CLARITYTRANspAReNCY

sImpLICITY

sustainability report

HIGHLIGHTS

Wind for the community to find out more, see page 65

5 family-residences supported in 2012 2 innovation workshops (Wind Integration Cup and Wind Business Factor)105 NGOs supported in 2012 through charity fundraising (+8% on 2011)3 charity initiatives organised by Wind staff for local communities

Wind for the environment to find out more, see page 73

Nearly 5,900 tonnes of direct CO2 emissions avoided in 2012 thanks to modernisation of our telecommunications facilities and energy saving initiatives in our offices

13% growth in use of electricity in data centres due to the 55% increase in mobile data traffic44% Electricity Generator Groups replaced by lower impact electrification systems380 people using ATAC and ATM conventions for public transport season tickets

Wind for our people to find out more, see page 53

Nearly 7,000 employeesMore than 150,000 training hours completed47% of employees are female99.5% employees have a permanent contract

Wind for the market to find out more, see page 37

5,427 million in total revenues from sales and services2,589 million in added value distributed to stakeholders21.6 million mobile telecommunications clients648 active suppliers, of which 601 are Italian

our company profile to find out more, see page 9

Approximately 900 million euros of investments in the fixed and mobile networks every year

90.6 client loyalty index (scale of 10-100)82.4 mobile consumer satisfaction index (scale of 10-100)99.8% of the Italian population covered by the Wind mobile network

INDEX

Wind for the market 2 Our economic performance 2.1 Annual results 2.1.1 Distribution of value added among the various stakeholders 2.1.2 Clients 2.2 Breakdown of client base 2.2.1 mobile Consumer Client assistance 2.2.2 Fixed Consumer Client assistance 2.2.3 Business Client assistance 2.2.4 The sales network 2.2.5 Advertising 2.2.6 protecting personal data 2.2.7 Unfair commercial practices and false advertising 2.2.8 Relations with the Competition and markets Authority and the Communications Authority 2.2.9 services charter 2.2.10 Client litigation 2.2.11

Suppliers 2.3 selection and qualification methods for suppliers 2.3.1 supplier composition 2.3.2 sA8000 supplier audits 2.3.3 supplier litigation 2.3.4

Chapter 2: 2012 goals achieved and 2013 targets 2.4 2012 goals achieved 2.4.1 Targets for 2013 2.4.2

our profile 1 Identity 1. 1 Winds business 1.1.1 Our values 1.1.2 The history of Wind 1.1.3 The Italian telecommunications market 1.1.4 Relations with the main regulatory bodies 1.1.5 Transparency in institutional relations 1.1.6 Corporate and organisational structure 1.2 The structure of the Group and our shareholders 1.2.1 subsidiaries and associated companies 1.2.2 Board of Directors and Board of Auditors 1.2.3 The organisational structure of Wind 1.2.4

The technological infrastructures 1.3 mobile network 1.3.1 Fixed network 1.3.2 projects funded 1.3.3 Research and development activities 1.3.4

Sustainability in Wind 1.4 Corporate strategic priorities 1.4.1 Analysis of the importance of sustainability issues 1.4.2 stakeholders 1.4.3 Listening to stakeholders 1.4.4 Customer satisfaction 1.4.5 Our Code of Conduct 1.4.6 Internal Control systems 1.4.7 Integrated management system 1.4.8

Chapter 1: 2012 goals achieved and 2013 targets 1.5 2012 goals achieved 1.5.1 Targets for 2013 1.5.2

Wind for the environment 5 Environmental policy 5.1

Electromagnetism 5.2 electromagnetism in Telecommunications 5.2.1 monitoring electromagnetism 5.2.2

Monitoring environmental performance 5.3 electricity use 5.3.1 Water use 5.3.2 Heating use 5.3.3 Atmospheric emissions 5.3.4

Managing special waste 5.4

Environmental issues and litigation 5.5 Chapter 5: 2012 goals achieved and 2013 targets 5.6

thanks

certification

annex 6 Tables and Diagrams 6.1 Our profile 6.1.1 Wind for the market 6.1.2 Wind for our people 6.1.3 Wind for the community 6.1.4 Wind for the environment 6.1.5

Methodology 6.2

Glossary 6.3

GRI indicators 6.4

Wind for the community 4 Innovation workshops 4.1 The Wind Integration Cup 4.1.1 Wind Business Factor 4.1.2

Charity projects 4.2 Charity fundraising, donations and dialogue with non-profit organisations 4.2.1 10decimi 4.2.2 Our employees commitment 4.2.3 Civil protection services 4.2.4 services for the judicial authorities 4.2.5

Events and sponsorships 4.3 Chapter 4: targets for 2013 4.4

Wind for our people 3 Wind people 3.1 staff composition 3.1.1 Geographic distribution of staff 3.1.2 staff recruitment, development and careers 3.1.3 Diversity 3.1.4 equal opportunities 3.1.5 employee health and safety 3.1.6 Internal communications 3.1.7 Corporate welfare 3.1.8 Industrial and trade union relations 3.1.9 Chapter 3: 2012 goals achieved and 2013 targets 3.2 2012 goals achieved 3.2.1 Targets for 2013 3.2.2

pag.120

pag.122

pag.008

pag.035

pag.052

pag.064

pag.072

pag.086

Dear readers,Wind presents its tenth Sustainability Report, a transparent and important tool that gives us the opportunity to present the initiatives and projects that took place in 2012. This year has been important, and despite the difficult economic situation we were able to continue our growth trend and increase our client base to reach a position of market leadership. We have succeeded in doing this by increasing our focus on our distinctive characteristics: excellent network quality, client services, transparency and low-cost rates. Wind is a young, innovative company that is expanding rapidly, and we aim to become the number one operator in the Italian mobile consumer market as well as to rapidly reach an important position in the small business segment. During the year we have also continued to strongly invest in mobile Internet, in order to grasp all of the opportunities of a growing demand. As always, none of this would have been possible without our people, who represent our most important value and our main strategic asset. From this point of view, the agreement signed last October with the most important Trade Unions at the Ministry of Economic Development has made it possible to reorganise our network maintenance and management, increasing productivity and significantly improving efficiency. Thanks to the commitment of all our employees, we will therefore manage to achieve structural savings that will allow us to reach important goals in terms of growth, stability, quality and profitability.Wind, however, has not forgotten the social context in which it operates. In line with our values, once again this year we have supported initiatives to promote integration, development, business start-ups and solidarity with the disadvantaged.Our ten Sustainability Reports show how we have grown and developed over the years. They are a way to tell anyone interested about the strategies, results and social value of our company.Lastly, they are another way to open Winds doors, show you our way of working and share in our successes.

Maximo Ibarra

Letter from the CEO

OUR PROFILE

Our profile

011010

1.1 Identity1.1.1 Winds BusinessThe Wind Group is one of Italys largest Italian telecommunications operators; we offer mobile, fixed and Internet communications services for both consumer and corporate clients, under the Wind (mobile communications) and Infostrada brands (fixed communications and Internet).The mobile communications category includes all the voice traffic, net-work access and international roaming services in addition to added value services such as SMS and MMS, offered to clients using mobile devices (mobile phones). The Internet category, on the other hand, includes con-stant Internet connection services through GSM and GPRS (so-called 2G or second generation technology) and voice, data and multimedia services using UMTS and HSPDA (known as 3G or third generation technology).Most of Winds mobile clients use pre-paid, pay-as-you-go plans, in line with Italian market trends.

Regarding the fixed communications market, which includes voice, data and multimedia services offered through the physical network, the Infostrada brand is the second leading operator in Italy.

1.1.2 Our valuesCLARITyWind has a range of easy-to-understand commercial offers. Whether costs are charged by the minute or as a lump-sum (such as All Inclusive and Mega Unlimited), clients know they wont have nasty surprises.Our advertising messages are clear and immediate while our testimonials, with their fun, transparent style, are effective ambassadors of our corporate values.

TRANSPARENCyWind rates are transparent. With Minuto Vero (real minutes), the minutes included in Winds All Inclusive plans are charged by the second, without

OUR PROFILE

CONSUMER CLIENTS

CORPORATE CLIENTS

1.1.3 The history of Wind

1,000,000

charging by the block in advance.Wind guarantees transparency and cultivates the quality of client relations with specialised Customer Care services. We encourage an open and constant dialogue with clients, consumers associations, shareholders, the financial community, employees, trade unions, institutions, suppliers and commercial partners.

SIMPLICITyWind improves our distribution services to make it easier to access our products and services. Wind Customer Care is committed to making client assi-stance simple.Replacing a SIM card due to theft, loss or defect is easy and takes place on the same day you make the request.

