Ladies and gentlemen, good morning and welcome to Telecom Italia Q1 2023 results conference call. Paolo Lesbo, Head of Investor Relations, will introduce the event. Ladies and gentlemen, good morning and welcome to TIM Q1 2023 results presentation. I am here with our CEO, Pietro Labriola, the CFO, Adrián Calaza, and the rest of the management team. Pietro will provide an overview of Q1 highlights and an update of the delayering plan, while Adrián will illustrate the financial results. A Q&A session will follow. Pointing out to our safe harbor disclaimer on page two, let me hand it over to Pietro. Pietro, the floor is yours. Thank you, Paolo. Good morning, everyone. Back in February, we published 2022 results showing positive operational trends. I'm pleased to say that Q1 confirms the same direction of travel of last year, with a sequential improvement both in Brazil and in Italy. We expect this improvement to further accelerate in coming quarters, thanks to positive drivers and actions already in place that will progressively kick in throughout the year. Today, we are very confident to achieve full year guidance. Let's go to slide four with the main highlights of the quarter. In this slide, you have a map of the topics I want to cover today, including a focus on the delayering plan and NetCo disposal process. We will address each topic in the following slides. Let's start. Slide five. The improvement of financial trends versus this quarter last year is very clear, both at domestic level and in Brazil, where we will lap all integration in the second half and where synergies are better than we initially planned. At group level, all metrics are now in positive territory. Quarter-on-quarter trends are also improving. The stabilization of domestic business is ongoing. I point out that this is the first full quarter where we have stopped to charge activation fee for most of wireline offers, in line with the new requirement of the communication code. I remind you that this is an accounting effect with non-cash impact, and it is transparent for the client. Therefore, in Q1, we see a 1.7 percentage points headwind affecting the year-over-year comparison of domestic service revenue. We expect a similar impact in Q2, a slight decline in Q3, while Q4 will be substantially clean of this effect. All in all, we are in line with our internal projection and fully on track to reach our full year guidance with broadly stable domestic service revenue and the potential for domestic EBITDA to slightly grow. Slide six. Let me now give you a high-level update on each of the four entities. For TIM Consumer, the volume to value strategy is ongoing with the progressive repositioning as a premium brand. In Q1, TIM has been the best brand in terms of top of mind and awareness. Last year, we were the only established player to increase FTTH market share, while all main competitors posted a decline. In Q1, we reached approximately 1 million active FTTH customer, further enhancing our leadership. Repricing initiatives are ongoing with a positive impact, not yet at full speed in Q1. Despite these price ups, this quarter we have strongly improved the year-over-year net test trend, both in fixed and mobile, where we are once again the best infrastructure MNO for mobile number portability. Small medium business is also improving this quarter with better KPIs and ARPU of new customer that for the first time is higher. These achievements led to an improving trend in total and service revenue, both year-on-year and quarter-on-quarter. We're implementing several cost transformation initiatives as well. In particular, we are significantly reducing the frequency of call, leading to a positive impact on customer care costs and higher efficiencies on sales channel mix. Let's move to TIM Enterprise. TIM Enterprise posted another quarter of growth. I point out that commercial margin increased year-over-year more than service revenue, as we have started to shift the revenue mix towards service generating higher margin. Cash generation also improved as investment for the data center transformation have already reached their peak. We also completed a small acquisition in the cybersecurity space, a further step in the consolidation of TIM Enterprise as Italy's largest ICT platform. Slide seven, NetCo total revenues increased 3.4% year-over-year, also thanks to the commercial deal with Open Fiber in white areas, which we started to book in Q4 2022. There is an improving trend also in service revenue, supported by higher fiber activation, representing 70% of total activation in Q1. Overall, we are pleased to see our wholesale revenue share being quite resilient despite Open Fiber's deployment and aggressive commercial promos. The revenue trend will further improve in coming quarters, thanks to 2023 regulated prices, which have been finally approved and that will start to book from Q2. With a positive impact of about EUR 30 million versus Q1, considering also the retroactive effect. FTTH rollout is on track at 53% coverage of technical units. We will deep dive on this in slide nine. Finally, TIM Brasil is over-delivering on growth targets versus our plan at the time of acquisition, thanks to higher than expected synergies. All integration is completed, As you know, from April, we will lap in terms of financial integration benefits. We are very pleased about the route so far because as I said, synergies are running higher than expected, especially in terms of cash flow generation. Let's now move to slide eight. Let's now focus on the price environment where we have some positive evolutions. Wholesale 2023 regulated assets prices have been finally green-lighted by the EU Commission. Considering that last year prices remain unchanged versus 2021, the new prices can be applied retroactively from January 2023, with a positive impact on service revenue from Q2. These new prices are not fully reflected in our budget. We see also a slight upside this year. The gap versus other European markets on copper has been reduced but not completely closed. There is more to do on this front. On retail, we have almost completed the first wave of 2023 repricing on more than 4 million fixed line and more than 2 million mobile lines. We are seeing a much lower effect on churn than expected. We will do more in coming quarters. We expect low churn and an overall positive impact of about EUR 20 million in Q2 versus Q1. We are pleased to see our competitors to follow the same approach with one operator last week announcing price up on its customer base also due to the old sale prices increase. The same time, Agcom published the guidelines for CPI price adjustment mechanism from 2024. In particular, on new contracts, we can apply CPI without explicit customer's consent, provided there is no markup. On existing contracts, explicit consent is required. Hence, we will likely adopt a more formal approach. The consultation is still ongoing, let's see what the outcome will be. Slide nine, we have good news also in the NRRP. We have obtained the possibility to get 20% cash grants in advance. It means that we will receive EUR 500 million also this year with a mechanism of proportional reduction in following years, which is still to be finalized. On our preliminary computation, this may translate in a potential upside on our 2023, 2025 Equity Free Cash Flow after lease guidance of approximately EUR 0.2 billion-EUR 0.3 billion. We'll have more clarity once the mechanism is set. The anticipation of the cash grants will secure the funds already at beginning of the rollout of the NRRP project, thus safeguarding our cash flow dynamic. In terms of execution, we are working hard on the Italia a 1 Giga tender, connecting building fast wherever possible. The walk-in checks we are conducting street by street show a high percentage of not applicable street number, in some areas higher than 50%, calling for a remodulation of the milestone targets. 