t vs everywhere telco asia 2010

TV Everywhere’s Prospects

Shanghai, September 1st

Telefonica

IPTV Competence Centre

Quick overview aboutTelfonica

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IPTV Competence CentreTelefonica

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Consistent growth since Consistent growth since Consistent growth since Consistent growth since the beginning of the 21st centurythe beginning of the 21st centurythe beginning of the 21st centurythe beginning of the 21st century

Services

Clients

1989 2000 2009

Integrated ICT solutions for all

customer segments

Basic telephone and data services

Wireline and mobile voice, data and Internet services

About 12million

subscribers

About 265million

customers

About 68million

customers

IPTV Competence CentreTelefonica

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Staff

Finances

Geographies

(1) EPS: Earnings per share

SpainOperations in

25 countriesOperations in

16 countries

About 71,000professionals

About257,000professionals

About149,000professionals

Revenues: 4,273M€

EPS (1): 0.45 €

Revenues: 56,731M€

EPS(1): : 1.71 €

Revenues: 28,485M€

EPS(1): 0.67 €

So, Telefónica is now a benchmark for the global Telco sector So, Telefónica is now a benchmark for the global Telco sector So, Telefónica is now a benchmark for the global Telco sector So, Telefónica is now a benchmark for the global Telco sector ............

International integrated Telco operator by customer base

�1st

European integrated Telco operator by market capitalisation

�1st

273.3 million accesses (as of Mar’10)• 101.0 million in Europe• 172.3 million in Latin America

Operations in 25 countries• 6 in Europe (1)

• 13 in Latin America (2)

• 3 through strategic and industrial alliances (3)

Telco in Dow Jones �1st

IPTV Competence CentreTelefonica

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Among the 50 largest companies

in the world by market cap

�

Among the 100 largest

companies in the world by revenues�

About 257,000 professionals• 31.1% in Europe• 68.1% in Latin America• 0.8% in others countries

Revenues (Mar’10) : 13,932Mill.€OIBDA (Mar’10) : 5,114 Mill.€Net Income (Mar’10) : 1,656 Mill.€

Telco in Dow Jones Sustainability Index

�1st

(1) Plus Morocco (2) Plus U.S.A. and Puerto Rico(3) China, Italy and Portugal

Telco services are essential today and they will be more so Telco services are essential today and they will be more so Telco services are essential today and they will be more so Telco services are essential today and they will be more so in the future …in the future …in the future …in the future …

� Everybody and everything connected

� Social networking

� User Generated Content

� Huge increase of digital content

Customer demand drivers

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Evolution from devices to ecosystems (Devices + Operating Systems + User Interfaces + Applications)

content

� Hundreds of thousands of applications

� e-World: e-Health, e-Learning, e-Finance services, e-Travel

� M2M : smart metering, e-Car, e-Logistics, vending

� Increasingly powerful devices

Multiscreen evolution

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European consumptionEuropean consumptionEuropean consumptionEuropean consumption

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Source: Forrester Research, Inc.

European consumptionEuropean consumptionEuropean consumptionEuropean consumption

IPTV Competence CentreTelefonica

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Source: Forrester Research, Inc.

European consumptionEuropean consumptionEuropean consumptionEuropean consumption

IPTV Competence CentreTelefonica

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Source: Forrester Research, Inc.

US US US US consumptionconsumptionconsumptionconsumption

IPTV Competence CentreTelefonica

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US US US US consumptionconsumptionconsumptionconsumption

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Favorite Favorite Favorite Favorite devicesdevicesdevicesdevices to to to to watchwatchwatchwatch TV TV TV TV

IPTV Competence CentreTelefonica

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Source: Ovum

DevicesDevicesDevicesDevices and and and and contentcontentcontentcontent

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Source: Ovum

Mobile Mobile Mobile Mobile consumptionconsumptionconsumptionconsumption willingnesswillingnesswillingnesswillingness

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Source: Ovum

Case Case Case Case StudyStudyStudyStudy: Comcast: Comcast: Comcast: Comcast

Strenghths

• Customer Base

• TV in the corestrategy

Weakness

• Infraestructure

• Wireline only

• Fancastcomplementary

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“Comcast rolls out iPhone app for phone and e-mail features, TV listings, and movie trailers”