1997 - Wind is first established as a joint-venture between Enel, France Telecom and Deutsche Telekom

1999 - Wind launches the Internet offer for the Consumer market, inaugurates the first telephone call and launches fixed, mobile and combined communications services for Consumer clients. Only six months after the commercial launch, we achieve our first million clients

1998 - Wind obtains a licence for fixed network services in Italy, wins a tender for a mobile telecommunications licence and launches fixed network services for Business clients

2000 - Wind acquires Infostrada and obtains a UMTS licence

A worldwide brand,a complete service.

The Wind Group offers mobile, fixed and Internet communications services to more than 25 million consumer and corporate clients under the Wind and

Infostrada brands.

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Our profile

2002 - Wind launches ULL services for Consumer clients: the fixed network monopoly finishes in Italy Wind introduces Mobile Number Portability. The Libero web portal is born, from the consolidation of the Groups portals (Wind, IOL and Libero)

2005 - Weather Investments buys a controlling share of Wind. The company introduces the new ADSL2+ access network

2008 - Wind receives the Marketing 2008 award

2001 - Wind launches ADSL services

2004 - Wind launches the commercial UMTS offer

2007 - Wind reaches one million direct fixed network subscribers

2009 - Wind celebrates 10 years from their first telephone call. In April, the first solar panel system is installed on a Wind telephone plant, aiming to increase the companys eco-sustainable policy, which already had ISO14001 certification since 2000. In December, 10decimi is launched, the first interactive solidarity project, an initiative to provide a concrete help to children all over the world (www.10decimi.org)

1,000,000 subscribers

3GSm

2010 - Wind reaches the threshold of 20 million mobile subscriptions and receives an award from the European Confederation of Contact Centre Organisations for Best Customer Satisfaction for Mobile Consumer Clients among TLC companies in Italy

2012 - Wind launches the Minuto Vero campaign to emphasise that the minutes included in Wind options and All Inclusive plans are all charged by the second. The company supports the population of Emilia-Romagna after the earthquake. In the summer, Wind promotes the Wind Integration Cup, a multi-ethnic football tournament, sponsored by Coni

2011 - Wind joins the VimpelCom Group, launches Wind Business Factor, an initiative designed to support new start-ups and the growth of innovative enterprises, and purchases LTE/4G frequencies

1.1.4 The Italian telecommunications marketItaly is Europes fourth largest market, in terms of turnover, for telecommunications services, with reference values distributed between mobile (e18 billion) and fixed communications (e7 billion).

In comparison with the previous year, 2012 saw an overall market contraction mainly due to the reduction in voice traffic, of around 4% in fixed and 1% in mobile communications. This was prevalently caused by the rise in competition and the introduction of new regulations. For example, the market was also very dynamic in terms of the introduction of pay-as-you-go business profiles without government licensing fees, targeted in particular at freelancers and micro-enterprises. 2012 was also characterised by new international roaming (use of the network by other operators in the absence of their own signal), cloud (data storage on other operators servers) and music streaming services (listening to tracks directly online). Lastly, an interesting evolution was regarding e-commerce via mobile devices, for which the main Italian TLC operators together with Poste Mobile will develop a special platform.The range of Mobile Internet services, offering the possibility of connecting to the Internet from mobile devices, has taken on considerably greater impor-tance in the strategies proposed by the various operators, who have been working during the year to equip themselves with the infrastructures necessary to offer the best possible performance (broadband). In Italy, the spread of broadband has lagged significantly behind other European countries, partly due to infrastructural factors, such as the lack of a cable network. In January 2012, penetration for this type of technology reached just over 22% of Italians on the fixed network, against a European average of 28%.Although the general trend is not positive, the Italian market still remains one of the most developed in Europe, with four operators offering mobile TLC services to more than 90 million users, the equivalent of a penetration rate of over 150% of the Italian population (many clients use more than one

20,000,000subscribers

lte 4G

014 015

Our profile

SIM card). A real boom in growth was also seen in data services, used by 22 million SIM cards (+15.1% on 2011).

Lastly, the TLC sector is the only one which has seen rates fall constantly since 2005, demonstrating the high level of competition in the sector. In fact, technological evolution and the gradual liberalisation of the market have created a dynamic which pushes operators to ever higher levels of efficiency, to the benefit of clients.The fixed network TLC market, on the other hand, is very concentrated, and it is difficult for alternative operators to develop positive cash flow and significant margins.

1.1.5 Relations with the main regulatory bodiesThe telecommunications market is governed by several different authorities, with which Wind collaborates on a regular basis. The regulations in the sector are mainly created on a European level, on the initiative of the European Commission, Parliament and Council or the European Regulatory Body (BEREC), and are subsequently implemented on a national level, often through open processes involving joint technical committees including institutions and sector operators, with public consultations.

At the moment, the main European regulatory bodies are:

the European Commission, through its various General Directorates (mainly the DG Comp, DG Connect and DG SANCO);

the European Parliament and Council;

the BEREC (Body of European Regulators for Electronic Communications);

the COCOM (Communication Committee).

On a national level, the main figures are:

the Italian Communications Authority (AGCOM);

the Market Competition Authority (AGCM).

In 2012, Wind participated in more than 60 activities, including public consultations and AgCom information requests, as well as 16 consultations with various European regulatory bodies.

Wind also took part in important technical committees led by the AgCom such as those on the move from ATM technology (Asynchronous Transfer Mode, network protocol for data transfer in fixed length packets) to the Ethernet as part of the bitstream (leasing the fixed network to operators without their own), those formed to draft the regulations for switching from the current method of TDM interconnection to the new IP technology, and the periodic meetings on the numeration plan and switching clients from one operator to another.

Lastly, on a European level, we participated in the technical committees to draft the Guidelines for the Roaming III Regulation, and submitted proposals in response to two public consultations on the subject of fair competition and promoting investment in broadband, on one hand, and key markets, on the other.

1.1.6 Transparency in institutional relationsIn pursuing our corporate goals, and certain of being able to contribute to the economic and technological development of the country, Wind has established long-standing collaborative and transparent relations with national and international institutions.Winds existing institutional relations exclusively involve forms of communication which aim to represent the companys position and, in general, to point out the implications of proposed measures on Wind and the TLC sector as a whole.Thanks to constant monitoring of the regulatory situation, with the aim of analysing the impact of critical issues and the development of legislative proposals, we can intervene rapidly by submitting position papers and proposals to modify legislative bills currently being considered, both by Parliament and the Government, without affecting the freedom of our institutional counterparts to assess the value of our proposals and the relative legislative support.Moreover, we would also specify that Wind does not provide any form of funding to politicians or their parties, we abstain from any form of undue pressure on political figures and we do not sponsor events which have the exclusive aim of providing political propaganda.

SUBSCRIBERS90 MILLION

PENETRATION RATEON THE ITALIAN POPULATION

MORE THAN 150%

Dynamics of the main public rates (2005=100)

Source: AGCOM analysis of Istat data

The Italian mobile telecommunications market.

2005

90

100

110

120

130

140

150

2006 2007 2008 2009 2010 2011

145

142

135

125

121

113

93

Telephone servicesWater suppliesWaste disposalelectric energy

Gas

Rail transportTV licence

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Our profile

WIND TELECOMUNICAZIONI S.p.A.

WIND ACQUISITIONFINANCE II SA

WIND FINANCE SL SA

WIND RETAIL SRL WIND ACQUISITIONFINANCE SA

27%

100% 100%

27%

1.2 Corporate and organisational structure

1.2.1 The structure of the Group and our shareholdersWind Telecomunicazioni S.p.A. (Wind) is a joint stock company, with registered offices at 48 Via Cesare Giulio Viola, Rome. Since 2011, Wind has been part of the VimpelCom Group, one of the largest operators in the mobile TLC sector in the world, with more than 212 million clients, providing voice and data services in 18 countries.

Our share capital, of euro 147,100,000 fully paid in, is held 100% by Wind Acquisition Holdings Finance SpA (WAHF), a joint stock company, with registered offices at 48 Via Cesare Giulio Viola, Rome. In turn, 99.99% of WAHF is held by the majority shareholder, Wind Telecom SpA (Wind Telecom). 92.24% of Wind Telecoms capital is held by VimpelCom Amsterdam BV (VimpelCom BV), based in Amsterdam (Netherlands) whose sole shareholder (100%) is VimpelCom Ltd.The following diagram sets out the Groups structure as at 31 December 2012 (global consolidation).

1.2.2 Subsidiaries and associated companiesWind holds the entire share capital of 2 companies:

WIND Retail Srl, with registered offices at 48 Via Cesare Giulio Viola, Rome.

