Telecom Italia S p A : TIM - BoD Explanatory Report Saving Shares conversion (SM)

Registered office in Milan, Via Gaetano Negri, no. 1

Registered in the Companies Register of Milan-Monza-Brianza-Lodi under no. 00488410010 Share capital of Euro 11,677,002,855.10 fully paid-up

drawn up pursuant to Article 125-ter of Legislative Decree No. 58 of 24 February 1998 and Articles 72 and 84-ter of the regulation adopted with CONSOB Resolution No. 11971 of 14 May 1999, as well as in accordance with Annex 3A, Scheme No. 6, to the aforementioned regulation

December 29, 2025

These materials do not constitute and may not be interpreted as an offer or an invitation to subscribe for or purchase securities. The securities referred to herein have not been and will not be registered in the United States pursuant to the United States Securities Act of 1933, as amended (the "Securities Act"), nor in Australia, Canada, Japan, or in any other country where the offering or solicitation is subject to authorization by local authorities or is otherwise prohibited by law (the "Excluded Countries"). The securities mentioned herein may not be offered or sold in the United States or to "U.S. Persons" (as defined under the Securities Act), unless they are registered under the Securities Act or an applicable exemption from the registration requirements under the Securities Act is available. Copies of these materials, or any portion thereof, are not and may not be sent, transmitted, or otherwise distributed, directly or indirectly, to the Excluded Countries.

"Conversion of saving shares into ordinary shares: (i) attribution to the holders of the saving shares of the right to convert them into ordinary shares, with payment of a cash component by the Company; and (ii) mandatory conversion into ordinary shares of saving shares for which the conversion option referred to in point (i) is not exercised, also with payment of a cash component by the Company. Amendment of Articles 5, 6, 14, 18, 19 and 20 of the By-Laws. Approval of any relevant and consequent resolution."

Dear Shareholders,

this report (the "Explanatory Report") - prepared pursuant to Article 125-ter of Legislative Decree No. 58 of 24 February 1998 ( "CFA") and Articles 72 and 84-ter of the Regulation adopted with CONSOB Resolution No. 11971 of 14 May 1999 (the "Issuers' Regulation"), as well as in accordance with Annex 3A, Schedule 6, to the Issuers' Regulation - is aimed at providing information on sole item on the agenda of the Special Meeting of the saving shareholders of Telecom Italia S.p.A. ("TIM" or the "Company") called for 28 January 2026 in a single call.

1. Reasons for the proposed transaction

   1. Transaction description

      The Shareholders' General Meeting of TIM, convened for 28 January 2026 in single call, is called - in extraordinary session - to approve a transaction concerning the conversion of the Company's issued saving shares (the "Saving Shares" and, the related holders, the "Saving Shareholders") into TIM ordinary shares (the "Ordinary Shares"), which comprises:

      1. the granting to Saving Shareholders of the right to convert, in whole or in part, their Saving Shares into Ordinary Shares according to the following terms: (i) a conversion ratio equal to 1 Ordinary Share for each Saving Share; plus (ii) a cash component of a total of Euro

         0.12 per Saving Share, to be paid by the Company to Saving Shareholders who exercise this conversion option (the "Voluntary Conversion Cash Component" and, the voluntary conversion transaction subject to the approval of the Shareholders' Meeting, the "Voluntary Conversion"); and

      2. the mandatory conversion into Ordinary Shares of the Saving Shares that have not been subject to Voluntary Conversion, according to the following terms: (i) a conversion ratio equal to 1 Ordinary Share for each Saving Share; plus (ii) a cash component of a total of Euro 0.04 per Saving Share, to be paid by the Company to the Saving Shareholders (the "Mandatory Conversion Cash Component" and, together with the Voluntary Conversion Cash Component, the "Cash Component") (the "Mandatory Conversion", and together with the Voluntary Conversion, the "Conversion").

         The Mandatory Conversion, which is part of the Conversion transaction, submitted for approval to the Shareholders' General Meeting of the Company, is relevant under art. 146, paragraph 1, letter (b), of the TUF, and is therefore subject to the approval of the Special Meeting of Savings Shareholders of the Company.

