News Release

Cisco Systems and Telecom Italia Announce Strategic Alliance to Deliver New World IP Services

Telecom Italia and Cisco Forge Alliance to Provide Broadband
Jun 30, 2000

Telecom Italia and Cisco Forge Alliance to Provide Broadband Integrated Data, Voice and Video IP Solutions for Fixed and Mobile Network Services Worldwide

MILAN, Italy - 30th June, 2000 - Telecom Italia, a leading international telecommunication company, and Cisco Systems, the worldwide leader in networking for the Internet, today announced a strategic alliance to promote the use of the Internet and related IP (Internet Protocol) applications.

The alliance will offer businesses and consumers a growing range of services (data, voice and video) based on Cisco's networking expertise, with the aim of developing innovative telecommunication solutions for consumer and business customers. The solutions will combine telecommunication and technology solutions (such as DSL and wireless). Telecom Italia and Cisco will also co-operate in the development of third generation (UMTS) mobile systems based on the IP protocol.

Key to the agreement is Telecom Italia and Cisco's common vision of future telecommunication technology trends, which will see increasing demand for value-added Internet services, based on converged multiservice networks. These services will include the introduction of new virtual private network functions (MPLS VPN platform), offering greater scalability and reliability, the expansion of Quality of Service (QoS) tools to support differentiated services and the enhancement of Multicasting. Cisco is happy to be working with Telecom Italia in bringing the most advanced applications and solutions to their enterprise and consumer customers in today's Internet Economy," said John T. Chambers, CEO and president of Cisco Systems, Inc. "This alliance highlights the growing demand in EMEA for high-speed IP based services, brining innovative applications to meet the changing demands on next generation networks."

Telecom Italia Chairman and CEO Roberto Colaninno states, "The Cisco alliance is a fundamental step towards the positioning of Telecom Italia as a major provider of advanced services and applications in the world of Internet to both large and small enterprises. We expect to reduce time to market for new services and to take advantage of our strong competitiveness enhanced through the offer of co-developed solutions."

For the business-to-business market, the alliance will include E-Commerce and Web Call Centre -or virtual call centre- applications, based on scalable, reliable and secure converged solutions. Small & medium businesses will benefit from LAN based PBXs and xDSL access solutions while joint bundling and billing solutions will address the needs for the consumer market.

Flexibility will be enhanced and capacity will be increased through the utilization of the Telecom Italia backbone. Optical and DSL access solutions will be deployed. Voice, data and video will share the same backbone giving advantages in quality, robustness and cost figures.

Cisco and Telecom Italia are forming joint project teams to accelerate the development of new services and use of new technology to serve the enterprise and consumer markets. The alliance will work together to facilitate Telecom Italia's network innovation. Joint development programs between Cisco and Telecom Italia will focus on data and voice integration, using IP protocols for both corporate and consumer markets. The evolution will include the use of broadband access (DSL), wireless IP voice switching evolution optical networking and future-proof network architectures.

"This alliance will have a big impact not only in Italy but in Europe, where both companies operate" added Stefano Venturi, Country Manager Cisco Systems Italy. "The co-operation will provide the impetus to bring Italy fully the Internet Economy era thanks to new technology platforms increasingly bringing the Internet closer to people and companies".

In addition to the advanced applications and network solutions, Cisco and Telecom Italia will be establishing a joint team to track telecommunications technology trends as well as designing and evaluating advanced network architectures to expand the number of Internet and integrated telecommunication services.

The alliance also covers training activities, including Cisco's Networking Academy program for senior high schools and universities, which trains new networking professionals. Telecom Italia's training institute, the 'Scuola Superiore G. Reiss Romoli', will act as a regional Network Academy to introduce Cisco's training courses and train network engineers for the future.

Finally, Telecom Italia becomes a Cisco preferred provider of network services under the prestigious Cisco Powered Network designation, the Cisco partner certification program that certifies Telecom Italia's ability to provide end-to-end service and reliability.

About Telecom Italia

Telecom Italia Group is one of the world's largest telecommunications operators and is the leader in Italy. Group international presence is mainly concentrated in Europe, Latin America, and the Mediterranean basin. One of Italy's largest companies, in 1999 the Group registered turnover of 27.1 billion (8.6 billion in the first quarter of 2000). The 1999 financial year closed with net consolidated profit of 1.7 billion and operating profit of 6.4 billion (600 million and 1.86 billion, respectively, in the first quarter of 2000). At 31 March 2000 the Telecom Italia Group employed approximately 130.000 people.

For further information:

Telecom Italia Press Office: +39 06 3688.2188-2066
Telecom Italia Group
Investor Relations: +39 06 3688.2381