WIND Acquisition Finance S.A., with registered offices at 2 Place de France, Luxembourg.

We also have absolute minority holdings in other companies and consortia, of which we hold a share of one third or less.

1.2.3 Board of Directors and Board of AuditorsAs at 31 December 2012, the Wind Board of Directors was composed of:

Jo Olav Lunder - Chairman of the Board of Directors; Maximo Ibarra - CEO; Jeffrey David Mc Ghie; Cornelis Hendrik Van Dalen; Vincenzo Nesci.

By Wind Shareholders Resolution dated 28 March 2012, Jo Olav Lunder was appointed Chairman of the Wind Board of Directors, with full powers of administration as Chairman of the Board in compliance with the law and the Company Statute.

The members of the Wind Board of Directors do not receive any form of payment for their activities.

Still as at 31 December 2012, the Board of Auditors was composed of 3 statutory auditors and 2 alternate auditors:

Giancarlo Russo Corvace - Chairman of the Board of Auditors; Roberto Colussi - Statutory auditor; Maurizio Patern di Montecupo - Statutory auditor; Lelio Fornabaio - Alternate auditor; Stefano Zambelli - Alternate auditor.

1.2.4 The organisational structure of WindThe two business units are responsible for achieving sales and profit targets set for the consumer and corporate and freelancers segments respectively. They are supported in their work by the Technology department, which is in charge of developing and managing all the technological infrastructures, and the corporate services structures. The Corporate Social Opportunity structure, which works in Public Relations, has the task of managing sustainability and social responsibility.

The following diagram sets out the Group's structure as at 31 December 2012 (global consolidation)

Wind holdings in companies and consortia as at 31.12.12

WIND

As at 31 December 2012, Wind had the following organisational structure:

LEGAL AFFAIRSFINANCE AND

PROCUREMENT

PUBLIC RELATIONS INTERNAL AUDITING

STRATEGIES BUSINESS ANALySIS, PLANNING & CONTROL

HUMAN RESOURCES

TECHNOLOGy

BUSINESSUNIT

AZIENDEE PARTITA IVA

WINDDIGITAL

REGULATORy,ANTITRUST,

PRIVACyAND

WHOLESALEAFFAIRS

BUSINESSUNIT

CONSUMER

Since 2011 Wind joins the VimpelCom Group, one of the largest operators in the mobile TLC sector in the world, with more than 212 million

clients in 18 countries.

33.33%ItalyConsorzio Fibra per l'Italy

33%ItalySPAL TLC S.p.A.

10%ItalyQXN societ consortile

17%ItalyJanna S.c.a.r.l.

1%ItalyConsorzio ELIS a.r.l.

15%ItalyMix s.r.l.

27%LuxembourgWIND Acquisition Finance II SA

27%LuxembourgWind Finance SL SA

33.33%ItalyConsorzio Wind Team

Percentage of share capital/consortium fund

held by Wind

COMPANy/CONSORTIA REGISTERED OFFICES

COMPANy/CONSORTIUM NAME

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Our profile

1.3 The technological infrastructures

1.3.1 Mobile networkThe Wind network is capable of providing voice and data services over almost the entire national territory and, through agreements with other operators, the rest of the world.

Wind has almost 14,000 antennas offering voice and data services (GSM and EDGE) and nearly 12,000 antennas offering voice and high speed data services (UMTS and HSPA). This infrastructure is already capable of guaranteeing mobile services to 99.8% of the population and high speed data services to 95.3% of the Italian population.The high speed network services (HSPA, 42 Mbit/s) were designed by Wind to offer a good level of service to the greatest possible number of clients, at a cost that is perceived as cheap and attractive. As at 31 December 2012, the 42 Mbit/s connection was available in the main cities (Rome, Milan, Cagliari, Bologna, Florence, Palermo, Bari, Turin, Genoa, Brescia, Venice, Verona, Padua, Chieti, Pescara, Naples and Catania) and will be gradually rolled out to the most important 64 cities during 2013; the rest of the network, in less densely populated areas, provides access to the 21 Mbit/s service, which will be extended to 96% of the population in 2013.

Lastly, in 2011 Wind participated in a public tender by the Italian State, purchasing the rights to an additional packet of frequencies, which together with the latest LTE technology (Long Term Evolution, also known as ultra-wide broadband or 4G) will allow us to offer better and faster connections and to reach geographic areas that currently have no good quality broadband connection (Digital divide), with performance of close to ADSL levels.

1.3.2 Fixed networkWith the Infostrada brand, Wind is the leading alternative operator to Telecom Italia for voice and ADSL services.

Over the years, Wind has invested heavily in constructing an alternative network to that of the leading market operator, offering clients the chance for higher quality at a lower price. The company has chosen to develop our

network independently from the existing structure, using fibre optics cables to connect more than 1,400 telephone switchboards, covering around 60% of the Italian population.This solution makes it extremely simple for users to access the network: in fact, clients can keep their telephone number and dont need to change anything in their telephone set-up.The same philosophy applies for ADSL Internet connection: activation is simple and almost completely automatic, even when using ADSL modems bought from retailers.

Investments In the mobIle and fIxed networksIn 2012, just like in 2010 and 2011, wind invested a total of approximately Euro 900 million, both in the fixed and mobile networks. for the mobile network, the investment was mainly dedicated to increasing the coverage of the third generation network (hsPa+) and its capacity in order to meet the substantial increase in demand for mobile Internet on one hand, and to continue improving and optimising the quality of our Gsm/GPrs/edGe network on the other. regarding the fixed network, the investments focussed on extending our coverage to at least 60% of the Italian population, while increasing the capacity and quality of the backbone (main dorsal network) used for both the mobile and fixed network services.

1.3.3 Projects fundedIn 2012, Wind conducted 2 infrastructural projects, co-funded by the Puglia Region.

PUGLIA II PROJECTkey figures Euro 46 million invested over 3 years Euro 13 million funding from the Puglia Region (27% of the investment)As part of this three-year project, completed in December 2012, Wind worked on the fixed and mobile network in all the provinces in the Region in order to boost the traffic capacity, increase geographic coverage and introduce new apparatus and technology for using the UMTS and higher system, improving the quality of traditional voice and data services and introducing new ones.

The Wind network provides services in Italy and in the rest of the world.

Wind is the leading alternative operator to Telecom Italia for the fixed network.

MOBILE SERvICESSUPPLY

TO 99.8%OF THE POPULATION

HIGH SPEED DATA SERvICESSUPPLY

TO 95.3%OF THE POPULATION

900 million

Investment 2012on the fixed and mobile network.

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Our profile

PUGLIA III PROJECT (MOLFETTA DATA CENTRE)key figures Euro 36.5 invested Euro 8.2 million in funding from the Puglia Region This Project, which is part of a wider program to modernise and rationalise the Data Centres that host all Winds IT apparatus and systems, involves the creation of a Data Centre in the ASI area of Molfetta, with the partnership of Network Contacts in managing the service.In 2012, the final project was drafted and worksite activities began.

Both projects, in addition to their considerable technological value, contribute to reducing Winds environmental impact, in line with the companys Environmental Policy. In fact, part of the investment was dedicated to constructing several solar panel systems on telephone switchboards and 4 photovoltaic plants, producing around 130 KWp and avoiding around 40 tonnes of CO2 emissions. Further details are available in Chapter 5.

1.3.4 Research and development activitiesWind research is focussed firstly on the technological solutions aiming to increase the bandwidth available, both in the mobile (using High Speed Packet Access, HSPA protocols), and fixed networks (using Fibre to the Home, FTTH fibre optics network architecture). At the same time, during 2012 Wind promoted the introduction of solutions to develop client services and an improve internal processes, through a ideas and projects workshop. For example, we initiated an analysis with the aim of improving the services offered to clients, starting with a study of Customer Care processes based on multi-channel solutions (chat, email, SMS, social media, etc.) and automatic interaction with clients, using conversational messaging and other more advanced solutions.

Moreover, we introduced new digital document handling and sales performance monitoring techniques in order to improve retail sale processes. In the context of corporate operations, we also experimented with some technical solutions to provide more secure data access through mobile devices, and we created virtual desktop management applications to allow employees remote access to their work stations.Lastly, in 2012 Wind participated in a range of projects funded by the European Community, in collaboration with around a dozen others

(innovative universities, laboratories and innovative Italian and international companies, including the CNR, The City University of London, the European Commission Joint Research Centre and the Fraunhofer Institute IAIS) on projects considered strategic:

sustainable mobility (geo-localisation applications designed for traffic planning, solutions for sustainable tourism and promoting the territory);

secure data access using private mobile terminals in institutions and organisations;

territorial monitoring and managing potential emergencies;

green data centres and improving interaction processes with energy providers;

analysis of the potential of emerging FI technology (Future Internet, i.e. research of new network architectures) and IoT (Internet of Things, a possible evolution of Internet whereby objects acquire intelligence thanks to being able to exchange information with other objects).