5G backhauling is progressing well ahead of schedule and 5G coverage is on track with no specific issue. Slide 10. On the transformation plan, last year we did slightly better than EUR 0.3 billion OpEx saving target. This year we are raising the bar with incremental EUR 0.8 billion of OpEx plus cash costs and CapEx savings, reaching EUR 1.1 billion saving versus the initial plan. In Q1, we are well on track with about 26% of incremental full year target already achieved. I remind you that back in March, we have signed the agreement with the trade unions for 2,000 voluntary exits in 2023 that will help achieving our labor cost targets reduction. Further saving will come from a strong acceleration of the decommissioning plan, which envisages the shutdown of public telephone booths and the phase out of a significant number of central offices. The best is yet to come on this project. Stay tuned. Slide 11. While we are fully focused to improve the group's operational performance, NetCo's process is ongoing. After having analyzed the two non-binding offers in depth, the board of directors last week deemed them not yet adequate even if they were improved. Considering the readiness expressed by at least one of the bidders to improve the offer, the board decided to explore the readiness with the perspective of obtaining a final offer by the 9th of June. We believe it's worth taking few more weeks to explore this final opportunity as NetCo disposal remain the main option to structurally deleverage TIM. Having in mind that the price must be fair and at market value, the two main elements are time and execution. We do not want to have uncertainty and will be key to receive an offer without condition, in particular on antitrust. I want to stress another important point. ServCo is a portfolio of three distinct businesses well-balanced in terms of cash generation, market maturity, and risk appetite. TIM Brasil is leader in a well-structured and rational market, and is exploiting the synergies of Oi acquisition beyond our initial expectations. It will generate approximately 42% of 2023-2025 ServCo's EBITDA After Lease on average. We can consider TIM Brasil a cash cow. TIM Enterprise is an asset with a unique positioning. If we do well on execution, the growth opportunity ahead of us is huge. It will generate approximately 24% of ServCo EBITDA After Lease. It is for sure a star. TIM Consumer is active in a market where every player is struggling, not only in Italy, but in Europe. The operational turnaround is on track. It will take time, but the direction of travel is clear. For us, it's a must to be ready for the market opportunities that will come from in market consolidation and from the new business models that will emerge. In any case, TIM Consumer will account for just 33% of ServCo's EBITDA after lease. The right way to look at ServCo is therefore to consider the combination of these three entities. If we take this approach, we see that ServCo is already sustainable, with a combined pro forma EBITDA after lease expected to be significantly above EUR 3 billion, and with positive operating free cash flow above EUR 1 billion in 2023. Furthermore, cash generation is set on a strong growth trajectory on the back of EBITDA increase and CapEx reduction. Let me now hand it over to Adrián for the Q1 financial results. Thank you, Pietro, and good morning, everyone. Let's start with a summary of group financials. Total revenues and EBITDA improved sequentially versus Q4, with service revenues suffering Q1 in domestic, affected by the drag from activations fees. This drag was factored in our budget. Looking at the trends, group service revenues were positive at +2.8% year-over-year in Q1 from +3.6% in Q4. The trend is in line with our full year guidance, and we expect an acceleration in the second part of the year. Group EBITDA improved +3.8% year-over-year from a +2.7% in Q4. Also here, we are in line with our guidance at group level, and we expect the domestic business to improve in the second part of the year to positive numbers. CapEx slowed down a touch in Q1 compared to last year, mainly due to the domestic business. As expected, equity free cash flow was negative in the quarter, but slightly better than our own budget. Q1 was affected by higher payments impacting working capital and lower help from FX effect. Implicitly, Net Debt after lease increased in Q1 landing at EUR 20.5 billion. Let's now have a look at fixed and mobile trends. Slide 14. Domestic fixed service revenues were down 1.8% year-over-year in Q1, a bit below Q4, which was a seasonally strong quarter for revenues coming from enterprise on ICT. The main explanation is retail, with revenues affected by approximately EUR 50 million activation fees drag, which is not a cash item, as Pietro mentioned. Net of this effect, fixed service revenues would be flat. I remind you that this drag was already anticipated last year and it will continue in Q2. It would also affect Q3, but with lower intensity. Positive news came from national wholesale that grew slightly despite competition. International wholesale was slightly down due to less voice revenues at low margin. In terms of market, following the growth in 2020 and 2021 that was fueled by vouchers and COVID, 2022 stabilized. Q1 is continued with the same trajectory. For these reasons, retail KPIs are still negative, even if improving this quarter compared to Q4. We reported a significant churn containment, now steadily around 1% per month, combined with a historic low level of delinquency. Price up have been done in previous quarters on our existing customer base with churn impact below expectation. As Pietro explained, we expect to do more in the coming quarters. Equipment was up year and year, reflecting a positive EUR 50 million recognition in Q1 of the wholesale agreement with Open Fiber in wide areas. As you know, we already booked a similar amount in Q4 of last year. We'll finish to recognize