenant provided pursuant to Section 301(25), 901(2) or 901(8) for the benefit of the Holders of Securities of such series or in Section 1007 or any term, provision or condition set forth in an indenture supplemental hereto, if before the time for such compliance the Holders of at least a majority in principal amount of the Outstanding Securities of such series shall, by Act of such Holders, either waive such compliance in such instance or generally waive compliance with such term, provision or condition, but no such waiver shall extend to or affect such term, provision or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Issuer and the Guarantor and the duties of the Trustee in respect of any such term, provision or condition shall remain in full force and effect.

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ARTICLE ELEVEN

REDEMPTION OF SECURITIES

Section 1101. Applicability of Article.

Securities of any series which are redeemable before their Stated Maturity shall be redeemable in accordance with their terms and (except as otherwise specified as contemplated by Section 301 for Securities of any series) in accordance with this Article.

Section 1102. Election to Redeem; Notice to Trustee.

The election of the Issuer to redeem any Securities of any series shall be evidenced by a Board Resolution or in another manner specified as contemplated in Section 301 or pursuant to any supplemental indenture. In case of any redemption at the election of the Issuer of all or less than all the Securities of any series (including any such redemption affecting only a single Security), the Issuer shall, at least 60 days prior to the Redemption Date fixed by the Issuer (unless a shorter notice shall be reasonably satisfactory to the Trustee), notify the Trustee of such Redemption Date, of the principal amount of Securities of such series to be redeemed and, if applicable, of the tenor of the Securities to be redeemed. In the case of any redemption of Securities prior to the expiration of any restriction on such redemption provided in the terms of such Securities or elsewhere in this Indenture, the Issuer shall furnish the Trustee with an Officer’s Certificate evidencing compliance with such restriction.

Section 1103. Selection by Trustee of Securities to Be Redeemed.

If less than all the Securities of any series are to be redeemed (unless all of the Securities of such series and of a specified tenor are to be redeemed or unless such redemption affects only a single Security), the particular Securities, of which the principal outstanding shall in no event exceed the paid in capital of the Issuer, to be redeemed shall be selected individually by lot, in the case of Securities in definitive form, and in accordance with the rules of the relevant Depositary, in the case of Securities in global form, not more than 60 days prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series not previously called for redemption, by such method as the Trustee shall deem fair and appropriate and which may provide for the selection for redemption of a portion of the principal amount of any Registered Securities of such series provided that the unredeemed portion of the principal amount of any Registered Security shall be in an authorized denomination which shall not be less than the minimum authorized denomination for such Security. If less than all of the Securities of such series and of a specified tenor are to be redeemed (unless such redemption affects only a single Security), the particular Securities to be redeemed shall be selected not more than 60 days prior to the Redemption Date by the Trustee, from

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the Outstanding Securities of such series and specified tenor not previously called for redemption in accordance with the preceding sentence, and the Trustee shall promptly notify the Issuer in writing of the Securities selected for redemption and, in the case of any Securities selected for partial redemption, the principal amounts thereof to be redeemed. If less than all Securities of any series are to be redeemed, the outstanding principal amount of which exceeds the Issuer’s paid in capital, the Issuer shall redeem such securities pro rata or in such other manner deemed appropriate under applicable law.

The provisions of the preceding paragraph shall not apply with respect to any redemption affecting only a single Security, whether such Security is to be redeemed in whole or in part. In the case of any such redemption in part, the unredeemed portion of the principal amount of the Security shall be in an authorized denomination (which shall not be less than the minimum authorized denomination) for such Security.

For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities shall relate, in the case of any Securities redeemed or to be redeemed only in part, to the portion of the principal amount of such Securities which has been or is to be redeemed.

Section 1104. Notice of Redemption.

Notice of redemption shall be given in the manner provided in Section 106 to each Holder of Securities to be redeemed not less than 30 nor more than 60 days prior to the Redemption Date, except that where Securities held in definitive form are to be redeemed, a list of the serial numbers of such Securities shall be given in the manner provided in Section 106 not less than 15 days prior to the Redemption Date.

All notices of redemption shall state:

(1) the Redemption Date,

(2) the Redemption Price, plus accrued interest, if any,

(3) if less than all the Outstanding Securities of any series consisting of more than a single Security are to be redeemed, the identification (and, in the case of partial redemption of any Securities, the principal amounts) of the particular Securities to be redeemed and if less than all the Outstanding Securities of any series consisting of a single Security are to be redeemed, the principal amount of the particular Security to be redeemed,

(4) that on the Redemption Date the Redemption Price, plus accrued interest, if any, will become due and payable upon each such Security to be

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redeemed and, if applicable, that interest thereon will cease to accrue on and after said date,

(5) the place or places where each such Security, together in the case of a Bearer Security with all coupons appertaining thereto, if any, maturing after the Redemption Date, is to be surrendered for payment of the Redemption Price, plus accrued interest, if any,

(6) that the redemption is for a sinking fund, if such is the case,

(7) the current conversion price and the date on which the right to convert such Securities or portions thereof will expire.

(8) the CUSIP number or numbers, if any, with respect to such Securities.

A notice of redemption published as contemplated by Section 106 need not identify particular Registered Securities to be redeemed.

Notice of redemption of Securities to be redeemed at the election of the Issuer shall be given by the Issuer or, at the Issuer’s request, by the Trustee in the name and at the expense of the Issuer and shall be irrevocable.

Section 1105. Deposit of Redemption Price.

Prior to any Redemption Date, the Issuer shall deposit with the Trustee or with a Paying Agent (or, if the Issuer is acting as its own Paying Agent, segregate and hold in trust as provided in Section 1003) an amount of money sufficient to pay the Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date) accrued interest on, all the Securities which are to be redeemed (other than those theretofore surrendered for conversion) on that date.

If the Securities of any series are redeemable at the option of the Issuer then, upon redemption, the Issuer shall pay a Redemption Price equal to the greater of:

(1) 100% of the principal amount and premium, if any, of the Securities of such series plus accrued interest to the Redemption Date; or

(2) as determined by the Quotation Agent, the sum of the present values of the remaining scheduled payments of principal, premium, if any, and interest on the Securities of such series (not including any portion of such payments of interest accrued as of the Redemption Date). Such present values shall be determined by discounting the remaining principal, premium, if any, and interest payments to the Redemption Date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months), using the Adjusted Treasury Yield.

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Section 1106. Securities Payable on Redemption Date.

Notice of redemption having been given as aforesaid, the Securities so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the Issuer shall default in the payment of the Redemption Price and accrued interest) such Securities shall cease to bear interest and the coupons for such interest appertaining to any Bearer Securities so to be redeemed, except to the extent provided below, shall be void. Upon surrender of any such Security for redemption in accordance with said notice, together with all coupons, if any, appertaining thereto maturing after the Redemption Date, such Security shall be paid by the Issuer at the Redemption Price, together with accrued interest to the Redemption Date; provided, however, that installments of interest on Bearer Securities whose Stated Maturity is on or prior to the Redemption Date shall be payable only at an office or agency located outside the United States (except as otherwise provided in Section 1002) and, unless otherwise specified as contemplated by Section 301, only upon presentation and surrender of coupons for such interest, and provided, further, that unless otherwise specified as contemplated by Section 301, installments of interest on Registered Securities whose Stated Maturity is on or prior to the Redemption Date shall be payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such at the close of business on the relevant Record Dates according to their terms and the provisions of Section 310.

If any Bearer Security surrendered for redemption shall not be accompanied by all appurtenant coupons maturing after the Redemption Date, such Security may be paid after deducting from the Redemption Price an amount equal to the face amount of all such missing coupons, or the surrender of such missing coupon or coupons may be waived by the Issuer and the Trustee if there be furnished to them such security or indemnity as they may require to save each of them and any Paying Agent harmless. If thereafter the Holder of such Security shall surrender to the Trustee or any Paying Agent any such missing coupon in respect of which a deduction shall have been made from the Redemption Price, such Holder shall be entitled to receive the amount so deducted; provided, however, that interest represented by coupons shall be payable only at an office or agency located outside the United States (except as otherwise provided in Section 1002) and, unless otherwise specified as contemplated by Section 301, only upon presentation and surrender of those coupons.

If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal and any premium shall, until paid, bear interest from the Redemption Date at the rate prescribed therefor in the Security.

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Section 1107. Securities Redeemed in Part.

Any Registered Security which is to be redeemed only in part shall be surrendered at a Place of Payment therefor (with, if the Issuer or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Issuer and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing), and the Issuer shall execute, and the Trustee shall authenticate and deliver to the Holder of such Security without service charge, a new Registered Security or Securities of the same series and of like tenor, of any authorized denomination as requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so surrendered.

Section 1108. Optional Redemption Due to Changes in Tax Treatment.

Unless otherwise specified in any Board Resolution or other appropriate form of corporate authorization of the Issuer or the Guarantor or pursuant to any supplemental indenture establishing the terms of the securities of a series or the guarantees relating thereto in accordance with Section 301, each series of Securities contained in one or more particular issues may be redeemed at the option of the Issuer or the Guarantor, in whole but not in part, at any time (except in the case of Securities that have a variable rate of interest, which may be redeemed on any Interest Payment Date) at a Redemption Price equal to the principal amount thereof plus accrued interest to the date fixed for redemption (except in the case of Outstanding Original Issue Discount Securities which may be redeemed at the Redemption Price specified by the terms of such series of Securities) if, as a result of any change in or amendment to the laws or any regulations or rulings promulgated thereunder of the jurisdiction (or of any political subdivision or taxing authority thereof or therein) in which the Issuer or the Guarantor is incorporated (or, in the case of a successor Person to the Issuer or the Guarantor, of the jurisdiction in which such successor Person is organized or any political subdivision or taxing authority thereof or therein) or any change in the official application or interpretation of such laws, regulations or rulings, or any change in the official application or interpretation of, or any execution of or amendment to, any treaty or treaties affecting taxation to which such jurisdiction or such political subdivision or taxing authority (or such other jurisdiction or political subdivision or taxing authority) is a party, which change, execution or amendment becomes effective on or after the date specified for such series pursuant to the terms of the Security (or in the case of a successor Person to the Issuer or the Guarantor, the date on which such successor Person became such pursuant to Sections 801 and 802 or in the case of an assumption by the Guarantor or its Subsidiary of obligations of the Issuer under the Securities pursuant to Section 803, the date of such assumption), (i) the Issuer or the Guarantor (or such successor Person or such Subsidiary) is or would be required to pay additional amounts with respect to the Securities or the Guarantees, as the case may be, on

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the next succeeding Interest Payment Date as described in Section 206 or Section 1004 or (ii) the Guarantor or any Subsidiary of the Guarantor is or would be required to deduct or withhold tax on any payment to the Issuer to enable the Issuer to make any payment of principal, premium, if any, or interest and, in each case, the payment of such additional amounts in the case of (i) above or such deductions or withholding in the case of (ii) above cannot be avoided by the use of any reasonable measures available to the Issuer, the Guarantor or the Subsidiary. Prior to the giving of notice of redemption of such Securities pursuant to this Indenture, the Issuer or the Guarantor will deliver to the Trustee an Officer’s Certificate, stating that the Issuer or the Guarantor is entitled to effect such redemption and setting forth in reasonable detail a statement of circumstances showing that the conditions precedent to the right of the Issuer or the Guarantor to redeem such Securities pursuant to this Section 1108 been satisfied.

Further, if, pursuant to Section 801(3)(a) of this Indenture, a Person into which the Issuer or the Guarantor is merged or to whom the Issuer or the Guarantor has conveyed, transferred or leased its properties or assets has been or would be required to pay any additional amounts as therein provided, each series of Securities may be redeemed at the option of such Person in whole, but not in part, at any time (except in the case of Securities that have a variable rate of interest, which may be redeemed on any Interest Payment Date), at a redemption price equal to the principal amount thereof plus accrued interest to the date fixed for redemption (except in the case of Outstanding Original Issue Discount Securities which may be redeemed at the Redemption Price specified by the terms of such series of Securities). The Issuer and the Guarantor have the option to redeem Securities pursuant to this Section even if the Issuer or the Guarantor is required to pay Additional Amounts immediately after such merger, conveyance, transfer or lease. However, the Securities may not be redeemed if the sole purpose of such a merger would be to permit such redemption. Prior to the giving of notice of redemption of such Securities pursuant to this Indenture, such Person shall deliver to the Trustee an Officer’s Certificate, stating that such Person is entitled to effect such redemption and setting forth in reasonable detail a statement of circumstances showing that the conditions precedent to the right of such Person to redeem such Securities pursuant to this Section have been satisfied.

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ARTICLE TWELVE

SINKING FUNDS

Section 1201. Applicability of Article.

The provisions of this Article shall be applicable to any sinking fund for the retirement of Securities of any series except as otherwise specified as contemplated by Section 301 for Securities of such series.

The minimum amount of any sinking fund payment provided for by the terms of Securities of any series is herein referred to as a “mandatory sinking fund payment”, and any payment in excess of such minimum amount provided for by the terms of Securities of any series is herein referred to as an “optional sinking fund payment”. If provided for by the terms of Securities, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 1202. Each sinking fund payment shall be applied to the redemption of Securities of any series as provided for by the terms of such Securities.

Section 1202. Satisfaction of Sinking Fund Payments with Securities.

The Issuer (1) may deliver Outstanding Securities of a series (other than any previously called for redemption), together in the case of any Bearer Securities of such series with all unmatured coupons appertaining thereto, and (2) may apply as a credit Securities of a series which have been redeemed either at the election of the Issuer pursuant to the terms of such Securities or through the application of permitted optional sinking fund payments pursuant to the terms of such Securities, in each case in satisfaction of all or any part of any sinking fund payment with respect to the Securities of such series required to be made pursuant to the terms of such Securities as and to the extent provided for by the terms of such Securities; provided that the Securities to be credited have not been previously so credited. The Securities to be so credited shall be received and credited for such purpose by the Trustee at the Redemption Price, as specified in the Securities so to be redeemed, for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly.

Section 1203. Redemption of Securities for Sinking Fund.

Not less than 60 days prior to each sinking fund payment date for any Securities, the Issuer will deliver to the Trustee an Officer’s Certificate specifying the amount of the next ensuing sinking fund payment for such Securities pursuant to the terms of such Securities, the portion thereof, if any, which is to be satisfied by payment of cash and the portion thereof, if any, which is to be satisfied by delivering and crediting Securities of that series pursuant to Section 1202 and will also deliver to the Trustee any Securities to be so delivered. Not less than 50 days prior to each such sinking fund payment date, the Trustee shall select the Securities to be redeemed upon such sinking fund payment date in the manner specified in Section 1103 and cause notice of the redemption thereof to be given in the name of and at the expense of the Issuer in the manner provided in Section 1104. Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Sections 1106 and 1107.

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ARTICLE THIRTEEN

MEETINGS OF HOLDERS OF SECURITIES

Section 1301. Purposes for Which Meetings May Be Called.

If Securities of a series are issuable as Bearer Securities, a meeting of Holders of Securities of such series may be called at any time and from time to time pursuant to this Article to make, give or take any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be made, given or taken by Holders of Securities of such series.

Section 1302. Call, Notice and Place of Meetings.

(a) The Trustee may at any time call a meeting of Holders of Securities of any series for any purpose specified in Section 1301, to be held at such time and at such place in the Borough of Manhattan, The City of New York, or in London as the Trustee shall determine. Notice of every meeting of Holders of Securities of any series, setting forth the time and the place of such meeting and in general terms the action proposed to be taken at such meeting, shall be given, in the manner provided in Section 106, not less than 21 nor more than 90 days prior to the date fixed for the meeting.

(b) In case at any time the Issuer or the Guarantor, pursuant to a Board Resolution, or the Holders of at least 10% in principal amount of the Outstanding Securities of any series shall have requested the Trustee to call a meeting of the Holders of Securities of such series for any purpose specified in Section 1301, by written request setting forth in reasonable detail the action proposed to be taken at the meeting, and the Trustee shall not have made the first publication of the notice of such meeting within 21 days after receipt of such request or shall not thereafter proceed to cause the meeting to be held as provided herein, then the Issuer, the Guarantor or the Holders of Securities of such series in the amount specified above, as the case may be, may determine the time and the place in the Borough of Manhattan, The City of New York, or in London, for such meeting and may call such meeting for such purposes by giving notice thereof as provided in subsection (a) of this Section.

Section 1303. Persons Entitled to Vote at Meetings.

To be entitled to vote at any meeting of Holders of Securities of any series, a Person shall be (1) a Holder of one or more Outstanding Securities of such series, or (2) a Person (who himself need not be a Holder) appointed by an instrument in writing as proxy for a Holder or Holders of one or more Outstanding Securities of such series by such Holder or Holders. The only Persons who shall be entitled to be present or to speak at any meeting of Holders of Securities of any series shall be the Persons entitled to vote at such meeting and

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their counsel, any representatives of the Trustee and its counsel and any representatives of the Issuer, the Guarantor and its counsel.

Section 1304. Quorum; Action.

Except as otherwise provided in this Indenture, the Persons entitled to vote a majority in principal amount of the Outstanding Securities of a series shall constitute a quorum for a meeting of Holders of Securities of such series. In the absence of a quorum within 30 minutes of the time appointed for any such meeting, the meeting may be adjourned for a period of not less than 10 days as determined by the chairman of the meeting prior to the adjournment of such meeting. In the absence of a quorum at any such adjourned meeting, such adjourned meeting may be further adjourned for a period of not less than 10 days as determined by the chairman of the meeting prior to the adjournment of such adjourned meeting. Notice of the reconvening of any adjourned meeting shall be given as provided in Section 1302(a), except that such notice need be given only once not less than five days prior to the date on which the meeting is scheduled to be reconvened. Notice of the reconvening of an adjourned meeting shall state expressly the percentage, as provided above, of the principal amount of the Outstanding Securities of such series which shall constitute a quorum.

Any resolution passed or decision taken at any meeting of Holders of Securities of any series duly held in accordance with this Section shall be binding on all the Holders of Securities of such series and the related coupons, whether or not presented or represented at the meeting.

Section 1305. Determination of Voting Rights; Conduct and Adjournment of Meetings.

(a) Notwithstanding any other provisions of this Indenture, the Trustee may make such reasonable regulations as it may deem advisable for any meeting of Holders of Securities of a series in regard to proof of the holding of Securities of such series and of the appointment of proxies and in regard to the appointment and duties of inspectors of votes, the submission and examination of proxies, certificates and other evidence of the right to vote, and such other matters concerning the conduct of the meeting as it shall deem appropriate. Except as otherwise permitted or required by any such regulations, the holding of Securities shall be proved in the manner specified in Section 104 and the appointment of any proxy shall be proved in the manner specified in Section 104 or by having the signature of the person executing the proxy witnessed or guaranteed by any trust, bank or banker authorized by Section 104 to certify to the holding of Bearer Securities. Such regulations may provide that written instruments appointing proxies, regular on their face, may be presumed valid and genuine without the proof specified in Section 104 or other proof.

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(b) The Trustee shall, by an instrument in writing, appoint a temporary chairman of the meeting, unless the meeting shall have been called by the Issuer, the Guarantor or by Holders of Securities as provided in Section 1302(b) in which case the Issuer, the Guarantor or the Holders of Securities of the series calling the meeting, as the case may be, shall in like manner appoint a temporary chairman. A permanent chairman and a permanent secretary of the meeting shall be elected by vote of the persons entitled to vote a majority in principal amount of the Outstanding Securities of such series represented at the meeting.

(c) At any meeting each Holder of a Security of such series or proxy shall be entitled to one vote for each U.S. $1,000 principal amount (or foreign currency equivalent) of the Outstanding Securities of such series held or represented by him: provided, however, that no vote shall be cast or counted at any meeting in respect of any Security challenged as not Outstanding and ruled by the chairman of the meeting to be not Outstanding. The chairman of the meeting shall have no right to vote, except as a Holder of a Security of such series or proxy.

(d) Any meeting of Holders of Securities of any series duly called pursuant to Section 1302 at which a quorum is present may be adjourned from time to time by Persons entitled to vote a majority in principal amount of the Outstanding Securities of such series represented at the meeting, and the meeting may be held as so adjourned without further notice.

Section 1306. Counting Votes and Recording Action of Meetings.

The vote upon any resolution submitted to any meeting of Holders of Securities of any series shall be by written ballots on which shall be subscribed the signatures of the Holders of Securities of such series or of their representatives by proxy and the principal amounts and serial numbers of the Outstanding Securities of such series held or represented by them. The permanent chairman of the meeting shall appoint two inspectors of votes who shall count all votes cast at the meeting for or against any resolution and who shall make and file with the secretary of the meeting their verified written reports in duplicate of all votes cast at the meeting. A record, at least in duplicate, of the proceedings of each meeting of Holders of Securities of any series shall be prepared by the secretary of the meeting and there shall be attached to said record the original reports of the inspectors of votes on any vote by ballot taken thereat and affidavits by one or more persons having knowledge of the facts setting forth a copy of the notice of the meeting and showing that said notice was given as provided in Section 1302, and, if applicable, Section 1304. Each copy shall be signed and verified by the affidavits of the permanent chairman and secretary of the meeting and one such copy shall be delivered to each of the Issuer and the Guarantor, and another to the Trustee to be preserved by the Trustee, the latter to have attached thereto the ballots voted at the meeting. Any record so signed and verified shall be conclusive evidence of the matters therein stated.

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This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed all as of the day and year first above written.

TELECOM ITALIA CAPITAL SOCIÉTÉ ANONYME as Issuer
By:	/S/    ADRIANO TRAPLETTI
Name:	Adriano Trapletti
Title:	Managing Director

TELECOM ITALIA S.P.A. as Guarantor
By:	/S/    FRANCESCO TANZI
Name:	Francesco Tanzi
Title:	Attorney-in-Fact

JPMORGAN CHASE BANK as Trustee
By:	/S/    GLENN W. ANDERSEN
Name:	Glenn W. Andersen
Title:	Vice President

151

EX-4.4

Exhibit 4.4

TELECOM ITALIA CAPITAL,

SOCIÉTÉ ANONYME

As Issuer

AND

TELECOM ITALIA S.p.A.

As Guarantor

TO

JPMORGAN CHASE BANK

As Trustee

FIRST SUPPLEMENTAL INDENTURE

Dated as of October 29, 2003

TO THE INDENTURE AMONG TELECOM ITALIA CAPITAL, AS ISSUER,

TELECOM ITALIA S.P.A., AS GUARANTOR AND JPMORGAN CHASE

BANK, AS TRUSTEE, DATED AS OF October 29, 2003.

ARTICLE 1

THE NOTES

Section 1.01.	DESIGNATION OF THE NOTES: ESTABLISHMENT OF FORM	2
Section 1.02.	AMOUNT	3
Section 1.03.	INTEREST	4
Section 1.04.	REDEMPTION	5
Section 1.05.	MATURITY	5
Section 1.06.	CURRENCY	5
Section 1.07.	DEFEASANCE AND DISCHARGE OF THE NOTES	5
Section 1.08.	OTHER TERMS OF THE NOTES	6
Section 1.09.	REGISTRATION RIGHTS	6
	ARTICLE 2
	AMENDMENTS TO THE INDENTURE
Section 2.01.	NOTICES TO HOLDERS	6
Section 2.02.	COVENANTS	9
	ARTICLE 3
	MISCELLANEOUS PROVISIONS
Section 3.01.	INTEGRAL PART	9
Section 3.02.	GENERAL DEFINITIONS	10
Section 3.03.	ADOPTION, RATIFICATION AND CONFIRMATION	10
Section 3.04.	COUNTERPARTS	10
Section 3.05.	SEVERABILITY	10
Section 3.06.	TRUSTEE NOT RESPONSIBLE FOR RECITALS	10
Section 3.07.	GOVERNING LAW	10
Annex A	Form of Face of Rule 144A Note	A-l
Annex B	Form of Face of Regulation S Note	B-7
Annex C	Form of Reverse of Security	C-l
Annex D	Form of Guarantee	D-l
Annex E	Schedule of Aggregate Unpaid Principal Amount	E-l

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TELECOM ITALIA CAPITAL, AS ISSUER

FIRST SUPPLEMENTAL INDENTURE

THIS FIRST SUPPLEMENTAL INDENTURE, dated as of October 29, 2003, is entered into among TELECOM ITALIA CAPITAL, SOCIÉTÉ ANONYME, a company with limited liability incorporated under the laws of the Grand-Duchy of Luxembourg in the form of a société anonyme (the “Issuer”), having its registered office at 12-14, Boulevard Grande-Duchesse Charlotte, L-1330 Luxembourg, registered with the register of commerce and companies in Luxembourg under number B-77.970, TELECOM ITALIA S.p.A., a joint stock company established under the laws of the Republic of Italy (the “Guarantor”), having its registered office at Piazza degli Affari 2, 20123 Milan, Italy, and JPMorgan Chase Bank, a company duly organized and existing under the laws of the State of New York, as Trustee hereunder (the “Trustee”) under the Indenture dated as of October 29, 2003 between the Issuer, the Guarantor and the Trustee (the “Base Indenture”), as amended and supplemented by this First Supplemental Indenture (collectively, the “Indenture”).

RECITALS

The Issuer has delivered to the Trustee the Base Indenture on October 29, 2003.

The Base Indenture provides for the issuance from time to time of guaranteed senior unsecured debt securities by the Issuer.

Article 9 of the Base Indenture provides that the Issuer, when authorized by or pursuant to a Board Resolution, the Guarantor when authorized by a Board Resolution and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental to the Indenture to establish the form and terms of securities of any series.

The Issuer and Guarantor desire to issue a series of Series A 4.000% Guaranteed Senior Global Notes due 2008, initially in the aggregate principal amount of $1,000,000,000 (the “Series A Notes”), Series B 5.250% Guaranteed Senior Global Notes due 2013 initially in the aggregate principal amount of $2,000,000,000 (the “Series B Notes”) and Series C 6.375% Guaranteed Senior Global Notes due 2033 initially in the aggregate principal amount of $1,000,000,000 (the “Series C Notes” and, together with the Series A Notes and the Series B Notes, the “Notes”) and has duly authorized the creation and issuance of such Notes and the execution and delivery of this First Supplemental Indenture to modify the Base Indenture and provide certain additional provisions as hereinafter described.

The Issuer and the Guarantor deem it advisable to enter into this First Supplemental Indenture for the purpose of establishing the terms of the Notes and providing for the rights, obligations and duties of the Trustee with respect to such Notes.

The Series A Notes, Series B Notes and the Series C Notes shall be treated as a separate series of debt securities in accordance with the terms of the Base Indenture and for all purposes under the Indenture.

All conditions and requirements of the Indenture necessary to make this First Supplemental Indenture a valid, binding and legal instrument in accordance with its terms have been performed and fulfilled by the parties hereto.

NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITHNESSETH.

For and in consideration of the premises and the purchase of the Notes by the Holders thereto, it is mutually agreed, for the equal and proportionate benefit of all Holders, as follows:

ARTICLE 1

THE NOTES

Section 1.01. DESIGNATION OF THE NOTES: ESTABLISHMENT OF FORM

(a) There shall be a series of guaranteed debt securities designated “$1,000,000,000 4.000% Series A Guaranteed Senior Global Notes Due 2008”, a series of guaranteed debt securities designated “$2,000,000,000 5.250% Series B Guaranteed Senior Global Notes Due 2013” and a series of guaranteed debt securities designated “$1,000,000,000 6.375% Series C Guaranteed Senior Global Notes Due 2033”.

(b) The Notes shall be substantially in the forms as set forth in Annexes A, B and C hereto. Annexes A, B, and C are incorporated into and shall be deemed a part of this First Supplemental Indenture, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by the Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or as may, consistently herewith, be determined by the officer of the Issuer executing such Notes, as evidenced by the execution of the Notes.

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(c) The Notes shall be direct, senior, unsecured and unsubordinated obligations of the Issuer and shall rank pari passu, without any preference or priority of payment, between themselves and equally with all other senior, unsecured, unsubordinated obligations of the Issuer, from time to time outstanding. The Series A Notes shall mature, unless previously redeemed or repurchased and cancelled, on November 15, 2008. The Series B Notes shall mature, unless previously redeemed or repurchased and cancelled, on November 15, 2013. The Series C Notes shall mature, unless previously redeemed or repurchased and cancelled, on November 15, 2033.

(d) The Notes are being offered and sold in reliance on Regulation S and Rule 144A under the Securities Act.

(e) The Notes shall be issued only in registered form. The Notes shall be issued in denominations of $1000 and integral multiples thereof.

(f) The Rule 144A Notes and Regulation S Notes shall be issued as registered Securities in book-entry global form and shall not be exchangeable for definitive securities except as provided in Section 306 of the Base Indenture. The Notes shall not be exchangeable at any time for bearer securities. The Notes will be issued as global notes registered in the name of DTC or its nominee. Book-entry interests in a global note may be held through organizations that participate, directly or indirectly, in DTC, Clearstream and Euroclear, as applicable. Book-entry interests in the Notes and all transfers relating to the Notes will be reflected in the book-entry records of DTC.

(g) Each Note shall be duly executed by an authorized officer of the Issuer and authenticated by the Trustee, as the Authenticating Agent. Each Note shall include a Guarantee endorsed thereon. The aggregate principal amount of the Notes for each series of the Notes may from time to time be increased or decreased by adjustments made by the trustee to reflect exchanges, conversions, repurchases and redemptions, as applicable.

(h) The Issuer initially appoints JPMorgan Chase Bank to act as its principal paying agent and registrar and transfer agent in New York and BNP Paribas Luxembourg to act as its Luxembourg paying agent, pursuant to Section 1002 of the Base Indenture.

