TELECOM ITALIA GROUP

CeBIT event

Roberto GALGANIStrategy, Innovation & Customer ExperienceInnovation – Business Positioning & PMO

Internet of Things exploitation

Strategy, Innovation & Customer Experience

Hannover – June 2018

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Agenda

CeBIT eventStra tegy, Innova tion, Custom er Experience - Innova tion

IoT Ma rket in Ita ly - overview

Telco industry evolution a nd TIM vision

Highly Efficient IoT

TIM a nd Hua wei MoU a greem ent on IoT

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IoT Ma rket in It a ly

Source: Ela bora t ion from Polim i 2018

980

950

500

810

550

480

520

510

350

360

250

220

320

230

190

250

185

150

210

120

90

150 100

50

15

0 500 1000 1500 2000 2500 3000 3500 4000

2017

2016

2015

IoT Italian Market (mln € )

2,8 bln €

2,0 bln €

+40%

Smart Home

Smart AssetMng

Others

Smart Factory

3,7 bln €

+90% +15% +45% +14% +23% +33%

IoT Market Growth + 36% Y0Y

in Italy

Smart Metering & Smart Asset Mng

(Utility)

Smart Car

Smart Building

Smart Logistics

Smart City

Italy IoT market is worth 3,7 bln € in 2017,average growth rate YoY has been of 36 %

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+3% +47% +2% +45% +35% +75%

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IoT – Drivers a nd numbers for It a ly

Source: Ela bora t ion from Polim i 2016-2018

IoT adoption drivers for Italy IoT connected devices diffusion for Italy

Value -Efficiency

23%

Safety -Security

28%

Regulations26%

Innovation23%

Costs reduction, Energy Saving, Routes

Optimization etc.

Comfort, Public Safety etc .

CeBIT eventStra tegy, Innova tion, Custom er Experience - Innova tion

Gas Meter500.000 units for Industry

5,5 m ln units for Residentia l

Electricity Meter36 m ln connected units

Smart bulbs80k connected units

Street Lights600k connected units

Solar Plants450k connected units

Thermostats150k connected units

Connected car4,7 m ln insurance boxes

650k na tive connect . ca rs

Connected bus200k connected buses

Connected truck700k connected trucks

Elevators330k connected units

Gambling machine340k connected units

Vending machine80k connected units

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ANALOGUE WORLD CONNECTED WORLD GIGABIT SOCIETY

Fixed and Mobile

UBB (FTTC, 4G)

UBB (FTTH, 5G), AI, Security, Analytics,

(Platforms and Services)

1990-2006 2007-2017 2018…

• Evolution of the business model, digital transformation and speed of execution are the key elements tore turn to winning in the Gigabit Society

Voice Voice, Data, Video

Digital Solutions(IoT, Augmented Reality, Virtual Reality, …)

Networks

Services

Business Models Basic

Competitive(Red Ocean)

Open Collaboration(Blue Ocean)

TELCO Indust ry evolut ion: from the Connected Word to the Giga bit Socie ty

Source: Elaboa ra t ion from TI Notizia rio Tecnico

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Va lue Crea t ion for the It a ly System

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Expense on TLC Services in Italy

202x

Infra st ructures20%**

** Market up to 2026 (Sha re of Va lue). Source: Elabora tion from Arthur D. Lit t le , 2017

Pla t forms 50%**

Applica t ions & Services 30%**

• Productivity growth• GDPgrowth• Digital Knowledge• ….

IoT+5G

18,9 17,6 19,1InvestmentsTELCOs Italia*(€ bln.)

* Spectrum Licenses not included. Source: e labora tion from Asstel

‘08-’10 ‘11-’13 ‘14-’16

14,5% 15,5% 20%Investments/RevenuesTELCOs Italia*(%)

~ -10 bln€

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TIM lea der for investment s on networks a nd innova t ion

TOTAL INVESTMENTSITALIA (2018-2020)

THE FOCUSOF THE PLAN REMAINS ON INNOVATION

~9€ bln

FOCUS ON NEW GENERATION NETWORK AND INNOVATION

THE FOCUSOF INNOVATION REMAINSTHE DIGITAL TRANSFORMATION

1 billion euros * =20,000 new jobs and 3 billion euros of

GDP growth

(*) Source: The socio-economic impact of bandwidth”,stury of DG Communications Networks, Content & Technology of European Commission, 2013.