the rest in Q2 for a total over EUR 120 million. Moving to mobile in slide 15. In terms of market dynamics, in Q1 we were once again the best infrastructure MNO in terms of mobile number portability. The market continues to go down and is increasingly rational. For the first time in several quarters, the total volume of MNP has been lower than 2 million. Even if mobile service revenues were down 3.8% year-on- year in Q1, KPIs are starting to show signs of improvement. Churn was stable year-on-year, and the reduction of human lines was 45% lower compared to Q1 2022. Notwithstanding the selective price increases done in recent months that supported consumer ARPU dynamic, which was up year-on-year and stable versus Q4. This evolution, together with the efforts already put in place on the customer value management front, give us a more optimistic view on the retail side of the mobile business. At the same time, wholesale trend continued to be positive, with higher revenues coming from roamers and MVNOs. Next slide. OpEx were just a touch higher year-on-year in Q1 on a P&L view and overall flat at plus 0.7% on a cash view. The slight increase was entirely due to volume-driven costs with all other actionable cost items down year-on-year. In particular, industrial costs were down 1% thanks to a reduction in network and energy, even absorbing the inflation effect on the specific contract with INWIT. About energy, the hedging policy applied together with the tax credits defined by the decrease issued by the government allowed us to maintain under control this energy line, and as a matter of fact, the first quarter sits well below our budget. Additionally, G&A were significantly down on lower IT and consultancies and professional service spendings. More importantly, labor costs were down 2% due to lower FTEs and the solidarity agreement. On this cost line, we expect, especially in the second half, a better trend also due to better comps. Next slide. TIM Brasil reported another quarter largely beating the guidance on every line. You can find many details in the company's disclosure done few days ago. Nonetheless, it is important to highlight the main achievements of this quarter. All integration is 100% delivered with network integration and client migration completed during March and April this year. Sites decommissioning is fully on track with 1,500 sites already dismantled with positive financial impact this year. The top line expanded 19% year-on-year with EBITDA net of non-recurring items growing at 22% following the consolidation of Oi numbers. EBITDA minus CapEx margin stood at a robust level of around 23% on revenues, the highest level among its LatAm peers. As you can see from the numbers, and even considering the discontinuity of, in the comparison versus the first quarter of last year, TIM Brasil is fully benefiting from Oi mobile integration and posted a strong organic performance focused on customers via the strategy that continues to pay off. Slide 18. CapEx were down year-over-year mainly for a different phasing in the domestic business within the year compared to 2022. We continued to invest heavily in ultra broadband deployment with a specific focus on NRRP initiatives and on the 5G deployment and backhauling in mobile. CapEx at TIM Enterprise were a touch lower thanks to the peak already reached on data centers transformation. Equity Free Cash Flow after lease was negative in the first quarter, driven by lower operating free cash flow, mainly due to the absorption of working capital related to the significant CapEx level of Q4 2022, and for an additional installment of the DAZN agreement. FX not helping, while it was positive support last year, and higher financial expenses. It is worth to mention that Equity Free Cash Flow in Q1 was better than our projections, and that the total for the next nine months should be positive if we consider the partial anticipation of the NRRP funds. Net Debt was a touch higher versus the full year to EUR 20.5 billion after lease. In slide 19, you find a summary of our debt maturities and the breakdown between fixed and variable rates. We worked hard since the beginning of the year to reinforce our liquidity position, and we succeeded especially considering the context. We secured EUR 850 million with the issuance of a bond in January, plus additional EUR 400 million in April, with the largest tap in the high yield market since October 2021. The tap issuance was priced 0.75% above par, thus reducing the cost of the regional issuance. Last week, we signed with the European Investment Bank and guaranteed by SACE a EUR 360 million loan with an attractive cost for the financing of the 5G rollout. All these actions show the strength of the group, both operationally and financially, and you will see further initiatives in the coming months. It is worth to mention that our average cost of debt at the end of the first quarter was just above 4%, in line with Italian GDP that stood at 1% only 15 months ago. With this, I hand over to Pietro for his final remarks. Thanks, Adrián. Q1 trends improved versus Q4 and were in line with expectations. As you can see at the bottom of the slide, we expect the improvement to further accelerate in coming quarters, thanks to several positive drivers that will progressively kick in throughout the year in the domestic business. It's important to remember that they are not a guess, they are largely secured. The effect of repricing will become more visible. The new wholesale tariffs will be booked starting from Q2. The stabilization of the customer base will continue. There will be easier energy and labor comparison in Q3 and Q4, while the drag on activation fee will reduce in Q3 and fade away in Q4. Already for Q2, we aim to be broadly flat on domestic. Equity Free Cash Flow after lease trajectory is expected to improve throughout the year, thanks to better operating cash flow performance. Our full year guidance is confirmed and reiterated. I also want to stress that the management team and all the employees continue to be focused on the operation. Last year, I said that we want to be the first management team in the last 12 years capable to achieve the guidance for two consecutive years, and we are on track. Now my closing remarks for today. We are facing two important challenges, keeping the company on track on the operation as it hasn't happened for years, and create the opportunity to have, again, the industrial and strategic option TIM shareholders deserve. Let's now move to the Q&A session. Thank you, everybody. The Q&A session is now open. If you would like to register for your question, press star followed by one. If you would like to cancel your reservation, press star followed by two. First question comes from Mr. Giorgio Tavolini of Intermonte. Mr. Tavolini, please. Good morning, gentlemen. I have three very quick questions on my side. The first one is on Iliad. Do you see any threat to TIM