Section 1.02. AMOUNT

(a) The Trustee is authorized, upon receipt of Notes executed by an authorized officer of the Issuer for the purposes of the original issuance of the Notes, to authenticate, for the Series A Notes, Notes in an aggregate principal amount initially not in excess of $1,000,000,000, for the Series B Notes, Notes in an aggregate principal amount initially not in excess of $2,000,000,000 and, for

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the Series C Notes, Notes in an aggregate principal amount initially not in excess of $1,000,000,000, without any further action by the Issuer and to deliver the Global Securities in accordance with the written order of the Issuer.

(b) There is no limit on the amount of Series A Notes and/or Series B Notes and/or Series C Notes, which may be issued in accordance with this First Supplemental Indenture and which shall be treated as part of such series of Notes. Subject to the limitations set forth in the next sentence, the Issuer may, without the consent of any Holder, reopen any series of Notes and issue additional Series A Notes, Series B Notes or Series C Notes, of like tenor (a “Further Issue”). Any Further Issue that utilizes the same ISIN, Common Code or “CUSIP” number as a Note already issued hereunder shall be effected only in a manner and under circumstances whereby the Further Issue is treated as a “qualified reopening” (within the meaning of U.S. Treasury Regulation Section 1.1275-2(k)(3), or any successor provision, all as in effect at the time of the Further Issue) of the issue of Notes having the shared ISIN, Common Code or “CUSIP” number, as the case may be. Any Further Issue shall initially be represented by a Global Note, in substantially the same form as set forth in Annexes A, B and C hereto. Any Further Issue shall be considered to be part of the relevant series of Notes, shall be fungible therewith after any applicable Restricted Period and shall rank equally and ratably therewith.

(c) The Issuer may not issue new Notes to replace securities that it has paid or delivered to the Trustee for cancellation.

Section 1.03. INTEREST

(a) Interest Rates.

(i) The Series A Notes will bear interest from the Issue Date to Maturity at a fixed rate per annum equal to 4.000%.

(ii) The Series B Notes will bear interest from the Issue Date to Maturity at a fixed rate per annum equal to 5.250%.

(iii) The Series C Notes will bear interest from the Issue Date to Maturity at a fixed rate per annum equal to 6.375%.

(b) Interest Payments.

Interest on the Notes will be payable semiannually in arrears on May 15 and November 15 of each year (each, an “Interest Payment Date”) commencing on May 15, 2004, to the persons in whose names the notes are registered at the close of business on the applicable preceding May 1 and November 1.

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The dates in this Section 1.03(b) with which reference is made to determine the Persons entitled to receive interest on the Notes of a series are collectively referred to as “Regular Record Dates”. If any Interest Payment Date would otherwise fall on a day which is not a Business Day, it shall be postponed to the next day which is a Business Day; provided that interest on such payment shall not accrue during the period from and after such Interest Payment Date. If the Stated Maturity date or any earlier redemption or repayment date with respect to the applicable series of Notes falls on a day that is not a Business Day, the payment of principal, and any premium, and any accrued interest shall be made on the next succeeding Business Day, but interest on such payment shall not accrue during the period from and after the Stated Maturity, redemption or repayment date.

Section 1.04. REDEMPTION

(a) There shall be no sinking fund for the retirement of the Notes.

(b) Except as provided for in Section 1108 of the Base Indenture, neither the Issuer, Guarantor nor the Holders shall be entitled to call any series of the Notes, except as provided below.

The Notes may be redeemed in whole or in part, at the option of the Issuer and without the consent of the Holders of the Notes or the Trustee, at any time on and after May 15, 2005, upon giving not less than 30 nor more than 60 days’ notice to the Holders of the Notes at a redemption price equal to the greater of (x) 100% of their aggregate principal amount plus accrued but unpaid interest to (but excluding) the date fixed for such redemption or (y) a Make-Whole Amount. Any such redemption shall be made in accordance with Article 11 of the Base Indenture.

Section 1.05. MATURITY

The Stated Maturity of the Series A Notes is November 15, 2008. The Stated Maturity of the Series B Notes is November 15, 2013. The Stated Maturity of the Series C Notes is November 15, 2033.

Section 1.06. CURRENCY

The U.S. dollar shall be the sole currency of account and payment for all sums payable by the Issuer under or in connection with the Notes.

Section 1.07. DEFEASANCE AND DISCHARGE OF THE NOTES

Section 403 of the Base Indenture “Defeasance and Discharge of Securities of a Series” shall apply to the Notes.

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Section 1.08. OTHER TERMS OF THE NOTES

Without limiting the foregoing provisions of this Article One, the terms of the Notes shall be set forth in the Form of Reverse of Security and the terms of the Guarantee shall be set forth in the Form of Guarantee attached hereto as Annex C and Annex D, respectively, and as provided in the Base Indenture.

Section 1.09. REGISTRATION RIGHTS

The Holders of the Notes shall have the benefit of the Registration Rights Agreement, dated October 22, 2003, between the Issuer, the Guarantor, on the one hand, and Citigroup Global Markets Inc., J.P. Morgan Securities Inc., and Lehman Brothers Inc. each for itself and on behalf of the several Initial Purchasers listed in Schedule 1 to the Purchase Agreement (as defined therein), on the other hand, and, in the event of Registration Default (as defined therein), the Company shall pay to the Holders of the Notes the Additional Interest, as defined and set forth therein.

ARTICLE 2

AMENDMENTS TO THE INDENTURE

The amendments contained herein shall, unless otherwise specified, apply to the Notes only and not to any other series of Securities issued under the Base Indenture and any covenants provided herein are expressly being included solely for the benefit of the holders of the Notes. These amendments shall, unless otherwise specified, be effective for so long as any Note remains Outstanding.

Section 2.01. NOTICES TO HOLDERS

Article 1 of the Base Indenture shall be amended for purposes of this First Supplemental Indenture as follows:

(a) Section 101 of the Base Indenture (“Definitions”) shall be amended by inserting, amending or restating, as the case may be in their appropriate alphabetical position, the following definitions:

“Adjusted Treasury Rate” means, with respect to any Redemption Date:

• the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated “H.15(519)” or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded U.S. Treasury securities adjusted to constant maturity under the caption

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“Treasury Constant Maturities,” for the maturity corresponding to the Comparable Treasury Issue (if no maturity is within three months before or after the remaining life (as defined below), yields for the two published maturities most closely corresponding to the Comparable Treasury Issue will be determined and the treasury rate will be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month); or

• if such release (or any successor release) is not published during the week preceding the Calculation Date or does not contain such yields, the rate per annum equal to the semiannual equivalent yield to maturity or interpolated (on a day count basis) of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date.

“Comparable Treasury Issue” means the U.S. treasury security selected by the Quotation Agent as having an actual or interpolated maturity comparable to the remaining term of the Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such Notes.

“Comparable Treasury Price” means, with respect to any Redemption Date, (1) the average of five reference treasury dealer quotations for such redemption date, after excluding the highest and lowest Reference Treasury Dealer Quotations, or (2) if the Quotation Agent obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such quotations.

“DTC” means the Depository Trust Company and its successors.

“Further Issue” shall have the meaning as set forth in Section 1.02 hereof.

“Indenture” shall mean the Base Indenture, dated October 29, 2003 as further supplemented and amended by this First Supplemental Indenture.

“Interest Payment Date” shall have the meaning as set forth in Section 1.03 hereof.

“Issue Date” shall mean the date of issue of any series of Notes including, but not limited to, Further Issues.

“Make-Whole Amount” means the amount determined by the Quotation Agent equal to the sum of the present values of the remaining scheduled payments

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of principal and interest thereon (not including any portion of such payments of interest accrued as of the date of redemption) to Stated Maturity of the Notes (as defined in Section 1.05 hereof) discounted to the Redemption Date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Adjusted Treasury Rate, plus

• 20 basis points in the case of the Series A Notes,

• 25 basis points in the case of the Series B Notes, and

• 30 basis points in the case of the Series C Notes

plus, in each case, accrued interest thereon to the Redemption Date.

“Primary Treasury Dealer” means a primary U.S. government securities dealer in New York City.

“Quotation Agent” means either Citigroup Global Markets Inc., J.P. Morgan Securities Inc. and Lehman Brothers Inc. or such other agent as appointed by the Issuer or the Guarantor, or, if these firms are unwilling or unable to select the Comparable Treasury Issue, an independent investment banking institution of national standing appointed by the Issuer or the Guarantor.

“Reference Treasury Dealer” means each of Citigroup Global Markets Inc., J.P. Morgan Securities Inc and Lehman Brothers Inc., or their affiliates which are primary US Government securities dealers, or their respective successors; provided, however, that if any of the foregoing shall cease to be a Primary Treasury Dealer, the Issuer will substitute such Reference Treasury Dealer with another Primary Treasury Dealer; and any other Primary Treasury Dealer selected by the quotation agent after consultation with the Issuer or the Guarantor.

“Reference Treasury Dealer Quotations” means with respect to each Reference Treasury Dealer and any Redemption Date, the average, as determined by the Quotation Agent, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Quotation Agent by such Reference Treasury Dealer at 3:30 p.m. (New York City time) on the third Business Day preceding such Redemption Date.

“Regulation S Notes” means all Notes distributed under Regulation S, substantially in the forms set forth in Annex B and Annex C, hereto.

“Rule 144A Notes” means all Notes initially distributed in connection with the offering of the Notes by the Initial Purchasers in reliance upon Rule 144A, substantially in the forms set forth in Annex A and Annex C.

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Section 2.02. COVENANTS

Article 10 of the Base Indenture shall be supplemented for purposes of this First Supplemental Indenture as follows:

In accordance with Section 1002 of the Base Indenture (“Maintenance of Office for Agency”) the Issuer hereby supplements such Section by making the following undertakings:

The Issuer will maintain in New York City, New York and in Luxembourg an office and agency where the Notes may be surrendered for payment and where such Notes may be surrendered for registration of transfer, exchange and where notices and demands to or upon the Issuer or the Guarantor in respect of the Notes and the Indenture may be served. Initially such office and agency shall be JPMorgan Chase Bank, 4 New York Plaza, 15^th Floor, New York, New York 10004 and J.P. Morgan Chase Luxembourg S.A For so long as the Notes are listed on the Luxembourg Stock Exchange, the Issuer has agreed to maintain such an agency in Luxembourg. The Issuer has also agreed that for so long as any Notes remain outstanding, if the conclusions of the ECOFIN Council meeting November 26-27, 2000 are implemented, it will maintain a paying agent in a European Union member state that will not be obliged to withhold or deduct tax pursuant to any Directive implementing such conclusions. The Issuer may, at any time, terminate the appointment of any paying agent, appoint additional paying agents, and approve any change in the office through which any paying agent acts. In the event that the Issuer should change its paying agent in Luxembourg, the Issuer shall give notice in accordance with Section 106 of the Indenture.

ARTICLE 3

MISCELLANEOUS PROVISIONS

Section 3.01. INTEGRAL PART

This First Supplemental Indenture constitutes an integral part of the Indenture. In the event of a conflict or inconsistency between the Base Indenture and this First Supplemental Indenture, with respect to the Notes only, this First Supplemental Indenture shall control.

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Section 3.02. GENERAL DEFINITIONS

For all purposes of this First Supplemental Indenture:

(a) capitalized terms used herein without definition shall have the meanings specified in the Base Indenture; and

(b) the terms “herein”, “hereof”, “hereunder”, “hereof” and other words of similar import refer to this First Supplemental Indenture.

Section 3.03. ADOPTION, RATIFICATION AND CONFIRMATION

The Base Indenture, as supplemented and amended by this First Supplemental Indenture, is in all respects hereby adopted, ratified and confirmed.

Section 3.04. COUNTERPARTS

This First Supplemental Indenture my be executed in any number of counterparts, each of which when so executed shall be deemed an original; and all such counterparts shall together constitute but one and the same instrument.

Section 3.05. SEVERABILITY

If any provision in the Base Indenture, this First Supplemental Indenture of the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

Section 3.06. TRUSTEE NOT RESPONSIBLE FOR RECITALS

The recitals herein contained are made by the Issuer and not by the Trustee, and the Trustee assumes no responsibility for the correctness thereof. The Trustee makes no representation as to the validity or sufficiency of this First Supplemental Indenture or the Notes. The Trustee shall not be accountable for the use or application by the Issuer of the Notes or the proceeds thereof.

Section 3.07. GOVERNING LAW

THIS FIRST SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY AND BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. THE PROVISIONS OF ARTICLES 86 TO 94-8 OF THE LUXEMBOURG LAW ON COMMERCIAL COMPANIES OF AUGUST 10, 1915, AS AMENDED ARE HEREBY EXCLUDED.

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IN WITNESS WHEREOF, the parties hereof have caused this First Supplemental Indenture to be duly executed and their respective corporate seals to be hereunto fixed and attested as of the day and year first written above.

TELECOM ITALIA CAPITAL SOCIÉTÉ ANONYME as Issuer
By:	/S/    ADRIANO TRAPLETTI
Name:	Adriano Trapletti
Title:	Managing Director

TELECOM ITALIA S.p.A. as Guarantor
By:	/S/    FRANCESCO TANZI
Name:	Francesco Tanzi
Title:	Attorney-in-Fact

JPMORGAN CHASE BANK as Trustee
By:	/S/    GLENN W. ANDERSEN
Name:	Glenn W. Andersen
Title:	Vice President

Annex A

Form of Face of Rule 144A Note

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) THAT IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE ISSUER, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A AND (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATIONS UNDER THE SECURITIES ACT, OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUER’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY

A-1

CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THIS SECURITY IS A GLOBAL REGISTERED SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

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TELECOM ITALIA CAPITAL

société anonyme

subscribed corporate capital of Euro 2,336,000 represented by

100,000 shares, nominal value of Euro 23.36 per share, all fully paid,

its Articles of Incorporation were published on October 13, 2000

in the Mémorial, Journal Officiel of the Grand Duchy of Luxembourg,

Recueil des Sociétés et Associations

12-14 Boulevard Grande-Duchesse Charlotte L-1330, Luxembourg

R.C.S. Luxembourg B-77.970

[PRINCIPAL AMOUNT]

SERIES · $··% GUARANTEED SENIOR GLOBAL NOTES

DUE                              

Payment of Principal, Premium, if any,

and Interest Fully and Unconditionally Guaranteed by

TELECOM ITALIA S.p.A.

No.                     

CUSIP No. ·

ISIN No. ·

Common Code: ·

TELECOM ITALIA CAPITAL, a company with limited liability (société anonyme) incorporated on September 27, 2000 for an unlimited duration under the laws of the Grand-Duchy of Luxembourg (herein called the “Issuer”, which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to                                         , or registered assigns, on November 15, ·, the aggregate unpaid principal amount shown on the schedule affixed hereto and made a part hereof as endorsed by the Trustee (as defined on the reverse hereof), which amount is on the date hereof $ ·. In addition, the issuer promises to pay interest on said principal amount from October 29, 2003 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually in arrears on May 15, and November 15 in each year, commencing on May 15, 2004, at the rate of         % per annum until the principal hereof is paid or made available for payment. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be May 1 or November 1 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this

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Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture].

Principal paying agent:

JPMorgan Chase Bank

4 New York Plaza 15^th Floor

New York, New York 10004

Luxembourg paying agent:

BNP Paribas Luxembourg

10A Boulevard Royal

L-2093 Luxembourg

The Issuer shall pay Additional Amounts as provided in Section 1004 of the Indenture.

Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof, directly or through an Authenticating Agent, by manual signature of an authorized signatory, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

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IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed manually or in facsimile.

Dated:

TELECOM ITALIA CAPITAL SOCIÉTÉ ANONYME
By:
	Name:
	Title:	Director

CERTIFICATE OF AUTHENTICATION

This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.

JPMorgan Chase Bank

As Trustee

By:
	Authorized Officer

Annex B

Form of Face of Regulation S Note

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) THAT IS 40 DAYS AFTER THE ORIGINAL ISSUE DATE HEREOF ONLY (A) TO THE ISSUER, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATIONS UNDER THE SECURITIES ACT, OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUER’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/ OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE &

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CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THIS SECURITY IS A GLOBAL REGISTERED SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

TELECOM ITALIA CAPITAL

société anonyme

subscribed corporate capital of Euro 2,336,000 represented by

100,000 shares, nominal value of Euro 23.36 per share, all fully paid,

its Articles of Incorporation were published on October 13, 2000

in the Mémorial, Journal Officiel of the Grand Duchy of Luxembourg

Luxembourg, Recueil des Sociétés et Associations

12-14 Boulevard Grande-Duchesse Charlotte L-1330, Luxembourg

R.C.S. Luxembourg B-77.970

[PRINCIPAL AMOUNT]

SERIES · $··% GUARANTEED SENIOR GLOBAL NOTES

DUE                          

Payment of Principal, Premium, if any,

and Interest Fully and Unconditionally Guaranteed by

TELECOM ITALIA S.p.A.

No.                     

CUSIP No.·

ISIN No.·

Common Code: ·

TELECOM ITALIA CAPITAL, a company with limited liability (société anonyme) incorporated on September 27, 2000 for an unlimited duration under the laws of the Grand-Duchy of Luxembourg (herein called the “Issuer”, which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to                             , or registered assigns, on November 15, ·, the aggregate unpaid principal amount

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shown on the schedule affixed hereto and made a part hereof as endorsed by the Trustee (as defined on the reverse hereof), which amount is on the date hereof $·. In addition, the issuer promises to pay interest on said principal amount from October 29, 2003 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually in arrears on May 15, and November 15 in each year, commencing on May 15, 2004, at the rate of             % per annum, until the principal hereof is paid or made available for payment. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be May 1 or November 1 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture.

Principal paying agent:

JPMorgan Chase Bank

4 New York Plaza 15^th Floor

New York, New York 10004

Luxembourg paying agent:

BNP Paribas Luxembourg

10A Boulevard Royal

L-2093 Luxembourg

The Issuer shall pay Additional Amounts as provided in Section 1004 of the Indenture.

Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof, directly or through an Authenticating Agent, by manual signature of an authorized signatory, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

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IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed manually or in facsimile.

Dated:

TELECOM ITALIA CAPITAL SOCIÉTÉ ANONYME
By:
	Name:
	Title:	Director

CERTIFICATE OF AUTHENTICATION

This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.

JPMorgan Chase Bank

As Trustee

By:
	Authorized Officer

Annex C

Form of Reverse of Registered Security

This Security is one of a duly authorized issue of securities of the Issuer (the “Securities”), issued and to be issued in one or more series under an Indenture, dated as of October 29, 2003 (the “Indenture” which term shall have the meaning assigned to it in such instrument), among the Issuer, Telecom Italia S.p.A., a joint stock company established under the laws of the Republic of Italy (herein called the “Guarantor”, which term includes any successor Person under the Indenture referred to herein), and JPMorgan Chase Bank, as Trustee (the “Trustee”, which term includes any other successor trustee under the Indenture), and reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Issuer, the Guarantor, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. This Security is one of the series designated on the face hereof and shall not be limited in aggregate principal amount.

The Issuer may from time to time, without the consent of the Holders, create and issue further securities having the same terms and conditions as the Securities in all respects (or in all respects except for the issue date, the first payment of interest thereon and/or issue price), so that such further issue shall be consolidated and form a single series with the outstanding Securities or upon such terms as the Issuer may determine at the time of their issue.

The Securities of this series are subject to redemption upon not less than 30 days’ notice by mail, at any time on after May 15, 2005 as a whole or in part, at the election of the Issuer, at the greater of (x) 100% of their aggregate principal amount plus accrued but unpaid interest to (but excluding) the date fixed for such redemption or (y) a Make-Whole Amount.

The Securities may be redeemed at the option of the Issuer or the Guarantor, in whole but not in part, upon not less than 30 nor more than 60 days’ notice given as provided in the Indenture, at any time at a Redemption Price equal to the principal amount thereof plus accrued interest to the date fixed for redemption if as a result of any change in or amendment to the laws or any regulations or rulings promulgated thereunder of the jurisdiction (or of any political subdivision or taxing authority thereof or therein) in which the Issuer or the Guarantor is incorporated (or in the case of a successor Person to the Issuer or the Guarantor, of the jurisdiction in which such successor Person is organized or any political subdivision or taxing authority thereof or therein) or any change in the official application or interpretation of such laws, regulations or rulings, or any change in the official application or interpretation of, or any execution of or amendment to, any treaty or treaties affecting taxation to which such jurisdiction or such political subdivision or taxing authority (or such other jurisdiction or

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political subdivision or taxing authority) is a party, which change, execution or amendment becomes effective on or after October 29, 2003 (or, in the case of a successor Person to the Issuer or the Guarantor, the date on which such successor Person became such pursuant to the applicable provisions of the Indenture) (i) the Issuer or the Guarantor (or such successor Person) is or would be required to pay Additional Amounts with respect to the Securities or the Guarantees, respectively, on the next succeeding Interest Payment Date as set forth below or in the Guarantee endorsed hereon or (ii) the Guarantor or any Subsidiary of the Guarantor is or would be required to deduct or withhold tax on any payment to the Issuer to enable the Issuer to make any payment of principal or interest in respect of the Securities and, in each case, the payment of such Additional Amounts in the case of (i) above or such deduction or withholding in the case of (ii) above cannot be avoided by the use of any reasonable measures available to the Issuer, the Guarantor or the Subsidiary.

The Securities may also be redeemed in whole but not in part upon not less than 30 nor more than 60 days’ notice given as provided in the Indenture at any time at a Redemption Price equal to the principal amount thereof plus accrued interest to the date fixed for redemption if the Person formed by a consolidation of the Issuer or the Guarantor or into which the Issuer or the Guarantor is merged or to which the Issuer or the Guarantor conveys, transfers or leases its properties and assets substantially as an entirety is required to pay a Holder additional amounts in respect of any tax, assessment or governmental charge imposed on any such Holder or required to be withheld or deducted from any payment to such Holder as a consequence of such consolidation, merger, conveyance, transfer or lease. However, the Securities may not be redeemed if the sole purpose of such a merger would be to permit such redemption.

Notice of redemption will be given by mail to Holders of Securities, not less than 30 nor more than 60 days prior to the date fixed for redemption, all as provided in the Indenture.

In the event of redemption of this Security in part only, a new Security or Securities of this series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.

The Indenture contains provisions for defeasance at any time of the entire indebtedness of this Security upon compliance by the Issuer or the Guarantor with certain conditions set forth therein, which provisions apply to this Security.

If an Event of Default with respect to Securities of this series shall occur and be continuing, the principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture.

If an Event of Default with respect to Securities of this series shall occur and be continuing, an amount of principal of the Securities of this series may be

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declared due and payable in the manner and with the effect provided in the Indenture. Upon payment (i) of the amount of principal so declared due and payable and (ii) of interest on any overdue principal, premium and interest (in each case to the extent that the payment of such interest shall be legally enforceable), all of the applicable Issuer’s obligations in respect of the payment of the principal of and interest, if any, on the Securities of this series shall terminate.

If any deduction or withholding for any present or future taxes or other governmental charges (including, for the avoidance of any doubt, any increase in the rate of the tax described in clause (5) below) of the Relevant Jurisdiction shall at any time be required by the Relevant Jurisdiction in respect of any amounts to be paid by the Issuer under the Securities, the Issuer will pay to the Holder of this Security, such additional amounts as may be necessary in order that the net amounts paid to such Holder of such Security shall be not less than the amounts specified in such Security to which such Holder is entitled; provided, however, that the Issuer shall not be required to make any payment of additional amounts for or on account of:

(1) any tax or other governmental charge which would not have been imposed but for the existence of any present or former connection between such Holder and the Relevant Jurisdiction (other than the mere holding of a Security and the receipt of payments thereon), including, without limitation, such Holder being or having been a citizen or resident thereof or being or having been present or engaged in trade or business therein or having or having had a permanent establishment therein;

(2) The application of European Directive 2003/48/EC of June 3, 2003, on the taxation of income from savings, as well as any measure adopted according or pursuant to such directive;

(3) any tax or other governmental charge that would not have been imposed but for a failure to comply with any applicable certification, information, identification, documentation or other reporting requirements concerning the nationality, residence, identity or connection with the Relevant Jurisdiction if such compliance is required as a precondition to relief or exemption from such tax or other governmental charge (including without limitation a certification that such Holder is not resident in the Relevant Jurisdiction or an individual resident in a member state of the European Union);

(4) any tax or other governmental charge which would not have been imposed but for a change in law that becomes effective more than 30 days after a payment by the Issuer under the Securities becomes due and payable, or is duly provided for and notice thereof is duly published, whichever occurs later;

(5) any tax or other governmental charge on Holders not resident in Italy imposed pursuant to Italian Law No. 239 of April 1, 1996, as amended, and

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as supplemented by the Decree of the Ministry of Finance dated January 23, 2002, as amended, listing the states of territories deemed to have a “privileged tax regime” or any superseding Decree replacing or modifying such list of states or territories;

(6) any tax or other governmental charge required to be withheld by any Paying Agent from a payment on a Security, if such payment can be made without such deduction or withholding by any other Paying Agent; or

(7) any combination of items (1), (2), (3), (4), (5) and (6) above.

The foregoing provisions shall apply mutatis mutandis to any withholding or deduction for or on account of any present or future taxes or governmental charges of whatever nature of any jurisdiction in which any successor Person to the Issuer is organized, or any political subdivision or taxing authority thereof or therein. In addition, neither the Issuer nor the Guarantor shall have any obligation to pay Additional Amounts to a Holder that is a fiduciary or partnership or an entity that is not the sole beneficial owner of the payment of the principal or interest on a Security to the extent that the laws of the Relevant Jurisdiction require the payment to be included in the income of a beneficiary or settlor for tax purposes with respect to such fiduciary, a member of such partnership or the beneficial owner who would not have been entitled to the Additional Amounts had such beneficiary, settlor member or beneficial owner been the Holder of such Security.

Upon request, the Issuer shall provide the Trustee with documentation (which may consist of certified copies of such documentation) satisfactory to the Trustee evidencing the payment of Luxembourg taxes with respect to payment on the Securities. Copies of such documentation shall be made available to the Owners of the Securities or the Paying Agent, as applicable, upon request therefor.

The Issuer shall pay all stamp and other duties, if any, and all documentary stamp or similar taxes, if any, which may be imposed by The Grand Duchy of Luxembourg, or any other governmental entity or political subdivision therein or thereof or any taxing authority of or in any of the foregoing, with respect to the Indenture, the initial issuance of this Security, any transfer of this Security or payment orders relating to this Security. The Issuer shall not assert or claim any exemption available to it in respect of any stamp or other duties, or documentary stamp or similar taxes, which it has agreed to pay under the preceding sentence, if, after the assertion or claiming of such exemption, Holders or Owners of this Security would be liable for such duty or tax.

All references in this Security to principal, premium or interest in respect of any Security shall be deemed to mean and include all Additional Amounts, if any, payable in respect of such principal, premium or interest, unless the context

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otherwise requires, and express mention of the payment of Additional Amounts in any provision hereof shall not be construed as excluding reference to Additional Amounts in those provisions hereof where such express mention is not made.

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the Guarantor and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Issuer, the Guarantor and the Trustee with the consent of the Holders of a majority in principal amount of the Securities at the time Outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Issuer or the Guarantor with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.

As set forth in, and subject to, the provisions of the Indenture, no Holder of any Security of this series will have any right to institute any proceeding with respect to the Indenture, the Guarantee endorsed hereon, this Security or for any remedy thereunder, unless such Holder shall have previously given to the Trustee written notice of a continuing Event of Default with respect to the Securities of this series, the Holders of not less than 25% in principal amount of the Outstanding Securities of this series shall have made written request, and offered reasonable indemnity, to the Trustee to institute such proceeding as trustee, and the Trustee shall not have received from the Holders of a majority in principal of the Outstanding Securities of this series a direction inconsistent with such request and shall have failed to institute such proceeding within 60 days; provided, however, that such limitations do not apply to a suit instituted by the Holder hereof for the enforcement of payment of the principal (and premium, if any) or any interest on this Security on or after the respective due dates expressed herein.

No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and any premium and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed or to convert this security as provided in the Indenture.

The Securities of this series are issuable only in registered form without coupons in denominations of $1,000 and any integral multiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination,

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as requested by the Holder surrendering the same. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registerable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Issuer in any place where the principal of and any premium and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Issuer and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

No service charge shall be made for any such registration of transfer or exchange, but the Issuer may require from the Holder hereof payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

Prior to due presentment of this Security for registration of transfer, the Issuer, the Guarantor, the Trustee and any agent of the Issuer, the Guarantor or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and none of the Issuer, the Guarantor, the Trustee nor any such agent shall be affected by notice to the contrary.

The Indenture and the Securities shall be governed by and construed in accordance with the laws of the State of New York. For the avoidance of doubt the provisions of Articles 86 to 94-8 of the Luxembourg law on commercial companies of August 10, 1915, as amended, are excluded.

All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

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Annex D

Form of Guarantee

GUARANTEE

For value received, Telecom Italia S.p.A., a joint stock company established under the laws of the Republic of Italy, having its registered office at Piazza degli Affari 2, 20123 Milan, Italy (herein called the “Guarantor”, which term includes any successor Person under the Indenture referred to in the Security upon which this Guarantee is endorsed), hereby fully, unconditionally and irrevocably guarantees to the Holder of the Security upon which this Guarantee is granted and to the Trustee, in its individual and trust capacities, and on behalf of each such Holder the due and punctual payment of the principal of, premium, if any, and interest on such Security (and, if applicable, any Additional Amounts) the due and punctual payment of the sinking fund or analogous payments referred to therein, if any, when and as the same shall become due and payable, whether at the Stated Maturity, by declaration of acceleration, call for redemption or otherwise, according to the terms thereof and of the Indenture referred to therein and the other meeting obligations of the Issuer to the Trustee pursuant to Section 607. In case of the failure of Telecom Italia Capital (the “Issuer”, which term includes any successor Person under such Indenture), punctually to make any such payment of principal, premium, if any, or interest or any sinking fund or analogous payment, the Guarantor hereby agrees to cause any such payment to be made punctually when and as the same shall become due and payable, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise, and as if such payment were made by the Issuer.

