smart world: how the alliances are driving the m2m ecosystem (telefónica m2m)

m2m Smart World

How the Alliances are Driving the M2M Ecosystem

Telefónica Digital 25th April 2013

© Telefónica S.A | Todos los derechos reservados m2m Global Unit

Telefónica Key Figures

•  Operations in 24 countries

•  130,250 professionals

•  Consolidated revenues of 62,356 million euros

•  315,7 million customers

(December 2012)


Global Coverage

Operations in 24 countries

Industrial Alliances


Telefónica Digital

§  Telefónica Digital is a established global business unit (headquartered in London with

regional centres in Silicon Valley, São Paolo, Spain, Tel Aviv, etc.) aimed at responding to the

basic trends of the digital revolution:

•  Connection anytime/anywhere and high speed data networks.

•  Smartphones and other devices going mass market.

•  Integration of digital innovations into business models.


Horizontal Solution and Vertical Applications

m2m SDP Supervision & Control tools

m2m BSS Specific Core Network

Multi Bearer

HORIZONTAL m2m

SERVICE

End-to-end Services for the diverse Vertical m2m Vertical Markets

An Horizontal m2m Service for providing connectivity + VAS. Support specialized

vertical services

E-health Security Financial Services

Connected Car

Fleet Management

Utilities Consumer electronics

Smart Cities Telemetry


Device/Module/ SIM manufacturer

Network Connectivity Application Developer

Service Provider Integrator SES*

VAS

Corporate Customer End User

•  M2M services are part of the core business of the companies and have specific characteristics that imply a different working model of the companies involved in the M2M arena.

•  It's necessary a partnership between the different members of the value chain to cover sectorial customer requirements related to security, availability, control, customer experience and business model of M2M markets.

•  Development of end-to-end best in class solutions for different sectors implies to work with other Telcos, customers and Partners.

•  Partnering will benefit cooperative parties by creating scale and market power, which will:

¤  Create new market dynamics and

¤  Generate new business models

M2M Value Chain - Collaboration


Our challenge


Network Connectivity

Application Developer


VAS


Telefónica Core & Telco Allies

Telefónica & Best Partners by Sector

Telefónica & Customers: Tools to access end-user market Alliances and

negotiation

Players are expanding along the value chain to capture customer relations

with integrated offers

Managed Connectivity vs.

end-to-end services

*Service Enablement Services


Creating an eco-system of Partners

Due to the fragmentation of the M2M Value Chain, development of end-to-end best in class solutions implies to work with Partners.

m2m Partner Eco-system “Program” aiming at bringing together the world class M2M players

along the value chain to rapidly create applications and services

Industry and market dynamics limit any one service provider’s ability to drive significant change by “going it alone”.

Some programs and tools must be put in place to make this process easier in creating a rich ecosystem of valuable partners.



Network Connectivity

Application Developer


VAS


1)  DEVICE/ MODULE & SIM MANUFACTURER -  Standardization, innovation and commercialization -  Indirect channel for small integrators and SMEs

3)  NETWORK CONNECTIVITY - TELCOS -  Joint commercial & solution efforts to look for a unique and very powerful geographic solution based

proposition -  Share platforms and identify “ready” end-to-end solutions & partners for different sectors (automotive,

utilities, smart cities,...) 5)  SES -  Innovation, product and commercialization

7)  DEVELOPERS, INTEGRATORS, SERVICE PROVIDERS AND CUSTOMERS -  Fostering the third party niche vertical development -  Partnership in integration and/or commercialization

Telefónica m2m Partner Program


Devices

Global strategic partnership Telit & Telefónica,

•  Offer to all the customers the premium value-added services, customer support, module innovation and global connectivity previously reserved for larger firms.

M2M Air –

Connected Modules


Subscription Management

•  Partnership with G&D to demonstrate a working solution for remote subscription management and a unique multioperator SIM:

-  Review the eSIM concept & architecture: Define business logic & work in the different business models

-  The trial began on 11/2011, using G&D SIM Cards, Samsung Tablets and Telit modules

-  Involving Telefonica Operators (Movistar SP, O2 UK, O2 DE) and Telco partners (China Unicom, Telstra…)

•  Today is a Commercial Solution!


n  Global solution: The agreements enable joint commercial efforts to look for a global solution based proposition. This is particularly important for M2M opportunities that require multiple services over large geographical areas: It's about Communication but also about Operations

M2M Global Customer Requirements

Requirements

•  one portal

•  a unique SIM

•  a common APN

•  a single VPN

•  a joint customer service

•  Unique/several invoicing

•  Local /lowest prices

•  Permanent roaming solution

•  Multioperator solution with local subscriptions

Solution

It´s mandatory the collaboration between operators!


Coopera'on Areas

Marke'ng /Strategy

Customers (enhancing footprint)

Ver'cal services Pla?orms

Technological coopera'on (standards, cer'fica'on, tes'ng, field trials, R&D)

1 2 3 4 5

Telco m2m Partnership

Objective Create a Global M2M Alliance

§  To increase market awareness and to expand footprint globally through partnerships

§  To increase efficiency and new vertical revenue streams


Multi Operator Alliance

•  KPN, NTT DOCOMO, INC., Rogers, Singtel, Telefónica, Telstra and Vimpelcom entered into an agreement to initiate collaboration with respect to their M2M businesses

-  Focus on create M2M echo-system and global multioperator products

-  Open to new members to fill the geographic gaps.