Enterprise from Iliad's entry to the business mobile segment? Do you think the network quality, your network quality, your consolidated presence in this segment will continue to give you a superior competitive advantage? The second one is on the ServiceCo. The Slide 11 highlights that the ServiceCo is a sustainable business based on the portfolio of the 3 different businesses, of which TIM Brasil and TIM Enterprise are offering a very good growth and cash generation profile. Where could further efficiencies be extracted to turn TIM Consumer around? The third one is on INWIT. INWIT recently mentioned the possibility for the tower costs to extend the perimeter to management of the active infrastructure, so equipment and maintenance, thanks to a greater outsourcing of activities by telecom operators. I was wondering if you see opportunities for TIM on this side, and in particular to boost the CapEx efficiencies. Many thanks. Thank you, Giorgio. Let's start with the so-called Iliad threat on the enterprise segment. It's important to explain that when we talk about enterprise, we mean, which is the perimeter of the, what we call the enterprise, TIM Enterprise, that are the largest company in Italy, the largest 30,000 company in Italy. We have the remaining part of the business that is made also by medium company, small business, and so. The Iliad offer is targeting much more the low part of this segment, more small office, home office. In this area, with all due respect, with the Iliad offer, we think that the result will be quite similar to what happened more on the fix that not on the mobile of the consumer. Why? First of all, this segment has already both consumer offer because for fiscal issue, it's indifferent for this segment to buy as a company or as a private. Second, in terms of sales channel, usually this is a segment where what we call door-to-door or let me say, not shops are the main challenge to try to targeting this kind of segment. Last but not least, the offer of Iliad, that is something that we have to continue to monitor and respect, is not so aggressive as the offer that they had in the past. In a nutshell, it's something that we have to monitor and control, but we don't foresee a specific threat out of what we have already planned in our market. On the enterprise segment, the offer of Iliad is not targeting the large corporation, where it's not just a matter of price, but you have also to put in place billing system that are able to divide the amount of the expenditure by cost centers, so on and so forth. About ServiceCo sustainability, as you have already mentioned, it was important for us to explain what is ServiceCo. Sorry if I'm back again on this point, because sometimes when I read on the press, it seems that ServiceCo, it's only the consumer. ServiceCo, it's a portfolio of business with different level of maturity, cash generation, and different challenges. As you have already explained or mentioned, I think that for sure the consumer is, of the three business, the one which we have to be much more focused in term of restructuring of the business model. It's important to highlight that this is not only a challenge for TIM in Italy or for the consumer market, the telco consumer market in Italy, but this is a challenge everywhere through all Europe. What we are doing, and we are on track on that, is trying to start to put the right level of efficiency, avoid irrational competition model, increase the level of quality of the service that we will supply to the customer, and try to manage in a better way what is so-called CVM, customer value management. In this market today, it's really important to be able to manage the customer base, because the end-to-end related to the acquisition cost, it's less efficient than to be able to contain. It doesn't mean that we will not try to foresee any improvement on the main KPIs. Last, about the INWIT. I think that in any case, it's something that has to be understood. It's clear that it's quite different also to put in place. Let's reword in this way. A Master Service Agreement when you talk about passive activity, tower, fiber, so on and so forth. When you start to talk about Master Service Agreement related to the active part on a medium long term, as you are going to define the way in which you will approach, for example, the change of technology from 5G Non-Standalone to 5G Standalone, how you will manage the migration to the 6G? How will you manage, for example, some change in the technology? This is reason for which, at least for the know-how that you have today about what we are talking about, we don't see immediately an opportunity. While on the so-called passive part, we continue to foresee opportunity, not for TIM, but generally speaking, for the telco player. I hope, Giorgio, that I was able to give you the colors you needed. Many thanks, Pietro. I had no particularly follow-up. Thank you, Giorgio. Next question, please. Next question comes from Mr. Fabio Pavan of Mediobanca. Mr. Pavan, please. Yes. Hi, good morning, and thank you for taking my questions. I would like to focus on the new tariff for wholesale. If I got it properly, the tariff will have to be applied from January 1st, but there was no impact on Q1 numbers. We may assume some additional contribution could come in in Q2 numbers. Second question is, these increase in tariffs are in line with the expectations you were having when you were preparing your budget for this year. The final question is, do you expect either other operators may follow the sample you were mentioning, so price increase during the retail just to capture the increase in wholesale tariff? Thank you. Thank you, Fabio. I think that your question help me also to be back on the chart 21. I would like to highlight the fact that we reiterated and confirmed the guidance, not because it is a guess, but because there are some mechanism that will allow us to increase. Just to give you an idea, if you do the math, you can easily calculate it to reach our target, how much is the amount of revenue and the EBITDA that we have to grow on the domestic. How it can happen, the growth from the first quarter to the second quarter? It's quite easy. First of all, the tariff wholesale. As you explained very well, the new tariff are applicable from the 3rd January 2023, in our number, they were not calculated in the closing of the first quarter. In the second quarter you will see the new tariff plus the recovery for the first quarter. This is already a good amount, and part of that must be projected also for the following years. On this point, it's important also to remember that the increase of the sale tariff will put pressure also on the other operator to increase price. Because if not, they will fire a part of their EBITDA. If I'm not wrong, in the reporting season of one of our competitor, they clearly expressed the willingness to increase the price on all the customer base. Another