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Outlook

The global economy is recovering, but not on an even basis. Growth for the advanced economies should be modest, even in comparison to previous experiences of recovery from recession. The recovery in Italy in particular is expected to be slow, with marked uncertainty linked especially to the trends of the international cycle and labour market conditions.

In this context, following a 2009 characterised by a significant reduction in income from advertising, market estimates for 2010 are still rather cautious, assuming a slightly positive sign, indicating the end of the critical phase. However, considering the high level of uncertainty and volatility, forecasts could change significantly. According to the schedule for the switchover to DTT, 2010 will be the central year, in which the platform will undergo most development and � in line with the increased competition between the platforms, the traditional business models adopted by operators will undergo an extensive review. 2010 will also be the year in which the strategic positions of the main players in the new competitive arena will be defined.

Consequently 2010 will be a particular important year for Rai.

The company has to reconcile two opposing needs: to pursue the structural recovery of the company's income statement and strengthen its role on the digital terrestrial platform, which is vital to the Company's repositioning which is, in turn, of essential importance to its future. In terms of technological investments alone, this project will use up resources of almost 100 million euros in 2010.

The economic forecasts for 2010 which, like every other year, will have to bear the cost of important international sporting events, the Vancouver Winter Olympics and the World Cup in South Africa, with an impact somewhere in the region of 120 million euros, show a downtrend.

However, Rai has set up an articulated corrective manoeuvre extended to all areas of the company and the subsidiaries, which will enable significant reduction of the prospective imbalance.

This manoeuvre includes the continuation of important interventions on operating management, with general actions to improve efficiency and rationalise costs, and the gradual launch of action to downsize nonstrategic activities for the Group's prospective positioning.

However, due to the large amount of costs which cannot be reduced and also to operations carried out in 2008- 2009, actions to optimise expenditure, with industrial and productive arrangements that are almost constant, may lead to improvements which do not solve the problems of the income statement.

So the handling of resources becomes of the utmost importance.

Considering that it is impossible to entrust the support of Rai's recovery and development projects to a quick recovery of the advertising market, the rebalance has to rely on public resources, which are structurally insufficient compared to the costs sustained by Rai for activities assigned by Law to the Service Contract.

Once again in 2010, the per-unit licence fee has been increased in line with inflation. Consequently, in relation to the effects on the year in progress, positive results could derive from a prompt review of the mechanisms to contrast evasion which, as we all know, are blatantly inadequate to cope with the phenomenon which is pathological.