Telefónica I+D 0

0Telefónica Servicios Audiovisuales S.A. / Telefónica España S.A.Título de la ponencia / Otros datos de interés / 26-01-2010TELEFÓNICA I+D

Developing the business eco-system for the Internet of Things

Brussels, June 2010

Telefónica I+D 1

Index

Telefónica and the new Internet of Things business

- Applications areas

What is needed?

- Networks

- Intelligent devices

- Open platforms

Working together to develop the new Internet

- An open approach

01

02

03

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Telefónica and the new IoT business

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01

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Revenues (2009): € 56.731 bnOIBDA (2009): € 22.603 bnNet Income (2009): € 7.776 bn

Among the 50 largest companies in the

world by market cap

Among the 100 largest companies in

the world by revenues

International integrated Telco operator by customer base

1st

European integrated Telco operator by market capitalisation

1st264.6 million accesses (as of Dec ‘09)

“ 96.0 million in Europe“ 168.6 million in Latin America

Telefónica is now a benchmark for the global Telco

sector …

(1) Plus U.S.A. and Puerto Rico(2) China, Italy and Portugal

Operations in 24 countries“ 6 in Europe

“ 13 in Latin America(1)

“ 3 through strategic and industrial alliances(2)

About 257,000 professionals“ 31.1% in Europe

“ 68.1% in Latin America

“ 0.8% in others countries

Telco in Dow Jones Sustainability Index1st

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…with significant presence in Europe and Latam

Total Accesses (as of Dec ‘09)

168.6 million

Total Accesses (as of Dec ‘09)

96.0 million

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The Internet of Things is offering a range of new

solutions to business and citizens

5

(*) Mc Kinsey quarterly 2010(**) Ericsson

Information and analysis(*)“ Tracking behavior of persons and goods “ Achieving real time awareness of physical environments.

“ Assisting human decision though data visualization

Automation and control(*)“ Process Optimization

“ Optimized resource usage

“ Complex autonomous systems

IOT major application areas

IoT

Society

Industrial Environmental

By 2020, 50 billion devices and sensors will be connected to the Internet**

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However, business models are still unclear and

require a multiparty stakeholder-system approach

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e.g. Stakeholders of IoT applied to smart cities

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The good news: many sectors/industries will

benefit from more digitalized and intelligent objects

7

Introducing IoT in a city of 1 million people

Smart metering 600.000 meters $120 million opportunity

Electric vehicle charginginfrastructure

45.000 electric vehicles $225 million opportunity

Remote patient monitoring (diabetes)

70.000 people w/ diabetes

$14 million opportunity

Smart retail establishments 4.000 stores $200 million opportunity

Smart bank branches 3.200 PTMs $160 million opportunity

* Source: High level estimates given by IDC Report Boston March 4, 2010

Total Worldwide ICT Opportunity ≈ $200 Billion

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What is needed?

02

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Three elements are needed to turn IoT into real

business

Pervasive broadband networks Intelligent devices Smart computing &

social media process

9

… enabling real-time communications among intelligent devices and back-end systems

… (e.g., smart phones, smart meters, sensors) providing cost effective ‚telemetry‛ for infrastructure, vehicles, people, etc.

… to process real-time data streams, enable real-time decision making, and provide a platform for information dissemination and collaboration among citizens and all stakeholders

I II III

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Pervasive broadband networks. Their business

models…are challengedCurrent network models are challenged to provide more capacity at lower

cost and more flexibility and new functionalities for enabling new services

10

I

Intelligent Open

Secure User experience

Cost efficient Scalable

Efficiency Excellence Capabilities

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But…we see this as an opportunity.

HSDPA R6

64 QAM2 X2 MIMO

Dual Carrier

Advanced Rx

LTE 2 X 2

LTE 4 X 4

2.5 Mbps

3.7 Mbps 4.1 Mbps4.5 Mbps 4.7Mbps

5.4 Mbps

7.1 Mbps

14 Mbps 14 Mbps 21 Mbps 28 Mbps 42Mbps170 Mbps20 MHz

340 Mbps20 MHz

HSPA+

LTE

5 M

Hz C

ell C

apacity

Peak Rate

HSPA

2.5 Mbps

HSDPA R6

7.2 Mbps

Current capabilityMulticarrier

5.0 Mbps

170 Mbps20 MHz

R6 R6 R6 R7 R7 R8 R9 R8 R8

Increased efficiency

More spectrum

Better planning

Flexibility in spectrum management together with more frequencies availability in the future will expand network capacity

• A dramatic increased in number of cells should be supported by LTE.

• Hierarchical architecture is key for delivering the demanded capacity• Micro and Picocells• Femtocells

I

We have the tools to win this battle…

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Intelligent and connected devices

M2M can be the next growth lever for Telco industry

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Revenues

Reaching 200M connections in 2012 with CAGR of 38% and 100M new shipments/year2

Total: 57,5B$by 20143

• Services could reach from 2,5 to 5x4 revenues compared to network traffic

• HW stalls representing only 6% (2014)

Source: Berg, Beecham, Strategy Analytics, GSMA, IDC, ABI used in TEF M2M Growth Platform presentation

II

Investments

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Smart Computing and processing

13

III

Things and

sensors

Intelligent interfaces

Smart Spaces

New applications for the business and the citizen

Connectivity Applications Processing

Sensors are nothing if they are not (smartly) connected

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Telco can be a leverage point for new IoT

services through open service platforms

14

On demand applications

New versions

Transparent billing and flexible payment options

security and privacy,

Solve fragmentation

Get paid

Share revenue

Get access to the network

III

Developing an open ‘service platform’ to reach the long tail of developers

Internet

of

Things open platform

Network

Applications

Media,

content

…Other

Lo

ng

tail

of

cu

sto

mers

:

cit

ies, b

us

ine

ss,

man

ufa

ctu

rin

g

Benefits for

customers

Benefits for

developers

Service Delivery, Call Control, Device access, control Infrastructure Mobile Internet, SMS, QoS, Identity, Charging, Location

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And it can be done using an open approach

Windows

PC Hardware Network

Operator own applications External applications enhanced by Operator

The telecom operating system (WAC)

Access to operator resources

SELECTED RESOURCESALL THE RESOURCES

Wholesale applications Community

III

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Working together to develop the new Internet

03

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The platform, together with the applications, will help

to realize the Internet future…

New services for the enterprise

Immersive experience

3D interfaces

Hybrid world

Cognitive intelligence development

Semantically tagged information

Deriving knowledge from mere information

Making knowledge accessible for humans and machines

The future internet we dream of

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…and bring new and smart applications closer to

business and citizens

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E-health, traffic safety, logistics, Smart grid,…new applications in the smart city

Connected hospital

EPR

Future telemedicine applications

Smart cities

Enhanced traffic security

New automotive applications

Business oriented applications

Connected home

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…and we need to do it in collaboration

Financial Services

eHealth, E-InclusionTourism

Green energyRoad safety E-learning

E-government

http://initiative.future-internet.eu/

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