point, we received a letter from EU just few minutes ago. It's important also that in the explanation of the approval at EU level, is related to the important to give a premium on the work to incentivize investment. That is something we were fighting for, because if you remember, we thought that it's impossible to continue to build network if you don't have the right return on investment. This is, I think, a real breakthrough compared to the past. Let's remember that in the last 20 years, we were never able to have an increase on the wholesale price. When we move to the second question, that is the repricing, this is the second element that will allow us to increase revenue, the EBITDA from Q1 to Q2. What's happened that we have already repriced 4 million fixed line and 2 million mobile line. The communication to the customer base happened in the first quarter. The impact on the revenues and on the EBITDA will appear in the second quarter. We are going slightly above our expectation in terms of churn because as you have seen, nevertheless the communication to the customer base during the first quarter, we were able to have a good level of churn, and it will be a further accelerator and help to reach the target. Last but not least, the third question that you were mentioning that is related to the other operator. I mentioned there are already two operator that expressly declared that they will increase the price on their customer base. This is a trend in which the market start to seem more rational and mature. This is something that, if you remember, when we started to discuss about that first quarter, 2022, one of the main point was it was declared four years, but it never happened. One year, one year and a half later, it seems that this is the trajectory also in Italy. Again, let's move on. The number that, and the fact that we reiterated our guidance is not based on the guess, on a guess, but on the fact that through the repricing, the wholesale tariff, the comparison compared to the last year, we are very safe on the fact that we'll be able to achieve. Finally, we hope to proceed in the second quarter flattish revenue and EBITDA on the domestic. That could be a real breakthrough compared to the history of our company. Thank you. Thank you, Fabio. Next one, please. Next question comes from Mr. Domenico Ghilotti of Equita. Mr. Ghilotti, please. Good morning. Three questions. First is a clarification, just a clarification on a comment from the previous statement. When you said that Q2 should be broadly flat at domestic level, are you referring to sales or EBITDA? That wasn't clear to me. My question are on the NetCo side, on the NetCo disposal process, because we are reading about potential, let's say, combined offers or something that, okay, has to be structured. I wonder if the deadlines or the board set is really something achievable considering the complexity. If you would consider keeping a minority stake. The last question is referring to the customer base stabilization. When I adjudge your ambition and your guidance, the area where I see more risk from my side is on the stabilization of the customer base, given the fact that the market is very, very mature. I'm trying to and you aren't raising prices. There is also this headwind. How, what are the levers that you can execute to really get to this stabilization of the customer base? Domenico, thank you. I have to improve my English. I confirm flattish number on revenue and EBITDA. This is the answer to the first question. Okay. How we foresee a possible combination. As I stated during the call, for us it's important time and execution. For us it's important to proceed fast and to have low risk in terms of execution, because it's something that is really important. These are elements to evaluate the reliability of the offer. Either someone that want to merge or combine is out of our possibility to be managed. While about the minority, it really depends. We always thought that today we don't want to have veto rights in any case, because if not, we are unable to explore the vertical disintegration. That is something important for NetCo and for ServiceCo. Also for NetCo, avoid to have a vertical integration allows to have more hands free in the definition of price and return on investment. The same on ServiceCo. If you keep a participation, you don't have to veto right, so it becomes a kind of financial participation because you think that you can have a further upside in the future from the evaluation. It is something that you can have also in terms of earn-out. About the customer base stabilization, now I leave the stage to Andrea. Let's remember this is very important. We are working for the stabilization of the customer base, but this is one of the driver of our growth. Let's remember that we have a portfolio of activity in which you find TIM Enterprise that is continuing to grow, and you have seen the number, and the following quarter will be better than this one. We have the wholesale, national and international. The wholesale national we have seen with increase of price will be better. The international will be also better due to the fact that we are going to face the seasonality period in our favor. We have the consumer. Today, in our number, the consumer is projecting improving number quarter-over-quarter, trying to reach a better level of customer base. As was mentioned also by other player that announced the number before of us, we don't have to look at the customer base stabilization at any cost. It's important to find the right balance between the commercial growth, because we have to continue to push and increase our number, and the cost for this kind of activity. If Andrea want to put some more color. Yes. Thank you, Domenico. A couple of comments and a couple of factors that give credibility to the stabilization of customer base. First of all, the market has improved condition over the last 12 months. We see more rationality in pricing, less aggressive offers on portability, for instance, in mobile. As a matter of fact, the number of rotation in the mobile market has reduced substantially. We see a reduction of around 25% in the volume of portability in the market. That clearly is helping us to improve our performance, which we improve better than our main competitor. Our mobile balance, for instance, improves substantially in Q1 year-over-year. We basically more than halve the negative balance, meaning that we do better than a reduction of 50% of the negative balance. Same applies to fixed line. We improved significantly the net negative balance. We are still in the negative. We improved the numbers versus last year. This is due to several factors. One is again that we see a bit more rationality in the market, in a market that is not growing as fast in broadband like it was in 2020 and in 2021, for pretty understandable reason. The pandemic had driven more net adds, but also more aggressiveness by