PartIcIPatIon In research Projectswind participates with other subjects in projects generating benefits both for the company and for our relations with clients and the community.regarding sustainable mobility, the studies conducted on the basis of the Geopkdd project allowed us to extend the potential of sensor-based systems which can, for example, provide a basis for mobility agencies in large centres to plan traffic routes (new roads, one--way systems, eco-pass areas, etc.) or elements for promoting the territory. these solutions use a knowledge of traffic flows to analyse average journey times or to identify areas of interest for citizens (such as parking spaces) and can be linked to local activities to promote green policies.

the ess project, on the other hand, uses integrated data from a range of different sensors to support those responsible for managing crisis situations caused by anomalous events (environmental emergencies, weather disasters, terrorist activities, etc.) using accurate and real time information. the adoption of this kind of solution makes it easier to control and manage crisis situations, allowing for a synchronisation and cooperation between on-site resources and control/command centres, reducing reaction times and improving the efficiency interventions using web portals.

Wind research is focused firstly on the technological solutions

aiming to increase the bandwidth available, both in the mobile,

and fixed networks.

022 023

Our profile

the company has activated Green Ict policies based on reducing data centre energy use. the first data centres to activate this policy were those in Ivrea and rome, where federated data centres are currently being tested as part of the all4Green project, allowing us to highlight the advantages of a green approach designed to reduce electricity use and therefore reduce the production of co2 and other harmful greenhouse gases. more in general, the all4Green project intends to check the possibility of creating an integrated, new generation federated data centre system (Green technology) to provide innovative services to users while reducing energy use, thanks to Ited architecture and the collaboration of all players (suppliers of services, energy, equipment and infrastructures) with the common goal of saving energy and reducing emissions, with both technological and process-based solutions.

lastly, as part of the fItUP project, funded by the european community, tests are currently underway to allow us to export objective assessments of CO2 emission reductions resulting from combining the capacities of hydrogen fuel cells with solar panels for energy production.

1.4 Sustainability in Wind1.4.1 Corporate strategic prioritiesWind is close to our clients. Our values of clarity, transparency and simplicity, which underlie all our business strategies, emphasise the central role of clients in our business and fit perfectly with our sustainability vision. These three concepts are particularly important and distinctive for a company that operates in a complex, competitive and highly-regulated sector such as telecommunications. A clear range of offers, transparent advertising and easy-to-use services are the key points of our commercial strategy, combined with low costs, attention to quality and technological innovation. These values are directly responsible for our recent commercial success; for example, the transparency of Minuto Vero, the simplicity of our Unlimited mobile Internet offers and the low costs of the innovative All Inclusive plans. All in line with a strategy that places clients, and their experience, at the centre of everything, putting technology at their service.

In order to better grasp the opportunities of an evolving market that, from traditional calls to SMS, is rapidly moving towards the world of data and Internet, Winds goal is to bring the Digital world within everyones reach, regardless of how well they use technology and what type of device they have: a traditional mobile phone or a smartphone. As well as guaranteeing simple services, in the near future it will be important to establish strategic alliances in order to explore new business models, such as providing contents (such as videos) or payment services, made possible by new technology (such as Mobile Ticketing, to pay for services like public transport using your calling credit).

Winds strategy also pays careful attention to technology which allows for new data services: fibre optics for super high-speed fixed network services and LTE technology (Long Term Evolution or 4G) for mobile communications. Both will allow us to considerably improve our current performance, with the possibility of offering ultra-wide broadband services as early as 2013, starting in the largest Italian cities.Wind is close to the community and the environment. Through initiatives to promote social integration, economic and business development, solidarity, sharing professional experiences and skills, the company contributes to the development of the communities in which we operate. Moreover, the awareness of being part of a system and being able to have a significant and long-lasting effect on the environment leads Wind to manage our environmental impact responsibly and search for ways to constantly improve.

1.4.2 Analysis of the importance of sustainability issues

In order to focus on the most relevant sustainability issues for the company, between the end of 2012 and the beginning of 2013, Wind decided to conduct an assessment of our situation, in line with the ISO 26000 Guide, an international regulation on social responsibility that helps organisations to contribute to sustainable development. The regulation identifies numerous themes associated with sustainability, and groups them into 7 core subjects:

Governance (decision-making structures and processes);

Human rights (discrimination and vulnerable groups, civil and political, economic, social and cultural rights, etc.);

Wind participates in research projects regarding sustainable mobility,

reducing energy useand emissions, and managing potential

emergencies.

Clarity, transparency and simplicity.Winds goal is to bring

the Digital world within everyones reach.

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Labour practices (working conditions and social protection, social dialogue, development of human resources and training in the workplace, etc.);

Environment (preventing pollution, sustainable use of resources, protecting the environment, biodiversity and restoring natural habitats, etc.);

Fair operating practices (combating corruption, fair competition, etc.);

Consumer issues (honest commercial communications, protecting consumer health and safety, customer services and support, resolving complaints and disputes, etc.);

Community (technological development and access to technology, education and culture, health, creation of wealth and income).

Each core-subject contains one or more issues, i.e. pertinent themes. Not all of the issues are equally applicable to all organisations, which therefore select the most relevant areas according to their specific features and goals.

In Winds case, for each of the issues indicated by ISO 26000, we have considered the external pressure on the company (for example, the probable regulatory evolution, the behaviour of our main competitors, the results of customer satisfaction surveys) in order to identify the most relevant.

For each issue identified, we then examined the various actions required (for example, improving complaint response procedures, protecting personal data, clearly marking advertising, collaborating with authorities), evaluating the presence of appropriate policies and plans in Wind (such as the Environmental Management System) and actions actually taken (for example, Wind does not send advertising messages to minors, we ensure our retailers comply with privacy legislation, etc.), in order to estimate not only their importance for the firm, but also the level of protection.

Our priority core subjects were as follows, by order of importance:

Consumer issues (very good);

Fair operating practices (average);

Community (could be improved);

Environment (good);

Governance (average);

Labour practices (good).

On the basis of these results and other relevant information, Wind intends to concentrate our future efforts in the field of sustainability mainly in the Consumer issues and Community areas.

1.4.3 StakeholdersStakeholders are people who have a legitimate interest in an organisations activities because they can influence or are affected by them. In the context of managing stakeholder relations efficiently, Wind has identifed the following groups and their relative interests.

1.4.4 Listening to stakeholders Since 2006, Wind has been using methods inspired by the principles and operating methods set out in the AA1000 Stakeholder Engagement Standard to get our stakeholders involved, ranging from ways to listen and dialogue with clients to managing long-running relations with consumer associations, from involving employees through surveys, focus groups, workshops and interviews to meetings with suppliers.

In early 2012, we closed the 2011-2012 Stakeholder Engagement, which was attended by suppliers, consumer associations, charity associations and representatives from clients and environmental organisations. To date, we have selected one or two subjects from each Stakeholder category to get involved, in collaboration with Winds internal structures.

CATEGORY STAKEHOLDERS THEME AREA

SHAREHOLDERS AND BOND HOLDERS

VimpelCom Ltd and its management Return on investment Transparency Change management

WIND PEOPLE Employees External consultants Trade Union Organisations and Representatives

Identity, values Valorisation, motivation and development Stability Internal communications Change management (new shareholders) Protection and Safety in the workplace Quality of life (stressful working environment) Equal opportunities Value continuity

FINANCIAL COMMUNITY Banks Institutional investors Private investors Financial analysts Ratings agencies

Transparency to the market Financial solidity and sustainability Investor relations Corporate Governance

CLIENTS AND CONSUMER ASSOCIATIONS

Consumer and Micro-business Users Business Users Public Administration Consumer Associations

Anticipating and capturing client needs and expectations Transparency Low-cost and simplicity Fast and effective problem solving Quality and reliability of the service and personalised client relations Valorisation of loyalty

SUPPLIERS AND COMMERCIAL PARTNERS

Suppliers of goods and products Suppliers of services Sub-suppliers of goods and products Direct and indirect sales network

Spreading our ethical standards outside the company Continuity of the relationship Qualification and assessment Negotiating conditions Terms of payment Developing partnerships Sustainable Supply Chain

ISTITUTIONS Regulatory bodies (Communications, Privacy, Antitrust authorities, etc.) National and local government (Ministry of Communications, local

authorities, etc.) Justice system and Public Prosecutors Judicial Authorities (Police Forces) Civil Protection

Compliance with laws and regulations Transparent communication Socially responsible corporate management Development of shared actions and projects Contribution to the life of the country in terms of taxes and social security

contributions

COMMUNITY Territory Charity Associations (non-profit, ONLUS, NGOs, etc.) Universities and Research Media and opinion leaders

Attention to and respect for the territory Collaboration with the academic world for research and development Fundraising through charity SMS texts Protecting minors Innovation Supporting social initiatives

ENvIRONMENT Ecosystem Ministry of the Environment Green associations Specialised agencies (e.g. ARPA, APAT) Future generations

Attention to possible environmental impact Reducing use of natural resources Waste recycling Sustainable mobility Use of green and alternative energy sources Energy monitoring and optimisation

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Our profile

The meetings were also attended by several corporate departments, both in order to get a better understanding of the information and expectations of the Stakeholders present, and to provide answers in real time, taking the opportunity to provide information on Wind.