The Guarantor hereby further agrees, subject to the limitations and exceptions set forth below, that if any deduction or withholding for any present or future taxes or other governmental charges (including, for the avoidance of doubt, any increase in the rate of the tax described in clause (e) below) of the Relevant Jurisdiction shall at any time be required by the Relevant Jurisdiction in respect of any amounts to be paid by the Guarantor under this Guarantee, then the Guarantor will pay to the Holder of a Security as additional interest such additional amounts as may be necessary in order that the net amounts paid to the Holder of such Security shall be not less than the amounts specified in such Security to which such Holder is entitled; provided, however, that the Guarantor shall not be required to make any payment of additional amounts for or on account of:

(a) any tax or other governmental charge which would not have been imposed but for the existence of any present or former connection between such Holder and the Relevant Jurisdiction (other than the mere holding of a Security and the receipt of payments thereon), including, without limitation, such Holder being or having been a citizen or resident thereof or being or having been present

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or engaged in trade or business therein or having or having had a permanent establishment therein;

(b) The application of European Directive 2003/48/EC of June 3, 2003, on the taxation of income from savings, as well as any measure adopted according or pursuant to such directive;

(c) any tax or other governmental charge that would not have been imposed but for a failure to comply with any applicable certification, information, identification, documentation or other reporting requirements concerning the nationality, residence, identity or connection with the Relevant Jurisdiction if such compliance is required as a precondition to relief or exemption from such tax or other governmental charge (including without limitation a certification that such Holder is not resident in the Relevant Jurisdiction or an individual resident in a member state of the European Union);

(d) any tax or other governmental charge which would not have been imposed but for a change in law that becomes effective more than 30 days after a payment by the Guarantor under this Guarantee becomes due and payable, or is duly provided for and notice thereof is duly published, whichever occurs later;

(e) any tax or other governmental charge on Holders not resident in Italy imposed pursuant to Italian Law No. 239 of April 1, 1996, as amended, and as supplemented by the Decree of the Ministry of Finance dated January 23, 2002, as amended, listing the states of territories deemed to have a “privileged tax regime” or any superseding Decree replacing or modifying such list of states or territories;

(f) any tax or other governmental charge required to be withheld by any Paying Agent from a payment on a Security, if such payment can be made without such deduction or withholding by any other Paying agent; or

(g) any combination of items (a), (b), (c), (d), (e) and (f) above.

The foregoing provision shall apply mutatis mutandis to any withholding or deduction for or on account of any present or future taxes or governmental charges of whatever nature of any jurisdiction in which any successor Person to the Guarantor is organized, or any political subdivision or taxing authority thereof or therein. In addition, neither the Issuer nor the Guarantor shall have any obligation to pay Additional Amounts to a Holder that is a fiduciary or partnership or an entity that is not the sole beneficial owner of the payment of the principal or interest on a Security to the extent that the laws of the Relevant Jurisdiction require the payment to be included in the income of a beneficiary or settlor for tax purposes with respect to such fiduciary, a member of such partnership or the beneficial owner who would not have been entitled to the

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Additional Amounts had such beneficiary, settlor, member or beneficial owner been the Holder of such Security.

The Guarantor hereby agrees that its obligations hereunder shall be as if it were principal debtor and not merely surety, and shall be absolute, full and unconditional, irrespective of, and shall be unaffected by, any invalidity, irregularity or unenforceability of such Security or such Indenture, any failure to enforce the provisions of such Security or such Indenture, or any waiver, modification or indulgence granted to the Issuer with respect thereto, by the Holder of such Security or the Trustee or any other circumstance which may otherwise constitute a legal or equitable discharge of a surety or guarantor; provided, however, that, notwithstanding the foregoing, no such waiver, modification or indulgence shall, without the consent of the Guarantor, increase the principal amount of such Security, or increase the interest rate thereon, or increase any premium payable upon redemption thereof, or alter the Stated Maturity thereof or, increase the principal amounts of any Original Issue Discount Security that would be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 502. The Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of merger or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest or notice with respect to such Security or the indebtedness evidenced thereby or with respect to any sinking fund or analogous payment required under such Security and all demands whatsoever, and covenants that this Guarantee will not be discharged except by payment in full of the principal of, premium, if any, and interest on such Security.

The Guarantor shall be subrogated to all rights of the Holder of such Security and the Trustee against the Issuer in respect of any amounts paid to such Holder by the Guarantor pursuant to the provisions of this Guarantee; provided, however, that the Guarantor shall not be entitled to enforce, or to receive any payments arising out of or based upon such right of subrogation until the principal of, premium, if any, and interest on all outstanding Securities of the same series issued under such Indenture shall have been paid in full.

No reference herein to such Indenture and no provision of this Guarantee or of such Indenture shall alter or impair the guarantee of the Guarantor, which is absolute and unconditional, of the due and punctual payment of the principal of, premium, if any, and interest on, and any sinking fund or analogous payments with respect to, the Security upon which this Guarantee is endorsed.

The obligations of the Guarantor under this Guarantee shall, without any further act or thing being required to be done or to occur, extend to the obligations of any successor Person who is not the Guarantor arising in respect of the Securities by virtue of a substitution pursuant to the Indenture.

D-3

This Guarantee shall not be valid or obligatory for any purpose until the certificate of authentication of such Security shall have been manually executed by or on behalf of the Trustee under such Indenture.

All terms used in this Guarantee which are defined in such Indenture shall have the meanings assigned to them in such Indenture.

The Guarantee shall be governed by and construed in accordance with the laws of the State of New York.

Claims against the Issuer and the Guarantor for payment of principal in respect of the Indenture shall be prescribed unless made within ten years from the date of payment of the relevant series of securities.

Executed and dated the date on the face hereof.

TELECOM ITALIA S.p.A.

By:

Name:

Title:

D-4

Annex E

Schedule of Aggregate Unpaid Principal Amount

The initial principal amount of this Security shall be $500,000,000. The following decreases/increases in the principal amount of this Security have been made:

Date of Decrease/ Increase Decrease in Principal Amount Increase in Principal Amount Total Principal Amount Following such Decrease/Increase Notation Made by or on Behalf of Trustee

E-1

EX-4.5

Exhibit 4.5

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THIS SECURITY IS A GLOBAL REGISTERED SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

TELECOM ITALIA CAPITAL

société anonyme

subscribed corporate capital of Euro 2,336,000 represented by

100,000 shares, nominal value of $23.36 per share, all fully paid,

its Articles of Incorporation were published on October 13, 2000

in the Mémorial, Journal Officiel of the Grand Duchy of Luxembourg

Recueil des Sociétés et Associations

12-14 Boulevard Grande-Duchesse Charlotte L-1330, Luxembourg

R.C.S. Luxembourg B-77.970

$1,000,000,000

SERIES A 4.000% GUARANTEED SENIOR GLOBAL NOTES

DUE NOVEMBER 15, 2008

Payment of Principal, Premium, if any,

and Interest Fully and Unconditionally Guaranteed by

TELECOM ITALIA S.p.A.

No.     

TELECOM ITALIA CAPITAL, a company with limited liability (société anonyme) incorporated on September 27, 2000 for an unlimited duration under the laws of the Grand Duchy of Luxembourg (herein called the “Issuer”, which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co., or registered assigns, on November 15, 2008, the aggregate unpaid principal amount

1

shown on the schedule affixed hereto and made a part hereof as endorsed by the Trustee (as defined on the reverse hereof), which amount is on the date hereof $            . In addition, the issuer promises to pay interest on said principal amount from May 15, 2004 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually in arrears on May 15, and November 15 in each year, commencing on November 15, 2004, at the rate of 4.000% per annum until the principal hereof is paid or made available for payment. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be May 1 or November 1 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture.

Principal paying agent:

JPMorgan Chase Bank

4 New York Plaza 15^th Floor

New York, New York 10004

Luxembourg paying agent:

BNP Paribas Luxembourg

10A Boulevard Royal

L-2093 Luxembourg

The Issuer shall pay Additional Amounts as provided in Section 1004 of the Indenture.

Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof, directly or through an Authenticating Agent, by manual signature of an authorized signatory, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

2

IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed manually or in facsimile.

Dated:                     , 2004

TELECOM ITALIA CAPITAL SOCIÉTÉ ANONYME
By:
	Name:
	Title:	Director

CERTIFICATE OF AUTHENTICATION

This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.

JPMorgan Chase Bank

As Trustee

By:
	Authorized Officer

Reverse of Series A 4.000% Guaranteed Senior Global Notes

due November 15, 2008

This Security is one of a duly authorized issue of securities of the Issuer (the “Securities”), issued and to be issued in one or more series under an Indenture, dated as of October 29, 2003 (the “Indenture”, which term shall have the meaning assigned to it in such instrument), among the Issuer, Telecom Italia S.p.A., a joint stock company established under the laws of the Republic of Italy (herein called the “Guarantor”, which term includes any successor Person under the Indenture referred to herein), and JPMorgan Chase Bank, as Trustee (the “Trustee”, which term includes any other successor trustee under the Indenture), and reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Issuer, the Guarantor, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. This Security is one of the series designated on the face hereof and shall not be limited in aggregate principal amount.

The Issuer may from time to time, without the consent of the Holders, create and issue further securities having the same terms and conditions as the Securities in all respects (or in all respects except for the issue date, the first payment of interest thereon and/or issue price), so that such further issue shall be consolidated and form a single series with the outstanding Securities or upon such terms as the Issuer may determine at the time of their issue.

The Securities of this series are subject to redemption upon not less than 30 days’ notice by mail, at any time on or after May 15, 2005 as a whole or in part, at the election of the Issuer, at the greater of (x) 100% of their aggregate principal amount plus accrued but unpaid interest to (but excluding) the date fixed for such redemption or (y) a Make-Whole Amount.

The Securities may be redeemed at the option of the Issuer or the Guarantor, in whole but not in part, upon not less than 30 nor more than 60 days’ notice given as provided in the Indenture, at any time at a Redemption Price equal to the principal amount thereof plus accrued interest to the date fixed for redemption if as a result of any change in or amendment to the laws or any regulations or rulings promulgated thereunder of the jurisdiction (or of any political subdivision or taxing authority thereof or therein) in which the Issuer or the Guarantor is incorporated (or in the case of a successor Person to the Issuer or the Guarantor, of the jurisdiction in which such successor Person is organized or any political subdivision or taxing authority thereof or therein) or any change in the official application or interpretation of such laws, regulations or rulings, or any change in the official application or interpretation of, or any execution of or amendment to, any treaty or treaties affecting taxation to which such jurisdiction or such political subdivision or taxing authority (or such other jurisdiction or political subdivision or taxing authority) is a party, which change, execution or amendment becomes effective on or after October 29, 2003 (or, in the case of a successor Person to the Issuer or the Guarantor, the date on which such successor Person became such pursuant to the applicable provisions of the Indenture) (i) the Issuer or the Guarantor (or such successor Person) is or would be required to pay Additional Amounts with respect to the Securities or the Guarantees, respectively, on the next succeeding Interest Payment Date as set forth below or in the Guarantee endorsed hereon or (ii) the Guarantor or any Subsidiary of the Guarantor is or would be required to deduct or withhold tax on any payment to the Issuer to enable the Issuer to make any payment

of principal or interest in respect of the Securities and, in each case, the payment of such Additional Amounts in the case of (i) above or such deduction or withholding in the case of (ii) above cannot be avoided by the use of any reasonable measures available to the Issuer, the Guarantor or the Subsidiary.

The Securities may also be redeemed in whole but not in part upon not less than 30 nor more than 60 days’ notice given as provided in the Indenture at any time at a Redemption Price equal to the principal amount thereof plus accrued interest to the date fixed for redemption if the Person formed by a consolidation of the Issuer or the Guarantor or into which the Issuer or the Guarantor is merged or to which the Issuer or the Guarantor conveys, transfers or leases its properties and assets substantially as an entirety is required to pay a Holder additional amounts in respect of any tax, assessment or governmental charge imposed on any such Holder or required to be withheld or deducted from any payment to such Holder as a consequence of such consolidation, merger, conveyance, transfer or lease. However, the Securities may not be redeemed if the sole purpose of such a merger would be to permit such redemption.

Notice of redemption will be given by mail to Holders of Securities, not less than 30 nor more than 60 days prior to the date fixed for redemption, all as provided in the Indenture.

In the event of redemption of this Security in part only, a new Security or Securities of this series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.

The Indenture contains provisions for defeasance at any time of the entire indebtedness of this Security upon compliance by the Issuer or the Guarantor with certain conditions set forth therein, which provisions apply to this Security.

If an Event of Default with respect to Securities of this series shall occur and be continuing, the principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture. Upon payment (i) of the principal amount so declared due and payable and (ii) of interest on any overdue principal, premium and interest (in each case to the extent that the payment of such interest shall be legally enforceable), all of the applicable Issuer’s obligations in respect of the payment of the principal of and interest, if any, on the Securities of this series shall terminate.

If any deduction or withholding for any present or future taxes or other governmental charges (including, for the avoidance of any doubt, any increase in the rate of the tax described in clause (5) below) of the Relevant Jurisdiction shall at any time be required by the Relevant Jurisdiction in respect of any amounts to be paid by the Issuer under the Securities, the Issuer will pay to the Holder of this Security, such additional amounts as may be necessary in order that the net amounts paid to such Holder of such Security shall be not less than the amounts specified in such Security to which such Holder is entitled; provided, however, that the Issuer shall not be required to make any payment of additional amounts for or on account of:

(1) any tax or other governmental charge which would not have been imposed but for the existence of any present or former connection between such Holder and the Relevant Jurisdiction (other than the mere holding of a Security and the receipt of payments thereon),

2

including, without limitation, such Holder being or having been a citizen or resident thereof or being or having been present or engaged in trade or business therein or having or having had a permanent establishment therein;

(2) the application of European Directive 2003/48/EC of June 3, 2003, on the taxation of income from savings, as well as any measure adopted according or pursuant to such directive;

(3) any tax or other governmental charge that would not have been imposed but for a failure to comply with any applicable certification, information, identification, documentation or other reporting requirements concerning the nationality, residence, identity or connection with the Relevant Jurisdiction if such compliance is required as a precondition to relief or exemption from such tax or other governmental charge (including without limitation a certification that such Holder is not resident in the Relevant Jurisdiction or an individual resident in a member state of the European Union);

(4) any tax or other governmental charge which would not have been imposed but for a change in law that becomes effective more than 30 days after a payment by the Issuer under the Securities becomes due and payable, or is duly provided for and notice thereof is duly published, whichever occurs later;

(5) any tax or other governmental charge on Holders not resident in Italy imposed pursuant to Italian Law No. 239 of April 1, 1996, as amended, and as supplemented by the Decree of the Ministry of Finance dated January 23, 2002, as amended, listing the states or territories deemed to have a “privileged tax regime” or any superseding Decree replacing or modifying such list of states or territories;

(6) any tax or other governmental charge required to be withheld by any Paying Agent from a payment on a Security, if such payment can be made without such deduction or withholding by any other Paying Agent; or

(7) any combination of items (1), (2), (3), (4), (5) and (6) above.

The foregoing provisions shall apply mutatis mutandis to any withholding or deduction for or on account of any present or future taxes or governmental charges of whatever nature of any jurisdiction in which any successor Person to the Issuer is organized, or any political subdivision or taxing authority thereof or therein. In addition, neither the Issuer nor the Guarantor shall have any obligation to pay Additional Amounts to a Holder that is a fiduciary or partnership or an entity that is not the sole beneficial owner of the payment of the principal or interest on a Security to the extent that the laws of the Relevant Jurisdiction require the payment to be included in the income of a beneficiary or settlor for tax purposes with respect to such fiduciary, a member of such partnership or the beneficial owner who would not have been entitled to the Additional Amounts had such beneficiary, settlor, member or beneficial owner been the Holder of such Security.

Upon request, the Issuer shall provide the Trustee with documentation (which may consist of certified copies of such documentation) satisfactory to the Trustee evidencing the payment of Luxembourg taxes with respect to payment on the Securities. Copies of such

3

documentation shall be made available to the Owners of the Securities or the Paying Agent, as applicable, upon request therefor.

The Issuer shall pay all stamp and other duties, if any, and all documentary stamp or similar taxes, if any, which may be imposed by the Grand Duchy of Luxembourg, or any other governmental entity or political subdivision therein or thereof or any taxing authority of or in any of the foregoing, with respect to the Indenture, the initial issuance of this Security, any transfer of this Security or payment orders relating to this Security. The Issuer shall not assert or claim any exemption available to it in respect of any stamp or other duties, or documentary stamp or similar taxes, which it has agreed to pay under the preceding sentence, if, after the assertion or claiming of such exemption, Holders or Owners of this Security would be liable for such duty or tax.

All references in this Security to principal, premium or interest in respect of any Security shall be deemed to mean and include all Additional Amounts, if any, payable in respect of such principal, premium or interest, unless the context otherwise requires, and express mention of the payment of Additional Amounts in any provision hereof shall not be construed as excluding reference to Additional Amounts in those provisions hereof where such express mention is not made.

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the Guarantor and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Issuer, the Guarantor and the Trustee with the consent of the Holders of a majority in principal amount of the Securities at the time Outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Issuer or the Guarantor with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.

As set forth in, and subject to, the provisions of the Indenture, no Holder of any Security of this series will have any right to institute any proceeding with respect to the Indenture, the Guarantee endorsed hereon, this Security or for any remedy thereunder, unless such Holder shall have previously given to the Trustee written notice of a continuing Event of Default with respect to the Securities of this series, the Holders of not less than 25% in principal amount of the Outstanding Securities of this series shall have made written request, and offered reasonable indemnity, to the Trustee to institute such proceeding as trustee, and the Trustee shall not have received from the Holders of a majority in principal amount of the Outstanding Securities of this series a direction inconsistent with such request and shall have failed to institute such proceeding within 60 days; provided, however, that such limitations do not apply to a suit instituted by the Holder hereof for the enforcement of payment of the principal (and premium, if any) or any interest on this Security on or after the respective due dates expressed herein.

4

No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and any premium and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed or to convert this security as provided in the Indenture.

The Securities of this series are issuable only in registered form without coupons in denominations of $1,000 and any integral multiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registerable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Issuer in any place where the principal of and any premium and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Issuer and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

No service charge shall be made for any such registration of transfer or exchange, but the Issuer may require from the Holder hereof payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

Prior to due presentment of this Security for registration of transfer, the Issuer, the Guarantor, the Trustee and any agent of the Issuer, the Guarantor or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and none of the Issuer, the Guarantor, the Trustee nor any such agent shall be affected by notice to the contrary.

The Indenture and the Securities shall be governed by and construed in accordance with the laws of the State of New York. For the avoidance of doubt the provisions of Articles 86 to 94-8 of the Luxembourg law on commercial companies of August 10, 1915, as amended, are excluded.

All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

5

GUARANTEE

For value received, Telecom Italia S.p.A., a joint stock company established under the laws of the Republic of Italy, having its registered office at Piazza degli Affari 2, 20123 Milan, Italy (herein called the “Guarantor”, which term includes any successor Person under the Indenture referred to in the Security upon which this Guarantee is endorsed), hereby fully, unconditionally and irrevocably guarantees to the Holder of the Security upon which this Guarantee is granted and to the Trustee, in its individual and trust capacities, and on behalf of each such Holder the due and punctual payment of the principal of, premium, if any, and interest on such Security (and, if applicable, any Additional Amounts) the due and punctual payment of the sinking fund or analogous payments referred to therein, if any, when and as the same shall become due and payable, whether at the Stated Maturity, by declaration of acceleration, call for redemption or otherwise, according to the terms thereof and of the Indenture referred to therein and the other meeting obligations of the Issuer to the Trustee pursuant to Section 607. In case of the failure of Telecom Italia Capital (the “Issuer”, which term includes any successor Person under such Indenture), punctually to make any such payment of principal, premium, if any, or interest or any sinking fund or analogous payment, the Guarantor hereby agrees to cause any such payment to be made punctually when and as the same shall become due and payable, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise, and as if such payment were made by the Issuer.

The Guarantor hereby further agrees, subject to the limitations and exceptions set forth below, that if any deduction or withholding for any present or future taxes or other governmental charges (including, for the avoidance of doubt, any increase in the rate of the tax described in clause (e) below) of the Relevant Jurisdiction shall at any time be required by the Relevant Jurisdiction in respect of any amounts to be paid by the Guarantor under this Guarantee, then the Guarantor will pay to the Holder of a Security as additional interest such additional amounts as may be necessary in order that the net amounts paid to the Holder of such Security shall be not less than the amounts specified in such Security to which such Holder is entitled; provided, however, that the Guarantor shall not be required to make any payment of additional amounts for or on account of:

(a) any tax or other governmental charge which would not have been imposed but for the existence of any present or former connection between such Holder and the Relevant Jurisdiction (other than the mere holding of a Security and the receipt of payments thereon), including, without limitation, such Holder being or having been a citizen or resident thereof or being or having been present or engaged in trade or business therein or having or having had a permanent establishment therein;

(b) the application of European Directive 2003/48/EC of June 3, 2003, on the taxation of income from savings, as well as any measure adopted according or pursuant to such directive;

(c) any tax or other governmental charge that would not have been imposed but for a failure to comply with any applicable certification, information, identification, documentation or other reporting requirements concerning the nationality, residence, identity or connection with the Relevant Jurisdiction if such compliance is required as a precondition to relief or exemption from such tax or other governmental charge (including without limitation a certification that such

Holder is not resident in the Relevant Jurisdiction or an individual resident in a member state of the European Union);

(d) any tax or other governmental charge which would not have been imposed but for a change in law that becomes effective more than 30 days after a payment by the Guarantor under this Guarantee becomes due and payable, or is duly provided for and notice thereof is duly published, whichever occurs later;

(e) any tax or other governmental charge on Holders not resident in Italy imposed pursuant to Italian Law No. 239 of April 1, 1996, as amended, and as supplemented by the Decree of the Ministry of Finance dated January 23, 2002, as amended, listing the states or territories deemed to have a “privileged tax regime” or any superseding Decree replacing or modifying such list of states or territories;

(f) any tax or other governmental charge required to be withheld by any Paying Agent from a payment on a Security, if such payment can be made without such deduction or withholding by any other Paying Agent; or

(g) any combination of items (a), (b), (c), (d), (e) and (f) above.

The foregoing provision shall apply mutatis mutandis to any withholding or deduction for or on account of any present or future taxes or governmental charges of whatever nature of any jurisdiction in which any successor Person to the Guarantor is organized, or any political subdivision or taxing authority thereof or therein. In addition, neither the Issuer nor the Guarantor shall have any obligation to pay Additional Amounts to a Holder that is a fiduciary or partnership or an entity that is not the sole beneficial owner of the payment of the principal or interest on a Security to the extent that the laws of the Relevant Jurisdiction require the payment to be included in the income of a beneficiary or settlor for tax purposes with respect to such fiduciary, a member of such partnership or the beneficial owner who would not have been entitled to the Additional Amounts had such beneficiary, settlor, member or beneficial owner been the Holder of such Security.

The Guarantor hereby agrees that its obligations hereunder shall be as if it were principal debtor and not merely surety, and shall be absolute, full and unconditional, irrespective of, and shall be unaffected by, any invalidity, irregularity or unenforceability of such Security or such Indenture, any failure to enforce the provisions of such Security or such Indenture, or any waiver, modification or indulgence granted to the Issuer with respect thereto, by the Holder of such Security or the Trustee or any other circumstance which may otherwise constitute a legal or equitable discharge of a surety or guarantor; provided, however, that, notwithstanding the foregoing, no such waiver, modification or indulgence shall, without the consent of the Guarantor, increase the principal amount of such Security, or increase the interest rate thereon, or increase any premium payable upon redemption thereof, or alter the Stated Maturity thereof, or increase the principal amounts of any Original Issue Discount Security that would be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 502. The Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of merger or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest or notice with respect to such Security or the indebtedness evidenced

2

thereby or with respect to any sinking fund or analogous payment required under such Security and all demands whatsoever, and covenants that this Guarantee will not be discharged except by payment in full of the principal of, premium, if any, and interest on such Security.

The Guarantor shall be subrogated to all rights of the Holder of such Security and the Trustee against the Issuer in respect of any amounts paid to such Holder by the Guarantor pursuant to the provisions of this Guarantee; provided, however, that the Guarantor shall not be entitled to enforce, or to receive any payments arising out of or based upon such right of subrogation until the principal of, premium, if any, and interest on all outstanding Securities of the same series issued under such Indenture shall have been paid in full.

No reference herein to such Indenture and no provision of this Guarantee or of such Indenture shall alter or impair the guarantee of the Guarantor, which is absolute and unconditional, of the due and punctual payment of the principal of, premium, if any, and interest on, and any sinking fund or analogous payments with respect to, the Security upon which this Guarantee is endorsed.

The obligations of the Guarantor under this Guarantee shall, without any further act or thing being required to be done or to occur, extend to the obligations of any successor Person who is not the Guarantor arising in respect of the Securities by virtue of a substitution pursuant to the Indenture.

This Guarantee shall not be valid or obligatory for any purpose until the certificate of authentication of such Security shall have been manually executed by or on behalf of the Trustee under such Indenture. All terms used in this Guarantee which are defined in such Indenture shall have the meanings assigned to them in such Indenture.

The Guarantee shall be governed by and construed in accordance with the laws of the State of New York. For the avoidance of doubt, the provisions of Articles 86 to 94-8 of the Luxembourg law on commercial companies of August 10, 1915, as amended, are hereby excluded and shall not be applicable.

Claims against the Issuer and the Guarantor for payment of principal in respect of the Indenture shall be prescribed unless made within ten years from the date of payment of the relevant series of securities.

Executed and dated the date on the face hereof.

TELECOM ITALIA S.p.A.

By:

Name:

Title

3

SCHEDULE OF AGGREGATE UNPAID PRINCIPAL AMOUNT

The initial principal amount of this Security shall be $                    . The following decreases/increases in the principal amount of this Security have been made:

Date of Decrease/ Increase Decrease in Principal Amount Increase in Principal Amount Total Principal Amount Following such Decrease/Increase Notation Made by or on Behalf of Trustee

EX-4.6

Exhibit 4.6

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THIS SECURITY IS A GLOBAL REGISTERED SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

TELECOM ITALIA CAPITAL

société anonyme

subscribed corporate capital of Euro 2,336,000 represented by

100,000 shares, nominal value of Euro 23.36 per share, all fully paid,

its Articles of Incorporation were published on October 13, 2000

in the Mémorial, Journal Officiel of the Grand Duchy of Luxembourg,

Recueil des Sociétés et Associations

12-14 Boulevard Grande-Duchesse Charlotte L-1330, Luxembourg

R.C.S. Luxembourg B-77.970

$2,000,000,000

SERIES B 5.250% GUARANTEED SENIOR GLOBAL NOTES

DUE NOVEMBER 15, 2013

Payment of Principal, Premium, if any,

and Interest Fully and Unconditionally Guaranteed by

TELECOM ITALIA S.p.A.

No.     

TELECOM ITALIA CAPITAL, a company with limited liability (société anonyme) incorporated on September 27, 2000 for an unlimited duration under the laws of the Grand Duchy of Luxembourg (herein called the “Issuer”, which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede

& Co., or registered assigns, on November 15, 2013, the aggregate unpaid principal amount shown on the schedule affixed hereto and made a part hereof as endorsed by the Trustee (as defined on the reverse hereof), which amount is on the date hereof $                . In addition, the issuer promises to pay interest on said principal amount from May 15, 2004 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually in arrears on May 15, and November 15 in each year, commencing on November 15, 2004, at the rate of 5.250% per annum until the principal hereof is paid or made available for payment. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be May 1 or November 1 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture.

Principal paying agent:

JPMorgan Chase Bank

4 New York Plaza 15^th Floor

New York, New York 10004

Luxembourg paying agent:

BNP Paribas Luxembourg

10A Boulevard Royal

L-2093 Luxembourg

The Issuer shall pay Additional Amounts as provided in Section 1004 of the Indenture.

Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof, directly or through an Authenticating Agent, by manual signature of an authorized signatory, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed manually or in facsimile.

Dated:                     , 2004

TELECOM ITALIA CAPITAL SOCIÉTÉ ANONYME
By:
	Name:
	Title:	Director

CERTIFICATE OF AUTHENTICATION

This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.

JPMorgan Chase Bank

As Trustee

By:
	Authorized Officer

Reverse of Series B 5.250% Guaranteed Senior Global Notes

due November 15, 2013

This Security is one of a duly authorized issue of securities of the Issuer (the “Securities”), issued and to be issued in one or more series under an Indenture, dated as of October 29, 2003 (the “Indenture”, which term shall have the meaning assigned to it in such instrument), among the Issuer, Telecom Italia S.p.A., a joint stock company established under the laws of the Republic of Italy (herein called the “Guarantor”, which term includes any successor Person under the Indenture referred to herein), and JPMorgan Chase Bank, as Trustee (the “Trustee”, which term includes any other successor trustee under the Indenture), and reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Issuer, the Guarantor, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. This Security is one of the series designated on the face hereof and shall not be limited in aggregate principal amount.