competitors. The other thing is that we are working day after day to improve the mix of technologies in the customer base. We migrate customer to better technology. We have a much better mix of technologies in the base. Over the last 3 quarters, we gained leadership in FTTH base. That means that now we have a better mix between DSL, FTTC and FTTH that gives more resilience to our churn. Okay. Thank you. Thank you, Domenico. Next question, please. Next question comes from Mr. James Ratzer of New Street Research. Mr. Ratzer, please. Yes. Good morning. Thank you for taking the question. I had just a couple of questions. The first one just on the NetCo potential disposal process. Could you confirm, are the offers that are due in on the ninth of June, are you expecting those to be binding offers or would those still be non-binding? threshold to be at the shareholder vote? I think it depends on what kind of meeting would be called to discuss it. Secondly, just interested in the upside in EBITDA going into the fourth quarter around some of the, in particular, the labor costs that you flag on the last slide. I think you've signed an agreement with the unions for 2,000 headcount reduction. Is that a lot of the driver that will start to come through in the fourth quarter EBITDA uplift, or is that something that could be a kind of further improvement going into 2024? To kind of understand that latest agreement with the unions a bit more. Thank you. Hi, James. Sorry, we lost the line briefly when you were doing the first question. Can you repeat it, please? Yeah, sure. Sorry. The first question was for the offers you're expecting on the ninth of June, are those going to be binding offers? Also if you do then go to a process to sell, would this be a shareholder vote? If so, what level of voting threshold would be required at the vote? I believe it depends on the type of meeting you'd call. Thank you. Hi, James. About the offer, as we stated in our communication, they will be final offer will not be yet binding. depends really from also the counterpart. For us, what is important, as I mentioned, the speediness of the process. The time, this is the reason for which we thought we ask for final offer. It's clear that from our understanding, everybody are working then to reduce eventually the time for a further analysis in terms of the data room and due diligence. Related to the second question that is on the shareholder meeting, I leave just for few second the answer to our legal counsel, Agostino, that can give you some more color. Adrián will answer about the labor cost. Hi. Going to your question, the Italian law makes a clear distinction between the acts of management, which fall under the responsibility of the board of directors, and the transaction, which has to be decided by the shareholders, the shareholders meeting, either ordinary or extraordinary. In our case, we are considering to do a contribution of an undertaking to a company, probably the existing FiberCop, and the sale of the shares. According to the law, those actions are actions in the responsibility of the management. Clearly, in our situation, the undertaking we are contributing is huge and makes a difference in terms of company organization. The question raised by someone is to what extent this change in the organization could raise a substantial change in the scope of the bylaws, where the change of the scope of the bylaws is something that has to be authorized by the extraordinary shareholders meeting, where you have effectively the need to have the two-third of the participant to the shareholders meeting to approve this change. Clearly, you need to do an interpretation to come to such a conclusion, which is not the case at the moment. We are studying, and clearly we can have a final position on this only after the binding office where we have a clear picture of the transaction, the perimeter, and the impact on the company organization. Hope I was clear. Thank you. Yeah, it's very clear. Yes. On the labor cost effect of the agreement we signed in March of this year, clearly this is not yet a cash impact, and it will be clear in the next for the next five years, probably half of that during 2023 and 2024. In term, in economic terms, the effect will be partial this year and you see that effect on again on slide 21 when we define the effect on the fourth quarter about the labor cost comps. Then it will be full on 2024 and onwards. Again, this is something that will probably start to have some effect in the third quarter, considering the timing of the exits. It will be full on 2024 and onwards then. All these effects were considered on our projections. These are already included both on our EBITDA guidance and on the equity figures of flow guidance that we gave for the three years. It was already considered when we gave the guidances. Okay. That's great. Thank you. Okay, James, thank you for your questions. We're ready for the next one, please. Next question comes from Mr. Andrea de Vita of Banca Akros. Mr. De Vita, please. Yes. Hello. Thank you for taking my question. Just two from my side. One is on your Equity Free Cash Flow, whether or not, and in case which part of the EUR 400 million provision for personal exits are included in this Equity Free Cash Flow. Otherwise, when the cash impact will be felt during the year. The second point, it is peculiar that it has been booked in Q1, so I wonder whether and which impact will be in the next few quarters in terms also of economic impact on the P&L. The second part, the second question is on, the Polo Strategico Nazionale, so the strategic national hub for data centers, whether there is any update, if work has started or when we can have, some, economic impact on the domestic business. Thank you. Yes. I didn't get clearly the second part of your first question, about the economic side of the union agreement. Is it? Yes. Sorry. The EUR 400 million- Yeah. Provisions in Q1. The question is, the first is from a cash perspective, whether or not it is affecting Q1 Equity Free Cash Flow, and in case, when will it materialize? The second is whether there are other important material provisions to take place in the next few quarters? Okay. Yeah. In terms of Equity Free Cash Flow, clearly this agreement doesn't create any effect. You need to consider that we are facing the effects of the previous agreements, the ones of 2022, 2021, 2020. You do have some effects in terms of working capital of these kind of agreements. About this one that is, it's on our reported figures for the first quarter, you will have some effect yet this year, probably something around EUR 60 million, and the rest in the following years. Again, this all these effects are considered in our projections. You will also need to consider the effect of the anticipation of the contribution for the NRRP projects that will probably be cashed in in the third quarter of this year for something around EUR 500 million. This