Working on the information gathered, Wind then initiated a series of projects which have been monitored during the year and occasionally modified to improve their efficiency, by agreement with those involved. For example, Wind promoted the creation of a round table between all the companies in the Parco dei Medici District (Rome) in order to improve the areas environmental and safety conditions.

Moreover, some of the issues raised during the stakeholder engagement have been integrated into the corporate processes systematically performed by the departments in question. For example, in the intranet we set up a Volunteer Noticeboard, where various corporate volunteer projects and initiatives are proposed to employees. Furthermore, Wind modified the procedure for managing unpaid debts, following discussion with the Movimento Difesa del Cittadino (Citizens Defence Movement).

2011-2012 stakeholder enGaGement Projects

maGIcabUrla and Peter Pan: the volunteer work for wind employees project led to the creation of a volunteer noticeboard in the company intranet, where volunteer initiatives and projects are regularly proposed to employees.

movImento dIfesa del cIttadIno: the credit management Process project was completed with a meeting between the mdc association and representatives from the departments affected by the process in question, sharing the procedure adopted by wind regarding clients with unpaid bills. the chairman of the association was fully satisfied by winds complete and prompt response and the work done to modify the process, which required improving in terms of flexibility towards clients.

hUaweI: the meeting with the rsPP project to share best practices for managing health and safety in the workplace issues ended by setting up a communications channel between the two firms, wind and huawei, along with plans to meet up and collaborate on other issues in the future.

safetY and the envIronment: the theme of the recycling project was changed and replaced by the Improving safety and the environment

in the district project. created with the aim of improving the quality of life within the Parco dei medici district in rome, from the point of view of both safety and road conditions, the project closed by setting up an extended round table including the wind corporate functions directly affected and all the companies present in the district. many of the initiatives proposed were subsequently realised, and many others will be re-proposed and discussed in future meetings.

erIcsson: the atmospheric Pollution project has closed as part of the stakeholder engagement, but is still ongoing and has led to a commercial product for monitoring emissions destined for use in small and large sized municipalities. In fact, the partnership between wind and ericsson has resulted in an innovative technological product designed to reduce and monitor atmospheric pollution in towns and cities.

lastly, the energy efficiency project, which is still underway, will see an integrated system using a range of alternative energy sources installed in five wind radio base stations, saving fuel and reducing atmospheric emissions.

Regarding our dialogue with employees, in 2012 we held 21 meetings as part of the training on social responsibility issues (SA 8000), which were attended by more than 200 employees, for a total of 70 hours. The most important issues discussed were:

the working environment;

the microclimate;

maintaining and cleaning company vehicles.

Listening to stakeholders,is an important part

of Winds sustainability.

These reports were addressed to the relevant corporate structures, which managed them during the course of the year.

Regarding relations with consumer associations, once again in 2012, for the fourth consecutive year, the company continued the dialogue set up as part of the OpenWind project. This year, we dedicated the first phase of the project to sales strategies and credit management, and the second phase to Customer Management. The various meetings were attended by more than 100 representatives from 15 consumer associations enrolled on the National Council of Consumers and Users.During the first part of the project, we focussed our attention on distance sales and Winds efforts to guarantee that our sales force complies with regulations and privacy legislation.

The second part of the project was dedicated to the Customer Experience, which saw representatives listen in on Wind customer care structures, allowing them direct experience with the way Wind staff provide assistance to our clients, in their daily work supporting consumers.The meetings saw a high level of participation by consumer associations, who actively took part in discussions. Our guests were very involved in the subjects covered and saw the experience as very positive, expressing the hope that the appointment would be repeated in the future.

We also dialogue with associations in other contexts, in addition to the OpenWind project. In particular, Wind regularly meets with consumer associations at institutional round tables (for example, those held by Authorities or the Ministry of Economic Development) to discuss consumer protection issues.Furthermore, our daily collaboration with consumer associations takes place through joint intermediation committees, which are one of the alternative solutions available to clients for resolving any disputes with the company relating to failure or bad management of complaints. The main advantages of the joint intermediation procedure are the low costs (due to the absence of the third independent person usually present in other forms of settlement or mediation) and the high degree of competence of the consumer association representatives who assist clients during the procedure.

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Our profile

Lastly, in 2012 we inaugurated the platform dedicated to managing joint intermediation procedures online. The details of the number of joint intermediation committees held and their results are shown in the appendix.

Wind holds ongoing relations with shareholders and the financial community through our Investor Relations department. There are a range of opportunities for dialogue: conference calls, meetings, conferences and road shows. In these occasions, our management presents the main results of the period to the financial community, and is available to answer questions from individual participants.

There is also a specific mailing list for the financial community, which the company uses to provide regular updates on the most important financial news, in addition to a dedicated mail box which we use to answer questions from investors or financial analysts in the case of particular new corporate activities or market trends. All of this financial and economic information relating to the company can be found in the dedicated section on the www.windgroup.it website.Although we have reduced the number of conferences and road shows that we attend in comparison to 2011, during 2012 we activated contacts with more than 550 analysts and investors. In particular, we made around 450 contacts during conference calls, 50 of which were from meetings in offices and the same number during the road shows.These methods of interaction have allowed Wind to establish a stable relationship with our investors and the financial community in general, with a level of information exchanged that is similar to that of a company listed on the stock exchange.

The following are Winds Corporate Ratings at the end of 2012: Standard & Poors: B+ Moodys: B1 Fitch: BB-

1.4.5 Customer SatisfactionCustomer satisfaction is one of the fundamental aspects of the success of any economic initiative. This is why, once again in 2012, Wind has measured and monitored the level of our consumer and business clients satisfaction, using specific market telephone surveys. The main areas measured are

service activation, network coverage and quality, economic positioning, client assistance and billing.

In addition to Perceived Quality, we also measured Quality Expectations for Wind and for an ideal operator, with the aim of understanding what Wind clients expect from individual aspects of the services offered and compare the results with the respective Perceived Quality indices in order to see where Wind differs from client expectations. The surveys were specifically aimed at the consumer and business mobile communications market. The customer satisfaction survey of mobile communication clients, in terms of overall satisfaction, was based on the following drivers:

Availability of rates the client requires (transparency, clarity, simplicity, low cost, frequency of promotions)

Customer care and assistance services (usability of automatic IVRanswering systems, ease of reaching and efficient problem solving by Call Centre operators, courtesy of Call Centre operators, usefulness of the www.wind.it Internet channel)

Network services (voice quality, home/work coverage)

Billing: top-ups/credit, remaining credit/telephone bill

The survey was performed through 900 interviews for Wind mobile Consumer clients and 700 mobile Business clients, using a representative sample of clients by geographic area, type of contract (pay-as-you-go and subscription), spending class (top, medium and low), length of contract with Wind.This survey showed, particularly in the Consumer segment, an excellent overall level of satisfaction among Wind clients, allowing the company to achieve a position of leadership in Customer Satisfaction in comparison to our main competitors. Regarding the mobile consumer segment, we recorded a satisfaction level of 82.4 (on a scale of 10-100) in the 900 clients interviewed, a value which is perfectly in line with client expectations (82.4) and higher than the expectations for an ideal operator (79.6). From the analysis of competitors, performed using surveys commissioned from an independent supplier, it emerged that Wind was the Best in Class for this segment.

Conference calls, meetings and road shows: Wind establishes a stable

relationship with our investors and the financial community.

In 2012, Wind has measured the level of our consumer clients satisfaction,

like in previous years, this survey showed an excellent overall level of

satisfaction among Wind clients.

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Our profile

Client satisfaction relating to customer care recorded a level of 80.5. This level was of 74.7 when interacting with automatic IVR systems and 83.6 when talking to customer care operators. These results put Wind in second place for client satisfaction regarding customer care services.