         The Conversion is part of a broader corporate transaction, which also encompasses the reduction of TIM's share capital, pursuant to and for the purposes of Article 2445 of the Italian Civil Code, to a total of Euro 6,000,000,000.00, without changing the number of TIM shares outstanding and

         with a consequent reduction in their implicit nominal value (considering that TIM shares do not have express nominal value indication) (the "Capital Reduction"). The Capital Reduction is subject to the approval of the same Shareholders' General Meeting called to resolve on the Conversion (i.e., under item 2 of the agenda of the extraordinary part to the Shareholders' Meeting). For further information on the proposed Capital Reduction, please refer to the explanatory report prepared by the Board of Directors pursuant to Articles 125-ter of the CFA and 72, paragraph 1-bis, of the Issuers' Regulation and available to the public at the Company's registered office and on TIM website (www.gruppotim.it, Section "Investors - Shares - AGM and Meetings").

         As described in the explanatory report on the proposed Capital Reduction, the portions of the Company's equity (patrimonio netto) that will be released from the nominal share capital constraint as a result of the Capital Reduction will be allocated as follows:

         1. up to one fifth of the share capital, to the legal reserve (riserva legale); and

         2. for the remaining amount, to the formation of an available equity reserve (riserva disponibile di patrimonio netto).

         This available equity reserve may be used by the Company to cover any capital needs resulting from the Conversion, for the purposes of: (i) the payment of the Cash Component paid to the Saving Shareholders in the context of the Conversion; and/or (ii) the purchase of the Saving Shares in respect of which the withdrawal right is exercised within the framework of the relevant liquidation procedure (for further information on the right of withdrawal granted to Saving Shareholders in connection with the Conversion, please refer to the following Paragraph 18).

         As further explained in Paragraph 10 below, the effectiveness of the Conversion resolution is subject to the fulfilment of each of the following conditions precedent:

         1. the approval of the Mandatory Conversion, pursuant to Article 146, paragraph 1, letter (b), of the CFA, by the Special Meeting of Saving Shareholders, called for 28 January 2026 in a single call;

         2. the circumstance that the maximum disbursement to be paid by the Company for the liquidation of the Saving Shares for which the right of withdrawal is exercised, and which have not been purchased by shareholders or placed to third parties as a result of the procedure referred to in Article 2437-quater of the Italian Civil Code, does not exceed an amount equal to a total of Euro 100,000,000.00 (the "Stop-Loss Condition").

            The Stop-Loss Condition shall be deemed to be in the exclusive interest of the Company and, therefore, may be waived in whole or in part by the Company unilaterally and at its own discretion; and

         3. also in consideration of the functional interdependence between the Capital Reduction and the Conversion, the circumstance that the Capital Reduction resolution is approved by the Shareholders' Meeting and no objection is presented by the Company's creditors within 90 days of the registration of the Capital Reduction resolution with the competent Companies Register, pursuant to art. 2445, paragraph 3, of the Civil Code, or, in the event of an opposition, the circumstance that the authorization of the Court intervenes, pursuant to art. 2445, paragraph 4, of the Italian Civil Code, within 6 months (which may be extended by the Company by a maximum of a further 3 months) from the registration of the Capital Reduction resolution with the Companies Register (a 6-month term, as potentially extended,

         English Courtesy Translation In the event of discrepancies with the Italian version, the Italian version shall prevail

         after which the condition will be considered not fulfilled) (the "Capital Reduction Condition").

         It should also be noted that - again in consideration of the functional interdependence between the two transactions and as described in the explanatory report concerning the Capital Reduction proposal, to which reference should be made for further information - the Capital Reduction resolution is in turn subject (unless waived by the Company): (i) to the approval of the Conversion proposal by the Shareholders' General Meeting, convened for January 28, 2026, and (ii) the fulfilment of the conditions referred to in points (a) and (b) above.

         It is provided that: (i) the effectiveness of the Conversion will occur before the payment date of any dividend which, should the relevant conditions be met, could be distributed from the results of the 2025 financial year; (ii) because of the Conversion, the Saving Shares will not benefit for the 2025 financial year from any capital privileges that may be due in their favour under the By-Laws.

   2. Reasons for Conversion

   The Conversion is, first of all, justified with a view to rationalizing the structure of TIM's share capital, thus achieving the need to simplify the ownership structure and, more generally, the governance of the Company and reduce the management costs associated with the partition of the share capital into several classes of shares admitted to listing.

