GOVERNING THE FUTURE

Maggie Zhang, Livio Quintavalle, Joe Sutanto, Dimitrios Vlachopoulos

Team Stockholm

NOTE:This presentation was created by a team

of MBA students for educational purposes and in no way reflects the

views and beliefs of Ericsson.

GOVERNING THE FUTUREVISION

CLIENTS

GOVERNMENTS TO BECOME OUR MAJOR CLIENTS

OPERATORS LOSING POWER. FEE IS NOT ERICSSON’S CONCERN

FEE STRUCTURE

UNATTRACTIVE MARKET FOR ERICSSONROLE OF APPLICATIONS

INTEGRATED SOLUTIONS TO GOVERNMENTS Multimedia, Medical, Transportation, Urban Development

SERVICE ECOSYSTEM

UTILITIESEnergy Smart Grid

SECTOR

AUSTRALIAREGION

INDUSTRY OVERVIEWSECTION I

SMART GRIDSECTION II

IMPLEMENTATIONSECTION III

CONCLUSIONSECTION IV

GOVERNING THE FUTUREVISION

CLIENTS

GOVERNMENTS TO BECOME OUR MAJOR CLIENTS

OPERATORS LOSING POWER. FEE IS NOT ERICSSON’S CONCERN

FEE STRUCTURE

UNATTRACTIVE MARKET FOR ERICSSONROLE OF APPLICATIONS

INTEGRATED SOLUTIONS TO GOVERNMENTS Multimedia, Medical, Transportation, Urban Development

SERVICE ECOSYSTEM

UTILITIESEnergy Smart Grid

SECTOR

AUSTRALIAREGION

Appendix

24

Ericsson’s Positioning in the Value Chain

Vodafone’s Services

Governments as Clients

• Canada– Budget 2009 provides $225 million over three years to Industry Canada to develop and implement a strategy

on extending broadband coverage to all currently unserved communities beginning in 2009-10.• Chile

– The development is expected to cost US$100 million, 70% of which will be provided by the government through the Telecoms Development Fund.

• Belgium– Government owns over 50% of the incumbent telco provider Belgacom

• Portugal– In January 2009, Portugal's government announced an 800-million-euro credit line for the roll-out of next-

generation broadband networks in the country• Sweden

– Total state governmental funding $817 million (5.25 billion SEK)• UK

– £200m from direct public funding• South Korea

– The central government will put up $1.1 billion (1.3 trillion won)

• Singapore– The Singaporean government will provide up to S$750 million (US$520 million) in grants to build the Next

Generation National Broadband Network

Transition to Fixed Mobile

Smart Grid Potential Partners

Financials

Australia2011 2012 2013 2014 2015

Fiber Optic ($m) $4,700 $5,000 $5,200 $5,400 $5,500Smart Grid ($m) $200 $250 $300 $350 $400

$4,900 $5,250 $5,500 $5,750 $5,900

Global2011 2012 2013 2014 2015

Fiber Optic ($m) $46,804 $49,144 $51,601 $54,181 $56,890Smart Grid ($m) $28,900 $34,000 $40,000 $46,000 $52,900

$75,704 $83,144 $91,601 $100,181 $109,790

Source• Australia fiber optic: Australian government media release - $43bn amortised over 8 years ($5.4bn/annum)• Australia smart grid: Technology Industry Association - $200m this year, total of $11bn over the next 20 years• International fiber optic: Telecommunications Industry Association & US National Cable and Telecommunications Association• International smart grid: Morgan Stanley for 2013 and grown at a CAGR of 15% per annum

Australian Energy Suppliers

Actew AGLAGLAurora EnergyAustralian Power & GasClick EnergyCountry EnergyEnergy AustraliaHorizon PowerIntegral EnergyJackgreenNeighbourhood EnergyOrigin EnergyPower & Water CorporationPowerDirectQueensland ElectricityRed EnergySimply EnergySouth Australian ElectricitySynergyTRUEnergyVictoria Electricity

California and Idaho Model

Historically: pay the utility based exclusively on how much more energy it sells and how many new power plants it builds

Decoupling: • Regulators compare a utility’s actual energy sales with its predicted sales• Independent auditor determines the saving• Regulator reimburses utility for out of pocket losses and adds a reward in proportion to reductions in customer costs.