In relation to the mobile business segment, the level of satisfaction was of 74.5, once again in line with client expectations (74.1) and slightly higher than expectations for an ideal operator (72.6).Regarding the level of client satisfaction for business customer care, on the other hand, the overall level of satisfaction was of 73.4.

Client loyalty indicators and likelihood of word of mouth referrals were also very high, contributing to increasing the value of Winds image, also supported by effective advertising. In fact, out of 900 Consumer clients interviewed, the loyalty index was of 90.6, while the word of mouth tendency was of 87.1, with advertising effectiveness of 82.4. In all three cases, Wind was Best in Class among our direct competitors.

For the business segment, meanwhile, the loyalty index was of 77.7, the word of mouth index was of 71.7 and advertising effectiveness of 71.3.

1.4.6 Our Code of ConductIn November 2012, the Wind Board of Directors approved the new Code of Conduct in line with the requirements of our parent company VimpelCom. The document sets out the guidelines for behaviour in order to guarantee the health and safety of our employees and ensure coherent behaviour when interacting with colleagues, clients, business partners, competitors, governments and communities. Among other things, it includes indications for the correct use of the companys assets and information.Some of the most important new aspects include:

the FAQ, offering a guide for managing possible real-life cases;

a greater focus on involving all employees in sharing the principles expressed, in addition to defining a whistleblowing procedure (allowing for anonymous reports);

setting up ad hoc communication channels (email and telephone);

creating new themes (from the previous Code of Ethics) relating to copyright, money-laundering and placing greater emphasis on the issue of public and private corruption;

setting out disciplinary sanctions;

lastly, the new administration system for the Code and introducing the figure of Compliance Office.

In order to fully implement the Code of Conduct and make it more efficient, we set up an email and free-phone number to answer any doubts or questions regarding the application of the behavioural guidelines, or to report, including anonymously, any behaviour discovered that is not in line with the Code.

1.4.7 Internal Control SystemsIn compliance with Legislative Decree no.231/2001, on corporate administrative liability, in 2003 Wind adopted an Organisation and Management Model as described in Article 6 of the Decree. The Model outlines the processes and procedures which the company has voluntarily introduced to prevent our own managers, directors and employees from committing offences.

During 2012, the Model was extended following the introduction in 2011 of administrative liability for offences against the environment. The BoD is expected to approve this modification in the first board meeting of 2013.

As described in the Organisational Model, a specific Supervision body, with the support of the Internal Audit Department, performs periodic supervision activities of the areas at risk, drafting biannual and annual reports for the Board of Directors. To date, this supervision activity has never found any illegal activity in Wind among those set out in the Legislative Decree.In relation to the information and training activities on the Organisational Model, the company has set up a special area on the corporate intranet, while managers and directors have signed a Commitment to the 231/01 Model; we also perform information and training activities during meetings with our employees identified in areas at risk, when implementing the Model.

"CLARITy"

"TRANSPARENCy""SIMPLICITy"

In 2012, Wind approved the new Code of Conduct that sets

out the guidelines for behaviour inward and outward facing.

The good results of loyalty indicatorsand likelihood of word of mouth

contribute to testify the value of Winds image.

Our profile

032 033Lastly, during 2012 the Human Resources Department launched a training program on the 231 Model which will see the entire corporate population involved by the end of 2013. At the same time, we will be organising an in-depth training project for management and the resources directing involved in critical activities.

1.4.8 Integrated Management SystemWind operates using an Integrated Management System (IMS) for certifications that complies with the following regulations:

ISO 14001 (since 2000) Environment: minimising and correctly managing the negative environmental impact caused by our activities;

OHSAS 18001 (since 2001) - Employee Health and Safety: increasing the safety levels in the workplace;

ISO 9001 (since 2002) - Quality: constantly improving internal processes, in order to offer goods and services with ever higher client satisfaction;

SA 8000 (since 2004) - Social Responsibility: aiming to guarantee respect for human rights and correct management of employment relationships;

ISO 27001 (since 2007) - Information Security: helps organisations to improve the logical, physical and organisational security of the information they hold.

The Integrated Management System is used by Wind to guide all our operational activities. In fact, a unitary view of the corporate system valorises the entire organisation by making it easier to see shared goals, providing coordinated management and a single reference for documentation and data management, optimising resources, reducing costs and improving the integration of skills.The guidelines and goals which the Integrated Management System is based on are set out in the integrated Policy document, which establishes the focus points which Wind intends to operate with. you can view this document at www.windgroup.it

All the certifications indicated above refer to a field of application which covers the entire company, with the exception of ISO 27001, which only

applies to the Milan data management centre (SOC), and ISO 9001, which only applies to the Technology, Companies and Freelancers BU and some of the Staff functions, such as Quality, General Services, Procurement, Privacy and Human Resources.

1.5 Chapter 1: 2012 goals achieved and 2013 targets

1.5.1 2012 goals achieved Updating the Organisational Model as per Legislative Decree 231/01 to include offences against the environment.

During 2012, the Model was extended following the introduction in 2011 of administrative liability for offences against the environment.

Increase the opportunities to meet with the financial community, both by participating in financial conferences and with in-house meetings and conference calls with investors and analysts.

During 2012, Wind had more than 550 contacts with analysts and investors, although we participated in fewer conferences and road shows that in 2011.

The contacts were divided into: contacts during Conferences and Conference Calls (around 450), meetings at Wind offices (around 50) and another 50 during Road shows.

The new Investors section in the wind.it Internet site.

iSo14001

ohSaS 18001

Sa 8000

iSo 27001

iSo 9001

To date, the supervision activity, in compliance with Legislative Decree no.231/2001 has never found any

illegal activity.

Wind operates using an Integrated Management System for certifications

that complies Quality, Environment, Information Security and Social

Responsibility.

Our profile

034 035

Continue Winds OpenWind project in 2012, with a first stage by geographic area and a second stage dedicated to customer experience.

For the fourth consecutive year, the company continued the dialogue set up as part of the OpenWind project. This year, we dedicated the first phase of the project to sales strategies and credit management, and the second phase to Customer Management.

The various meetings were attended by more than 100 representatives from 15 consumer associations enrolled on the National Council of Consumers and Users.

During the first part of the project, we focussed our attention on distance sales and Winds efforts to guarantee that our sales force complies with regulations and privacy legislation.

The second part of the project was dedicated to the Customer Experience, which saw representatives listen in on Wind customer care structures, allowing them direct experience with the way Wind staff provide assistance to our clients, in their daily work supporting consumers.

Transfer nearly all the user complaints and disputes management that pass through the Consumer Associations channel online. This goal requires an adequate level of sharing and participation by the Associations, to be pursued in the conviction that this represents a small but important step in promoting digital culture in Italy.

In 2012, we inaugurated a platform dedicated to the online management of joint intermediation processes, which are now completely managed through the platform.

Propose amendments to simplify national and local legislation.

In order to help bring 4G networks up to the targets set in the Digital Agenda, we have proposed modifications to the regulations on protecting the population from electrical, magnetic and electromagnetic fields; furthermore, in order to harmonise local regulations on a national level,

we have made proposals regarding excavation methods for fibre optics: all of these proposals, after significant efforts to work together made by the various parties involved, were implemented by Legislative Decree no. 179 dated 18 October 2012, converted into Law no. 221 dated 17 December 2012.

1.5.2 Targets for 2013 Extend the high speed network (HSPA, 42 Mbit/s) to the 64 main cities.

Extend the 21 Mbit/s service to the remaining, less densely populated areas of the country, achieving coverage of 96% of the population.

Activate at least two more innovative research programs, in addition to those already planned.

Extend trials to improve the quality of the service offered and the control of internally established safety parameters.

Invest in improving the quality and coverage of the broadband mobile network (so-called 3G) to offer Mobile Broadband data services, i.e. high speed Internet services (42 Mbit/s) accessible from mobile devices (smartphones, tablets or USB sticks connected to portable computers).

Start constructing the network to allow for 4G connections, in order to use the frequencies purchased in 2011 and extend the range of Mobile Broadband services.

Develop the new infrastructures in order to continue guaranteeing high levels of usability and without causing discontinuity in clients current user experience.

Continue to perfect ADSL service quality and client management processes, in order to maintain our market position as leading alternative operator to Telecom Italia in the fixed network. In particular, to activate a fibre optics network in Milan, in collaboration with Metroweb, capable of reaching clients homes, allowing for connection speeds of up to 1Gb per second.

Re-propose in 2013 a stakeholder engagement initiative focussing on the results and suggestions of the previous year.

Continue and strengthen opportunities to dialogue and collaborate with Consumer Associations, both at institutional round tables and bilateral discussions with individual associations.