The Issuer may from time to time, without the consent of the Holders, create and issue further securities having the same terms and conditions as the Securities in all respects (or in all respects except for the issue date, the first payment of interest thereon and/or issue price), so that such further issue shall be consolidated and form a single series with the outstanding Securities or upon such terms as the Issuer may determine at the time of their issue.

The Securities of this series are subject to redemption upon not less than 30 days’ notice by mail, at any time on or after May 15, 2005 as a whole or in part, at the election of the Issuer, at the greater of (x) 100% of their aggregate principal amount plus accrued but unpaid interest to (but excluding) the date fixed for such redemption or (y) a Make-Whole Amount.

The Securities may be redeemed at the option of the Issuer or the Guarantor, in whole but not in part, upon not less than 30 nor more than 60 days’ notice given as provided in the Indenture, at any time at a Redemption Price equal to the principal amount thereof plus accrued interest to the date fixed for redemption if as a result of any change in or amendment to the laws or any regulations or rulings promulgated thereunder of the jurisdiction (or of any political subdivision or taxing authority thereof or therein) in which the Issuer or the Guarantor is incorporated (or in the case of a successor Person to the Issuer or the Guarantor, of the jurisdiction in which such successor Person is organized or any political subdivision or taxing authority thereof or therein) or any change in the official application or interpretation of such laws, regulations or rulings, or any change in the official application or interpretation of, or any execution of or amendment to, any treaty or treaties affecting taxation to which such jurisdiction or such political subdivision or taxing authority (or such other jurisdiction or political subdivision or taxing authority) is a party, which change, execution or amendment becomes effective on or after October 29, 2003 (or, in the case of a successor Person to the Issuer or the Guarantor, the date on which such successor Person became such pursuant to the applicable provisions of the Indenture) (i) the Issuer or the Guarantor (or such successor Person) is or would be required to pay Additional Amounts with respect to the Securities or the Guarantees, respectively, on the next succeeding Interest Payment Date as set forth below or in the Guarantee endorsed hereon or (ii) the Guarantor or any Subsidiary of the Guarantor is or would be required to deduct or withhold tax on any payment to the Issuer to enable the Issuer to make any payment

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of principal or interest in respect of the Securities and, in each case, the payment of such Additional Amounts in the case of (i) above or such deduction or withholding in the case of (ii) above cannot be avoided by the use of any reasonable measures available to the Issuer, the Guarantor or the Subsidiary.

The Securities may also be redeemed in whole but not in part upon not less than 30 nor more than 60 days’ notice given as provided in the Indenture at any time at a Redemption Price equal to the principal amount thereof plus accrued interest to the date fixed for redemption if the Person formed by a consolidation of the Issuer or the Guarantor or into which the Issuer or the Guarantor is merged or to which the Issuer or the Guarantor conveys, transfers or leases its properties and assets substantially as an entirety is required to pay a Holder additional amounts in respect of any tax, assessment or governmental charge imposed on any such Holder or required to be withheld or deducted from any payment to such Holder as a consequence of such consolidation, merger, conveyance, transfer or lease. However, the Securities may not be redeemed if the sole purpose of such a merger would be to permit such redemption.

Notice of redemption will be given by mail to Holders of Securities, not less than 30 nor more than 60 days prior to the date fixed for redemption, all as provided in the Indenture.

In the event of redemption of this Security in part only, a new Security or Securities of this series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.

The Indenture contains provisions for defeasance at any time of the entire indebtedness of this Security upon compliance by the Issuer or the Guarantor with certain conditions set forth therein, which provisions apply to this Security.

If an Event of Default with respect to Securities of this series shall occur and be continuing, the principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture. Upon payment (i) of the principal amount so declared due and payable and (ii) of interest on any overdue principal, premium and interest (in each case to the extent that the payment of such interest shall be legally enforceable), all of the applicable Issuer’s obligations in respect of the payment of the principal of and interest, if any, on the Securities of this series shall terminate.

If any deduction or withholding for any present or future taxes or other governmental charges (including, for the avoidance of any doubt, any increase in the rate of the tax described in clause (5) below) of the Relevant Jurisdiction shall at any time be required by the Relevant Jurisdiction in respect of any amounts to be paid by the Issuer under the Securities, the Issuer will pay to the Holder of this Security, such additional amounts as may be necessary in order that the net amounts paid to such Holder of such Security shall be not less than the amounts specified in such Security to which such Holder is entitled; provided, however, that the Issuer shall not be required to make any payment of additional amounts for or on account of.

(1) any tax or other governmental charge which would not have been imposed but for the existence of any present or former connection between such Holder and the Relevant Jurisdiction (other than the mere holding of a Security and the receipt of payments thereon),

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including, without limitation, such Holder being or having been a citizen or resident thereof or being or having been present or engaged in trade or business therein or having or having had a permanent establishment therein;

(2) the application of European Directive 2003/48/EC of June 3, 2003, on the taxation of income from savings, as well as any measure adopted according or pursuant to such directive;

(3) any tax or other governmental charge that would not have been imposed but for a failure to comply with any applicable certification, information, identification, documentation or other reporting requirements concerning the nationality, residence, identity or connection with the Relevant Jurisdiction if such compliance is required as a precondition to relief or exemption from such tax or other governmental charge (including without limitation a certification that such Holder is not resident in the Relevant Jurisdiction or an individual resident in a member state of the European Union);

(4) any tax or other governmental charge which would not have been imposed but for a change in law that becomes effective more than 30 days after a payment by the Issuer under the Securities becomes due and payable, or is duly provided for and notice thereof is duly published, whichever occurs later;

(5) any tax or other governmental charge on Holders not resident in Italy imposed pursuant to Italian Law No. 239 of April 1, 1996, as amended, and as supplemented by the Decree of the Ministry of Finance dated January 23, 2002, as amended, listing the states or territories deemed to have a “privileged tax regime” or any superseding Decree replacing or modifying such list of states or territories;

(6) any tax or other governmental charge required to be withheld by any Paying Agent from a payment on a Security, if such payment can be made without such deduction or withholding by any other Paying Agent; or

(7) any combination of items (1), (2), (3), (4), (5) and (6) above.

The foregoing provisions shall apply mutatis mutandis to any withholding or deduction for or on account of any present or future taxes or governmental charges of whatever nature of any jurisdiction in which any successor Person to the Issuer is organized, or any political subdivision or taxing authority thereof or therein. In addition, neither the Issuer nor the Guarantor shall have any obligation to pay Additional Amounts to a Holder that is a fiduciary or partnership or an entity that is not the sole beneficial owner of the payment of the principal or interest on a Security to the extent that the laws of the Relevant Jurisdiction require the payment to be included in the income of a beneficiary or settlor for tax purposes with respect to such fiduciary, a member of such partnership or the beneficial owner who would not have been entitled to the Additional Amounts had such beneficiary, settlor, member or beneficial owner been the Holder of such Security.

Upon request, the Issuer shall provide the Trustee with documentation (which may consist of certified copies of such documentation) satisfactory to the Trustee evidencing the payment of Luxembourg taxes with respect to payment on the Securities. Copies of such

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documentation shall be made available to the Owners of the Securities or the Paying Agent, as applicable, upon request therefor.

The Issuer shall pay all stamp and other duties, if any, and all documentary stamp or similar taxes, if any, which may be imposed by the Grand Duchy of Luxembourg, or any other governmental entity or political subdivision therein or thereof or any taxing authority of or in any of the foregoing, with respect to the Indenture, the initial issuance of this Security, any transfer of this Security or payment orders relating to this Security. The Issuer shall not assert or claim any exemption available to it in respect of any stamp or other duties, or documentary stamp or similar taxes, which it has agreed to pay under the preceding sentence, if, after the assertion or claiming of such exemption, Holders or Owners of this Security would be liable for such duty or tax.

All references in this Security to principal, premium or interest in respect of any Security shall be deemed to mean and include all Additional Amounts, if any, payable in respect of such principal, premium or interest, unless the context otherwise requires, and express mention of the payment of Additional Amounts in any provision hereof shall not be construed as excluding reference to Additional Amounts in those provisions hereof where such express mention is not made.

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the Guarantor and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Issuer, the Guarantor and the Trustee with the consent of the Holders of a majority in principal amount of the Securities at the time Outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Issuer or the Guarantor with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.

As set forth in, and subject to, the provisions of the Indenture, no Holder of any Security of this series will have any right to institute any proceeding with respect to the Indenture, the Guarantee endorsed hereon, this Security or for any remedy thereunder, unless such Holder shall have previously given to the Trustee written notice of a continuing Event of Default with respect to the Securities of this series, the Holders of not less than 25% in principal amount of the Outstanding Securities of this series shall have made written request, and offered reasonable indemnity, to the Trustee to institute such proceeding as trustee, and the Trustee shall not have received from the Holders of a majority in principal amount of the Outstanding Securities of this series a direction inconsistent with such request and shall have failed to institute such proceeding within 60 days; provided, however, that such limitations do not apply to a suit instituted by the Holder hereof for the enforcement of payment of the principal (and premium, if any) or any interest on this Security on or after the respective due dates expressed herein.

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No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and any premium and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed or to convert this security as provided in the Indenture.

The Securities of this series are issuable only in registered form without coupons in denominations of $1,000 and any integral multiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registerable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Issuer in any place where the principal of and any premium and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Issuer and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

No service charge shall be made for any such registration of transfer or exchange, but the Issuer may require from the Holder hereof payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

Prior to due presentment of this Security for registration of transfer, the Issuer, the Guarantor, the Trustee and any agent of the Issuer, the Guarantor or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and none of the Issuer, the Guarantor, the Trustee nor any such agent shall be affected by notice to the contrary.

The Indenture and the Securities shall be governed by and construed in accordance with the laws of the State of New York. For the avoidance of doubt the provisions of Articles 86 to 94-8 of the Luxembourg law on commercial companies of August 10, 1915, as amended, are excluded.

All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

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GUARANTEE

For value received, Telecom Italia S.p.A., a joint stock company established under the laws of the Republic of Italy, having its registered office at Piazza degli Affari 2, 20123 Milan, Italy (herein called the “Guarantor”, which term includes any successor Person under the Indenture referred to in the Security upon which this Guarantee is endorsed), hereby fully, unconditionally and irrevocably guarantees to the Holder of the Security upon which this Guarantee is granted and to the Trustee, in its individual and trust capacities, and on behalf of each such Holder the due and punctual payment of the principal of, premium, if any, and interest on such Security (and, if applicable, any Additional Amounts) the due and punctual payment of the sinking fund or analogous payments referred to therein, if any, when and as the same shall become due and payable, whether at the Stated Maturity, by declaration of acceleration, call for redemption or otherwise, according to the terms thereof and of the Indenture referred to therein and the other meeting obligations of the Issuer to the Trustee pursuant to Section 607. In case of the failure of Telecom Italia Capital (the “Issuer”, which term includes any successor Person under such Indenture), punctually to make any such payment of principal, premium, if any, or interest or any sinking fund or analogous payment, the Guarantor hereby agrees to cause any such payment to be made punctually when and as the same shall become due and payable, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise, and as if such payment were made by the Issuer.

The Guarantor hereby further agrees, subject to the limitations and exceptions set forth below, that if any deduction or withholding for any present or future taxes or other governmental charges (including, for the avoidance of doubt, any increase in the rate of the tax described in clause (e) below) of the Relevant Jurisdiction shall at any time be required by the Relevant Jurisdiction in respect of any amounts to be paid by the Guarantor under this Guarantee, then the Guarantor will pay to the Holder of a Security as additional interest such additional amounts as may be necessary in order that the net amounts paid to the Holder of such Security shall be not less than the amounts specified in such Security to which such Holder is entitled; provided, however, that the Guarantor shall not be required to make any payment of additional amounts for or on account of:

(a) any tax or other governmental charge which would not have been imposed but for the existence of any present or former connection between such Holder and the Relevant Jurisdiction (other than the mere holding of a Security and the receipt of payments thereon), including, without limitation, such Holder being or having been a citizen or resident thereof or being or having been present or engaged in trade or business therein or having or having had a permanent establishment therein;

(b) the application of European Directive 2003/48/EC of June 3, 2003, on the taxation of income from savings, as well as any measure adopted according or pursuant to such directive;

(c) any tax or other governmental charge that would not have been imposed but for a failure to comply with any applicable certification, information, identification, documentation or other reporting requirements concerning the nationality, residence, identity or connection with the Relevant Jurisdiction if such compliance is required as a precondition to relief or exemption from such tax or other governmental charge (including without limitation a certification that

1

such Holder is not resident in the Relevant Jurisdiction or an individual resident in a member state of the European Union);

(d) any tax or other governmental charge which would not have been imposed but for a change in law that becomes effective more than 30 days after a payment by the Guarantor under this Guarantee becomes due and payable, or is duly provided for and notice thereof is duly published, whichever occurs later;

(e) any tax or other governmental charge on Holders not resident in Italy imposed pursuant to Italian Law No. 239 of April 1, 1996, as amended, and as supplemented by the Decree of the Ministry of Finance dated January 23, 2002, as amended, listing the states or territories deemed to have a “privileged tax regime” or any superseding Decree replacing or modifying such list of states or territories;

(f) any tax or other governmental charge required to be withheld by any Paying Agent from a payment on a Security, if such payment can be made without such deduction or withholding by any other Paying Agent; or

(g) any combination of items (a), (b), (c), (d), (e) and (f) above.

The foregoing provision shall apply mutatis mutandis to any withholding or deduction for or on account of any present or future taxes or governmental charges of whatever nature of any jurisdiction in which any successor Person to the Guarantor is organized, or any political subdivision or taxing authority thereof or therein. In addition, neither the Issuer nor the Guarantor shall have any obligation to pay Additional Amounts to a Holder that is a fiduciary or partnership or an entity that is not the sole beneficial owner of the payment of the principal or interest on a Security to the extent that the laws of the Relevant Jurisdiction require the payment to be included in the income of a beneficiary or settlor for tax purposes with respect to such fiduciary, a member of such partnership or the beneficial owner who would not have been entitled to the Additional Amounts had such beneficiary, settlor, member or beneficial owner been the Holder of such Security.

The Guarantor hereby agrees that its obligations hereunder shall be as if it were principal debtor and not merely surety, and shall be absolute, full and unconditional, irrespective of, and shall be unaffected by, any invalidity, irregularity or unenforceability of such Security or such Indenture, any failure to enforce the provisions of such Security or such Indenture, or any waiver, modification or indulgence granted to the Issuer with respect thereto, by the Holder of such Security or the Trustee or any other circumstance which may otherwise constitute a legal or equitable discharge of a surety or guarantor; provided, however, that, notwithstanding the foregoing, no such waiver, modification or indulgence shall, without the consent of the Guarantor, increase the principal amount of such Security, or increase the interest rate thereon, or increase any premium payable upon redemption thereof, or alter the Stated Maturity thereof, or increase the principal amounts of any Original Issue Discount Security that would be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 502. The Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of merger or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest or notice with respect to such Security or the indebtedness evidenced

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thereby or with respect to any sinking fund or analogous payment required under such Security and all demands whatsoever, and covenants that this Guarantee will not be discharged except by payment in full of the principal of, premium, if any, and interest on such Security.

The Guarantor shall be subrogated to all rights of the Holder of such Security and the Trustee against the Issuer in respect of any amounts paid to such Holder by the Guarantor pursuant to the provisions of this Guarantee; provided, however, that the Guarantor shall not be entitled to enforce, or to receive any payments arising out of or based upon such right of subrogation until the principal of, premium, if any, and interest on all outstanding Securities of the same series issued under such Indenture shall have been paid in full.

No reference herein to such Indenture and no provision of this Guarantee or of such Indenture shall alter or impair the guarantee of the Guarantor, which is absolute and unconditional, of the due and punctual payment of the principal of, premium, if any, and interest on, and any sinking fund or analogous payments with respect to, the Security upon which this Guarantee is endorsed.

The obligations of the Guarantor under this Guarantee shall, without any further act or thing being required to be done or to occur, extend to the obligations of any successor Person who is not the Guarantor arising in respect of the Securities by virtue of a substitution pursuant to the Indenture.

This Guarantee shall not be valid or obligatory for any purpose until the certificate of authentication of such Security shall have been manually executed by or on behalf of the Trustee under such Indenture.

All terms used in this Guarantee which are defined in such Indenture shall have the meanings assigned to them in such Indenture.

The Guarantee shall be governed by and construed in accordance with the laws of the State of New York. For the avoidance of doubt, the provisions of Articles 86 to 94-8 of the Luxembourg law on commercial companies of August 10, 1915, as amended, are hereby excluded and shall not be applicable.

Claims against the Issuer and the Guarantor for payment of principal in respect of the Indenture shall be prescribed unless made within ten years from the date of payment of the relevant series of securities.

Executed and dated the date on the face hereof.

TELECOM ITALIA S.p.A.

By:

Name:

Title:

3

SCHEDULE OF AGGREGATE UNPAID PRINCIPAL AMOUNT

The initial principal amount of this Security shall be $                    . The following decreases/increases in the principal amount of this Security have been made:

Date of Decrease/ Increase Decrease in Principal Amount Increase in Principal Amount Total Principal Amount Following such Decrease/Increase Notation Made by or on Behalf of Trustee

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EX-4.7

Exhibit 4.7

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THIS SECURITY IS A GLOBAL REGISTERED SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

TELECOM ITALIA CAPITAL

société anonyme

subscribed corporate capital of Euro 2,336,000 represented by

100,000 shares, nominal value of Euro 23.36 per share, all fully paid,

its Articles of Incorporation were published on October 13, 2000

in the Memorial, Journal Officiel of the Grand Duchy of Luxembourg,

Recueil des Sociétés et Associations

12-14 Boulevard Grande-Duchesse Charlotte L-1330, Luxembourg

R.C.S. Luxembourg B-77.970

$1,000,000,000

SERIES C 6.375% GUARANTEED SENIOR GLOBAL NOTES

DUE NOVEMBER 15, 2033

Payment of Principal, Premium, if any,

and Interest Fully and Unconditionally Guaranteed by

TELECOM ITALIA S.p.A.

No.     

TELECOM ITALIA CAPITAL, a company with limited liability (société anonyme) incorporated on September 27, 2000 for an unlimited duration under the laws of the Grand Duchy of Luxembourg (herein called the “Issuer”, which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede

1

& Co., or registered assigns, on November 15, 2033, the aggregate unpaid principal amount shown on the schedule affixed hereto and made a part hereof as endorsed by the Trustee (as defined on the reverse hereof), which amount is on the date hereof $                . In addition, the issuer promises to pay interest on said principal amount from May 15, 2004 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually in arrears on May 15, and November 15 in each year, commencing on November 15, 2004, at the rate of 6.375% per annum until the principal hereof is paid or made available for payment. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be May 1 or November 1 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture.

Principal paying agent:

JPMorgan Chase Bank

4 New York Plaza 15^th Floor

New York, New York 10004

Luxembourg paying agent:

BNP Paribas Luxembourg

10A Boulevard Royal

L-2093 Luxembourg

The Issuer shall pay Additional Amounts as provided in Section 1004 of the Indenture.

Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof, directly or through an Authenticating Agent, by manual signature of an authorized signatory, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

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IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed manually or in facsimile.

Dated:                         , 2004

TELECOM ITALIA CAPITAL SOCIÉTÉ ANONYME
By:
	Name:
	Title: Director

CERTIFICATE OF AUTHENTICATION

This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.

JPMorgan Chase Bank

As Trustee

By:
	Authorized Officer

Reverse of Series C 6.375% Guaranteed Senior Global Notes due November 15, 2033

This Security is one of a duly authorized issue of securities of the Issuer (the “Securities”), issued and to be issued in one or more series under an Indenture, dated as of October 29, 2003 (the “Indenture”, which term shall have the meaning assigned to it in such instrument), among the Issuer, Telecom Italia S.p.A., a joint stock company established under the laws of the Republic of Italy (herein called the “Guarantor”, which term includes any successor Person under the Indenture referred to herein), and JPMorgan Chase Bank, as Trustee (the “Trustee”, which term includes any other successor trustee under the Indenture), and reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Issuer, the Guarantor, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. This Security is one of the series designated on the face hereof and shall not be limited in aggregate principal amount.

The Issuer may from time to time, without the consent of the Holders, create and issue further securities having the same terms and conditions as the Securities in all respects (or in all respects except for the issue date, the first payment of interest thereon and/or issue price), so that such further issue shall be consolidated and form a single series with the outstanding Securities or upon such terms as the Issuer may determine at the time of their issue.

The Securities of this series are subject to redemption upon not less than 30 days’ notice by mail, at any time on or after May 15, 2005 as a whole or in part, at the election of the Issuer, at the greater of (x) 100% of their aggregate principal amount plus accrued but unpaid interest to (but excluding) the date fixed for such redemption or (y) a Make-Whole Amount.

The Securities may be redeemed at the option of the Issuer or the Guarantor, in whole but not in part, upon not less than 30 nor more than 60 days’ notice given as provided in the Indenture, at any time at a Redemption Price equal to the principal amount thereof plus accrued interest to the date fixed for redemption if as a result of any change in or amendment to the laws or any regulations or rulings promulgated thereunder of the jurisdiction (or of any political subdivision or taxing authority thereof or therein) in which the Issuer or the Guarantor is incorporated (or in the case of a successor Person to the Issuer or the Guarantor, of the jurisdiction in which such successor Person is organized or any political subdivision or taxing authority thereof or therein) or any change in the official application or interpretation of such laws, regulations or rulings, or any change in the official application or interpretation of, or any execution of or amendment to, any treaty or treaties affecting taxation to which such jurisdiction or such political subdivision or taxing authority (or such other jurisdiction or political subdivision or taxing authority) is a party, which change, execution or amendment becomes effective on or after October 29, 2003 (or, in the case of a successor Person to the Issuer or the Guarantor, the date on which such successor Person became such pursuant to the applicable provisions of the Indenture) (i) the Issuer or the Guarantor (or such successor Person) is or would be required to pay Additional Amounts with respect to the Securities or the Guarantees, respectively, on the next succeeding Interest Payment Date as set forth below or in the Guarantee endorsed hereon or (ii) the Guarantor or any Subsidiary of the Guarantor is or would be required to deduct or withhold tax on any payment to the Issuer to enable the Issuer to make any payment

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of principal or interest in respect of the Securities and, in each case, the payment of such Additional Amounts in the case of (i) above or such deduction or withholding in the case of (ii) above cannot be avoided by the use of any reasonable measures available to the Issuer, the Guarantor or the Subsidiary.

The Securities may also be redeemed in whole but not in part upon not less than 30 nor more than 60 days’ notice given as provided in the Indenture at any time at a Redemption Price equal to the principal amount thereof plus accrued interest to the date fixed for redemption if the Person formed by a consolidation of the Issuer or the Guarantor or into which the Issuer or the Guarantor is merged or to which the Issuer or the Guarantor conveys, transfers or leases its properties and assets substantially as an entirety is required to pay a Holder additional amounts in respect of any tax, assessment or governmental charge imposed on any such Holder or required to be withheld or deducted from any payment to such Holder as a consequence of such consolidation, merger, conveyance, transfer or lease. However, the Securities may not be redeemed if the sole purpose of such a merger would be to permit such redemption.

Notice of redemption will be given by mail to Holders of Securities, not less than 30 nor more than 60 days prior to the date fixed for redemption, all as provided in the Indenture.

In the event of redemption of this Security in part only, a new Security or Securities of this series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.

The Indenture contains provisions for defeasance at any time of the entire indebtedness of this Security upon compliance by the Issuer or the Guarantor with certain conditions set forth therein, which provisions apply to this Security.

If an Event of Default with respect to Securities of this series shall occur and be continuing, the principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture. Upon payment (i) of the principal amount so declared due and payable and (ii) of interest on any overdue principal, premium and interest (in each case to the extent that the payment of such interest shall be legally enforceable), all of the applicable Issuer’s obligations in respect of the payment of the principal of and interest, if any, on the Securities of this series shall terminate.

If any deduction or withholding for any present or future taxes or other governmental charges (including, for the avoidance of any doubt, any increase in the rate of the tax described in clause (5) below) of the Relevant Jurisdiction shall at any time be required by the Relevant Jurisdiction in respect of any amounts to be paid by the Issuer under the Securities, the Issuer will pay to the Holder of this Security, such additional amounts as may be necessary in order that the net amounts paid to such Holder of such Security shall be not less than the amounts specified in such Security to which such Holder is entitled; provided, however, that the Issuer shall not be required to make any payment of additional amounts for or on account of:

(1) any tax or other governmental charge which would not have been imposed but for the existence of any present or former connection between such Holder and the Relevant Jurisdiction (other than the mere holding of a Security and the receipt of payments thereon),

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including, without limitation, such Holder being or having been a citizen or resident thereof or being or having been present or engaged in trade or business therein or having or having had a permanent establishment therein;

(2) the application of European Directive 2003/48/EC of June 3, 2003, on the taxation of income from savings, as well as any measure adopted according or pursuant to such directive;

(3) any tax or other governmental charge that would not have been imposed but for a failure to comply with any applicable certification, information, identification, documentation or other reporting requirements concerning the nationality, residence, identity or connection with the Relevant Jurisdiction if such compliance is required as a precondition to relief or exemption from such tax or other governmental charge (including without limitation a certification that such Holder is not resident in the Relevant Jurisdiction or an individual resident in a member state of the European Union);

(4) any tax or other governmental charge which would not have been imposed but for a change in law that becomes effective more than 30 days after a payment by the Issuer under the Securities becomes due and payable, or is duly provided for and notice thereof is duly published, whichever occurs later;

(5) any tax or other governmental charge on Holders not resident in Italy imposed pursuant to Italian Law No. 239 of April 1, 1996, as amended, and as supplemented by the Decree of the Ministry of Finance dated January 23, 2002, as amended, listing the states or territories deemed to have a “privileged tax regime” or any superseding Decree replacing or modifying such list of states or territories;

(6) any tax or other governmental charge required to be withheld by any Paying Agent from a payment on a Security, if such payment can be made without such deduction or withholding by any other Paying Agent; or

(7) any combination of items (1), (2), (3), (4), (5) and (6) above.

The foregoing provisions shall apply mutatis mutandis to any withholding or deduction for or on account of any present or future taxes or governmental charges of whatever nature of any jurisdiction in which any successor Person to the Issuer is organized, or any political subdivision or taxing authority thereof or therein. In addition, neither the Issuer nor the Guarantor shall have any obligation to pay Additional Amounts to a Holder that is a fiduciary or partnership or an entity that is not the sole beneficial owner of the payment of the principal or interest on a Security to the extent that the laws of the Relevant Jurisdiction require the payment to be included in the income of a beneficiary or settlor for tax purposes with respect to such fiduciary, a member of such partnership or the beneficial owner who would not have been entitled to the Additional Amounts had such beneficiary, settlor, member or beneficial owner been the Holder of such Security.

Upon request, the Issuer shall provide the Trustee with documentation (which may consist of certified copies of such documentation) satisfactory to the Trustee evidencing the payment of Luxembourg taxes with respect to payment on the Securities. Copies of such

3

documentation shall be made available to the Owners of the Securities or the Paying Agent, as applicable, upon request therefor.

The Issuer shall pay all stamp and other duties, if any, and all documentary stamp or similar taxes, if any, which may be imposed by the Grand Duchy of Luxembourg, or any other governmental entity or political subdivision therein or thereof or any taxing authority of or in any of the foregoing, with respect to the Indenture, the initial issuance of this Security, any transfer of this Security or payment orders relating to this Security. The Issuer shall not assert or claim any exemption available to it in respect of any stamp or other duties, or documentary stamp or similar taxes, which it has agreed to pay under the preceding sentence, if, after the assertion or claiming of such exemption, Holders or Owners of this Security would be liable for such duty or tax.

All references in this Security to principal, premium or interest in respect of any Security shall be deemed to mean and include all Additional Amounts, if any, payable in respect of such principal, premium or interest, unless the context otherwise requires, and express mention of the payment of Additional Amounts in any provision hereof shall not be construed as excluding reference to Additional Amounts in those provisions hereof where such express mention is not made.

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the Guarantor and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Issuer, the Guarantor and the Trustee with the consent of the Holders of a majority in principal amount of the Securities at the time Outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Issuer or the Guarantor with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.

As set forth in, and subject to, the provisions of the Indenture, no Holder of any Security of this series will have any right to institute any proceeding with respect to the Indenture, the Guarantee endorsed hereon, this Security or for any remedy thereunder, unless such Holder shall have previously given to the Trustee written notice of a continuing Event of Default with respect to the Securities of this series, the Holders of not less than 25% in principal amount of the Outstanding Securities of this series shall have made written request, and offered reasonable indemnity, to the Trustee to institute such proceeding as trustee, and the Trustee shall not have received from the Holders of a majority in principal amount of the Outstanding Securities of this series a direction inconsistent with such request and shall have failed to institute such proceeding within 60 days; provided, however, that such limitations do not apply to a suit instituted by the Holder hereof for the enforcement of payment of the principal (and premium, if any) or any interest on this Security on or after the respective due dates expressed herein.

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No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and any premium and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed or to convert this security as provided in the Indenture.

The Securities of this series are issuable only in registered form without coupons in denominations of $1,000 and any integral multiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registerable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Issuer in any place where the principal of and any premium and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Issuer and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

No service charge shall be made for any such registration of transfer or exchange, but the Issuer may require from the Holder hereof payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

Prior to due presentment of this Security for registration of transfer, the Issuer, the Guarantor, the Trustee and any agent of the Issuer, the Guarantor or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and none of the Issuer, the Guarantor, the Trustee nor any such agent shall be affected by notice to the contrary.