IMPACT OF INVESTMENTS ON NEW GENERATION NETWORKS

+15 ca. €bln

GDP growth

+100 ca.Kilosof jobs

A constant commitment tha t focuses on customers, citizens and businesses. Investments, know-how and technologies a t the service of the digitiza tion of Ita ly

Source: Elaboa ra t ion from TIM Plan 2018-2020

DIGI

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Highly Efficient IoT - Focus on NB-IoT

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Wireless cellular coverage : Runtime update , through just in tim e FW/SW upda tes; LTE licensesed spectrums , interferences m anagem ent optim isa tion; “ deep indoor ” coverage (+20dB wrt GSM)

NB-IoT = efficiency + security + flexibility for advanced IoT Solutions

Basem ent

Meter covered

Network coverage extended (+ 20 dB)

Meter covered

Meter not covered

Network coverage a s usua l

Meter covered

LTE Cat.4+150Mbps

LTE-M

CostEfficiencyPerformance

LTE Cat-110Mbps

LTE Cat-M1 (eMTC)~1Mbps

NB-IoT

Cat-NB1~250kbps

Scaling-down feature, complexity and consumptions t owards the cost -efficiency

Source: Elaboa ra t ion from TI Notizia rio Tecnico

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NB-IoT towa rds 5G

eMBB:Handling of 5G enhanced Mobile broadband, useful,but not limited to the general consumer space mobilebroadband applications including streaming of HighQuality Video, Fast large file transfers etc.

mIoT:Allowing the support of a large number and high densityof IoT devices efficiently and cost effectively (massiveIoT or Massive Machine Type Communication).

URLLC/CriC:Supporting Ultra-Reliable Low LatencyCommunications for allocations including augmented(virtual) reality, advanced gaming, industrial automation,tactile interaction, (remote) control systems. Publicsafety and Critical Communication are included in thiscategory.

eMBB: Enached Mobile Broadband

mIoT: m assive Internet of

Things

URLLC/CriC: Ultra -reliable and

Low La tency Com m unica tion &

Crit ica l Com m .

Rel-13 Rel-14 Rel-15 Rel-16Jun-16 Jun-17 Sep-18 Mar-20

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Hea lth: predictive m edicine, persona lized, robotic surgery

Life qua lity Persona lized ca re Rem ote m onitoring of

vita l pa ram eters Access to your Digita l

Clinica l Folder

From the Giga bit Socie ty to Digit a l Life : A World of ServicesHom e: security and enterta inm ent

Security and Autom a tion

New m odels of Enterta inm ent

Reliability, Sa fety and Com fort

Collabora tion & Enterta inm ent

Sm art Mobility: connected ca r

Autom a tion Safety Productivity Com petit iveness

Safety Susta inability Life qua lity Energy saving

Sm art city: cit izen services and susta inability

Work: a new m anufacturing rea lity tha t is m ore productive and susta inableCeBIT event

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5G Sperimenta t ion supported by It a lia n Government

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TIM St ra t egy: the Winning Approa ch for the Count ry System

Strategic agreements for IoT and 5G rela ted innovative

SolutionsAn ecosystem of industrial

partners and start -upsto crea te new m odels of

business and servicesThe involvem ent of Institutions (Universit ies

and loca l adm inistra tions) for the accelera tion of

adoption in the industria l fabric and in the service

system

CeBIT eventStra tegy, Innova tion, Custom er Experience - Innova tion

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TIM-Hua wei a greement on IoT

A stra tegic collaboration on Internet of Things is the focus of the TIM-Huawei MoU (signed by TIM a nd Hua wei Ita ly CEOs during the MWC18 in Barcelona ).

TIM a nd Huawei long-term coopera tion on Internet of Things (IoT) ecosystem with focus on the m ost innova tive business solutions a nd business m odels ba sed on NB-IoTtowa rds 5G.

Use Cases: Sm a rt City, Sm a rt Metering, Sm a rt Sa fety, Sm a rt Agriculture e tc.

Relevant Stakeholders: TIM (Stra tegy, Innova tion & Custom er Experience –

Innova tion) Hua wei

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Grazie!

Thank You!

Danke Schön!