“Comcast Looking To Offer À La Carte Streaming Music To ISP And Cable Customers”

“HBO, Cinemax coming to Comcast’s and Time Warner’s TV Everywhere plans”

“Use an iPad to Control Cable Shows Remotely with New Comcast Initiative”

Case Case Case Case StudyStudyStudyStudy: : : : VerizonVerizonVerizonVerizon

“Verizon Promotes Use of Its Inventive Self-Service Interactive Tool”

“Android App Controls Your Verizon Fios TV”

“Motorola and Verizon team up for TV tablet”

“Verizon FiOS Media Manager: Easy Setup, So-So Delivery”

“Verizon Expands Advanced, Remote DVR Management Service to FiOS TV Customers”

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“FiOS To Carry YouTube, Internet Radio”

“FiOS TV Subscribers First to Access HBOGo.com”

Strenghths

• Technology & seamless approach

• TV in the corestrategy forwireline company

Weakness

• Mobile service(Vcast) notintegrated

Typical Starting Scenario of content deliveryTypical Starting Scenario of content deliveryTypical Starting Scenario of content deliveryTypical Starting Scenario of content delivery

Content Negotiations

Encoding Encription Distribution Delivery Presentation

Content Encoding Encription Distribution Delivery Presentation

IPTV Competence CentreTelefonica

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Content Negotiations

Encoding Encription Distribution Delivery Presentation

Content Negotiations

Encoding Encription Distribution Delivery Presentation

First Step into content delivery convergenceFirst Step into content delivery convergenceFirst Step into content delivery convergenceFirst Step into content delivery convergence

Encoding Encription Distribution Delivery Presentation

Content Negotiations

•It’s not only content negotiation, implies a common business stragey•Not efficient to provide a multiscreen strategy but suitable

•Common UX guidelines to provide a seamless experience to customers

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Encoding Encription Distribution Delivery Presentation

Encoding Encription Distribution Delivery Presentation

Second Step into content delivery convergenceSecond Step into content delivery convergenceSecond Step into content delivery convergenceSecond Step into content delivery convergence

Content Negotiations

Encoding Encription Distribution

Delivery Presentation

•Encodig stage includes metadata creation and

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Delivery Presentation

Delivery Presentation

•Encodig stage includes metadata creation and distribution to the different platforms•Encoding and encryption to fit in selectedconvergenced devices•Single Distribution to existing content deliveryelements

Third Step into content delivery convergenceThird Step into content delivery convergenceThird Step into content delivery convergenceThird Step into content delivery convergence

Content Negotiations

Encoding Encription Distribution Delivery

Presentation

•Second and third step could be alternateddepending on each service provider state of art

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Presentation

Presentation

depending on each service provider state of art•Homogeneous CDN to provide efficieny and improve business models•Presentation layer cannot be harmonized yet butone day it can be the fourth step of convergence

MultiscreenMultiscreenMultiscreenMultiscreen challengeschallengeschallengeschallenges

�Commercial

• Internal development process towards convergence scenarios

• Adquire content rights for all screens

• Harmonized of commercial brands

• Adequate bundling to reduce churn and give more ARPU

• Seamless User eXperience

�Technical

• Fragmented technologies

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• Fragmented technologies

› Content Formats

› DRM

› Presentation layer

• Migration

› Reuse or replace

› Evolution from actual vertical silos

• Unified customer care

› Unified User ID

› Convergence OSS/BSS

�Open IPTV Forum• Multiple player: Service Providers, CE manufacturers, SW Suppliers, DRM

manufacturers…

• Convergence to maximum› Managed and un-managed networks

› Service Provider and Platform provider independent environments

StandardizationStandardizationStandardizationStandardization

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PayPayPayPay TV TV TV TV strategystrategystrategystrategy

�Multiscreen is one of the pilars for evolving PayTV strategy

�Let’s go one step back for a global vision

• Content…remains king

• Pricing

› Entry level

› Upselling

› Bundling

› Competitive

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› Competitive

• Give to consumers control

› DVR

› Remote Control (convergence management)

• Personalize

• Home Integration

• Multiroom services

• Cross Platform Video Delivery

� User eXperience to provide an easy to use and differentiated experience

QuestionsQuestionsQuestionsQuestions????

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