The Indenture and the Securities shall be governed by and construed in accordance with the laws of the State of New York. For the avoidance of doubt the provisions of Articles 86 to 94-8 of the Luxembourg law on commercial companies of August 10, 1915, as amended, are excluded.

All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

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GUARANTEE

For value received, Telecom Italia S.p.A., a joint stock company established under the laws of the Republic of Italy, having its registered office at Piazza degli Affari 2, 20123 Milan, Italy (herein called the “Guarantor”, which term includes any successor Person under the Indenture referred to in the Security upon which this Guarantee is endorsed), hereby fully, unconditionally and irrevocably guarantees to the Holder of the Security upon which this Guarantee is granted and to the Trustee, in its individual and trust capacities, and on behalf of each such Holder the due and punctual payment of the principal of, premium, if any, and interest on such Security (and, if applicable, any Additional Amounts) the due and punctual payment of the sinking fund or analogous payments referred to therein, if any, when and as the same shall become due and payable, whether at the Stated Maturity, by declaration of acceleration, call for redemption or otherwise, according to the terms thereof and of the Indenture referred to therein and the other meeting obligations of the Issuer to the Trustee pursuant to Section 607. In case of the failure of Telecom Italia Capital (the “Issuer”, which term includes any successor Person under such Indenture), punctually to make any such payment of principal, premium, if any, or interest or any sinking fund or analogous payment, the Guarantor hereby agrees to cause any such payment to be made punctually when and as the same shall become due and payable, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise, and as if such payment were made by the Issuer.

The Guarantor hereby further agrees, subject to the limitations and exceptions set forth below, that if any deduction or withholding for any present or future taxes or other governmental charges (including, for the avoidance of doubt, any increase in the rate of the tax described in clause (e) below) of the Relevant Jurisdiction shall at any time be required by the Relevant Jurisdiction in respect of any amounts to be paid by the Guarantor under this Guarantee, then the Guarantor will pay to the Holder of a Security as additional interest such additional amounts as may be necessary in order that the net amounts paid to the Holder of such Security shall be not less than the amounts specified in such Security to which such Holder is entitled; provided, however, that the Guarantor shall not be required to make any payment of additional amounts for or on account of:

(a) any tax or other governmental charge which would not have been imposed but for the existence of any present or former connection between such Holder and the Relevant Jurisdiction (other than the mere holding of a Security and the receipt of payments thereon), including, without limitation, such Holder being or having been a citizen or resident thereof or being or having been present or engaged in trade or business therein or having or having had a permanent establishment therein;

(b) the application of European Directive 2003/48/EC of June 3, 2003, on the taxation of income from savings, as well as any measure adopted according or pursuant to such directive;

(c) any tax or other governmental charge that would not have been imposed but for a failure to comply with any applicable certification, information, identification, documentation or other reporting requirements concerning the nationality, residence, identity or connection with the Relevant Jurisdiction if such compliance is required as a precondition to relief or exemption from such tax or other governmental charge (including without limitation, a certification that

1

such Holder is not resident in the Relevant Jurisdiction or an individual resident in a member state of the European Union);

(d) any tax or other governmental charge which would not have been imposed but for a change in law that becomes effective more than 30 days after a payment by the Guarantor under this Guarantee becomes due and payable, or is duly provided for and notice thereof is duly published, whichever occurs later;

(e) any tax or other governmental charge on Holders not resident in Italy imposed pursuant to Italian Law No. 239 of April 1, 1996, as amended, and as supplemented by the Decree of the Ministry of Finance dated January 23, 2002, as amended, listing the states or territories deemed to have a “privileged tax regime” or any superseding Decree replacing or modifying such list of states or territories;

(f) any tax or other governmental charge required to be withheld by any Paying Agent from a payment on a Security, if such payment can be made without such deduction or withholding by any other Paying Agent; or

(g) any combination of items (a), (b), (c), (d), (e) and (f) above.

The foregoing provision shall apply mutatis mutandis to any withholding or deduction for or on account of any present or future taxes or governmental charges of whatever nature of any jurisdiction in which any successor Person to the Guarantor is organized, or any political subdivision or taxing authority thereof or therein. In addition, neither the Issuer nor the Guarantor shall have any obligation to pay Additional Amounts to a Holder that is a fiduciary or partnership or an entity that is not the sole beneficial owner of the payment of the principal or interest on a Security to the extent that the laws of the Relevant Jurisdiction require the payment to be included in the income of a beneficiary or settlor for tax purposes with respect to such fiduciary, a member of such partnership or the beneficial owner who would not have been entitled to the Additional Amounts had such beneficiary, settlor, member or beneficial owner been the Holder of such Security.

The Guarantor hereby agrees that its obligations hereunder shall be as if it were principal debtor and not merely surety, and shall be absolute, full and unconditional, irrespective of, and shall be unaffected by, any invalidity, irregularity or unenforceability of such Security or such Indenture, any failure to enforce the provisions of such Security or such Indenture, or any waiver, modification or indulgence granted to the Issuer with respect thereto, by the Holder of such Security or the Trustee or any other circumstance which may otherwise constitute a legal or equitable discharge of a surety or guarantor; provided, however, that, notwithstanding the foregoing, no such waiver, modification or indulgence shall, without the consent of the Guarantor, increase the principal amount of such Security, or increase the interest rate thereon, or increase any premium payable upon redemption thereof, or alter the Stated Maturity thereof, or increase the principal amounts of any Original Issue Discount Security that would be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 502. The Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of merger or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest or notice with respect to such Security or the indebtedness evidenced

2

thereby or with respect to any sinking fund or analogous payment required under such Security and all demands whatsoever, and covenants that this Guarantee will not be discharged except by payment in full of the principal of, premium, if any, and interest on such Security.

The Guarantor shall be subrogated to all rights of the Holder of such Security and the Trustee against the Issuer in respect of any amounts paid to such Holder by the Guarantor pursuant to the provisions of this Guarantee; provided, however, that the Guarantor shall not be entitled to enforce, or to receive any payments arising out of or based upon such right of subrogation until the principal of, premium, if any, and interest on all outstanding Securities of the same series issued under such Indenture shall have been paid in full.

No reference herein to such Indenture and no provision of this Guarantee or of such Indenture shall alter or impair the guarantee of the Guarantor, which is absolute and unconditional, of the due and punctual payment of the principal of, premium, if any, and interest on, and any sinking fund or analogous payments with respect to, the Security upon which this Guarantee is endorsed.

The obligations of the Guarantor under this Guarantee shall, without any further act or thing being required to be done or to occur, extend to the obligations of any successor Person who is not the Guarantor arising in respect of the Securities by virtue of a substitution pursuant to the Indenture.

This Guarantee shall not be valid or obligatory for any purpose until the certificate of authentication of such Security shall have been manually executed by or on behalf of the Trustee under such Indenture.

All terms used in this Guarantee which are defined in such Indenture shall have the meanings assigned to them in such Indenture.

The Guarantee shall be governed by and construed in accordance with the laws of the State of New York. For the avoidance of doubt, the provisions of Articles 86 to 94-8 of the Luxembourg law on commercial companies of August 10, 1915, as amended, are hereby excluded and shall not be applicable.

Claims against the Issuer and the Guarantor for payment of principal in respect of the Indenture shall be prescribed unless made within ten years from the date of payment of the relevant series of securities.

Executed and dated the date on the face hereof.

TELECOM ITALIA S.p.A.

By:

Name:

Title:

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SCHEDULE OF AGGREGATE UNPAID PRINCIPAL AMOUNT

The initial principal amount of this Security shall be $            . The following decreases/increases in the principal amount of this Security have been made:

Date of Decrease/ Increase Decrease in Principal Amount Increase in Principal Amount Total Principal Amount Following such Decrease/Increase Notation Made by or on Behalf of Trustee

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EX-5.1

EXHIBIT 5.1

[Letterhead of Morgan, Lewis & Bockius LLP]

June 10, 2004

Telecom Italia S.p.A.

Piazza degli Affari 2

20123 Milan, Italy

Attn: Board of Directors

Telecom Italia Capital

12-14 Boulevard Grand-Duchesse Charlotte

L-1330, Luxembourg

Attn: Board of Directors

Re: Registration Statement on Form F-4 of Telecom Italia Capital and Telecom Italia S.p.A.

Ladies and Gentlemen:

We have acted as special U.S. counsel to Telecom Italia S.p.A., a joint stock company (Società per Azioni, or, in abbreviated form, S.p.A.) organized under the laws of the Republic of Italy (“TI”), and Telecom Italia Capital, a company with limited liability (société anonyme) organized under the laws of Luxembourg (“TIC” and together with TI, the “Registrants”), in connection with the preparation and filing with the U.S. Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “Act”), of a Registration Statement on Form F-4 (the “Registration Statement”), which includes a form of prospectus (the “Prospectus”) relating to the proposed exchange by TIC of all outstanding Series A 4% Guaranteed Senior Notes Due 2008 (CUSIP Nos.: 87927VAB4 and T92762AB8), all outstanding Series B 5.25% Guaranteed Senior Notes Due 2013 (CUSIP Nos.: 87927VAA6 and T92762AA0), and all outstanding Series C 6.375% Guaranteed Senior Notes Due 2033 (CUSIP Nos. 87927VAC2 and T92762AC6) (collectively, the “Initial Notes”) for Series A 4% Guaranteed Senior Notes Due 2008, Series B 5.25% Guaranteed Senior Notes Due 2013, and Series C 6.375% Guaranteed Senior Notes Due 2033 registered under the Act (collectively the “Exchange Notes”).

The Exchange Notes will be guaranteed by TI on a senior unsecured basis (the “Guarantees”). The Exchange Notes are to be issued and the Guarantees will be given under an Indenture, dated as of October 29, 2003, among TIC, as Issuer, TI, as Guarantor, and JPMorgan Chase Bank, as Trustee (the “Trustee”), as supplemented by a First Supplemental Indenture, dated as of October 29, 2003, among TIC, as Issuer, TI, as Guarantor, and the Trustee (such instruments referred to hereinafter collectively as the “Indenture”).

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In connection with this opinion, we have examined originals or certified, conformed or reproduction copies of such agreements, instruments, documents and records of the Registrants, such certificates of public officials, and such other documents, and have made such investigations of law, as we have deemed necessary or appropriate for the purposes of this opinion. In all such examinations, we have assumed without investigation the legal capacity of all natural persons executing documents, the genuineness of all signatures on original or certified copies, the authenticity of all original or certified copies and the conformity to original or certified documents of all copies submitted to us as conformed or reproduction copies. We have relied as to factual matters upon, and have assumed the accuracy of, the statements made in the certificates of officers or representatives of the Registrants delivered to us, and certificates and other statements or information of or from public officials and officers and representatives of the Registrants and others.

With your permission, for the purposes of the opinion expressed herein, we have assumed that (i) TIC is a company with limited liability (société anonyme) duly organized and validly existing under the laws of Luxembourg, (ii) the Indenture and the Exchange Notes have been duly authorized, executed and delivered by TIC insofar as the laws of Luxembourg are concerned, (iii) TI is a company duly incorporated and validly existing under the laws of the Republic of Italy as a joint stock company (Società per Azioni), (iv) the Indenture and the Guarantees have been duly authorized, executed and delivered by TI insofar as the laws of the Republic of Italy are concerned, (v) the Trustee had and has the power and authority to enter into and perform its obligations under, and has duly authorized, executed and delivered, the Indenture, (vi) the Indenture is valid, binding and enforceable with respect to the Trustee, (vii) the Exchange Notes will be duly authenticated by the Trustee in the manner provided in the Indenture, and(viii) insofar as any obligation under the Indenture or the Exchange Notes is to be performed in, or by a party incorporated or organized under the laws of, any jurisdiction outside the United States of America, its performance will not be illegal or ineffective in any such jurisdiction by virtue of the law of that jurisdiction.

We note that with respect to matters of Italian law, TI is relying upon the opinion letter of Gianni, Origoni, Grippo & Partners, Italian counsel to TI, dated the date hereof, and delivered to TI contemporaneously herewith, a copy of which is being filed with the Commission as an exhibit to the Registration Statement. We note that with respect to matters of Luxembourg law, TIC is relying upon the opinion letter of Linklaters Loesch, Luxembourg counsel to TIC, dated the date hereof, delivered to TIC contemporaneously herewith, a copy of which is being filed with the Commission as an exhibit to the Registration Statement.

Based upon and subject to the foregoing, and to the limitations and qualifications described below, we are of the opinion that, upon the execution and issuance of the Exchange Notes by TIC and authentication of the Exchange Notes by the Trustee in accordance with the Indenture and the delivery of the Exchange Notes in exchange for the Initial Notes pursuant to the exchange offer described in the Registration Statement, (i) the Exchange Notes will constitute valid and legally binding obligations of TIC, and (ii) the Guarantees will constitute valid and legally binding obligations of TI.

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The opinions set forth above are subject to the following additional qualifications and assumptions:

1. The opinions set forth above are subject to the effects of (i) bankruptcy, insolvency, fraudulent conveyance, fraudulent transfer, reorganization, moratorium or other similar laws relating to or affecting enforcement of creditors’ rights or remedies generally, (ii) general principles of equity (whether such principles are considered in a proceeding at law or equity), including the discretion of the court before which any proceeding may be brought, concepts of good faith, reasonableness and fair dealing and standards of materiality, and (iii) limitations on enforceability to the extent that acceleration of indebtedness under any Exchange Note may impair collectibility of that portion, if any, of the principal amount thereof that might be determined to be unearned interest thereon.

2. We express no opinion as to the effect of any U.S. Federal or state laws regarding fraudulent transfers or conveyances. We express no opinion as to the laws of any jurisdiction other than the laws of the State of New York, as currently in effect, that in our experience are applicable to transactions of the type contemplated by the Registration Statement and the Indenture. In particular (and without limiting the generality of the foregoing) we express no opinion concerning (i) the laws of any country or subdivision thereof (other than the laws of the State of New York of the United States of America) or as to the effect of such laws (whether limiting, prohibitive or otherwise) on any of the rights or obligations of TIC or TI, the holders of the Exchange Notes, or any other party to or beneficiary of any of the Indenture and the Exchange Notes or (ii) the effect, if any, of the law of any jurisdiction (except the State of New York) in which any holder of any Exchange Note is located that limits the rate of interest that such holder may charge or collect. We express no opinion as to whether a United States Federal court would accept jurisdiction in any dispute, action, suit or proceeding arising out of or relating to the Exchange Notes, the Indenture or the transactions contemplated hereby.

3. We express no opinion as to (i) any objection to jurisdiction on the basis of the inconvenience of the forum provided for in the Indenture or (ii) any provision in the Indenture relating to judgments in other currencies.

4. This opinion is furnished to you in connection with the filing of the Registration Statement and is not to be used, circulated, quoted or otherwise relied upon for any other purpose. We consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of our name under the heading “Legal Matters” in the Prospectus. In giving such consent, we do not hereby concede that we are within the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission thereunder.

This opinion is effective only as of the date hereof. We do not assume responsibility for updating this opinion as of any date subsequent to its date, and we assume no responsibility for advising you of any changes with respect to any matters described in this opinion that may occur, or facts that may come to our attention, subsequent to the date hereof.

Very truly yours,

/S/    MORGAN, LEWIS & BOCKIUS LLP

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EX-5.2

EXHIBIT 5.2

[Letterhead of Linklaters Loesch]

To:  Telecom Italia Capital

287-289, route d’Arlon

L-1150 Luxembourg

10 June 2004

Dear Sirs,

Re: Telecom Italia Capital: Offer to exchange all outstanding US$ 1,000,000,000 4.000 % Guaranteed Series A Senior Notes due 2008, all outstanding US$ 2,000,000,000 Series B 5.250 % Guaranteed Senior Notes due 2013 and all outstanding US$ 1,000,000,000 Series C 6.375 % Guaranteed Senior Notes due 2033 guaranteed by Telecom Italia S.p.A. (the “Notes”) for registered US$ 1,000,000,000 4.000 % Guaranteed Series A Senior Exchange Notes due 2008, US$ 2,000,000,000 Series B 5.250 % Guaranteed Senior Exchange Notes due 2013 and US$ 1,000,000,000 Series C 6.375 % Guaranteed Senior Exchange Notes due 2033 (the “Exchange Notes”)

1 Introduction

We have acted as Luxembourg legal advisers to Telecom Italia Capital (the “Company”) in connection with the exchange offer to the holders of the Notes to exchange their Notes for Exchange Notes(the “Exchange”).

2 Scope of Inquiry

For the purpose of this opinion, we have examined the following documents (the documents mentioned in paragraphs 2.2 to 2.4, the “Transaction Documents”):

2.1 a copy of the Form F-4 Registration Statement under the Securities Act of 1933 as filed with the Securities and Exchange Commission on the date hereof (the “Registration Form”);

2.2 a copy of the Indenture dated 29 October 2003 between the Company, Telecom Italia S.p.A. as Guarantor (the “Guarantor”) and JP Morgan Chase Bank, as Trustee (the “Trustee”) (the “Indenture”);

2.3 a copy of the first supplemental indenture dated 29 October 2003 between the Company, the Guarantor and the Trustee (the “First Supplemental Indenture”);

2.4 a copy of an excerpt of the resolutions of the Board of Directors of the Company, authorizing the issue of the Notes and of the Exchange Notes dated 16 October 2003 (the “Resolutions”);

2.5 a copy of the coordinated articles of incorporation of the Company dated 16 January 2003; and

2.6 an excerpt of the Luxembourg Register of Commerce and Companies dated 17 May 2004.

Linklaters is a partnership under English law. A list of the partners in Linklaters is available on request from the above address.

Please refer to www.linklaters.com/regulation for important information on the regulatory position of the firm.

Terms defined in the Transaction Documents shall have the same meaning herein, unless the context requires otherwise and subject to any contrary indication.

3 Assumptions

For the purposes of this opinion, we have assumed:

3.1 the genuineness of all signatures on all documents submitted to us as originals and the completeness and conformity to originals thereof of all documents submitted to us as copies or specimens;

3.2 the due authorization, execution and delivery of the Transaction Documents by the parties thereto other than the Company, and the power, authority and legal right of the parties thereto other than the Company to enter into, execute, deliver and perform their respective obligations thereunder, and compliance with all applicable laws and regulations, other than Luxembourg law;

3.3 that all authorizations and consents of any country other than the Grand-Duchy of Luxembourg (“Luxembourg”) which may be required for the Company in connection with the execution, delivery and performance of the Transaction Documents and the issue of the Notes, the issue of the Exchange Notes and the Exchange have been or will be obtained;

3.4 to the extent that the relevant documents are governed by New York law, that all such relevant documents are valid, binding and enforceable under New York law;

3.5 that the Exchange Notes will not be the subject of a public offering in Luxembourg unless and until the relevant requirements of Luxembourg law concerning public offerings of securities have been fulfilled;

3.6 that an application has been or will be made by the Company for listing of the Exchange Notes on the Luxembourg Stock Exchange;

3.7 that proceedings pertaining to the Transaction Documents will be brought in New York courts; and

3.8 that the names of the holder(s) of the Exchange Notes in registered form will be duly entered into the Noteholder’s Register.

4 Opinion

Based on the documents referred to in paragraph 2 above, subject to the assumptions made in paragraph 3 above and subject to the qualifications in paragraph 5 below and subject further to any matters not disclosed to us, we are of the following opinion:

4.1 The Company is a company with limited liability (société anonyme) duly organized and validly existing under the laws of Luxembourg.

4.2 The Company has the necessary corporate power to enter into the Transaction Documents and to issue the Exchange Notes and perform its obligations thereunder.

4.3 Each of the Transaction Documents and the Exchange Notes has been duly authorized by the Company, and each of the Transaction Documents has been duly executed and delivered by the Company.

4.4 Each of the Transaction Documents constitutes legal, valid and binding obligations of the Company enforceable against the Company.

4.5 The certificates evidencing the promise of the Company to make certain payments to the registered holders of the Exchange Notes, when duly executed by an authorised representative of the Company appointed in the Resolutions, have been duly executed and delivered and the Exchange Notes, when the holders of the Exchange Notes in registered form have been duly registered in the Noteholders’ Register, will be issued and constitute the valid and legally binding obligations of the Company enforceable in accordance with their terms.

4.6 No consent, authorization, approval or order of or filing with any governmental or regulatory commission, board, authority or agency of Luxembourg or any subdivision thereof is required to be obtained or made by the Company in connection with the execution, delivery and performance by the Company of the Transaction Documents.

4.7 The execution, delivery and performance of the Transaction Documents by the Company do not, and the issue and sale of the Exchange Notes and consummation by the Company of the transactions contemplated thereby will not (i) result in a violation of the articles of incorporation of the Company or (ii) result in a violation of any statute, order, rule or law having the force of law in Luxembourg.

4.8 The choice of New York law to govern each of the Transaction Documents and the Exchange Notes will be recognized by the courts of Luxembourg and the Company can sue and be sued in its own name under the laws of Luxembourg.

4.9 The irrevocable submission of the Company to the non-exclusive jurisdiction of any state or federal court located in the Borough of Manhattan, The City of New York, New York (each a “New York Court”), the waiver by the Company of any objection to the venue of proceedings of a New York Court (as defined below) and the agreement of the Company that the Transaction Documents and the Exchange Notes shall be governed by and construed in accordance with the laws of the State of New York are legal, valid and binding; there is no provision of Luxembourg law that would render service of process in the manner set forth in the Transaction Documents and the Exchange Notes invalid; the judgment obtained in a New York Court arising out of or in relation to the obligations of the Company under the Transaction Documents and the Exchange Notes would be enforceable against the Company in the courts of Luxembourg, subject to applicable exequatur proceedings.

Any final judgment rendered by any New York Court in an action to enforce the obligations of the Company under the Transaction Documents or the Exchange Notes will be enforceable in Luxembourg subject to Luxembourg ordinary rules on enforcement (“exequatur”) of foreign judgments. Pursuant to such rules, an enforceable judgment rendered by any United States (‘U.S.’) federal or state court based on contract would not directly be enforceable in Luxembourg. However, a party who obtains a judgment in a U.S. court may initiate enforcement proceedings in Luxembourg (“exequatur”), by requesting enforcement of the U.S. judgment from the District Court (“Tribunal d’Arrondissement”), pursuant to Section 678 of the New Luxembourg Code of Civil Procedure. The District Court will authorise the enforcement in Luxembourg of the U.S. judgment if it is satisfied that the following conditions are met:

- the U.S. judgment is enforceable (“exécutoire”) in the U.S.;

- the jurisdiction of the U.S. court is founded according to Luxembourg private international law rules and to the applicable domestic U.S. federal or state jurisdiction rules;

- the U.S. court has applied to the dispute the substantive law which would have been applied by Luxembourg courts;

- the principles of natural justice have been complied with; and

- the U.S. judgment does not contravene Luxembourg international public policy.

In practice, Luxembourg courts tend not to review the merits of the foreign judgment, although there is no clear statutory prohibition of such review.

4.10 The Company is not entitled to any immunity on the basis of sovereignty or otherwise in respect of its obligations under the Transaction Documents and the Exchange Notes.

5 Qualifications

Our opinion as to the enforceability of the Transaction Documents and the Notes is subject to the following qualifications:

5.1 The binding effect and validity of the Transaction Documents and the Exchange Notes and their enforceability against the Company are subject to all limitations by reason of bankruptcy, insolvency, moratorium, controlled management, general settlement with creditors, reorganization, or similar laws relating to or affecting the rights of creditors generally.

5.2 Any obligation to pay a sum of money in a currency other than the euro will be enforceable in Luxembourg in terms of euro only. Monetary judgements may be expressed in a foreign currency or its euro equivalent at the time of judgement or payment.

5.3 Certain obligations other than payment of money obligations may not be the subject of specific performance pursuant to Court orders, but may result in damages only.

5.4 Any certificate or determination which would by contract be deemed to be conclusive may not be upheld in a Luxembourg Court.

5.5 A Luxembourg Court may refuse to give effect to a purported contractual obligation to pay costs imposed upon another party in respect of the costs of any unsuccessful litigation brought against that party before a Luxembourg Court and the Luxembourg Court may not award by way of costs all of the expenditure incurred by a successful litigant in proceedings brought before a Luxembourg Court.

5.6 The provisions in jurisdiction clauses contained in some of the Transaction Documents whereby the taking of proceedings in one or more jurisdictions shall not preclude the taking of proceedings in any other jurisdiction, whether concurrently or not, might not be enforceable in a Luxembourg Court. If proceedings were previously commenced between the same parties and on the same grounds as proceedings in Luxembourg, a plea of pendency might be entered in the Luxembourg Court and proceedings stayed pending the termination of the proceedings abroad.

5.7 A contractual provision allowing the service of process against the Company to a service agent or any other third party appointed to such effect could be overridden by Luxembourg statutory provisions allowing the valid service of process against the Company in accordance with applicable laws at the registered office of the Company.

5.8 Claims may become barred under statutory limitations period rules.

5.9 Claims may be or become subject to defenses of set-off or counterclaims.

5.10 We do not express any opinion as to any taxation matters.

5.11 We express no opinion as to the accuracy of any warranties given by the Company (expressly or impliedly) under or by virtue of the Transaction Documents, save if and insofar as the matters warranted are the subject of specific opinions in this matter.

5.12 Where obligations are to be performed in a jurisdiction outside Luxembourg they may not be enforceable in Luxembourg to the extent that performance would be illegal under the laws of that other jurisdiction.

5.13 The admissibility as evidence of any Note or the Transaction Documents before a Luxembourg Court or Public Authority (“autorité constituée”) to which the Exchange Notes or the Transaction Documents are produced may require that the Exchange Notes or the Transaction Documents come with a complete or partial translation into French or German.

5.14 Obligations to make payments that may be regarded as penalties might not be enforceable.

5.15 According to Luxembourg law any term of any of the agreements herein referred to may be amended with the agreement of all the parties thereto orally or by conduct by the parties thereto, notwithstanding any provision to the contrary contained therein.

5.16 We reserve our opinion as to the extent to which a Luxembourg court would, in the event of any relevant illegality, sever the offending provisions and enforce the remainder of the transaction of which such provision forms a part, notwithstanding any express provisions in this regard.

5.17 According to Luxembourg law, the certificated registered Exchange Notes do not represent ownership of registered Exchange Notes but are certificates evidencing the entries in the Noteholders’ register maintained at the registered office of the Company (the “Noteholders’ Register”). In case of discrepancy between these certificates, any register of noteholders maintained outside the registered office of the Company and the Noteholders’ Register maintained at the registered office of the Company, the entries into the Noteholders’ Register maintained at the registered office of the Company shall prevail as a rule.

5.18 In the absence of any case law, contractual clauses stipulating that money held by persons which are Luxembourg entities or persons will be held in trust in Luxembourg might not be recognised by Luxembourg courts.

This opinion is given on the basis that there will be no amendment to or termination or replacement of any of the documents, authorizations and consents referred to in paragraph 2 above.

6 European Union Savings Tax Directive

On 3 June 2003 the EU Council of Economic and Finance Ministers adopted a new directive regarding the taxation of savings income. The directive is scheduled to be applied by Member States as from 1 January 2005, provided that certain non-EU countries and territories adopt similar measures from the same date. Under the directive each Member State will be required to provide to the tax authorities of another Member State details of payments of interest or other similar income paid by a person within its jurisdiction to or for the benefit of an individual resident in that other Member State. However, Austria, Belgium and Luxembourg may instead apply a withholding system for a transitional period in relation to

such payments, deducting tax at the rate of 15%, this rate rising over time to 35%. The transitional period is to commence on the date from which the directive is to be applied by Member States and to terminate at the end of the first fiscal year following agreements by certain non-EU countries with EU Member States to the exchange of information relating to such payments.

7 Luxembourg Law

This opinion speaks as of its date and is confined to, and is solely given on the basis of, the laws of Luxembourg as applied by the Luxembourg Courts and as presently in force. We undertake no responsibility to notify any addressee of this opinion of any change in the laws of Luxembourg or their construction or application after the date of this opinion.

In this opinion, Luxembourg legal concepts are expressed in English terms and not in their original French terms. The concepts concerned may not be identical to the concepts described by the same English terms as they exist under the laws of other jurisdictions. This opinion may, therefore, only be relied upon under the express condition that it is given under Luxembourg law and that any issues of interpretation arising thereunder will be governed by Luxembourg law and be brought before a Luxembourg court.

We express no opinion as to any laws other than the laws of Luxembourg and we have assumed that there is nothing in any other law that affects our opinion. In particular, we have made no independent investigation of the laws of New York as the basis for the opinion stated herein and we do not express or imply any opinion on such laws.

8 Reliance

This opinion is furnished to you in connection with the filing of the Registration Statement and is not to be used, circulated, quoted or otherwise relied upon for any other purpose.

We consent to the filing of this opinion as an exhibit to the Registration Form and to the use of our name under the heading “Legal Matters” in the prospectus included in the Registration Form. In giving such consent, we do not hereby concede that we are within the category of persons whose consent is required under Section 7 of the U.S. Securities Act of 1933, as amended, or the rules and regulations of the U.S. Securities and Exchange Commission thereunder.

Yours faithfully,

Linklaters Loesch

by

/S/    JANINE BIVER

EX-5.3

EXHIBIT 5.3

Studio Legale

Roma 00184, Via delle Quattro Fontane, 20

Milano 20121, Piazza Belgioioso, 2

Padova 35121, Via Altinate, 146

Bologna 40123, Via Massimo d’Azeglio, 57

Napoli 80121, Riviera di Chiaia, 276

London EC2Y 8HQ, One Silk Street

New York N.Y. 10105, 1345 Avenue of the Americas 19th Floor

Telecom Italia S.p.A.