Adapt the Organisational Model to the new offences of private-to-private corruption and undue inducement to give or promise benefits introduced by Legislative Decree 231/01 in November 2012.

Complete the training program on the 231 Model for the entire Wind population.

Initiate supervision activities on information flows linked to areas at risk for Offences against the Environment.

Extend the ISO 27001 Management System to corporate functions not yet included within the certification parameter.

Experiment with a new Integrated Management System online training method, to accompany traditional classroom courses.

WIND FOR THE MARKET

Q

039

Wind for the market

038

2.1 Our economic performance2.1.1 Annual resultsIn a difficult economic scenario and a particularly challenging regulatory context, Wind closed 2012 with the best results on the market. In fact, our work to strengthen our principles of clarity, transparency and simplicity, which have always been our inspiration, allowed us to increase our market share, which in the mobile segment rose from 22.7% in 2011 to 23.3% at the end of 2012.

In 2012, total revenues were of around 5,427 million euros, slightly down (-2.6%) on the previous year. Net of the impact of the cuts to mobile1 termination rates, imposed by the regulatory body, Wind would have achieved growth of 2.1%.The best performances were in the mobile market, in particular with reference to the Internet component (+41.3%) and instant messaging (+9.3%). The fixed network market was less successful, with a 3.6% fall in revenues caused by the change in commercial strategy, which currently focusses mainly on acquiring direct access clients with higher margins.

The operating result before depreciation, amortization, write-downs of non-current assets and gains/losses from non-current assets (EBITDA) as at 31 December 2012 reached 2,063 million euros, slightly down on the previous year. This was mainly due to the cuts to mobile termination rates; nonetheless, the relative margin remained stable at 38%. The positive EBITDA performance coupled with the efficiency of our investments allowed Wind to increase Operating Cash Flow (EBITDA - CAPEX) by 2.8% in comparison with 2011.

Again at 31 December 2012, Wind had overall net financial debt of 9.151 million euros, down from the 9,346 million recorded on 31 December 2011, with a net debt/EBITDA ratio of 4.4. The debt fell mainly thanks to some corporate optimisation initiatives taken during the year.

1 this is the rate that a telecommunications operator pays to another operator for the service of delivering calls made by their own clients to another operator's clients. this rate is set by the regulatory body.

WIND FOR THE MARKETWind closed 2012 by increasing its

market share in the mobile segment;the best performances were in the mobile market, in particular with

reference to the Internet component (+41.3%) and SMS (+9.3%).

+41.3% +9.3%

2011

2012

The income statement shows contributions to operating expenses of Euro 1,557,299.37 for a range of special projects funded by the State, Regions, European Union or other institutions.

In October 2012, Wind also approved and subsequently implemented the Network Transformation Project signed by Italian trade unions and most of our employees, which will allow the company to save around 40-45 million euros per year in operating costs from 2013 onwards, thanks to a the internalising of a series of activities associated with network maintenance, reducing personnel costs and increasing productivity.

Lastly, in December 2012 Wind drew up an agreement with a single supplier for developing network construction services, with the aim of optimising investment costs, with forecast savings for around 40 million euros from 2013.

2.1.2 Distribution of value added among the

various stakeholdersThe economic value generated and distributed shows how much wealth has been produced and how it is distributed between our stakeholders, allowing us to create a link between the financial reports and the sustainability report.

In comparison to 2011, in 2012 the added value produced by Wind fell by a total of 0.6%2. This negative result mainly affected the State stakeholder (-29.1%)3, followed by shareholders (-19.5%) and employees (-4.8%); vice versa, distribution to investors (1.4%) and the company (6.8%) rose in terms of depreciations and amortizations.Donations to the community were of over Euro 98,000, down from Euro 108,000 in 2011.

2 the distribution of value added for 2012 has included also the donations; the same change has been applied to the data included into the 2011 report.

3 the value of the grants towards operating costs during 2012 are not included in the calculation or the distribution to the "state" stakeholder.

1,400,000

1,200,000

1,000,000

800,000

600,000

400,000

200,000

0

(200,000)

Economic Value Generated and Distributed to the various stakeholders

To employees

To capital (borrowing costs net)

To the company (depreciation and amortization)

To shareholders

To the State

Donations

321,726

1,142,402

(123,886)

279,698

98

969,173

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Wind for the market

2.2 Clients2.2.1 Breakdown of client baseAs at 31 December 2012, Wind recorded 21.6 million mobile communications clients, 3.1 million fixed network subscribers, 2.2 million broadband Internet clients and 40,000 on the narrow band.

The biggest growth occurred in the mobile communications market (+3% clients on 2011). The client base for voice calls on the Wind fixed network, on the other hand, fell by 1%; while the component of direct voice clients rose by 3% on the previous year.Regarding Internet and data clients, there was a physiological tendency to abandon narrow band services (-53% on 2011) to the advantage of the equivalent but better services available with broadband (+4%).

2.2.2 Mobile Consumer Client assistance

The operational organisation of customer assistance for Mobile Consumer clients (or Mobile Clients) is divided among 9 Call Centres, the responsible Pozzuoli internal centre, and 8 external centres, two of which are located outside Italy (in Romania and Albania). All the external call centres are run by operators specialised in the sector, with whom Wind has had a long-running and stable relationship for years. In detail:

our call centres abroad, along with those run by partners with operating offices in Italy, are 100% integrated with Winds systems. The operators use the same systems and applications available to our internal call centres, and they have access to the same information.

the training courses during the start-up phase and during subsequent maintenance and retraining activities are substantially the same as those for internal call centres. The length of training courses giving access to the activities or to improve skills varies from 2 to 4 weeks, depending on the activities in question.

from a operational point of view, the call centres abroad are completely integrated with all the Italian call centres, and are run in the same way

Mobile communications

Client base (millions of SIM Cards)

Revenues (millions of euro) (1)

Voice traffic (billions of minutes)

ARPU (euros/month)

% Data ARPU out of Total ARPU

Fixed network

Client base (billions of lines)

of which ULL (billions) (1)

Revenues (millions of euros)

Voice traffic (billions of minutes)

ARPU (euros/month)

(1) Including Virtual ULL clients.

Internet and data services

Internet Customer Base ('000) of which Narrowband ('000)

of which Broadband

of which ULL

of which Shared Access ('000)

2012

21.6

3,870

52.8

14.4

27.5%

2012

3.1

2,465

1,392

18.1

31.2

2012

2,253

43

2,210

1,849

15

2011

21.0

3,989

48.2

15.6

22.6%

2011

3.1

2,397

1,442

18.5

33.2

2011

2,225

90

2,135

1,751

18

% variation

3.0%

(3.0%)

9.5%

(7.8%)

% variation

(1.0%)

2.8%

(3.5%)

(2.3%)

(6.0%)

% variation

1%

(53%)

4%

6%

(18%)

in terms of targets, performance monitoring and quality provided and perceived by clients.

During 2012, our Customer Management assistance services for Mobile Clients were completely reorganised, with the goal of improving skills and efficiency.The main centre, located in Pozzuoli, during 2012 underwent a specialisation program for managing post-paid clients and the new assistance needs created by multimedia services (evolved, new generation telephones). This allowed Wind to manage client requests directly by phone, without needing to forward calls to back office departments, improving management time and therefore ultimate client satisfaction.The call centres in Romania and Albania, on the other hand, manage niche activities and international clients, to whom they can offer mother tongue assistance.

In 2012, the Call Centres were also asked to guide clients to the commercial offers best suited to their needs. This area will be extended during 2013. At the same time, we have continued to update the IVR platform.

Lastly, during 2012 Wind introduced a new integrated platform dedicated to managing and tracing contacts with clients, in addition to monitoring the functioning of all the management processes relating to them. This tool, which is fundamental for governing relations with final clients, was implemented without any interruptions to the assistance service.

The Perceived Quality of Mobile Consumer assistance services is recorded through automatic interviews proposed to a representative sample of clients after calling the 155 call centre. Clients are invited to rate the assistance received on a scale of 1 to 5. The results from recent years show a constantly improving trend; in particular, over the last year this indicator reached an absolutely excellent value (4.10 out of 5). Moreover, clients showed a preference for the answers given by operators rather than those provided by automatic answering systems (IVR).Another fundamental indicator for measuring the efficiency of assistance centres for Mobile Consumer clients is One Call Resolution (OCR), which measures the percentage of dossiers managed by the call centre during the call, where clients did not need to call back for clarifications or reminders. Proof of the considerable progress seen in developing our management models and processes in recent years, in 2012 Wind achieved a result of

Customer assistance for Mobile Consumer clients is divided among 9 call centers, that are asked

also to guide clients to the commercial offers best suited to their needs.

