The Mobile Internet Revolution: Strategies and New Business Opportunities

Telefónica Germany

The Mobile Internet Revolution

René Schuster, CEO, Telefónica Germany17th Handelsblatt Annual Conference Cologne – May 17, 2011

Strategies and New Business Opportunities

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The mobile Internet overrides traditional principles

01

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Communications technology has changed the world...

... but the mobile Internet revolution has only just begun

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Mobile connectivity offers endless opportunities...

...these are just a few

The F-factor makes brands

Time is money

Networks empower

communities

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In the telco industry: Exploiting Assets for Digital Growth

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0

200

400

600

800

0

1000

2000

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6

Time spent/ day2

Smartphone

1h30’

Tablet

2h45’

Non smartphone

6’

Sales1

Worldwide. Millions cumulative units shippedMobile data traffic growth3

Worldwide. Pbps/Month4

50% of traffic

is already video

Desktop PC Smartphones Tablets

FY 2010 FY 2011E FY 2012E FY 2013E FY 2010 FY 2011E FY 2012E FY 2013E

Video Web P2P

1Morgan Stanley 20102Merril Lynch. Matrix Wireless Q4; AppsFire. January 2011; Morgan Stanley Blue Paper, February 20113Cisco VNI 2010-2014. June 20104 Pbps/Month = Petabit per month is a unit of data transmission rate (bandwidth) equaling 1015 bit per month.

Mobile broadband is the biggest market growth opportunity today

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Broadening our portfolio to new growth engines

DH: Digital HomeCDN: Content Delivery NetworkRCS: Rich Communications SuitNFC: Near Field CommunicationsCRM: Customer Relationship ManagementDC: Data Center

Apps BlueVia, Wac X.0, App Folder, eBooks, O2 Media, RCS

Video & DH IPTV, Videoclub, HD, Social features, Telepresence, CDN

Financial servicesHandset insurance, Merchant payments & NFC, Direct to bill, m-pass, Cobranded cards

eHealthMovistar eHealth, Health CRM, Tele rehabilitation,Imaging, Mobile baby, Chronic management

SecurityClean pipes, Anti fraud, Managed security, Mobile security, Data loss prevention, Identity management

M2MManaged connectivity, Managed devices, Asset management, Utilities, Connected car, Smart cities

Cloud Aplicateca, Terabox/3G, Virtual DC, Virtual Desktop

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Cooperations and alliances across industries to foster growth

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Our digital assets balance the equation for a new service ecosystem

TLS: Telefónica Ingeniería de Seguridad TLS: Telefónica Learning Services

Unified communications

Social network

Media content and services

eTravel

Security

eLearning

Enterprise solutions

Jajah

Tuenti

Terra

Rumbo

TIS

TLS

T Solutions

Support through Telefónica units

Service for iPhone and Android smartphone users to change from IM in Facebook to VoiP call

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Fibers & frequencies become the infrastructure of our future

Almost every device will be connected by 2020

Automotive

Fleet management

Smart cities

Smart meters

Consumer electronics

eHealth, eFinance, security, …

Intelligent NetworksIntelligent Networks

Single Family Home

Communication Device on Utility Pole

Utility Office

Smart metersAutomotive

Smart cities

Consumer Electronics

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Rules for the Digital Age

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Every part of the internet value chain needs to achieve a return

Content Rights

Online Services

Enabling Technology /

Services Connectivi

ty User

Interface

User

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…and regulation to become part of a virtuous circle

Customers

Industry

Governments and regulators Investme

nt

Let’s find the right balance to push forward in the race for digital leadership!