Piazza degli Affari 2

20123 Milan

Italy

Attn.: Francesca Petralia

Rome, June 10, 2004

Dear Sirs,

Offer to exchange all outstanding Telecom Italia Capital Société Anonyme (the “Issuer”) Series A 4.000% Guaranteed Senior Global Notes due 2008, Series B 5.250% Guaranteed Senior Global Notes due 2013 and Series C 6.375% Guaranteed Senior Global Notes due 2033 (collectively, the “Initial Notes”) for Registered Series A 4% Guaranteed Senior Notes Due 2008, Registered Series B 5.25% Guaranteed Senior Notes Due 2013, and Registered Series C 6.375% Guaranteed Senior Notes Due 2033 issued by the Issuer (collectively, the “Exchange Notes”), all fully and unconditionally guaranteed by Telecom Italia S.p.A. (the “Guarantor”).

Introduction

1.1 We have acted as Italian legal advisers to the Guarantor in connection with the issuance of the Guarantee (as defined below) by the Guarantor for the obligations undertaken by the Issuer in relation to the issue of the Exchange Notes.

1.2 In such capacity, we have examined copies of the documents necessary for the purpose of giving this opinion (the “Documents”), set out in the schedule to this opinion attached hereto (the “Schedule”).

1.3 References in this opinion to:

1.3.1 the “Specified Transactions” are to the execution and delivery by the Guarantor of the Transaction Documents in connection with the issue of the Exchange Notes and the performance by the Guarantor of its obligations thereunder;

1.3.2 the “Transaction Documents” are to each of:

1.3.2.1 the Indenture as defined in the Schedule;

1.3.2.2 the First Supplemental Indenture as defined in the Schedule;

and

1.3.3 the “Guarantee” means the guarantee, endorsed on the Exchange Notes in the form included in Exhibits 4.5, 4.6 and 4.7 to the exchange offer registration statement (the “Form F-4 Registration Statement”).

Assumptions

2.1 In giving this opinion, we have assumed that:

2.1.1 all documents submitted to us as copy or specimen documents are conformed to their originals;

2.1.2 all relevant documents have been validly authorised, executed and delivered by all of the parties thereto other than the Guarantor;

2.1.3 the signatures on the originals of all documents submitted to us are genuine;

2.1.4 all warranties and representations of the Guarantor contained in each of the Transaction Documents (disregarding warranties and representations as to matters of Italian law explicitly being opined on herein) were true and accurate when made and will remain true and accurate with regard to the facts stated therein;

2.1.5 all opinions and intentions expressed in the Form F-4 Registration Statement are honestly held and all statements contained therein (other than statements regarding the laws of Italy) were true and accurate when made and remain true and accurate;

2.1.6 a warranty by the Guarantor that it is not aware, or has no notice, of any act, matter, thing or circumstance means that the same does not exist or has not occurred;

2.1.7 each company which is a party to the Transaction Documents (other than the Guarantor) is duly incorporated and validly existing under the laws of the relevant jurisdiction and is fully qualified and empowered to own its assets and carry on business in each jurisdiction in which it owns assets or carries on business;

2.1.8 each of the Transaction Documents has been duly executed and delivered and the obligations set out therein by the respective parties thereto do not violate, contravene, conflict with, or result in any breach of, the laws (including the applicable public policy requirements) of any jurisdiction other than Italy;

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2.1.9 the obligations of each party to the Transaction Documents (other than the Guarantor) are valid obligations, binding on it under the applicable laws (other than Italian law) and enforceable in the applicable jurisdictions (other than the jurisdiction of the Italian courts);

2.1.10 the irrevocable submission of the Guarantor to the non-exclusive jurisdiction of a New Your court and the waiver by the Guarantor of any objection to the venue of a New York court are legal, valid and binding on it under the laws applicable to the Transaction Documents (other than Italian law);

2.1.11 there has not been any amendment to the By-laws of the Guarantor referred to in the Schedule;

2.1.12 the content of the certificate issued by the Register of Enterprises at the Chamber of Commerce of Milan and dated May 14, 2004, referred to in the Schedule, is true and correct as of the date hereof;

2.1.13 the resolutions of the Board of Directors of the Guarantor referred to in the Schedule were duly passed and have not been revoked, superseded or amended, in full or in part, and are still in force as of the date hereof;

2.1.14 no offer whatsoever of the Exchange Notes will take place in the Republic of Italy;

2.1.15 there is an absence of fraud and the presence of good faith on the part of all the parties to the Transaction Documents and their respective officers, employees, agents and advisers;

2.1.16 there are no facts, documents, circumstances or matters which may be material to the opinions set out herein and which have not been disclosed to us, notwithstanding our reasonable inquiry.

2.2 We express no opinion as to any laws other than the laws of Italy and we have assumed that none of the opinions expressed below will be affected by the laws of any jurisdiction other than Italy. In particular, we have made no independent investigation of the laws of the State of New York and of the Grand Duchy of Luxembourg as a basis for the opinion stated herein and do not express or imply any opinion on such laws.

Opinion

3.1 Based upon and subject to the above, we are of the opinion that:

3.1.1 The Guarantor is a company duly incorporated and validly existing under the laws of the Republic of Italy as a joint stock company (Società per Azioni, or, in abbreviated form, S.p.A.) and is capable of suing and being sued in its own name under the laws of the Republic of Italy.

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3.1.2 The Guarantor has the necessary corporate power to enter into the Transaction Documents, to issue the Guarantee and to perform its obligations thereunder.

3.1.3 Each of the Transaction Documents and the Guarantee has been duly authorised by the Guarantor, and each of the Transaction Documents has been duly executed and delivered by the Guarantor.

3.1.4 Subject to paragraph 3.1.7 below, each of the Transaction Documents is, and the Guarantee will be, upon execution and delivery by the Guarantor and authentication by the Trustee, legal, valid and binding obligations of the Guarantor enforceable against the Guarantor.

3.1.5 No consent, authorization, approval or order of or filing with any governmental or regulatory commission, board, authority or agency of the Republic of Italy or any subdivision thereof is required to be obtained or made by the Guarantor in connection with the execution, delivery and performance by Guarantor of the Transaction Documents.

3.1.6 Subject to paragraph 3.1.7 below, the execution, delivery and performance of the Transaction Documents by the Guarantor do not, and the execution, delivery and performance of the Guarantee and consummation by the Guarantor of the transactions contemplated thereby will not (i) result in a violation of the Articles of Association, or the By-laws of the Guarantor referred to in the Schedule, or (ii) result in a violation of any statute, order, rule or law having the force of law in the Republic of Italy.

3.1.7 The choice of New York law to govern each of the Transaction Documents and the Guarantee will be recognized by the courts of the Republic of Italy, provided that, when applying the law of the State of New York as the governing law of any of the Transaction Documents, an Italian court:

- may refuse to apply the law of the State of New York if its application is manifestly incompatible with the public policy of Italy (“ordine pubblico”) or if submission to a foreign law is deemed to have been made with the aim of avoiding mandatory provisions of Italian law;

- will apply Italian law in a situation where it is mandatory irrespective of the law otherwise applicable to the Transaction Documents; and

- shall have regard to the law of the country in which performance takes place in relation to the manner of performance and the steps to be taken in the event of defective performance.

3.1.8 The irrevocable submission of the Guarantor to the non-exclusive jurisdiction of any state or federal court located in the Borough of Manhattan, The City of New York, New York (each a “New York Court”), and the waiver by the Guarantor of any objection to the venue of a New York Court and the agreement of the Guarantor that the Transaction Documents and the Guarantee shall be governed by and construed in accordance with the laws of the State of New York are legal, valid and binding pursuant to the Italian Law, it being understood that:

- any waiver of Italian jurisdiction must comply with Article 4 of Law no. 218 of May 31, 1995 (the “Law 218/1995”);

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- the existence of a non-exclusive jurisdiction clause in the Transaction Documents does not prevent the parties thereto from bringing a legal action before the Italian courts, if the relevant jurisdiction exists under applicable provisions of Italian law.

3.1.9 Any final judgement duly obtained in a New York Court arising out of or in relation to the obligations of the Guarantor under the Transaction Documents and the Guarantee which is enforceable in that country in respect of the terms, conditions, rights or obligations of the Guarantor contained in the Transaction Documents, would be recognised and enforced by the courts in the Republic of Italy in accordance with the provisions on the recognition of foreign judgements contained in Title IV, Articles 64-71 of Law no. 218/1995, and subject, among other things, (i) to the absence of a conflicting judgment by an Italian court or of an action pending in Italy among the same parties and arising from the same facts and circumstances and started before the U.S. proceedings, and (ii) to the Italian courts’ determination that the U.S. courts had jurisdiction, that process was appropriately served on the defendant, and that enforcement would not violate Italian public policy. In general, the enforceability in the Republic of Italy of final judgments of U.S. courts would not require retrial in Italy, subject to the decision of the competent court of appeal ascertaining the existence of the aforementioned requirements and subject to challenge by the other party.

3.1.10 Pursuant to certain conventions concerning jurisdiction and/or recognition and enforcement of foreign judgements to which Italy is a party the taking of proceedings against the Guarantor with respect to any subject matter arising from the Transaction Documents in one jurisdiction may limit the right to take proceedings with respect to the same subject matter in another jurisdiction. Subject to the application of Law no. 218/1995, there is no provision of Italian law that would render service of process effected in the manner set forth in the Transaction Documents invalid with respect to legal proceedings in United States; in addition, as to the service of process regime, the Republic of Italy is a party to the Hague Convention of November 15, 1965.

3.1.11 The Guarantor is not entitled to immunity based on sovereignty or otherwise in respect of its obligations under the Transaction Documents.

Qualifications

4.1 It should be understood that (i) the opinions expressed in paragraphs 3.1.1, 3.1.2, 3.1.3, 3.1.4 and 3.1.6 above are based upon our examination of the Documents listed in the Schedule, as applicable, and (ii) we have not been responsible for investigating or verifying the accuracy of the facts, statements of foreign law, in particular of the laws of the State of New York and Luxembourg, or the reasonableness of any statements of opinion, contained in any of the Documents, or that no material facts have been omitted from them and express no opinion with respect thereto.

4.2 This opinion is subject to the qualification that enforcement may be limited by (a) bankruptcy, insolvency, liquidation, reorganisation and mandatory provisions of Italian law relating to or affecting the rights of creditors in general, and (b) rights of acceleration, if any, and the availability of equitable remedies under applicable laws.

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4.3 In relation to paragraph 3.1.5, it should be noted that payments of sums, including principal, premium, if any, and interest, may be legally carried out and freely transferred out of the Republic of Italy subject to compliance with applicable laws preventing usury (Law No. 108 of March 7, 1996, as amended) and money-laundering (Law Decree No. 143 of 3 May 1991, converted by Law No. 197 of 5 July 1991, as amended).

4.4 Any provision contained in any of the Transaction Documents purporting to require a party to indemnify another against the damages suffered by the latter as a result of a default of the former is subject to (i) Article 1223 of the Italian Civil Code, providing that damages payable as a result of a breach of contract are constituted by two elements: (a) actual loss (danno emergente) and (b) loss of profit (lucro cessante) (in both cases only in so far as they are an immediate and direct consequence of the breach), and (ii) Article 1225 of the Italian Civil Code, providing that, except in the case of a breach of contract caused by wilful misconduct (dolo), the liability of a party is limited to those damages which were foreseeable at the time the contract was entered into. Furthermore, according to Article 1229 of the Italian Civil Code, clauses providing for limitation of liability in case of wilful misconduct or gross negligence are not enforceable under Italian law.

4.5 Any provision contained in any of the Transaction Documents purporting to require a party to indemnify another person against the costs or expenses of proceedings in Italian courts is subject to the discretion of the court to decide whether and to what extent a party to such proceedings should be awarded the costs or expenses incurred by it in connection therewith.

4.6 Italian law recognises the ability of an Italian court to issue a judgement requiring the payment by the debtor of a sum determined in a foreign currency; provided that, if a judgement is rendered against an Italian debtor for a payment of a sum in a foreign currency, pursuant to Article 1278 of the Italian Civil Code, the debtor will have the right to pay in Euro at the exchange rate prevailing on the day when the sum was due and at the place agreed for payment. In this connection, although there are no specific provisions in the Italian Civil Code, in the event of late payment of a debt expressed in a foreign currency, if the Italian debtor chooses to convert his or her debt into Euro, he or she shall also pay both any interest accrued on the amount as a result of late payment and any difference between the exchange rate on the day when the payment was due and that prevailing on the date payment is actually made.

4.7 Where any party to any of the Transaction Documents is vested with discretion or may determine a matter in its opinion, Italian law may require that such discretion is exercised reasonably or that such opinion is based on reasonable grounds, and such law may as a matter of public policy be applied by the Italian courts notwithstanding that the law governing the Transaction Documents is stated to be the law of the State of New York.

4.8 Any provision of the Transaction Documents providing that any calculation or certification will be conclusive and binding will not be effective if such calculation or certificate is fraudulently made or given and will not necessarily prevent judicial enquiry by the Italian courts into the merits of any claim by any party thereto.

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4.9 Enforcement of rights provided for in the Transaction Documents, including the Guarantee, may be limited by prescription or by lapse of time or may become subject to defences of set-off (save where specifically excluded) or counterclaim or may be invalidated by reasons of fraud.

4.10 We express no opinion as to whether any specific performance remedy, injunctive relief or precautionary measures would be available in respect of any breach by the Guarantor of its obligations under the Transaction Documents, as such grants are subject to the discretion of the court.

4.11 We express no opinion as to any party to the Transaction Documents other than the Guarantor.

4.12 We express no opinion as to tax matters.

Reliance

5.1 This opinion is effective only as of the date hereof. This opinion is given on the basis that there will be no amendment to or termination or replacement of the documents, referred to in the Schedule to this opinion and on the basis of the laws of Italy in force as at the date of this opinion. This opinion is also given on the basis that we undertake no responsibility to notify any addressee of this opinion of any change in the laws of Italy after the date of this opinion.

5.2 Any issue of liability connected with our rendering this opinion shall be solely subject to the substantive laws of Italy regardless of any reference to the laws of another jurisdiction pursuant to any applicable rule governing conflicts of laws.

5.3 This opinion is furnished to you in connection with the filing of the Form F-4 Registration Statement and is not to be used, circulated, quoted or otherwise relied upon for any other purpose.

5.4 We consent to the filing of this opinion as an exhibit to the Form F-4 Registration Statement and to the use of our name under the heading “Legal Matters” in the prospectus included in the Form F-4 Registration Statement. In giving such consent, we do not hereby concede that we are within the category of persons whose consent is required under Section 7 of the U.S. Securities Act of 1933, as amended, or the rules and regulations of the U.S. Securities and Exchange Commission thereunder.

Yours faithfully.

/s/  Gianni, Origoni, Grippo & Partners

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SCHEDULE

1. A copy of the By-laws of Telecom Italia S.p.A. dated May 2004, certified by the Secretary to the Board of Directors of Telecom Italia S.p.A. as of May 26, 2004.

2. A copy of the certificate relating to Telecom Italia S.p.A., issued by the Register of Enterprises at the Chamber of Commerce of Milan, dated May 14, 2004.

3. A copy of the officer’s certificate issued on May 26, 2004 by the Secretary to the Board of Directors of Telecom Italia S.p.A., concerning the resolutions relating to the Guarantee adopted by the Board of Directors’ meeting of the Guarantor on May 20, 2004.

4. The Registration Rights Agreement dated October 22, 2003 (the “Registration Rights Agreement”) between the Issuer and the Guarantor, on the one side, Citigroup Global Markets Inc., J.P. Morgan Securities Inc., Lehman Brothers Inc., on their behalf and on behalf of the other Initial Purchasers listed in Schedule 1 to the Purchase Agreement, on the other side.

5. The Indenture dated October 29, 2003 (the “Indenture”) and the First Supplemental Indenture dated October 29, 2003 (the “First Supplemental Indenture”) between the Issuer, the Guarantor and the Trustee.

6. The Form F-4 Registration Statement relating to the offer to exchange the Initial Notes for the Exchange Notes, filed on the date hereof.

7. Forms of Exchange Notes including the Guarantee, set out as Exhibits no. 4.5, 4.6 and 4.7 to the Form F-4 Registration Statement.

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EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in the Registration Statement (Form F-4) of Telecom Italia S.p.A. and in the related Prospectus of our report dated April 15, 2004 (except Notes 27, 28 and 29, as to which the date is June 4, 2004), with respect to the consolidated financial statements of Telecom Italia S.p.A. included in its Annual Report on Form 20-F for the year ended December 31, 2003.

/s/ Reconta Ernst & Young S.p.A.

Turin, Italy

June 4, 2004

EX-23.2

Exhibit 23.2

CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in this Registration Statement of Telecom Italia Capital on Form F-4 of our report dated January 26, 2004, except for Note 38 for which the date is March 31, 2004 (which report expresses an unqualified opinion and includes an explanatory paragraph referring to the translation of Chilean peso amounts into U.S. dollar amounts and an explanatory paragraph regarding the reconciliation of Chilean GAAP to U.S. GAAP for net income and shareholders’ equity and the application thereof), relating to the consolidated financial statements of Empresa Nacional de Telecomunicaciones S.A. as at December 31, 2003 and 2002 and for the three years ended December 31, 2003, appearing in the Annual Report on Form 20-F of Telecom Italia S.p.A. for the years ended December 31, 2003, 2002 and 2001. We also consent to the reference to us under the heading “Independent Accountants” in the Prospectus, which is a part of this Registration Statement.

Santiago, Chile

June 4, 2004

Una firma miembro de

Deloitte Touche Tohmatsu

EX-23.3

	EXHIBIT 23.3
	PricewaterhouseCoopers SpA

CONSENT OF INDEPENDENT AUDITORS

We hereby consent to the incorporation by reference in the Registration Statement on Form F-4 of Telecom Italia SpA of our report dated March 5, 2004 relating to the consolidated financial statements of Finsiel SpA for the three years ended December 31, 2003, 2002 and 2001, which appears in the issuer’s Annual Report on Form 20-F for the year ended December 31, 2003.

PricewaterhouseCoopers SpA

Corrado Testori

(Partner)

Rome, 4 June 2004

EX-23.4

Exhibit 23.4

CONSENT OF INDEPENDENT ACCOUNTANTS

The Board of Directors

Telecom Italia S.p.A.:

We hereby consent to the incorporation by reference in the Registration Statement on Form F - 4 of Telecom Italia S.p.A. of our report dated March 10, 2004 relating to the consolidated financial statements of Telekom Austria Aktiengesellschaft as of December 31, 2003 and 2002, which appears in the Annual Report of Telecom Italia S.p.A. on Form 20 - F for the year ended December 31, 2003.

Vienna, June 4, 2004

KPMG Alpen-Treuhand GmbH

Wirtschaftsprüfungs-und Steuerberatungsgesellschaft

/S/    MICHAEL SCHLENK-FRIEDRICH UNTERKIRCHER      

EX-23.5

Exhibit 23.5

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in the Registration Statement on Form F – 4 of Telecom Italia S.p.A. of our report dated February 12, 2004 relating to the consolidated financial statements of mobilkom austria AG & Co KG and mobilkom austria AG, which appears in the issuer’s Annual Report on Form 20 – F for the year ended December 31, 2003.

Vienna, June 4, 2004

Grant Thornton

Wirtschaftsprüfungs-und Steuerberatungs-GmbH

/S/    WALTER PLATZER-KARL NEWERTAL        

EX-23.6

EXHIBIT 23.6

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in the Registration Statement on Form F-4 of Telecom Italia S.p.A., of our report dated March 15, 2002 relating to the combined consolidated financial statements of Mobilkom Austria AG & Co KG and Mobilkom Austria AG, which appears in the issuer’s Annual Report on Form 20-F for the year ended December 31, 2003.

Vienna, June 4, 2004

Grant Thornton Wirtschaftsprüfungs-und Steuerberatungs-GmbH	KPMG Austria GmbH Wirtschaftsprüfungs-und Steuerberatungsgesellschaft
/S/    WALTER PLATZER-KARL NEWERTAL	/S/    MICHAEL SCHLENK-MARTIN WAGNER

EX-23.7

Exhibit 23.7

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in the Registration Statement on Form F-4 of Telecom Italia S.p.A. of our report dated March 20, 2002 relating to the consolidated financial statements of Telekom Austria Aktiengesellschaft, which appears in the issuer’s Annual Report on Form 20-F for the year ended December 31, 2003.

Vienna, June 4, 2004

Grant Thornton Wirtschaftsprüfungs-und Steuerberatungs-GmbH	KPMG Austria GmbH Wirtschaftsprüfungs-und Steuerberatungsgesellschaft
/S/ WALTER PLATZER – KARL NEWERTAL	/S/ MICHAEL SCHLENK – MARTIN WAGNER

EX-23.8

EXHIBIT 23.8

Basaran Nas Serbest Muhasebeci

Mali Müsavirlik A. S.

a member of

PricewaterhouseCoopers

BJK Plaza, Süleyman Seba Caddesi

No.48 B Blok Kat 9 Akaretler

Besiktas 34357 Istanbul-Turkey

www.pwc.com/tr

Telephone: +90 (212) 326 6060

Facsimile: +90 (212) 326 6050

CONSENT OF INDEPENDENT ACCOUNTS

We hereby consent to the incorporation by reference in this Registration Statement on Form F-4 of Telecom Italia S.p.A. of our report dated 1 February 2002 relating to the 2001 financial statements of Is-Tim Telekomünikasyon Hizmetleri A.S., which appears in the issuer’s Annual Report on Form 20-F for the year ended December 31, 2003.

Basaran Nas Serbest Muhasebeci

Mali Müsavirlik Anonim Sirketi

a member of

PricewaterhouseCoopers

Murat Sancar, SMMM

Istanbul, 4 June 2004

EX-23.12

Exhibit 23.12

[LETTERHEAD OF MAISTO E ASSOCIATI]

CONSENT OF MAISTO E ASSOCIATI

We hereby consent to the reference to our firm under the caption “Legal Matters” contained in the Registration Statement on Form F-4 (including the prospectus contained therein) filed with the U.S. Securities and Exchange Commission by Telecom Italia Capital and Telecom Italia S.p.A.

MAISTO E ASSOCIATI

/S/    RICCARDO MICHELUTTI

Milan, 10 June 2004

EX-25.1

EXHIBIT 25.1

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM T-1

STATEMENT OF ELIGIBILITY

UNDER THE TRUST INDENTURE ACT OF 1939 OF

A CORPORATION DESIGNATED TO ACT AS TRUSTEE

CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF

A TRUSTEE PURSUANT TO SECTION 305(b)(2)

JPMORGAN CHASE BANK

(Exact name of trustee as specified in its charter)

New York	13-4994650
(State of incorporation if not a national bank)	(I.R.S. employer identification No.)
270 Park Avenue
New York, New York	10017
(Address of principal executive offices)	(Zip Code)

Thomas F. Godfrey

Vice President and Assistant General Counsel

JPMorgan Chase Bank

1 Chase Manhattan Plaza, 25^th Floor

New York, NY 10081

Tel: (212) 552-2192

(Name, address and telephone number of agent for service)

TELECOM ITALIA CAPITAL

société anonyme

(Exact name of obligor as specified in its charter)

Luxembourg	Not Applicable
(State or other jurisdiction of	(I.R.S. employer
incorporation or organization)	identification No.)

287-289 route d’Arlon

L-1550

Luxembourg

(Address of principal executive offices) (Zip Code)

Guaranteed Debt Securities

(Title of the indenture securities)

GENERAL

Item 1. General Information.

Furnish the following information as to the trustee:

(a) Name and address of each examining or supervising authority to which it is subject.

New York State Banking Department, State House, Albany, New York 12110.

Board of Governors of the Federal Reserve System, Washington, D.C., 20551

Federal Reserve Bank of New York, District No. 2, 33 Liberty Street, New York, N.Y.

Federal Deposit Insurance Corporation, Washington, D.C., 20429.

(b) Whether it is authorized to exercise corporate trust powers.

Yes.

Item 2. Affiliations with the Obligor and Guarantors.

If the obligor or any Guarantor is an affiliate of the trustee, describe each such affiliation.

None.

Item 16. List of Exhibits

List below all exhibits filed as a part of this Statement of Eligibility.

1. A copy of the Restated Organization Certificate of the Trustee dated March 25, 1997 and the Certificate of Amendment dated October 22, 2001 (see Exhibit 1 to Form T-1 filed in connection with Registration Statement No. 333-76894, which is incorporated by reference.)

2. A copy of the Certificate of Authority of the Trustee to Commence Business (see Exhibit 2 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference). On November 11, 2001, in connection with the merger of The Chase Manhattan Bank and Morgan Guaranty Trust Company of New York, the surviving corporation was renamed JPMorgan Chase Bank.

3. None, authorization to exercise corporate trust powers being contained in the documents identified above as Exhibits 1 and 2.

4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1 filed in connection with Registration Statement No. 333-76894, which is incorporated by reference.)

5. Not applicable.

6. The consent of the Trustee required by Section 321(b) of the Act (see Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference). On November 11, 2001, in connection with the merger of The Chase Manhattan Bank and Morgan Guaranty Trust Company of New York, the surviving corporation was renamed JPMorgan Chase Bank.

7. A copy of the latest report of condition of the Trustee, published pursuant to law or the requirements of its supervising or examining authority.

8. Not applicable.

9. Not applicable.

SIGNATURE

Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee, JPMorgan Chase Bank, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York and State of New York, on the    day of            ,

JPMORGAN CHASE BANK
By	/s/    Glenn Andersen

- 2 -

Item 16. List of Exhibits

List below all exhibits filed as a part of this Statement of Eligibility.

1. A copy of the Restated Organization Certificate of the Trustee dated March 25, 1997 and the Certificate of Amendment dated October 22, 2001 (see Exhibit 1 to Form T-1 filed in connections with Registration Statement No. 333-76894, which is incorporated by reference.)

2. A copy of the Certificate of Authority of the Trustee to Commence Business (see Exhibit 2 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference). On November 11, 2001, in connection with the merger of The Chase Manhattan Bank and Morgan Guaranty Trust Company of New York, the surviving corporation was renamed JPMorgan Chase Bank.

3. None, authorization to exercise corporate trust powers being contained in the documents identified above as Exhibits 1 and 2.

4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1 filed in connection with Registration Statement 333-76894, which is incorporated by reference.)

5. Not applicable.

6. The consent of the Trustee required by Section 321(b) of the Act (see Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference). On November 11, 2001, in connection with the merger of The Chase Manhattan Bank and Morgan Guaranty Trust Company of New York, the surviving corporation was renamed JPMorgan Chase Bank.

7. A copy of the latest report of condition of the Trustee, published pursuant to law or the requirements of its supervising or examining authority.

8. Not applicable.

9. Not applicable.

SIGNATURE

Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee, JPMorgan Chase Bank, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York and State of New York, on the    day of            .

JPMORGAN CHASE BANK
By	/s/    Glenn Anderson

Exhibit 7 to Form T-1

Bank Call Notice

RESERVE DISTRICT NO. 2

CONSOLIDATED REPORT OF CONDITION OF

JPMorgan Chase Bank

of 270 Park Avenue, New York, New York 10017

and Foreign and Domestic Subsidiaries,

a member of the Federal Reserve System,

at the close of business December 31, 2003, in

accordance with a call made by the Federal Reserve Bank of this

District pursuant to the provisions of the Federal Reserve Act.

ASSETS	Dollar Amounts in Millions
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin	$	19,429
Interest-bearing balances		9,602
Securities:
Held to maturity securities		176
Available for sale securities		53,625
Federal funds sold and securities purchased under agreements to resell
Federal funds sold in domestic offices		26,067
Securities purchased under agreements to resell		80,099
Loans and lease financing receivables:
Loans and leases held for sale		20,359
Loans and leases, net of unearned income	$	163,864
Less: Allowance for loan and lease losses		3,151
Loans and leases, net of unearned income and allowance		160,713
Trading Assets		197,197
Premises and fixed assets (including capitalized leases)		6,010
Other real estate owned		128
Investments in unconsolidated subsidiaries and associated companies		828
Customers’ liability to this bank on acceptances outstanding		225
Intangible assets
Goodwill		2,315
Other Intangible assets		4,997
Other assets		46,892
TOTAL ASSETS	$	628,662

LIABILITIES
Deposits
In domestic offices	$	190,249
Noninterest-bearing	$	74,112
Interest-bearing		116,137
In foreign offices, Edge and Agreement subsidiaries and IBF’s		136,496
Noninterest-bearing	$	6,355
Interest-bearing		130,141
Federal funds purchased and securities sold under agreements to repurchase:
Federal funds purchased in domestic offices		4,639
Securities sold under agreements to repurchase		71,995
Trading liabilities		128,738
Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases)		23,496
Bank’s liability on acceptances executed and outstanding		225
Subordinated notes and debentures		8,028
Other liabilities		26,985
TOTAL LIABILITIES		590,851
Minority Interest in consolidated subsidiaries		320
EQUITY CAPITAL
Perpetual preferred stock and related surplus		0
Common stock		1,785
Surplus (exclude all surplus related to preferred stock)		16,318
Retained earnings		19,590
Accumulated other comprehensive income		(202	)
Other equity capital components		0
TOTAL EQUITY CAPITAL		37,491
TOTAL LIABILITIES, MINORITY INTEREST, AND EQUITY CAPITAL	$	628,662

I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true to the best of my knowledge and belief.