one clearly wasn't considered in our guidance, so this is an upside definitely for 2023. Partial upside for the three-year guidance in terms of equity free cash flow. In terms of economics, again, on this effect, you will have some positive effect on the fourth quarter of this agreement. Again, you see that effect on slide 21. You will have the full effect for 2024 and onwards. We are not expecting any other provision about these kind of agreements this year. It was fully booked on the first quarter because it was signed during March. Hope I was clear. There's the second question about the PSN. Yeah. We will hand it to. Yeah, sorry, just a. Yeah. Sorry, I didn't get the number that the rough impact in Q1. Just didn't get the number you said. No. About this 2023 agreement, there is no cash impact on the first quarter of 2023. Okay. No cash impact. Okay. Okay. Yeah. We hand. About the second question, the PSN. Let's remember that in our plan, the value of the PSN on this year was marginal, around EUR 30 million. We continue to foresee further opportunity and upside. I leave to Elio to give some more colors on that. Yes. Thank you for the question. As Pietro Labriola said, we have been very conservative in predicting revenues on the PSN for 2023, because we have only EUR 30 million revenues in our budget, which will become EUR 62 in 2024 and EUR 81 in 2025. Meaning that we were expecting a delay that is actually now materializing. We don't see any major risk. Clearly, there will be a phasing in our cloud revenues in probably in quarter two, but the effect is very, very small. It's very limited. The positive news is that the program overall is registering a bit of delay but Public Administration have already submitted the projects. The total number of project is 669, out of which almost 70 are projects where we are already analyzing, so the PSN is already analyzing. Very soon, they will translate into actual projects. We feel very confident that the number is not at risk. Thank you. Okay. Thank you very much. Okay. Grazie, Andrea. We are ready for the next one, please. Next question comes from Mr. Keval Khiroya of Deutsche Bank. Mr. Khiroya, please. Thanks for taking the questions, I have two, please. First, in the event there's no approval on NetCo or it takes a while, what is a potential plan B? You've talked about a potential sale of a minority stake in Enterprise. Is that still something you're exploring? How quickly could X execute on it if need be? Secondly, the ICT service revenue growth was quite a bit lower this quarter. As I understand, you're pushing low margin revenues less aggressively. In the context of how you report today, should it still be similar to that 11% growth going forward? Is there any comment on the margin contribution from the ICT revenue line as well? Thank you. Keval, about the big plan, as we always stated, we have to keep optionality open for our company to be able to face different scenario. I don't want to be misunderstood. It doesn't mean that we don't have clear idea, but it just have a clear understanding about the fact that we must have optionality. The fact that TIM Enterprise continue to be one of the option that we put in our plan the seventh of July. If you remember, it was the ninth of November when we received the approval from the board to proceed in the definition of the carve-out, and we are completely on track in on this area. TIM Enterprise. Sorry. It's important to state that while we are facing all this kind of discussion on the deleverage and delayering of the company. We are continue to improve the number of the company. As we told, we expect a second quarter flattish on revenue and the EBITDA at domestic level. About TIM Enterprise, I leave to Elio to elaborate more on that. First of all, we have to be very clear on the fact that when we look to the number of TIM Enterprise, it's not like the consumer. The view per quarter sometimes can show different path, because this is a business where you can close big contract, and sometimes you can close at the end of the quarter or at the beginning of the new quarter. We'll have always this kind of seasonality, and the real trend cannot be read in this way. Second, as we told since the beginning, is that we are trying to do a different approach and to focus our activity and our sales people more and more on high margin offer. It doesn't mean that we will not continue to work on some ICT offer with low margin, because in any case, it's a kind of Trojan horse that allow us to enter in the relationship with the customer and then develop further activity. Elio, if you want to give some more color. Yes, thanks, Pietro. No. Well, what I would like to add is that we do believe that we have a clear, a clear strategy and a very crystal clear view about where we go and how do we want to get there, because we made a statement several times that we want to focus on revenues generating higher margin. As a matter of fact, let's say, while in quarter one 2022, we registered the growth of 5%, now we are at 4%, but our EBITDA is significantly increasing. More importantly, if you reach the level of EBITDA minus CapEx is getting even better. We will keep doing this exercise without, let's say, losing attention on how to generate growth on the top line, but being very surgical in the approach, concentrating our focus on revenues generating higher margin. Thank you. Okay, thank you so much. Thank you, Keval. Next one, please. Next question comes from Mr. Ottavio Adorisio of Société Générale. Mr. Adorisio, please. Hi, good morning, everyone. I've quite a few questions and some follow-ups. The first one is the segments. There's a lot of talks about growth or comparison, I couldn't see absolute numbers. In the first 22 financials, you said that IFRS 18 prevent you from giving some detailed financials on NetCo, the consumer and the enterprise. I was wondering if you can at least share some absolute figures on EBITDA, CapEx and revenues you make in these three segments. The second is related to that one, it's basically, you talk about the Master Service Agreement with INWIT, there is another Master Service Agreement, is that one between ServiceCo and NetCo. I was just wondering if that part of the negotiations you're currently running for the bidding of the NetCo or the MSA is already finalized. If so, if you can tell us how much has ServiceCo is paid NetCo last year or is basically in your plans paying NetCo, and how much it will pay in 2023. Then moving to another one. You're talking about flattish EBITDA growth in the second quarter for the domestic. Will it be still flattish if you don't have the attractive impact of the wholesale or will be negative? The fourth, I apologize, I don't know if you already replied that one, but I wasn't there in the previous call. You had a significant loss on non-human SIM losses in mobile. That was quite different from previous quarter. Could you tell what's