   Indeed, also taking into account the progressive decline in market interest in saving shares, the Board of Directors believes that their retention at present does not respond to an appreciable interest of TIM. The simplification and rationalization of the share capital structure is a well-established trend towards which the market converges. As of the date of this Explanatory Report, only 5 Italian companies issuing shares listed on regulated markets - including TIM - maintain a capital structure divided into ordinary and saving shares.

   On the other hand, the Conversion would make it possible to expand the overall free float of the Ordinary Shares, helping to create the conditions for greater liquidity of the TIM share and, therefore, also for greater interest of the market and institutional investors in the stock.

   In this perspective, the Conversion would allow (in compliance with the rights and prerogatives of the holders of the Saving Shares, who are also granted the possibility of opting for the Voluntary Conversion according to the conversion terms described above):

   1. Saving Shareholders:

      1. to convert their Saving Shares into Ordinary Shares according to Conversion terms that express the following implicit premiums with respect to: (x) closing prices as of December 19, 2025 (i.e., on the trading day prior to the date of announcement of the Conversion to the market) (the "Reference Date"); and (y) the arithmetic mean of the closing prices in the 6 and 3 months and in the month preceding the Reference Date (inclusive) (for more information on the Conversion terms and the related determination criteria, please refer to the following Paragraph 8):

         	Optional Conversion	Mandatory
         	(1)	Conversion (2)
         Conversion Ratio	1:1	1:1
         Cash Component per Share	€ 0.1200	€ 0.0400
         Price at Reference Date	€0.5744	€0.5744
         Implied premium on price at Reference Date	8.3%	(5.6%)
         1-month average price (*)	€0.5622	€0.5622
         Implied premium on average price over 1 month	10.6%	(3.6%)
         3-month average price (**)	€ 0.5481	€ 0.5481
         Implicit premium on average price over 3 months	13.5%	(1.1%)
         6-month average price (***)	€ 0.5117	€ 0.5117
         Implied premium on 6-month average price	21.6%	5.9%

         (∗)19/12/2025 - 20/11/2025 (inclusive). The days on which the market is closed were not taken into account for the purposes of the calculation.

         (∗∗)19/12/2025 - 20/09/2025 (inclusive). The days on which the market is closed were not taken into account for the purposes of the calculation.

         (∗∗∗)19/12/2025 - 20/06/2025 (inclusive). The days on which the market is closed were not taken into account for the purposes of the calculation.

      2. as a result of the Conversion (whether voluntary or mandatory) to:

         − be holders of Ordinary Shares that confer voting rights in the ordinary and extraordinary shareholders' meetings of the Company and incorporate their value;

         − receive a security that has a greater degree of liquidity in terms of trading volumes and that falls within the scope of the discipline of mandatory takeover bids (which only concern securities that confer voting rights in shareholders' resolutions concerning the appointment or removal of directors pursuant to Article 105, paragraph 2, of the CFA);

         − to participate in the future remuneration of Ordinary Shareholders in line with the Shareholder remuneration policies that may be adopted by the Company;

   2. the current holders of Ordinary Shares, to benefit from the loss of the patrimonial privileges attributed to the Saving Shares;

   3. all TIM Shareholders to benefit from the greater liquidity of the share as a result of the expansion of the free float of the Ordinary Shares following the Conversion; and

   4. the Company to rationalize and simplify the composition of its shareholding structure, also benefiting from a reduction in management costs associated with the existence of several classes of shares admitted to listing.

2. Description of the rights or privileges of the Saving Shares

1. ‌Calculated as follows: Implicit premium = [(a*b+c) / d ] -1

   where: "a" means the closing price on the Reference Date of the Ordinary Share equal to Euro 0.5020; "b" means the Conversion ratio of the Voluntary Conversion; "c" means the Voluntary Conversion Cash Component; and "d" indicates the price taken as a reference for the Saving Share.

2. ‌Calculated as follows: Implicit premium = [(a*b+c) / d ] -1

where: "a" means the closing price on the Reference Date of the Ordinary Share equal to Euro 0.5020; "b" means the Conversion ratio of the Mandatory Conversion; "c" indicates the Mandatory Conversion Cash Component; and "d" indicates the price taken as a reference for the Saving Share.