JOSEPH L. SCLAFANI

We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true and correct.

WILLIAM B. HARRISON JR. WILLIAM H. GRAY, III HELENE L. KAPLAN ) ) DIRECTORS )

EX-99.1

EXHIBIT 99.1

LETTER OF TRANSMITTAL

OFFER TO EXCHANGE

SERIES A 4% GUARANTEED SENIOR NOTES DUE 2008,

SERIES B 5.25% GUARANTEED SENIOR NOTES DUE 2013, AND

SERIES C 6.375% GUARANTEED SENIOR NOTES DUE 2033

OF

TELECOM ITALIA CAPITAL

UNCONDITIONALLY GUARANTEED BY

TELECOM ITALIA S.p.A.

PURSUANT TO THE PROSPECTUS, DATED                      , 2004, OF TELECOM ITALIA CAPITAL AND TELECOM ITALIA S.p.A. (THE “PROSPECTUS”).

THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON                      , 2004, UNLESS THE OFFER IS EXTENDED (THE “EXPIRATION DATE”). TENDERS MAY BE WITHDRAWN PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.

The Exchange Agent for the Exchange Offer is:

JPMORGAN CHASE BANK

By Registered or Certified Mail:	By Overnight Delivery or by Hand between 8:00 a.m. and 4:30 p.m.:
JPMorgan Chase Bank 4 New York Plaza, 15th Floor New York, New York 10004	JPMorgan Chase Bank 4 New York Plaza, 15th Floor New York, New York 10004	J.P. Morgan Bank Luxembourg S.A. 5 Rue Plaetis, Floor 1 L-2338 Luxembourg
Attention: Institutional Trust Services	Attention: Institutional Trust Services
To Confirm by Telephone: (212) 623-5159	To Confirm by Telephone: (212) 623-5159
Facsimile Transmissions: (212) 623-6207 or 6214	Facsimile Transmissions: (212) 623-6207

DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.

1

The undersigned acknowledges that he, she or it has received and reviewed the Prospectus and this letter of transmittal (the “Letter of Transmittal”), which together constitute the offer (the “Exchange Offer”) from Telecom Italia Capital, a societe anonyme organized under the laws of Luxembourg (“Telecom Italia Capital”), to exchange all of its outstanding Series A 4% Guaranteed Senior Notes due 2008—(Common Codes: 017953281 and 017953354; CUSIP Nos.: 87927VAB4 and T92762AB8; ISIN Nos.: US87927VAB45 and UST92762AB80) (the “Outstanding Series A Notes”), all of its outstanding Series B 5.25% Guaranteed Senior Notes due 2013—(Common Codes: 017953150 and 017953168; CUSIP Nos.: 87927VAA6 and T92762AA0; ISIN Nos.: US87927VAA61 and UST92762AA08) (the “Outstanding Series B Notes”), and all of its outstanding Series C 6.375% Guaranteed Senior Notes due 2033—(Common Codes: 017953427 and 017953435; CUSIP Nos. 87927VAC2 and T92762AC6; ISIN Nos. US87927VAC28 and UST92762AC63) (the “Outstanding Series C Notes” and together with the Outstanding Series A Notes and Outstanding Series B Notes, the “Outstanding Notes”) for a like aggregate principal amount of Series A 4% Guaranteed Senior Notes due 2008, Series B 5.25% Guaranteed Senior Notes due 2013 and Series C 6.375% Guaranteed Senior Notes due 2033 that, in each case, have been registered under the Securities Act (“Exchange Notes”).

For each Outstanding Note accepted for exchange, the holder of such Outstanding Note will receive an Exchange Note of the same denomination having a principal amount equal to that of the surrendered Outstanding Note.

The Exchange Notes will bear interest from May 15, 2004. Interest due on the Exchange Notes will be payable in cash and will be payable on the same dates on which interest is otherwise payable on the Outstanding Notes. No interest will be paid on any Outstanding Notes when they are surrendered and exchanged in the Exchange Offer. Outstanding Notes not tendered in the Exchange Offer will bear interest at the same rate in effect at the time of original issuance of the Outstanding Notes and, after consummation of the exchange offer, will not be entitled to additional interest or further registration rights.

This Letter of Transmittal is to be completed by a holder of Outstanding Notes either if certificates are to be forwarded herewith or if a tender of certificates for Outstanding Notes, if available, is to be made by book-entry transfer to the account maintained by the Exchange Agent at the Depository Trust Company (the “Book-Entry Transfer Facility” or “DTC”) pursuant to the procedures set forth in “Terms of the Exchange Offer—Procedures for Tendering” section of the Prospectus and an Agent’s Message (as defined herein) is not delivered.

Holders of Outstanding Notes who wish to tender their Outstanding Notes and whose certificates are not immediately available, or who wish to tender their Outstanding Notes and are unable to deliver their certificates or confirmation of the book-entry tender of their Outstanding Notes into the Exchange Agent’s account at the Book-Entry Transfer Facility (a “Book-Entry Confirmation”) and all other documents required by this Letter of Transmittal to the Exchange Agent on or prior to the Expiration Date, must tender their Outstanding Notes according to the guaranteed delivery procedures set forth in “Terms of the Exchange Offer—Guaranteed Delivery Procedure” section of the Prospectus. See Instruction 1 below. Delivery of documents to the Book-Entry Transfer Facility does not constitute delivery to the Exchange Agent.

If delivery of the Outstanding Notes is to be made by book-entry transfer to the account maintained by the Exchange Agent at DTC, this Letter of Transmittal need not be manually executed; provided, however, that tenders of Outstanding Notes must be effected in accordance with the procedures mandated by DTC’s Automated Tender Offer Program (ATOP).

HOLDERS WHO WISH TO TENDER MORE THAN ONE SERIES OF OUTSTANDING NOTES USING THIS LETTER OF TRANSMITTAL SHOULD COMPLETE SEPARATE LETTERS OF TRANSMITTAL, FOR EACH OF THE OUTSTANDING SERIES A NOTES, OUTSTANDING SERIES B NOTES AND OUTSTANDING SERIES C NOTES, AS APPLICABLE

2

The undersigned has completed the appropriate boxes below and signed this Letter of Transmittal to indicate the action the undersigned desires to take with respect to the Exchange Offer.

PLEASE READ THE ENTIRE LETTER OF TRANSMITTAL, INCLUDING THE INSTRUCTIONS TO THIS LETTER, CAREFULLY BEFORE CHECKING ANY BOX BELOW

List below the Outstanding Notes to which this Letter of Transmittal relates. If the space provided below is inadequate, the certificate numbers and principal amount of Outstanding Notes should be listed on a separate signed schedule affixed hereto. Holders that wish to tender more than one series of Outstanding Notes using this Letter of Transmittal should complete separate Letters of Transmittal for each series.

DESCRIPTION OF OUTSTANDING NOTES TENDERED
Series of Outstanding Notes	Aggregate Principal Amount of Outstanding Notes
Name(s) and Address(es) of Registered Holder(s) (Please fill in, if blank, exactly as name(s) appear on Certificate(s)	Certificate Number(s)*	Aggregate Principal Amount Represented	Outstanding Notes Tendered
	Total Principal Amount of Outstanding Notes
*     DOES NOT need to be completed by holders tendering Outstanding Notes by book-entry transfer. **     Unless otherwise indicated, it will be assumed that all Outstanding Notes evidenced by each certificate delivered to the Exchange Agent are being tendered hereby. See Instruction 3 below.

THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED “DESCRIPTION OF OUTSTANDING NOTES TENDERED” ABOVE AND SIGNING THIS LETTER, WILL BE DEEMED TO HAVE TENDERED THE OUTSTANDING NOTES AS SET FORTH IN SUCH BOX ABOVE.

¨ CHECK HERE IF TENDERED OUTSTANDING NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE RELEVANT BOOK ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING:

Name of Tendering Institution:                                                                                                                                                       

Account Number:                                                                                                                                                                                 

Transaction Code Number:                                                                                                                                                                

By crediting Outstanding Notes to the Exchange Agent’s Account at the Book-Entry Transfer Facility in accordance with such Book-Entry Transfer Facility’s procedures for transfer with respect to the Exchange Offer the participant or account holder in such Book-Entry Transfer Facility’s system confirms on behalf of itself and the beneficial owners of such Outstanding Notes all provisions of this Letter of Transmittal applicable to it and such beneficial owners as if it had completed the information required herein and executed and transmitted this Letter of Transmittal to the Exchange Agent.

3

¨ CHECK HERE IF TENDERED NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY DELIVERED TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING:

Name of Registered Holder(s):                                                                                                                                                        

Window Ticket Number (if any):                                                                                                                                                   

Date of Execution of Notice of guaranteed delivery:                                                                                                              

Name of Eligible Institution (as defined herein) that guaranteed delivery:

IF DELIVERED BY BOOK-ENTRY TRANSFER COMPLETE THE FOLLOWING:

Account Number:                                                                                                                                                                                 

Transaction Code Number:                                                                                                                                                               

¨ CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO:

Name:                                                                                                                                                                                                       

Address:                                                                                                                                                                                                   

If the undersigned or any beneficial owner of the Outstanding Notes tendered hereby is not a broker-dealer, the undersigned and each such beneficial owner represents that it has no arrangement or understanding with any person to participate in a distribution (within the meaning of the Securities Act) of the Exchange Notes. If the undersigned or any such beneficial owner is a broker-dealer that will receive Exchange Notes in exchange for Outstanding Notes for its own account as a result of market-making or other trading activities, the undersigned and each such beneficial owner represents that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such Exchange Notes; however, by so representing and by delivering a prospectus, neither the undersigned nor any such beneficial owner will be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.

The undersigned and each beneficial owner of the Outstanding Notes tendered hereby also represents that it is not an “affiliate” as defined in Rule 405 of the Securities Act of either Telecom Italia Capital or Telecom Italia S.p.A. The undersigned and each such beneficial owner also represents that it is not engaged in, and does not intend to engage in, a distribution of Exchange Notes to be issued in the Exchange Offer, that it is acquiring the Exchange Notes in its ordinary course of business and that it is not acting on behalf of any person who could not truthfully make the foregoing representations.

A broker-dealer may not participate in the Exchange Offer with respect to Outstanding Notes acquired other than as a result of market-making or other trading activities. Any holder who has an arrangement or understanding with respect to the distribution of the Exchange Notes to be acquired pursuant to the Exchange Offer, or any broker-dealer who purchased Outstanding Notes from Telecom Italia Capital or Telecom Italia S.p.A., as the case may be, for resale pursuant to Rule 144A under the Securities Act or any other available exemption under the Securities Act, must comply with the registration and prospectus delivery requirements under the Securities Act.

4

PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY

Ladies and Gentlemen:

Upon the terms and subject to the conditions of the Exchange Offer, the undersigned hereby tenders to Telecom Italia Capital the aggregate principal amount of Outstanding Series A Notes, Outstanding Series B Notes or Outstanding Series C Notes indicated above. The undersigned is the registered owner of all the Outstanding Notes tendered hereby and the undersigned represents that it has received from each beneficial owner of the Outstanding Notes tendered hereby (“Beneficial Owners”) a duly completed and executed form of “Letter of Instruction to Registered Holder and/or Participant or Account Holder in the Depository Trust Company, Euroclear or Clearstream” accompanying this Letter of Transmittal, instructing the undersigned to take the action described in this Letter of Transmittal or notice from the Book-Entry Transfer Facility of receipt of instructions to tender in accordance with the procedures of such Book-Entry Transfer Facility.

Subject to, and effective upon, the acceptance for exchange of the Outstanding Notes tendered hereby, the undersigned hereby sells, assigns and transfers to, or upon the order of, Telecom Italia Capital all right, title and interest in and to such Outstanding Notes as are being tendered hereby, and irrevocably constitutes and appoints the Exchange Agent as its true and lawful agent and attorney-in-fact with respect to such tendered Outstanding Notes to cause the Outstanding Notes to be assigned, transferred and exchanged.

The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Outstanding Notes tendered hereby and to acquire Exchange Notes issuable upon the exchange of such tendered Outstanding Notes and that Telecom Italia Capital will acquire good and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claim when the same are accepted for exchange by Telecom Italia Capital. The undersigned hereby further represents that (i) neither the undersigned nor any Beneficial Owner is an “affiliate” of either Telecom Italia Capital or Telecom Italia S.p.A. as defined in Rule 405 of the Securities Act; (ii) neither the undersigned nor any Beneficial Owner is engaged in, or intends to engage in, or has any arrangement or understanding with any person to participate in, a distribution (within the meaning of the Securities Act) of the Exchange Notes; (iii) if the undersigned or any Beneficial Owner is a broker-dealer and holds Outstanding Notes acquired as a result of market-making or other trading activities (other than transfer restricted securities acquired directly from Telecom Italia Capital or Telecom Italia S.p.A. or an affiliate of Telecom Italia Capital or Telecom Italia S.p.A.), the undersigned or such Beneficial Owner, as the case may be, will deliver a prospectus in connection with the resale of any Exchange Notes issued in exchange for such Outstanding Notes; (iv) any Exchange Notes acquired pursuant to the Exchange Offer are being acquired by the undersigned and any Beneficial Owner in the ordinary course of business of the undersigned and any such Beneficial Owner; and (v) it is not acting on behalf of any person who could not truthfully make the foregoing representations. By representing that it will deliver a prospectus in the circumstances indicated in clause (iii) of the preceding sentence and by so delivering a prospectus, neither the undersigned nor any such Beneficial Owner will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act. The undersigned and each Beneficial Owner also warrants that acceptance of any tendered Outstanding Notes by Telecom Italia Capital and the issuance of Exchange Notes in exchange therefore shall constitute performance in full by Telecom Italia Capital and Telecom Italia S.p.A. of their respective obligations to provide registration rights under that certain registration rights agreement, dated as of October 22, 2003, among Telecom Italia Capital, Telecom Italia S.p.A and the initial purchasers named therein (the “Registration Rights Agreement”) and that Telecom Italia Capital and Telecom Italia S.p.A. shall have no further registration obligations thereunder. The undersigned and each Beneficial Owner will comply with its obligations under the Registration Rights Agreement. The undersigned and each Beneficial Owner has read and agrees to all terms of the Exchange Offer.

The undersigned and each Beneficial Owner also acknowledges that this Exchange Offer is being made in reliance on interpretations by the staff of the Securities and Exchange Commission (the “SEC”), as set forth in

5

no-action letters issued to third parties, that the Exchange Notes issued in exchange for the Outstanding Notes pursuant to the Exchange Offer may be offered for resale, resold and otherwise transferred by holders thereof (other than any such holder that is a broker-dealer or an “affiliate” of either Telecom Italia Capital or Telecom Italia S.p.A. as defined in Rule 405 under the Securities Act), without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that such Exchange Notes, as the case may be, are acquired in the ordinary course of business and such holder has no arrangement with any person to engage in the distribution of such Exchange Notes, as the case may be, and is not engaged in and does not intend to engage in, the distribution of such Exchange Notes. However, the SEC has not considered the Exchange Offer in the context of a no-action letter and there can be no assurance that the staff at the SEC would make a similar determination with respect to the Exchange Notes as it has in the no-action letters issued to third parties.

The undersigned and each Beneficial Owner also acknowledges that any holder or Beneficial Owner that is a broker-dealer or is using the Exchange Offer to participate in the distribution of the Exchange Notes to be acquired pursuant to the Exchange Offer, (i) could not rely on the applicable interpretations of the staff of the SEC and (ii) must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any secondary resale transaction.

The SEC has taken the position that broker-dealers may fulfill their prospectus delivery requirements with respect to the Exchange Notes (other than a resale of Exchange Notes received in exchange for an unsold allotment from the original sale of the Outstanding Notes) with the Prospectus. The Prospectus, as it may be amended or supplemented from time to time, may be used by certain broker-dealers (as specified in the Registration Rights Agreement) (“Participating Broker-Dealers”) for a period of time, starting at 5:00 p.m., New York City time, on                     , 2004, unless extended (such date, as extended, the “Expiration Date”) and ending on the close of business 180 days after the Expiration Date in connection with the sale or transfer of such Exchange Notes. Telecom Italia Capital has agreed that, for such period of time, it will make the Prospectus (as it may be amended or supplemented) available to a broker-dealer that elects to exchange Outstanding Notes, acquired for its own account as a result of market making or other trading activities, for Exchange Notes pursuant to the Exchange Offer for use in connection with any resale of such Exchange Notes.

By accepting the Exchange Offer, each broker-dealer that receives Exchange Notes pursuant to the Exchange Offer acknowledges and agrees to notify Telecom Italia Capital prior to using the Prospectus in connection with the sale or transfer of Exchange Notes and that, upon receipt of notice from Telecom Italia Capital of the happening or any event which makes any statement in the Prospectus untrue in any material respect or which requires the making of any changes in the Prospectus in order to make the statements therein (in light of the circumstances under which they were made) not misleading, such broker-dealer will suspend use of the Prospectus until (i) Telecom Italia Capital has amended or supplemented the Prospectus to correct such misstatement or omission, or (ii) such broker-dealer has been advised in writing by Telecom Italia Capital that use of the Prospectus may be resumed, and has received copies of any additional or supplemental filings that are incorporated by reference in the Prospectus. Except as described above, the Prospectus may not be used for or in connection with an offer to resell, a resale or any other retransfer of Exchange Notes. A broker-dealer that acquired Outstanding Notes in a transaction other than as part of its market-making activities or other trading activities will not be able to participate in the Exchange Offer.

The undersigned and each Beneficial Owner will, upon request, execute and deliver any additional documents deemed by Telecom Italia Capital to be necessary or desirable to complete the sale, assignment and transfer of the Outstanding Notes tendered hereby. All authority conferred or agreed to be conferred in this Letter of Transmittal and every obligation of the undersigned hereunder shall be binding upon the successors, assigns, heirs, executors, administrators, trustees in bankruptcy and legal representatives of the undersigned and each Beneficial Owner and shall not be affected by, and shall survive, the death or incapacity of the undersigned and each Beneficial Owner. This tender may be withdrawn only in accordance with the procedures set forth in “Terms of the Exchange Offer—Withdrawal of Tenders” section of the Prospectus.

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Unless otherwise indicated herein in the box entitled “Special Issuance Instructions” below, please deliver the Exchange Notes (and, if applicable, substitute certificates representing Outstanding Notes for any Outstanding Notes not exchanged) in the name of the undersigned or, in the case of a book-entry delivery of Outstanding Notes please credit the account indicated above maintained at the Book Entry Transfer Facility. Similarly, unless otherwise indicated under the box entitled “Special Delivery Instruction” below, please send the Exchange Notes (and, if applicable, substitute certificates representing Outstanding Notes for any Outstanding Notes not exchanged) to the undersigned at the address shown above in the box entitled “Description of Outstanding Notes Tendered.”

THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED “DESCRIPTION OF OUTSTANDING S NOTES” ABOVE AND SIGNING THIS LETTER OF TRANSMITTAL, WILL BE DEEMED TO HAVE TENDERED THE OUTSTANDING NOTES AS SET FORTH IN SUCH BOX ABOVE.

PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL

CAREFULLY BEFORE COMPLETING ANY BOX ABOVE.

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(TO BE COMPLETED BY ALL TENDERING HOLDERS)

If a holder is tendering any Outstanding Notes, this Letter of Transmittal must be signed by the registered holder(s) as the name(s) appear(s) on the certificate(s) for the Outstanding Notes or by any person(s) authorized to become registered holder(s) by endorsements and documents transmitted herewith. If signature is by a trustee, executor, administrator, guardian, officer or other person acting in a fiduciary or representative capacity, please set forth full title. See Instruction 4.

____________________________________________________________________________________________

(Signature(s) of Owner)

Area Code and Telephone Number:  _______________________________________________________________

Date:   _____________________________________________________________________________________

Name(s):   __________________________________________________________________________________

(Please Type or Print)

Capacity:   __________________________________________________________________________________

Address:  ___________________________________________________________________________________

                 ___________________________________________________________________________________

(Include Zip Code)

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SIGNATURE GUARANTEE

(IF REQUIRED BY INSTRUCTION 4)

Signature(s)                                                                                                                                                                                                

Guaranteed by an

Eligible Institution:                                                                                                                                                                                  

(Authorized Signature)

Title:                                                                                                                                                                                                              

Name and Firm:                                                                                                                                                                                        

Date:                                                                                                                                                                                                              

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SPECIAL ISSUANCE INSTRUCTIONS (See Instructions 4 & 5) To be completed ONLY if certificates for Outstanding Notes not exchanged and/or Exchange Notes are to be issued in the name of and sent to someone other than the person or persons whose signature(s) appear(s) on this Letter of Transmittal above, or if Outstanding Notes delivered by book-entry transfer which are not accepted for exchange are to be returned by credit to an account maintained at the relevant Book-Entry Transfer Facility other than an account indicated above. IssueExchange Notes to: Name(s):  (Please Type or Print) Address  (Include Zip Code) (Taxpayer Identification or Social Security Number) ¨        Credit unexchanged Outstanding Notes delivered by book-entry transfer to the Book-Entry Transfer Facility account set forth below (Book-Entry Transfer Facility Account Number, if applicable) SPECIAL DELIVERY INSTRUCTIONS (See Instructions 4 and 5) To be completed ONLY if certificates for Outstanding Notes not exchanged and/or Exchange Notes are to be sent to someone other than the person or persons whose signature(s) appear(s) on this Letter of Transmittal above to such person or persons at an address other than shown in the box entitled “Description of Outstanding Note Tendered” on this Letter of Transmittal above. Mail Exchange Notes to: Name(s):  (Please Type or Print) Address  (Include Zip Code) IMPORTANT: UNLESS GUARANTEED DELIVERY PROCEDURES ARE COMPLIED WITH, THIS LETTER OR A FACSIMILE HEREOF OR AN AGENT’S MESSAGE IN LIEU HEREOF (TOGETHER WITH THE CERTIFICATES FOR OUTSTANDING NOTES OR A BOOK-ENTRY CONFIRMATION AND ALL OTHER REQUIRED DOCUMENTS OR THE NOTICE OF GUARANTEED DELIVERY) MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR TO 12:00 MIDNIGHT, NEW YORK CITY TIME, ON THE EXPIRATION DATE.

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INSTRUCTIONS

(FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER)

Forming part of the terms and conditions of the offer to exchange all outstanding Series A 4% Guaranteed Senior Notes due 2008—(Common Codes: 017953281 and 017953354; CUSIP Nos.: 87927VAB4 and T92762AB8; ISIN Nos.: US87927VAB45 and UST92762AB80), all outstanding Series B 5.25% Guaranteed Senior Notes due 2013—(Common Codes: 017953150 and 017953168; CUSIP Nos.: 87927VAA6 and T92762AA0; ISIN Nos.: US87927VAA61 and UST92762AA08), and all outstanding Series C 6.375% Guaranteed Senior Notes due 2033—(Common Codes: 017953427 and 017953435; CUSIP Nos. 87927VAC2 and T92762AC6; ISIN Nos. US87927VAC28 and UST92762AC63) for a like aggregate principal amount of Series A 4% Guaranteed Senior Notes due 2008, Series B 5.25% Guaranteed Senior Notes due 2013 and Series C 6.375% Guaranteed Senior Notes due 2033 that, in each case, have been registered under the Securities Act.

1. Delivery of this Letter of Transmittal and Outstanding Notes; Guaranteed Delivery Procedures.

This Letter of Transmittal is to be completed by Outstanding Note holders either if certificates are to be forwarded herewith or if tenders are to be made pursuant to the procedures for delivery by book-entry transfer set forth in “Terms of the Exchange Offer—Procedures for Tendering” section of the Prospectus and an Agent’s Message is not delivered. Certificates for all physically tendered Outstanding Notes, or Book-Entry Confirmation, as the case may be, as well as a properly completed and duly executed Letter of Transmittal (or manually signed facsimile hereof) and any other documents required by this Letter of Transmittal, must be received by the Exchange Agent at the address set forth herein on or prior to the Expiration Date, or the tendering holder must comply with the guaranteed delivery procedures set forth below. Outstanding Notes tendered hereby must be in denominations of principal amount of $1,000 and any integral multiple thereof.

The term “Agent’s Message” means a message, transmitted by DTC (the “Book-Entry Transfer Facility”) to, and received by the Exchange Agent and forming a part of the Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has received an express acknowledgment from a participant or account holder, as the case may be, tendering the Outstanding Notes, which states that such participant or account holder, as applicable, has received this Letter of Transmittal and agrees to be bound by the terms of this Letter of Transmittal (or in the case of an Agent’s Message relating to a guaranteed delivery, that such participant or account holder, as the case may be, has received and agreed to be bound by the applicable notice of guaranteed delivery) and that Telecom Italia Capital or Telecom Italia S.p.A., as the case may be, may enforce such agreement against such participant or account holder as the case may be. Delivery of an Agent’s Message will also constitute an acknowledgement from the tendering DTC, participant that the representations contained in this Letter of Transmittal are true and correct.

Outstanding Note holders whose certificates for Outstanding Notes are not immediately available or who cannot deliver their certificates and all other required documents to the Exchange Agent on or prior to the Expiration Date, or who cannot complete the procedure for book-entry transfer on a timely basis, may tender their Outstanding Notes pursuant to the guaranteed delivery procedures set forth in “Terms of the Exchange Offer—Guaranteed Delivery Procedure” section of the Prospectus. Pursuant to such procedures, (i) such tender must be made through an Eligible Institution, (ii) before the Expiration Date, the Exchange Agent must receive from the Eligible Institution a properly completed and duly executed notice of guaranteed delivery, substantially in the form provided by Telecom Italia Capital and Telecom Italia S.p.A., by facsimile transmission, mail or hand delivery or a properly transmitted Agent’s Message in lieu of notice of guaranteed delivery: (a) stating the name and address of the holder of Outstanding Notes, and the principal amount of Outstanding Notes tendered, (b) stating that the tender is being made by that notice of guaranteed delivery, and (c) guaranteeing that, within three New York Stock Exchange trading days after the Expiration Date, the Eligible Institution will deposit with the Exchange Agent this Letter of Transmittal, together with a confirmation of a book-entry transfer and any other documents required by this Letter of Transmittal; and (iii) within three New York Stock Exchange trading days

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after the Expiration Date, the Exchange Agent must receive a properly executed letter of transmittal, or a confirmation of a book-entry transfer in respect of all such tendered Outstanding Notes in proper form for transfer and all other documents required by this Letter of Transmittal.

If delivery of the Outstanding Notes is to be made by book-entry transfer to the account maintained by the Exchange Agent at DTC, this Letter of Transmittal need not be manually executed; provided, however, that tenders of Outstanding Notes must be effected in accordance with the procedures mandated by DTC’s Automated Tender Offer Program (ATOP).

The method of delivery of this Letter of Transmittal, the Outstanding Notes and all other required documents is at the election and risk of the tendering holders, but the delivery will be deemed made only when actually received or confirmed by the Exchange Agent. If Outstanding Notes are sent by mail, it is suggested that the mailing be made sufficiently in advance of the Expiration Date to permit delivery to the Exchange Agent prior to 5;00 p.m., New York City time, on the Expiration Date. See the “Terms of the Exchange Offer” section of the Prospectus.

2. Beneficial Owner Instructions To Registered Holders.

Only a holder in whose name Outstanding Notes are registered (or the legal representative or attorney-in-fact of such registered holder) may execute and deliver this Letter of Transmittal. Any Beneficial Owner of Outstanding Notes who is not the registered holder must arrange promptly with the registered holder to execute and deliver this Letter of Transmittal on his or her behalf through the execution and delivery to the registered holder of the form accompanying this Letter of Transmittal.

3. Partial Tenders (Not Applicable to Holders of Outstanding Notes Who Tender by Book-Entry Transfer).

If less than all of the Outstanding Notes evidenced by a submitted certificate are to be tendered, the tendering holder(s) should fill in the aggregate principal amount of Outstanding Notes to be tendered in the box above entitled “Description of Outstanding Notes Tendered—Aggregate Principal Amount of Outstanding Notes Tendered.” A reissued certificate representing the balance of non-tendered Outstanding Notes will be sent to such tendering holder, unless otherwise provided in the appropriate box on this Letter of Transmittal, promptly after the Expiration Date. ALL OF THE OUTSTANDING NOTES DELIVERED TO THE EXCHANGE AGENT WILL BE DEEMED TO HAVE BEEN TENDERED UNLESS OTHERWISE INDICATED.

4. Signatures on this Letter of Transmittal, Bond Powers and Endorsements; Guarantee of Signatures.

If this Letter of Transmittal is signed by the registered holder of the Outstanding Notes tendered hereby, the signature must correspond exactly with the name as written on the face of the certificates without any change whatsoever.

If any tendered Outstanding Notes are owned of record by two or more joint owners, all of such owners must sign this Letter of Transmittal. If any tendered Outstanding Notes are registered in different names

on several certificates, it will be necessary to complete, sign and submit as many separate copies of this Letter of Transmittal as there are different registrations of certificates.

When this Letter of Transmittal is signed by the registered holder or holders of the Outstanding Notes specified herein and tendered hereby, no endorsements of certificates or separate bond powers are required. If, however, the Exchange Notes are to be issued, or any untendered Outstanding Notes are to be reissued, to a person other than the registered holder, then such person must, prior to completing and executing this Letter of Transmittal and delivering the Outstanding Notes, either make appropriate arrangements to register ownership of the Outstanding Notes in its name or obtain a properly completed bond power from the registered holder.

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If this Letter of Transmittal is signed by a person other than the registered holder or holders of any certificate(s) specified herein, such certificate(s) must be endorsed or accompanied by appropriate bond powers, in either case signed exactly as the name or names of the registered holder or holders appear(s) on the certificate(s) and signatures on such certificate(s) must be guaranteed by an Eligible Institution.