happened there? It was just a specific contract that dropped or something we should expect going forward? Thanks. Okay. Ottavio, let's start from the last question that you raised to the SIM losses. Not only TIM, but all the player during the COVID period have deployed and offer specific SIM for university, public administration, so on and so forth, with an ARPU that was with a value that was practically marginal. That makes no sense to continue to keep alive because in some way they are cannibalized also in the market, other services or other SIM with a higher level of ARPU. About the segment, Adrián, if you want to. No, the segment and the MSA, in terms of numbers for the different segments, clearly, as we mentioned in the previous calls, we are not disclosing by this time this kind of information. We did it last year during the. During the capital market days, you can have a sense of where each business stands in terms of marginality, in terms of proxy of Operating Free Cash Flow. The thing is, as you know, we are under negotiation in these days, and it's clearly not our intention to give many details on this. Probably, going forward, we'll start to disclose our numbers with that view. As a matter of fact, we gave a lot of information in terms of revenues these days. I think that That's for these days an important kind of disclose. On the third question- Yes. Yeah. The other question, I think that you can imagine that release too many things in a so critical phase of the negotiation can have an impact. When we discuss about the MSA, in our business plan, we have our assumption that respect regulatory constraints that we foresee. It's clear that each of the two counterpart can do their own proposal, and then we'll understand. What is important is that from an industry strategic point of view, we are not looking for a financial deal, because what we have to foresee is something that will allow to ServCo to be able to compete at the same level of the other player, avoiding any kind of things that can have an impact on the future freedom to compete of ServCo. I don't know if I was clear. Yeah. Just to complement, in the numbers we disclosed in July of last year, on the EBITDA of ServCo, the MSA with NetCo was already included. With the definition of the perimeter that we presented that day and with the regulatory assumptions that we also disclosed that day. At the end, if when we talk about the EBITDA of ServCo, it's already considering the MSA with NetCo. About the third question in terms of the EBITDA, if it would be the same without considering the wholesale price increases. What Pietro mentioned that we expect flat both revenues and EBITDA. Probably I'm a little bit more optimistic in terms of EBITDA. Again, even if it is a very interesting effect the... Because we will be booking two quarters in the second quarter because we remember that it is retroactive. I think that will be probably also on the flat side without this effect. Ottavio, just to be clear, until the NetCo is inside our perimeter, this is not something that is raining from the sky. This is the result of activity. It's like when someone say that we are growing in Brazil. Brazil wasn't a ticket won to the lottery. Brazil was something on which the company invested. The fact that we were able to increase the wholesale tariff after 20 years means something. This is an important element because it will help the rationalization of the consumer. As Adrián stated, we could be positive on the EBITDA, we have to look at the company as the sum of the part. Thank you. Thank you, Ottavio. I hope the answers were clear, in particular the last one. We have now time for the final question. Thank you. Just one second, please. Our last question comes from Mr. Georgios Ierodiaconou of Citibank. Mr. Watts, please. Hi, guys. Just a quick clarification point. On your CMD last year, you outlined in the event of a NetCo sale, roughly EUR 11 billion of debt was intended to travel to the NetCo structure. Is that still the expectation, assuming a deal went through, that you would look to do that? And any indication as to what part of the structure in terms of the bonds might travel? As in would you look to potentially move some of the dollar debt, some of the retail bonds? Any kind of indication as to how that might work would be very useful. Yeah. Thank you for your question. Again, when we disclosed the all the figures last year in July, that the amount of debt that could be pushed down, that was our view that by that time a vehicle as NetCo for infrastructure, what kind of leverage can absorb, and we mentioned that could be the case up to EUR 11 billion. Then it will dependOn the offer, and they have specific hypothesis about this. They can have a different view in terms of what kind of leverage the company can have, or they can already start with a specific leverage, especially in one of the one of the cases. Again, it will depend on what's their view and if it happens then. We think that, for a vehicle as NetCo, a leverage between five or six times, it's acceptable. In terms of what kind of debt instrument can be pushed down or can be ported to NetCo. We are running a very deep analysis on this side, we decided. Clearly, there are some bond structures that are, I won't say easy, but you will need probably a lower level of consent. There are some bonds that you will probably need 100% of consent. The thing is, we would like to have an equilibrated debt profile, especially on ServiceCo. It's not that in terms of, in terms of type of bond, in terms of... in terms of maturities. That will be a specific analysis depending on what the offerer would like to have. After the push down of the debt, there will be also a liability management because we expect a significant cashing in terms of equity if the deal goes forward. It will be an interesting process. In terms of the debt that's potentially being ported to the NetCo, as yet, you don't have really a firm preference as to whether it might be short-dated or long-dated. Just because I've heard from certain schools of thought that maybe some of the longer dated debt would more naturally suit the NetCo type structure, given the sort of the asset liability nature of that business, just to match. At the moment, there's no kind of firm plans. Clearly, these are fair assumption because the infrastructure kind of vehicle could absorb longer maturities. Again, we would like to have also an equilibrated profile of debt on ServCo. Again, if this happens at the end, the company will run a very friendly process. It will be also in the interest on the bondholders. Understood. Okay. Thank you very much for attending today in such a busy morning in terms of reporting season with the Telefónica and Deutsche Telekom out with the results. We will be back at the beginning of August with our Q2 results. Thank you. Have a nice day. Ladies and gentlemen, the conference is now over. Thank you for calling.