Telefonica Delivering the M2M Experience - Leading the IoT Path

Delivering the m2m

experience, leading the

IoT pathway_Rosalía Simón – IoT End-to-End Solutions Director Francisco Jariego – IoT Innovation Director

DISCOVER, DISRUPT, DELIVER

We want to lead the IoT opportunity

Customers at the center of

our offer

In our Core Business &

Beyond

Now & in the Future

Connectivity & e2e

Solutions

Being a key growth engine for Telefonica

Short term & Long

term objectives

Business &

Consumers

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DISCOVER, DISRUPT, DELIVER3

We do what it takes

Future needs

Today business

In-country teams

Global teams (sales, product, operations)

In-house solutions

Partners agreements +

+

+

DISCOVER, DISRUPT, DELIVER4

With a consistent two-fold strategy

Innovation


Revenue Growth 2014

>40%Looking back

We are showingconsistent growth

and we are accelerating

2014

Looking forwardWe are committed to

building on this momentum

20172010

Enabling revenue acceleration and great ambition

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Strengthening our value proposition with Geotab key partnership

� Geotab: a success story with >400K units

� Best in class solution

� Modular/adaptable to customer needs

� New key client segments

� Key engine data

� Plug & Play

Web Application

Cloud network

Self installable module

APIs

Accelerating our fleet business (50% growth)

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Bringing new solutions to market

• Leaderboard

• Live tracking• Geo-fences• Group sharing

• Trip history• Driving insights

• Vehicle health

Connected car solution in partnership with Zubie

� Vehicle diagnosis, tracking & monitoring driving behaviour

� Plug & Play

� Launched in Germany, under B2C model

� O2 stores & other channels

� Future expansion: new geographies, new business models (B2B2C)

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Bundling diverse e2e solutions to increase client r eturn

With a strong telemetry catalogue: > 40 solutions (e.g. vending, tanks, elevators)_

� Integrated value proposition bundling fleet, brewery & tanks

� Customization required at client back-end

� Client segment target: beverage corporations

� Multiplying client profit: sales increase and cost reduction

Tanks Brewery Fleet

IoT Platform

+ +

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Our Energy Efficiency Solution

Helping retailers drastically reduce their energy bill

� Business model based on energy savings

� Hardware provision, energy efficiency platform & consumption reports

� Case study – multinational fashion retail company

� 20% energy reduction in the stores; 35% in the logistics center

Engineer

Installation & Maintenance

Web Platform

Lighting

EnergySupply

HVAC

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Transforming Valencia into a 100% intelligent city

Service NService 1 Service 2

Smart Devices

Managed Connectivity

Smart City platform (Open)

Service NService 1 Service 2

Intelligence 1 Intelligence 2 Intelligence n

Network 1 Network 2 Network n

Device 1 Device 2 Device n

From traditional isolated model To a holistic integr ated view

Why Telefonica?

Consultancy services

Top management commitment

Best in class platform

Customized solutionLong term partnership

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Innovation in IoT: Falling in Love with The Machine

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� Wider range of technical requirements: Coverage, Mobility, Autonomous Operation…

� Connectivity prices matching the marginal utility of connecting more ‘things’

� Embedding connectivity inside a data-hungry software ‘brain’

Machines have their own needs…

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� Low-cost devices, even disposable

� Years of operation with a small battery

� Coverage of low-rate services into basements, manholes, etc.

� Optimized for small payloads, with low signaling overhead

� Overall ease of use: integration of devices, with apps and IT systems

…and the XL size does not fit all

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� Wide Area Networks are what telcos excel at

� Offered as a pay-as-you-go service, save customers the deployment and O&M of their own networks

� Device on-boarding is easier and faster

� No ‘islands’ of connectivity - whole countries covered

The case for Low Power Wide Area

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� Simplifying data plans

� Making it easier to get SIMs in small quantities to develop and test

� Reducing the price of communications module

� Embedding connectivity in a software application/process in a simple way (API)

① Making cellular more attractive for makers

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� Arduino-compatible CPU

� GSM radio

� Soldered SIM with global, pre-provisioned data plan

� Integrated Li-Po battery management

� Simple API

� OTA upgrades

� Industrial-grade module designed to fit into production lines

� Cost below 10€ (BOM)

① That’s why we’ve opened Thinking Things…

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� The Smartphone is not the End of History

� Cellular is also sexy for many other physical objects

① …and it works: Just Click and Do

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� LPWA enables new use cases thanks to a new mix of coverage, energy consumption, and total cost

� Overlap with cellular is limited

� Significant upside in the number of potential connections

② We’ll extend our ‘cellular’ connectivity…

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� More than a fancy radio technology

� End-to-end service

� Developer-friendly global platform

� Proven fast deployment model

� Royalty-free model for devices

� Promising ecosystem around it

② …when we fully understand how to do it best

SIGFOX™ has created a new category and unique value proposition

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� Continue accelerating our managed connectivity business (Smart m2m and Jasper platforms) with more volume, more quality and more efficiency

� Continue building our e2e solutions business by leveraging our strong catalogue and our solutions partner ecosystem. Push commercial plans and segmented value propositions in key verticals

� Accelerate sales in both horizontal and e2e solutions through our key commercial assets: OB sales channels, m2m sales specialist teams and m2m Global Partner Programme

� Keep focusing on IoT innovation, leveraging our dedicated organization, to bring new disruptive solutions in the market

2015: Continue accelerating while building assets for future

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Technology

Telefonica Delivering the M2M Experience - Leading the IoT Path