If this Letter of Transmittal or any certificates or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and unless waived by the Telecom Italia Capital evidence satisfactory to Telecom Italia Capital of their authority to so act must be submitted with this Letter of Transmittal.

Endorsements on certificates for Outstanding Notes or signatures on bond powers required by this Instruction 4 must be guaranteed by a firm which is a member of a registered national securities exchange or a member of the National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or correspondent in the United States or an “Eligible Institution” within the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended (each an “Eligible Institution”).

Signatures on this Letter of Transmittal need not be guaranteed by an Eligible Institution, provided the Outstanding Notes are tendered: (i) by a registered holder who has not requested the Exchange Notes or the Outstanding Notes not exchanged be issued or sent to someone other than such registered holder by completing the box entitled “Special Issuance Instructions” or “Special Delivery Instructions” on this Letter of Transmittal, or (ii) for the account of an Eligible Institution.

5. Special Issuance and Delivery Instructions.

Tendering holders of Outstanding Notes should indicate in the applicable box the name and address to which Exchange Notes issued pursuant to the Exchange Offer and/or substitute certificates evidencing Outstanding Notes not exchanged are to be issued or sent, if different from the name or address of the person signing this Letter of Transmittal. In the case of issuance in a different name, the employer identification or social security number of the person named must also be indicated. Holders tendering Outstanding Notes by book-entry transfer may request that the Outstanding Notes not exchanged be credited to such account maintained at the Book-Entry Transfer Facility as such Outstanding Note holder may designate hereon. If no such instructions are given, such Outstanding Notes not exchanged will be returned to the name or address of the person signing this Letter of Transmittal.

6. Transfer Taxes.

Telecom Italia Capital will pay all transfer taxes, if any, applicable to the transfer of Outstanding Notes to it or its order pursuant to the Exchange Offer. If, however, Exchange Notes and/or substitute Outstanding Notes not exchanged are to be delivered to, or are to be registered or issued in the name of, any person other than the registered holder of the Outstanding Notes tendered hereby, or if tendered Outstanding Notes are registered in the name of any person other than the person signing this Letter of Transmittal, or if a transfer tax is imposed for any reason other than the transfer of Outstanding Notes to Telecom Italia Capital or its order pursuant to the Exchange Offer, the amount of any such transfer taxes (whether imposed on the registered holder or any other persons) will be payable by the tendering holder. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted herewith, the amount of such transfer taxes will be billed directly to such tendering holder.

Except as provided in this Instruction 6, it will not be necessary for transfer tax stamps to be affixed to the Outstanding Notes specified in this Letter of Transmittal.

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7. Waiver of Conditions.

Telecom Italia Capital and Telecom Italia S.p.A. reserve the absolute right to waive satisfaction of any or all conditions enumerated in the Prospectus.

8. No Conditional Tenders.

No alternative, conditional, irregular or contingent tenders will be accepted. All tendering holders of Outstanding Notes, by execution of this Letter of Transmittal, shall waive any right to receive notice of the acceptance of their Outstanding Notes for exchange.

None of Telecom Italia Capital, Telecom Italia S.p.A., the Exchange Agent nor any other person is obligated to give notice of any defect or irregularity with respect to any tender of Outstanding Notes nor shall any of them incur any liability for failure to give any such notice.

9. Mutilated, Lost, Stolen or Destroyed Outstanding Notes.

Any holder whose Outstanding Notes have been mutilated, lost, stolen or destroyed should contact the Exchange Agent at the applicable address indicated above for further instructions.

10. Withdrawal Rights.

Tenders of Outstanding Notes may be withdrawn at any time prior to 5:00 p.m., New York City time, on the Expiration Date.

For a withdrawal of a tender of Outstanding Notes to be effective, a written or facsimile transmission notice of withdrawal must be received by the Exchange Agent at the applicable address set forth above prior to 5:00 p.m., New York City time, on the Expiration Date; or for DTC, Euroclear or Clearstream participants, each holder wishing to withdraw a tender must comply with their respective standard operating procedures for electronic tenders and the Exchange Agent must receive an electronic notice of withdrawal from DTC. Any such notice of withdrawal must (i) specify the name of the person who deposited the Outstanding Notes to be withdrawn, (ii) identify the Outstanding Notes to be withdrawn, including the principal amount of such Outstanding Notes, (iii) contain a statement that such holder is withdrawing its election to have such Outstanding Notes exchanged, (iv) be signed in the same manner as the original signature on the Letter of Transmittal by which such Outstanding Notes were tendered including any required signature guarantees or be accompanied by documents of transfer sufficient to have the trustee register the transfer of such Outstanding Notes to the name of the person withdrawing the tender, and (v) specify the name in which such Outstanding Notes are to be registered, if different from that of the person tendering such Outstanding Notes.

In the case of Outstanding Notes tendered by book-entry transfer, any notice of withdrawal must specify the name and number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn Outstanding Notes and otherwise comply with the procedures of such facility.

All questions as to the validity, form and eligibility (including time of receipt) of such withdrawal notices will be determined by Telecom Italia Capital in its sole discretion, whose determination shall be final and binding on all parties. Telecom Italia Capital will not deem any properly withdrawn Outstanding Notes to have been validly tendered for the purpose of the Exchange Offer, and will not issue Exchange Notes with respect to those Outstanding Notes, unless the tendering holder validly retenders the withdrawn Outstanding Notes.

If tendered Outstanding Notes are not exchanged for any reason, they will be returned to the tendering Holder without cost to such holder. In the case of Outstanding Notes tendered by book-entry transfer into the Exchange Agent’s account at the Book Entry Transfer Facility pursuant to the book-entry procedures described

14

in the “Terms of the Exchange Offer—Book-Entry Transfer” section of the Prospectus, the Outstanding Notes will promptly be credited to the account maintained with the Book Entry Transfer Facility. Properly withdrawn Outstanding Notes may be retendered by following one of the procedures described above at any time prior to 5:00 p.m., New York City time, on the Expiration Date.

11. Requests for Assistance or Additional Copies.

Questions relating to the procedure for tendering, as well as requests for additional copies of the Prospectus and this Letter of Transmittal, may be directed to the Exchange Agent, at the applicable address and telephone number indicated above.

12. Incorporation of Letter of Transmittal.

This Letter of Transmittal shall be deemed to be incorporated in and acknowledged and accepted by any tender through the procedures of the Book-Entry Transfer Facility by any participant on behalf of itself and the beneficial owners of any Outstanding Notes so tendered.

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EX-99.2

Exhibit 99.2

NOTICE OF GUARANTEED DELIVERY

OFFER TO EXCHANGE

SERIES A 4% GUARANTEED SENIOR NOTES DUE 2008,

SERIES B 5.25% GUARANTEED SENIOR NOTES DUE 2013, AND

SERIES C 6.375% GUARANTEED SENIOR NOTES DUE 2033

OF

TELECOM ITALIA CAPITAL

UNCONDITIONALLY GUARANTEED BY

TELECOM ITALIA S.p.A.

PURSUANT TO THE PROSPECTUS, DATED                      , 2004, OF TELCOM ITALIA CAPITAL AND TELECOM ITALIA S.p.A. (THE “PROSPECTUS”).

This form or one substantially equivalent hereto must be used to accept the Exchange Offer (as defined below) of Telecom Italia Capital, a societe anonyme organized under the laws of Luxembourg (“Telecom Italia Capital”), made pursuant to the Prospectus, if certificates for the outstanding Series A 4% Guaranteed Senior Notes due 2008—(Common Codes: 017953281 and 017953354; CUSIP Nos.: 87927VAB4 and T92762AB8; ISIN Nos.: US87927VAB45 and UST92762AB80) (the “Outstanding Series A Notes”), Series B 5.25% Guaranteed Senior Notes due 2013—(Common Codes: 017953150 and 017953168; CUSIP Nos.: 87927VAA6 and T92762AA0; ISIN Nos.: US87927VAA61 and UST92762AA08) (the “Outstanding Series B Notes”), and Series C 6.375% Guaranteed Senior Notes due 2033—(Common Codes: 017953427 and 017953435; CUSIP Nos. 87927VAC2 and T92762AC6; ISIN Nos. US87927VAC28 and UST92762AC63) (the “Outstanding Series C Notes” and together with the Outstanding Series A Notes and Outstanding Series C Notes, the “Outstanding Notes”) are not immediately available or if such certificates and all other required documents cannot be delivered on or prior to the Expiration Date or if the procedure for book-entry transfer cannot be completed on a timely basis or any other documents required by the Letter of Transmittal cannot be delivered to JPMorgan Chase Bank (the “Exchange Agent”) prior to 5:00 p.m., New York City time, on the Expiration Date of the Exchange Offer at the applicable address set forth below. Such form may be delivered or transmitted by facsimile transmission, mail or hand delivery to the Exchange Agent at the applicable address and facsimile number set forth below. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Prospectus.

THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON                     , 2004, UNLESS THE OFFER IS EXTENDED (THE “EXPIRATION DATE”). TENDERS MAY BE WITHDRAWN PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.

The Exchange Agent for the Exchange Offer is:

JPMORGAN CHASE BANK

By Registered or Certified Mail:	By Overnight Delivery or by Hand between 8:00 a.m. and 4:30 p.m.:
JPMorgan Chase Bank 4 New York Plaza, 15th Floor New York, New York 10004	JPMorgan Chase Bank 4 New York Plaza, 15th Floor New York, New York 10004	J.P. Morgan Bank Luxembourg S.A. 5 Rue Plaetis, Floor 1 L-2338 Luxembourg
Attention: Institutional Trust Services	Attention: Institutional Trust Services
To Confirm by Telephone: (212) 623-5159	To Confirm by Telephone: (212) 623-5159
Facsimile Transmissions: (212) 623-6207 or 6214	Facsimile Transmissions: (212) 623-6207

DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.

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This form is not to be used to guarantee signatures. If a signature on a Letter of Transmittal is required to be guaranteed by an “Eligible Institution” under the instructions thereto, such signature guarantee must appear in the applicable space provided in the signature box on the Letter of Transmittal.

Ladies and Gentlemen:

The undersigned hereby tenders to Telecom Italia Capital, upon the terms and conditions set forth in the Prospectus and the Letter of Transmittal, receipt of which are hereby acknowledged, and which together constitute the offer (the “Exchange Offer”) from Telecom Italia Capital to exchange its Outstanding Series A Notes, Outstanding Series B Notes and Outstanding Series C Notes for a like aggregate principal amount of Exchange Notes of the same denomination, the principal amount of Outstanding Series A Notes, Outstanding Series B Notes or Outstanding Series C Notes set forth below pursuant to the guaranteed delivery procedures described in the Prospectus and the Letter of Transmittal.

The undersigned understands and acknowledges that the Exchange Offer will expire at 5:00 p.m., New York City time, on                      , 2004, unless extended by Telecom Italia Capital or Telecom Italia S.p.A. With respect to the Exchange Offer, “Expiration Date” means 5:00 p.m., New York City time, on                      , 2004, or if the Exchange Offer is extended, the latest time and date to which the Exchange Offer is so extended by either Telecom Italia Capital or Telecom Italia S.p.A..

All authority herein conferred or agreed to be conferred by this Notice of Guaranteed Delivery shall survive the death or incapacity of the undersigned and every obligation of the undersigned under this Notice of Guaranteed Delivery shall be binding upon the heirs, personal representatives, executors, administrators, successors, assigns, trustees in bankruptcy and other legal representatives of the undersigned.

HOLDERS WHO WISH TO TENDER MORE THAN ONE SERIES OF NOTES USING THIS NOTICE OF GUARANTEED DELIVERY SHOULD COMPLETE SEPARATE NOTICES FOR EACH OF THE OUTSTANDING SERIES A NOTES, OUTSTANDING SERIES B NOTES AND OUTSTANDING SERIES C NOTES, AS APPLICABLE.

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SIGNATURES

Signature of Owner

Signature of Owner (if more than one)

Date:

This Notice of Guaranteed Delivery must be signed by the holder(s) exactly as their name(s) appear on certificates for the Outstanding Notes, as the case may be, or on a security position listing as the owner of the Outstanding Notes, as the case may be, or by person(s) authorized to become holder(s) by endorsements and documents transmitted with this Notice of Guaranteed Delivery. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer or other person acting in a fiduciary or representative capacity, such person must provide the following information. Holders that wish to tender more than one series of Outstanding Notes using this Notice of Guaranteed Delivery should complete separate Notices of Guaranteed Delivery for each series.

Name(s):
	(Please print)
Address:
	(Include Zip Code)
Area Code and Telephone No:

Capacity (full title), if signing in a representative capacity:                                                                                                 

Taxpayer Identification or Social Security No:                                                                                                                        

Principal amount of Outstanding Series A Notes Exchanged:                                                                                              

Principal amount of Outstanding Series B Notes Exchanged:                                                                                              

Principal amount of Outstanding Series C Notes Exchanged:                                                                                              

Certificate Nos. of Outstanding Series A Notes (if available):                                                                                             

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Certificate Nos. of Outstanding Series B Notes (if available): 

Certificate Nos. of Outstanding Series C Notes (if available): 

IF OUTSTANDING NOTES WILL BE DELIVERED BY BOOK-ENTRY TRANSFER, PROVIDE THE DEPOSITORY TRUST COMPANY (“DTC” OR THE “BOOK-ENTRY TRANSFER FACILITY”) ACCOUNT NO:

Account No. for Outstanding Series A Notes (if applicable):

Account No. for Outstanding Series B Notes (if applicable):

Account No. for Outstanding Series C Notes (if applicable):

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GUARANTEE OF DELIVERY

(Not to be used for signature guarantee)

The undersigned, a member of a registered national securities exchange or a member of the National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or correspondent in the United States or an “Eligible Institution” within the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended, hereby guarantees that the certificates representing the principal amount of Outstanding Notes tendered hereby in proper form for transfer, or timely confirmation of the book-entry transfer of such Outstanding Notes into the Exchange Agent’s account at the Book-Entry Transfer Facility pursuant to the procedures set forth in “Terms of the Exchange Offer—Guaranteed Delivery Procedure” section of the Prospectus, together with a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof) with any required signature guarantee and any other documents required by such letter of transmittal, will be received by the Exchange Agent at the applicable address set forth above, no later than 5:00 p.m., New York City time, on the fifth business day following the Expiration Date.

Name of Firm:                                                                                                                                                                                       

Address:                                                                                                                                                                                                  

(Include Zip code)

Area Code and Telephone No:                                                                                                                                                        

(Authorized Signature)

Name:                                                                                                                                                                                                       

(Please Print)

Title:                                                                                                                                                                                                         

Date:                                                                                                                                                                                                         

NOTE: DO NOT SEND OUTSTANDING NOTE CERTIFICATES WITH THIS FORM. CERTIFICATES FOR OUTSTANDING NOTES SHOULD BE SENT WITH THE LETTER OF TRANSMITTAL.

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INSTRUCTIONS FOR NOTICE OF GUARANTEED DELIVERY

1. DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY.

A properly completed and duly executed copy of this Notice of Guaranteed Delivery and any other documents required by this Notice of Guaranteed Delivery must be received by the Exchange Agent at the applicable address set forth above prior to 5:00 p.m., New York City time, on the Expiration Date. The method of delivery of this Notice of Guaranteed Delivery and any other required documents to the Exchange Agent is at the election and risk of the holder of the Outstanding Notes and the delivery will be deemed made only when actually received by the Exchange Agent. If delivery is by mail, registered or certified mail properly insured, with return receipt requested, is recommended. In all cases, sufficient time should be allowed to assure timely delivery. For a description of the guaranteed delivery procedure, see Instruction 1 of the Letter of Transmittal.

2. SIGNATURES OF THIS NOTICE OF GUARANTEED DELIVERY.

If this Notice of Guaranteed Delivery is signed by the registered holder(s) of the Outstanding Notes referred to herein, the signature must correspond with the name(s) written on the face of the Outstanding Notes, as the case may be, without alteration, enlargement, or any change whatsoever. If this Notice of Guaranteed Delivery is signed by a participant of a Book-Entry Transfer Facility whose name appears on a security position listing as the owner of Outstanding Notes, the signature must correspond with the name shown on the security position listing as the owner of the Outstanding Notes, as the case may be.

If this Notice of Guaranteed Delivery is signed by a person other than the registered holder(s) of any Outstanding Notes listed or a participant of the Book-Entry Transfer Facility whose name appears on a security position listing as the owner of Outstanding Notes, this Notice of Guaranteed Delivery must be accompanied by appropriate bond powers, signed as the name of the registered holder(s) appears on the Outstanding Notes or signed as the name of the participant shown on the Book-Entry Transfer Facility’s security position listing.

If this Notice of Guaranteed Delivery is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation, or other person acting in a fiduciary or representative capacity, such person should so indicate when signing and unless waived by Telecom Italia Capital evidence satisfactory to Telecom Italia Capital of its authority to so act must be submitted with the Letter of Transmittal.

3. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES.

Questions and requests for assistance and requests for additional copies of the Prospectus may be directed to the Exchange Agent at the applicable address set forth above. Holders of Outstanding Notes may also contact their broker, dealer, commercial bank, trust company, or other nominee for assistance concerning the Exchange Offer.

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EX-99.3

EXHIBIT 99.3

LETTER OF INSTRUCTION

TO REGISTERED HOLDER AND/OR PARTICIPANT OR

ACCOUNT HOLDER IN THE DEPOSITORY TRUST COMPANY,

EUROCLEAR OR CLEARSTREAM

OFFER TO EXCHANGE

SERIES A 4% GUARANTEED SENIOR NOTES DUE 2008

SERIES B 5.25% GUARANTEED SENIOR NOTES DUE 2013, AND

SERIES C 6.375% GUARANTEED SENIOR NOTES DUE 2033

OF

TELECOM ITALIA CAPITAL

UNCONDITIONALLY GUARANTEED BY

TELECOM ITALIA S.p.A.

PURSUANT TO THE PROSPECTUS, DATED                      , 2004, OF TELECOM ITALIA CAPITAL AND TELECOM ITALIA S.p.A. (THE “PROSPECTUS”).

THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON                      , 2004, UNLESS THE OFFER IS EXTENDED (THE “EXPIRATION DATE”). TENDERS MAY BE WITHDRAWN PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.

To Registered Holder and/or Participant or Account Holder in the Depository Trust Company, Euroclear or Clearstream:

The undersigned hereby acknowledges receipt of the Prospectus and the accompanying letter of transmittal (the “Letter of Transmittal”) which together constitute the offer (the “Exchange Offer”) from Telecom Italia Capital, a societe anonyme organized under the laws of Luxembourg (“Telecom Italia Capital”), to exchange all of its outstanding Series A 4% Guaranteed Senior Notes due 2008—(Common Codes: 017953281 and 017953354; CUSIP Nos.: 87927VAB4 and T92762AB8; ISIN Nos.: US87927VAB45 and UST92762AB80) (the “Outstanding Series A Notes”), all of its outstanding Series B 5.25% Guaranteed Senior Notes due 2013—(Common Codes: 017953150 and 017953168; CUSIP Nos.: 87927VAA6 and T92762AA0; ISIN Nos.: US87927VAA61 and UST92762AA08) (the “Outstanding Series B Notes”), and all of its outstanding Series C 6.375% Guaranteed Senior Notes due 2033—(Common Codes: 017953427 and 017953435; CUSIP Nos. 87927VAC2 and T92762AC6; ISIN Nos. US87927VAC28 and UST92762AC63) (the “Outstanding Series C Notes” and together with the Outstanding Series A Notes and Outstanding Series C Notes, the “Outstanding Notes”) for a like aggregate principal amount of Series A 4% Guaranteed Senior Notes due 2008, Series B 5.25% Guaranteed Senior Notes due 2013 and Series C 6.375% Guaranteed Senior Notes due 2033 that, in each case, have been registered under the Securities Act (“Exchange Notes”).

Capitalized terms used herein but not defined herein have the meanings ascribed to them in the Prospectus.

This will instruct you, the registered holder and/or participant or account holder in the Depository Trust Company, Euroclear or Clearstream, as to the action to be taken by you relating to the Exchange Offer with respect to the Outstanding Series A Notes, Outstanding Series B Notes or Outstanding Series C Notes held by you for the account of the undersigned.

The aggregate face amount of the Outstanding Series A Notes, Outstanding Series B Notes or Outstanding Series C Notes held by you for the account of the undersigned is (FILL IN AMOUNT):

US Dollar Amount of the Outstanding Series A Notes

US Dollar Amount of the Outstanding Series B Notes:

US Dollar Amount of the Outstanding Series C Notes:

With respect to the Exchange Offer, the undersigned hereby instructs you (CHECK APPROPRIATE BOX):

¨ to TENDER the following Outstanding Series A Notes held by you for the account of the undersigned (INSERT PRINCIPAL AMOUNT OF OUTSTANDING SERIES A NOTES, TO BE TENDERED, IF ANY):

¨ NOT to TENDER any Outstanding Series A Notes held by you for the account of the undersigned

¨ to TENDER the following Outstanding Series B Notes held by you for the account of the undersigned (INSERT PRINCIPAL AMOUNT OF OUTSTANDING SERIES B NOTES TO BE TENDERED, IF ANY):

¨ NOT to TENDER any Outstanding Series B Notes held by you for the account of the undersigned

¨ to TENDER the following Outstanding Series C Notes held by you for the account of the undersigned (INSERT PRINCIPAL AMOUNT OF OUTSTANDING SERIES C NOTES TO BE TENDERED, IF ANY):

$                                                                                                                                                                                                                  

¨ NOT to TENDER any Outstanding Series C Notes held by you for the account of the undersigned

If the undersigned instructs you to tender Outstanding Series A Notes, Outstanding Series B Notes or Outstanding Series C Notes hereby for the account of the undersigned, it is understood that you are authorized (a) to make, on behalf of the undersigned (and the undersigned, by its signature below, hereby makes to you), the representations and warranties contained in the Letter of Transmittal that are to be made with respect to the undersigned as a beneficial owner, including but not limited to the representations that (i) the undersigned is not an “affiliate” of either Telecom Italia Capital or Telecom Italia S.p.A. as defined in Rule 405 of the Securities Act; (ii) the undersigned is not engaged in, nor does it intend to engage in, nor does it have any arrangement or understanding with any person to participate in, a distribution (within the meaning of the Securities Act) of the Exchange Notes; (iii) if the undersigned is a broker-dealer and holds Outstanding Notes acquired as a result of market-making or other trading activities (other than transfer restricted securities acquired directly from Telecom Italia Capital or Telecom Italia S.p.A. or any affiliate of Telecom Italia Capital or Telecom Italia S.p.A.), that the undersigned will deliver a prospectus in connection with the resale of any Exchange Notes issued in exchange for such Outstanding Notes; (iv) any Exchange Notes acquired pursuant to the Exchange Offer are being acquired by the undersigned in the ordinary course of business of the undersigned; and (v) it is not acting on behalf of any person who could not truthfully make the foregoing representations, (b) to make such acknowledgments and agreements, on behalf of the undersigned, as are set forth in the Letter of Transmittal, and (c) to take all such other actions as may be necessary under the Prospectus or the Letter of Transmittal to effect the valid tender of the Outstanding Notes that the undersigned has indicated above. By representing that it will deliver a prospectus in the circumstances indicated in clause (a)(iii) of the preceding sentence and by so delivering a prospectus, the undersigned will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act. The undersigned also warrants that acceptance of any tendered Outstanding Notes by Telecom Italia Capital and the issuance of Exchange Notes in exchange therefore shall constitute performance in full by Telecom Italia Capital and Telecom Italia S.p.A of their obligations to provide registration rights under that certain Registration Rights Agreement, dated as of October 22, 2003, among Telecom Italia Capital, Telecom Italia S.p.A and the initial purchasers named therein, and that Telecom Italia Capital and Telecom Italia S.p.A shall have no further registration obligations thereunder. The undersigned will comply with its obligations under the such Registration Rights Agreement. The undersigned has read and agrees to all terms of the Exchange Offer.

¨ Check this box if the beneficial owner of the Outstanding Notes is a broker-dealer and such broker-dealer acquired the beneficial interests in the Outstanding Notes for its own account as a result of market-making or other trading activities. IF THIS BOX IS CHECKED, PLEASE SEND A COPY OF THESE INSTRUCTIONS TO THE FOLLOWING ADDRESS:

Delivery to the Exchange Agent JPMorgan Chase Bank:

By Registered or Certified Mail:	By Overnight Delivery or by Hand between 8:00 a.m. and 4:30 p.m.:
JPMorgan Chase Bank 4 New York Plaza, 15th Floor New York, New York 10004	JPMorgan Chase Bank 4 New York Plaza, 15th Floor New York, New York 10004	J.P. Morgan Bank Luxembourg S.A. 5 Rue Plaetis, Floor 1 L-2338 Luxembourg
Attention: Institutional Trust Services	Attention: Institutional Trust Services
To Confirm by Telephone: (212) 623-5159	To Confirm by Telephone: (212) 623-5159
Facsimile Transmissions: (212) 623-6207 or 6214	Facsimile Transmissions: (212) 623-6207

SIGN HERE

(Name of beneficial owner(s))

(Signature(s))

(Name(s)—please print)

(Address)

(Telephone number, including Area Code)

(Taxpayer Identification or Social Security Number)

(Date)

EX-99.4

EXHIBIT 99.4

LETTER TO CLIENTS

OFFER TO EXCHANGE

SERIES A 4% GUARANTEED SENIOR NOTES DUE 2008,

SERIES B 5.25% GUARANTEED SENIOR NOTES DUE 2013, AND

SERIES C 6.375% GUARANTEED SENIOR NOTES DUE 2033

OF

TELECOM ITALIA CAPITAL

UNCONDITIONALLY GUARANTEED BY

TELECOM ITALIA S.p.A.

PURSUANT TO THE PROSPECTUS, DATED             , 2004, OF TELECOM ITALIA CAPITAL AND TELECOM ITALIA S.p.A. (THE “PROSPECTUS”).

To Our Clients:

We are enclosing herewith the Prospectus, dated             , 2004 (the “Prospectus”), of Telecom Italia Capital, a societe anonyme organized under the laws of Luxembourg (“TIC”), and Telecom Italia S.p.A., a joint stock company organized under the laws of the Republic of Italy (“TI”), and a related Letter of Transmittal (which together constitute the “Exchange Offer”) relating to the offer by TIC to exchange all of its outstanding Series A 4% Guaranteed Senior Notes due 2008—(Common Codes: 017953281 and 017953354; CUSIP Nos.: 87927VAB4 and T92762AB8; ISIN Nos.: US87927VAB45 and UST92762AB80) (the “Outstanding Series A Notes”), all of its outstanding Series B 5.25% Guaranteed Senior Notes due 2013—(Common Codes: 017953150 and 017953168; CUSIP Nos.: 87927VAA6 and T92762AA0; ISIN Nos.: US87927VAA61 and UST92762AA08) (the “Outstanding Series B Notes”), and all of its outstanding Series C 6.375% Guaranteed Senior Notes due 2033—(Common Codes: 017953427 and 017953435; CUSIP Nos. 87927VAC2 and T92762AC6; ISIN Nos. US87927VAC28 and UST92762AC63) (the “Outstanding Series C Notes” and together with the Outstanding Series A Notes and Outstanding Series B Notes, the “Outstanding Notes”) for a like aggregate principal amount of Series A 4% Guaranteed Senior Notes due 2008, Series B 5.25% Guaranteed Senior Notes due 2013 and Series C 6.375% Guaranteed Senior Notes due 2033 that, in each case, have been registered under the Securities Act (“Exchange Notes”), upon the terms and subject to the conditions set forth in the Exchange Offer.

Please note that the Exchange Offer will expire at 5:00 p.m., New York City time, on             , 2004 unless it is extended.

The Exchange Offer is not conditioned upon any minimum number of Outstanding Notes being tendered.

We are the holder of record and/or participant in the book-entry transfer facility of Outstanding Notes held by us for your account. A tender of such Outstanding Notes can be made only by us as such record holder or participant and pursuant to your instructions. The Letter of Transmittal is furnished to you for your information only and cannot be used by you to tender Outstanding Notes held by us for your account.

We request instructions as to whether you wish to tender any or all of the Outstanding Notes held by us for your account pursuant to the terms and conditions of the Exchange Offer. To do so, please complete and return to us the Letter of Instruction to Registered Holder and/or Participant or Account Holder in the Depository Trust Company, Euroclear or Clearstream enclosed herewith. We also request that you confirm that we may on your behalf make the representations contained in the Letter of Transmittal.

Pursuant to the Letter of Transmittal, each holder of Outstanding Notes will represent to the TI and TIC that (i) any Exchange Notes received by such holder pursuant to the Exchange Offer are being acquired in the

ordinary course of its business, (ii) such holder has no arrangements or understanding with any person to participate in the distribution of the Exchange Notes within the meaning of the Securities Act, (iii) such holder is not an “affiliate,” as defined in Rule 405 of the Securities Act, of TIC or TI, or if it is an affiliate, in connection with any resale of the Exchange Notes such holder would comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable, (iv) if such holder is not a broker-dealer, it is not engaged in, and does not intend to engage in, the distribution of the Exchange Notes and (v) if such holder is a broker-dealer, it will receive Exchange Notes for its own account in exchange for Outstanding Notes that were acquired as a result of market-making activities or other trading activities and that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such Exchange Notes. By acknowledging that it will deliver and by delivering a prospectus meeting the requirements of the Securities Act in connection with any resale of such Exchange Notes, the holder will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.

Very truly yours,

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