Solid positions in the fixed-line and mobile markets in Italy. High domestic EBITDA margins, with further room for improvement. Difficult market conditions in Brazil, compounded by the effect of currency depreciation in 2015 and the first quarter of 2016. Challenging economic and regulatory environments in Italy. S&P Global Ratings-adjusted leverage is significant at 3.5x-4.0x. Relatively limited free operating cash flows (FOCF). Conservative dividend policy. The stable outlook on Telecom Italia SpA reflects our view that it will demonstrate improved domestic performance and smoothly execute its plan to make meaningful savings in operating and capital expenditures. This will enable Telecom Italia to generate positive and growing free cash flows in 2016 and 2017, reduce its adjusted leverage to comfortably below 3.8x,
