JETSONS OR JUSTIFIED?

THE INTERNET OF THINGS IN THE HOME

John ChambersExecutive DirectorHome and Premium ServicesInternational and New Business

WHERE WILL IT ALL END?

Whole Home Energy

Management

Home Services Revolution

Intelligent Insurance

Collaborative CitiesSupport for aging and

those with a disability

The Home IOT market will mature …driven by Awareness, Utility, Trust

INCEPTION GROWTH MATURITYTIMEDial Up Internet Early Broadband Modern Broadband

Smart Home

Fixed Internet

Avg. Spend$15-30 mth

”Always on” internet, new use cases emerge, providers consolidate

Incremental spend, non-essential service

Penetration (’96)~5%

Avg. Spend Penetration (’16)

High Speed FBB a

necessity

$30-60 mth

Spend offset by other wallet reductions

40%

Avg. Spend Penetration (’01)$50-100 mth

Essential home service and monthly spend

>60%

Lots of smaller players and start-ups, almost endless devices, many emerging

platforms and protocols

Platforms and providers start to consolidate, alternate applications start

to emerge

Few main platform players and home services transform into a wealth of different, integrated smart services

Today Next 5 Years 6 Years and Beyond

Others?

$15-30 mth

Incremental spend, non-essential service

~1% $30-60 mth

Starts to add real value / drive cost savings

40% $50-100 mth

Essential home service and monthly spend

>60%Avg. Spend Penetration Avg. Spend PenetrationAvg. Spend Penetration

Fewer, yet to be determined plat-form providers will emerge

Integrated smart services become the norm

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As the Home IOT market is still emerging, there is a large variance across market size forecast estimates…

20132014

20152016

20172018

20192020

20210.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

$ bi

llion

s

Other Analyst 2 $216m

Telstra Estimate

>$1b

Telsyte $3.2b

Other Analyst 1(Incl. Security)

$2.8b

Although not entirely comparable, forecasts by Telsyte, Frost & Sullivan vary greatly but are all positive of the market growth potential

MARKET FORECAST COMPARISON

2013 2014 2015 2016 2017 2018 2019 20200

5

10

15

20

25

30

35

7.4 8 9.211.4

14.6

20.7

24.8

28.7

INTERNET CONNECTED DEVICES IN THE HOME –

Sources: Telsyte, Analyst research, Telstra Research

With approx. 11M households by 2020, there could be up to 200M new internet connected devices bought between now and 2020 in Australia

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Telsyte IoT @ Home Market Study 2016

Annual revenue ($m) 2015 (e) 2016 (f) 2020 (f) CAGR (16-20)

Smart Energy $85 $139 $996 64%

Smart Security $46 $90 $635 63%

Smart Lifestyle $56 $81 $1,698 107%

Smart hubs (dedicated) $5 $9 $69 65%

IoT@home services and installation $39 $65 $624 76%

Total $231 $383 $4,022 79%

Smart lifestyle and managed services expected to grow fastest to 2020

Telsyte IoT @ Home Market Study 2016 5

IoT@home market, 2015 to 2020 (A$ million)

So many options…

INTRODUCING TELSTRA SMART HOMEBe at home, even when you can’t be there

Simple self install (or optional professional install for a fee)

24/7 Smart Home Tech Support

Telstra Smart Home app Telstra Platinum phone

support for the first 90 days*

SMS and email alerts Telstra Smart Home Community Record up to 30 video clips per

day, stored for 30 days in the cloud

All content securely hosted in Australia

Both starter kits also include:

The ‘Watch and Monitor’ option will give customers peace of mind by allowing them to keep an eye on things when they’re away from home with a Smart Home hub, two door sensors and camera with an inbuilt motion sensor that can be set up to send instant alerts to their mobile devices.

INTRODUCING TELSTRA SMART HOMEBe at home, even when you can’t be there

Simple self install (or optional professional install for a fee)

24/7 Smart Home Tech Support

Telstra Smart Home app Telstra Platinum phone

support for the first 90 days*

SMS and email alerts Telstra Smart Home Community Record up to 30 video clips per

day, stored for 30 days in the cloud

All content securely hosted in Australia

Both starter kits also include:

The ‘Automation and Energy’ option comes with a Smart Home hub, two smart power plugs, two door sensors and a motion sensor, helping customers set up tailored automation or energy solutions for their home.

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