!

•  First results:

-  Alliance as a structured working group

-  Presentation of the Multioperator unique SIM & Platform Demo at MWC

-  Etisalat as a new member


M2M Multi-operator Alliance Footprint Global Coverage

Bangladesh

Russia

Pakistan India Thailand

Canada

Puerto Rico

Venezuela

Brazil

Argentina Uruguay

Chile

Ecuador

Panamá El Salvador

Guatemala

Nicaragua Colombia

Peru

México

Costa Rica

UK Germany

Czech R.

Ireland Belgium

Slovakia

Spain Italy

The Netherlands

Algeria Libya Egypt KSA

Central African R.

Australia New Zealand

Japan

Sri Lanka

Indonesia

Philippines

Armenia Georgia

Kazakhstan

Uzbekistan Kyrgyzstan

Tajikistan

Cambodia Laos

Afghanistan Myanmar

Ukraine

Singapore

Burundi Zimbabwe

Benin, Gabon, Ivory Coast, Togo

Niger, Nigeria

UAE

Tanzania


M2M Alliance Extended Global Coverage

Bangladesh

Russia

Pakistan India Thailand

Canada

Puerto Rico

Venezuela

Brazil

Argentina Uruguay

Chile

Ecuador

Panamá El Salvador

Guatemala

Nicaragua Colombia

Peru

México

Costa Rica

UK Germany

Czech R.

Ireland Belgium

Slovakia

Spain Italy

The Netherlands

Algeria Libya Egypt KSA

Central African R.

Australia New Zealand

Japan

Sri Lanka

Indonesia

Philippines

Armenia Georgia

Kazakhstan

Uzbekistan Kyrgyzstan

Tajikistan

Cambodia Laos

Afghanistan Myanmar

Ukraine

Singapore

Burundi Zimbabwe

Benin, Gabon, Ivory Coast, Togo

Niger, Nigeria

UAE

Tanzania

Denmark Norway Sweden

Hungary

Serbia Turkey

Switzerland


SES

• Innovation, product and commercialization

© Telefónica Digital | All rights reserved m2m 18

End-to-end Services - Fleet Management

Fleet Management over the basic tracking service :

§  Visualization as the tool set to position and visualize assets

§  Protection regarding Safety and Security issues

§  Productivity & Sustainability to improve business processes, increase efficiency and reduce pollution.

ScreenWatcher

•  Rich-detailed mapping & resource Visibility

•  Real-time & historic information

VISUALISATION PROTECTION PRODUCTIVITY & SUSTAINABILITY

Sustainability

Out-the box track & trace monitoring

Employee Protect •  Out-the box track & trace monitoring

Risk Director •  Driver behaviour metrics, Safety &

Security services enabler Duty of Care

•  Manage corporate responsibilities: driver insurance & health, vehicle license and taxes, ...

•  Out-the box track & trace monitoring

Business Improvement

Data Analyser •  Resource visibility,

alerting & exception reporting

Sustainability •  Tracking, navigation &

communications, Productivity Visibility, Job Scheduling

•  Business Intelligence reporting

Global Unit

© Telefónica Digital | All rights reserved m2m 19

Value

Proposition

insurers

drivers

Customer

Needs

End-to-end Services - Insurance Telematics

drivers

insurers

• Need to save on premiums •  Increasing demand of parental control

• Need to expand current portfolio and differentiate from competitors • Need to optimize operations

•  Lack of levers for customer loyalty

•  Stop increasing costs from fraud

•  Increase accuracy in Risk Pricing and retain best drivers •  Improve Combined Ratio: reduce Costs and Claims Ratio

• Reduce Fraud

•  Improve Customer Experience and Loyalty with additional interactions to

deepen relationships

• Differentiating product with unique features to capture new customers

Young drivers (18-25 years old) and young drivers’ parents

• Understand and improve the way of driving by monitoring driving patterns •  Vehicle crash detection and automatic notification

•  Vehicle location, parental control, driving behaviour tips, maintenance reminders

and social network integration among others

young drivers

their parents

Global Unit


Risks of no collaboration

•  50 billion devices will impose tough requirements to the networks. Risk of not having them well prepared. Lack of interoperability.

•  Lack of standards in m2m related to Telecommunications and the industries involved (automotive, utilities…) bringing fragmentation.

•  Local regulations that imply that without cooperation between Telcos, global solutions will become impossible.

•  Unfavorable component and device economics due to isolated development and requirements.

•  Clients driving the development of closed, non largely deployable solutions (m2m Project Islands).

•  No economies of scale neither in service nor in technology harmonization. Higher costs and, therefore, higher prices for customer or less sales and margins.

•  No business models developed. Market dynamics slowing down.


Summary

•  m2m will be the “next big thing” and we have to develop attractive value propositions on both horizontal and end to end vertical services.

•  Due to the different sectors, regions and type of customers, we have to adapt the m2m products and commercialization channels to fulfill de diverse customer needs.

•  Partnerships are critical to capture the value opportunity. Companies from different sectors and regions should collaborate looking for “Wold-Class-Products”

Angel David García Barrio Head of Alliances & New Businesses. Global m2m. Telefonica Digital

Chairman. Multi Operator Alliance [email protected]

smart world: how the alliances are driving the m2m ecosystem (telefónica m2m)

Technology

telefnica s

core business

different business models

working solution

m2m arena

business logic work

global connectivity

different members