042 043

Wind for the market

76%, confirming a constantly increasing trend; for further details, please see the Attachment.

2.2.3 "Fixed Consumer Client assistanceThe operational organisation of Infostrada fixed network assistance is divided between 11 call centres; of these, 3 are in-house Wind centres and 8 are external. The call centres are all located in Italy, with the exception of 2 Romanian offices in Iasi and Constanta, which are run by specialised partners. All the external call centres are run by operators in the sector, with whom Wind has had a long-running and stable relationship for years.

The organisation of Customer Management for the fixed communications and ADSL market has improved considerably since the end of 2011. The new service model aims to ensure more effective CRM (Customer Relationship Management) strategies; to this end, we have identified 2 macro-areas of specialisation, the first focussing on welcoming and managing recently acquired clients and the second on loyalty and managing long-term clients. The 2 specialisation areas are managed by 2 territorial competence centres.

In the same way as for mobile communications, Infostrada Customer Management has also been asked to guide clients towards the commercial offers best suited to their needs.Furthermore, we also introduced a new integrated platform dedicated to managing and tracing contacts with clients, in addition to monitoring the functioning of all the management processes relating to them. This tool, which is fundamental for governing relations with final clients, was implemented without any interruptions to the service.

Regarding service quality surveys, Infostrada call centres have been improving both in terms of Perceived Quality and One Call Resolution (OCR).In 2012, the former reached 3.6 points out of a maximum of 5, while the second reached just under 72%, a satisfactory result considering the complex and specific nature of the assistance processes for Fixed Network Clients (billing, technical assistance, etc.). Further details are set out in the Attachment.

2.2.4 Business Client assistanceThe Wind assistance service for Business clients, accessed by calling 1928, through dedicated web, fax or email addresses and the new Facebook page, operates through 4 call centres.Distributed in the national territory, the call centres provide specialised services for micro, small, medium and large enterprises. They can provide information on all types of service, both mobile and fixed, and support clients in choosing the best rate plan for their individual needs. At the same time, they receive reports, manage complaints and offer personalised assistance. In particular, technical assistance for the mobile and fixed network has become even more specialised by setting up dedicated, specialised groups in order to offer a high quality service to clients, in line with market development and technological evolution.

In comparison with 2011, we have extended the scope of the Pozzuoli call centre to include direct management of high value Corporate Clients. We have continued to invest heavily in the Puglia region, expanding our existing Molfetta facilities with 50 new, young operators and launching a series of new activities both in Molfetta and the Almaviva site in Milan.

With reference to high end, so-called Top Enterprise Clients, the Business Customer Management team has organised its activities in order to provide an ever closer relationship between consultants and Clients, assigning a maximum of 6 Clients to each consultant.During 2012 we intensified our monitoring activities regarding the quality of answers provided to clients by our Business call centre operators, with a strong focus on One Call Resolution (OCR). This allowed us to improve the level of online Perceived Quality by clients, recording a rise in the indicator from 3.6 at the beginning of the year to 3.8 out of 5 on 31 December. Average response times to complaints was within 7 days.

2.2.5 The sales networkAs part of our strategy, which sees distribution as an ever more crucial factor for our success, in 2012 Wind continued to improve the quality of our distribution channels and strengthen our sales network.

Welcoming and managing long-term clients

are the main activities of our 11 Infostrada call centers,

that in 2012 have been improving Perceived Quality.

The Wind assistance service for Business clients operates

through 4 call centres,they can provide information

on all types of serviceboth mobile and fixed.

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Wind for the market

On 31 December 2012 Wind had 646 exclusive sales points, of which 166 own property shops and 480 franchisings through which to sell our mobile products and services, operating exclusively with the Wind brand. The non-exclusive sales network, on the other hand, is composed of around 1,463 retailers, 913 sales points in electronic retail chains and around 5,172 other sales points in smaller Italian towns run by SPAL SpA. Furthermore, some of our services are sold online through the www.155.it website, while our scratch cards are also distributed through small sales points such as tobacco shops and newsagents.Lastly, Wind extended the distribution of our Business offers to the Internet channel, opening an online shop for direct sales of mobile products and services: WindBusinessShop.it, which offers mobile voice and Internet services through the WindBusiness.it portal, targeted at freelancers and small enterprises who can make their purchase directly online.

2.2.6 AdvertisingThe Wind Group offers our mobile, fixed and Internet communications services under the Wind brand for mobile and Internet communications, Infostrada for the fixed network and Wind Business for both companies and VAT.In 2012, TV was the main media used by Wind to focus our advertising campaign; at the same time, we increased our investments in local-territorial communications. The media mix includes billboards, press and radio, and the messages we transmit are in line with the TV campaign. We have also introduced other one-to-one communication tools such as Direct Marketing, with a particular focus on sales points; moreover, we have boosted the local communications channel dedicated to events, in an effort to move ever closer to the territory. The Wind of Winter Tour and Wind of Summer Tours are part of this strategy.

Following market investment trends, in 2012 Wind increased our presence on the Internet, social media and the most popular websites in general, with display campaigns in line with the above the line campaigns. The launch of the new websites confirms our attention and interest in the web. In the second half of the year, we ran a big information campaign on Minuto Vero, a distinctive element that sets Wind apart from our competitors, with the goal of promoting Wind and Infostradas typical values of transparency and low costs. The campaign was supported across all communication channels.

The testimonials for the two brands continued to star in the TV ads: Aldo, Giovanni and Giacomo for the mobile market, and Fiorello for the Infostrada fixed network services.In the second half of the year, the new Sogno advertising format saw Fiorello, Infostradas long-running testimonial, star in an advert for Wind, in order to underline the fact that the mobile communications brand and Infostrada both belong to the same large group, with ever more integrated fixed and mobile offers. The slogan for the campaign announced in August, Fiorello marries Wind, emphasised this union thanks to the actors strong association with the brand. The development of the Sogno format into several creative episodes saw Fiorello alternate as testimonial between Wind and Infostrada, guaranteeing a constant presence on TV.

Wind also sponsors concert, TV programs and sporting events; in particular in the field of music, which attracts the greatest attention from all age ranges along with the greatest capacity to involve the public. In 2012, the Wind Music Awards, now in their sixth edition, were aired in prime time on RAI 1, achieving huge public interest and audience share. During the year in question, Wind was also the main sponsor of the A.S. Roma football team, and will continue to sponsor all their matches up until 30 June 2013.

2.2.7 Protecting personal dataThe Data Protection Authority is responsible for checking compliance with data protection regulations, in addition to managing any complaints/reports of alleged violations. If the Authority finds evidence of illegal handling of personal data, they will impose the necessary or appropriate measures on the company in order to bring the handling into compliance, in addition to an administrative fine.The safety measures protecting personal data handled by Wind are described in the Data Security Programming Document (DPS), the latest version of which was approved in 2012 and is available on our corporate website. The DPS sets out the details of the actions to support Data Protection taken by Wind in the past, along with some guidelines for future action. Although this document is no longer required by law, Wind has decided to keep it active given the importance which the company attributes to this subject.

The sales network has 646 exclusive sales points,1,463 retailers, 913 sales points

in electronic retail chains and around 5,172 other sales points

in smaller Italian towns.

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Wind for the market

Data protection is managed by Winds Privacy Office, which implements legal requirements and directly manages relations with the Authority. In particular, the Privacy Office is responsible for:

1. managing relations with the Data Protection Authority;

2. managing claims regarding data protection issues from private citizens and law firms;

3. supporting corporate functions in issues relating to data protection.

In 2012, the Privacy Office managed around 200 requests, complaints about undesired promotional calls made by Agents and/or Telesellers. In order to call a halt to this phenomenon, Wind conducted supervision of its sales agents, affecting 100% of the population to whom the privacy legislation applies. Also following these blanket activities, Wind decided to modify the organisational structure of its sales network, terminating all current contracts with Agents working in the physical channel, and reducing telemarketing activities by 50%. As a result, the number of sanctions received by the Privacy Office from the Authority has fallen from 10 in 2011 to 4 in 2012.

The Privacy Office also managed more than 1,000 claims from private citizens and law firms in 2012. The majority of requests from private citizens were clients requesting access to their data or exercising their right to oppose the handling of their data for promotional purposes. Lastly, the Privacy Office provided support on regulatory and legislative issues for corporate functions and conducted periodic monitoring of activities and internal procedures, in order to ensure compliance with current data protection regulations.

2.2.8 Unfair commercial practices and false advertising

The Markets and Competition Authority (AGCM) has the power to bring proceedings, including formal litigation, and impose fines up to a maximum of Euro 5,000,000 for each procedure for unfair commercial