Emerging Trends and Opportunities
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1 Emerging Trends and Opportunities Smart Homes & End User Engagement track_ TEF. Digital Emilio Martinez Head of Utilities & Building Energy Efficiency Telefonica M2M Global Unit
2 1 Wireless Connectivity Technology 2 The role of M2M and End User Engagement opportunities 3 Generating new revenue streams from M2M
3 Connec&vity Wireless connec&vity technology
4 Wireless connec&vity technology Connected everywhere, any&me anything_ 26bn Connected devices at ,6bn World population at 2020 Total Connectivity everywhere More connections than people Source: Gartner Digital Marketing, Internet of Things and 3D Printing Are Digital-Business-Driven Disruptions for Supply Chains Source: United Nations, World population to 2300
5 Wireless connec&vity technology Characteris&cs_ Bandwidth Security Quick &me to market Global footprint Technical Coverage Availability Commercial Flexible pricing Maintenance costs Multiple access technologies management Highly scalable Single point of contact Entry cost
6 Wireless connec&vity technology What does cellular technology offer_ Global standard Affordable cost Real-time communications Trusted technology Customer experience High scalability More than 5 billion connections worldwide Based on Global System for Mobile Communications (GSM) Cost is decreasing continuously Average latency in the milliseconds range Deep understanding of security, information privacy, QoS and overall experience Trusted by public and private markets More than 27 years of experience dealing with people and businesses
7 Wireless connec&vity technology How is connec&vity addressed for U&li&es_ 1 PLC 2 Cellular 3 RF Mesh PLC Concentrator BTS RF RF RF RF RF RF 4 RF Short Distance 5 RF Long Distance 6 Satellite SD RF LD RF SAT gateway Diverse models with different strengths and weakness
8 Wireless connec&vity technology Where is each connec&vity model posi&oned_ PLC: very popular in some countries LPWA: early stage technology RF short distance: for specify models, using a 2 nd tech. to backhaul (fixed conn.) RF long distance: dedicated grid, upfront investment needed RF mesh: for extremely concentrated areas or when cellular can t 3G & 4G Preferred to ensure bandwidth & large range coverage Good quality of services and VAS for covered areas Leverages existing network, less costs of deployment Range + 2 LPWA CDMA RF LD 4 RF Mesh 5 Cellular (2G, 3G, 4G) WiFi Wifi: Potential solution for VAS like Digital Home PLC 3-1 RF SD (multihop) VAS enabled - Bandwidth + Bubble size represent the potential to address Utilities needs
9 Wireless connec&vity technology Where is each connec&vity model posi&oned_ No single technology to cover the needs of all utilities
10 Wireless connec&vity technology Where is each connec&vity model posi&oned_ What is an optimal solution? Hybrid models
11 Wireless connec&vity technology Where is each connec&vity model posi&oned_ PLC: very popular in some countries LPWA: early stage technology RF short distance: for specify models, using a 2 nd tech. to backhaul (fixed conn.) RF long distance: dedicated grid, upfront investment needed RF mesh: for extremely concentrated areas or when cellular can t 3G & 4G Preferred to ensure bandwidth & large range coverage Good quality of services and VAS for covered areas Leverages existing network, less costs of deployment Range + 2 LPWA CDMA RF LD 4 8 RF Mesh 5 Hybrid (cellular + RFMesh / LPWA) Cellular (2G, 3G, 4G) WiFi Wifi: Potential solution for VAS like Digital Home PLC 3 RF mesh first w. cellular backhaul Maximizes coverage while keeping costs low VAS enabled only for those covered with the Cellular network RF SD (multihop) VAS enabled Bandwidth + Bubble size represent the potential to address Utilities needs
12 Wireless connec&vity technology What is to come_ Range 10 Km Low Power Wide Area Cellular? Ideal networks for M2M 100m 10m Short range low throughput Short range high throughput Low cost chipsets & communications fees Low battery consumption High reachability Bandwidth 1m Data Rate (Mbps) and connectivity technologies have room for improvement
13
14 M2M is the next BIG business Many believe M2M is the next genera&on of personal compu&ng_ Penetration / ubiquity Virtually any object can be connected Apps Social Internet Networking Personal Computer Ubiquity Mobility Mainframe Portability TIME Source : Morgan Stanley Research
15 M2M is the next BIG business Is the technology that establishes intelligent communica&on between things m2m Enables companies to reduce costs and provide a better service, while improving the quality of life of people
16 M2M is the next BIG business with impressive impact in daily things_
17 M2M is the next BIG business Great benefits to companies, individuals and society Efficiency Cost Reduction Productivity Quality of Service
18 End User Engagement How is M2M being accepted by final users_ Connected things have started to proliferate
19 End User Engagement Smart Metering: what is being done in the UK_ UK government has a specific plan lead by the Central Delivery Body (DCB) UK government 2014 budget for User Engagement: over 6M Centralized Engagement Program Objectives Build consumer confidence and awareness Increase consumer willingness to use smart meters Assist vulnerable, low income and pre-payment consumers
20 End User Engagement Smart Metering: changes in consumer behavior_ UK government has a specific plan lead by the Central Delivery Body (DCB) ACEEE* has estimated an average reduction of 3.8% in overall energy consumption as a result of better information on costs and use of energy which drives behavioral change 3,8%_ electricity Centralized Engagement Program ESMIG** through a review of 100 pilots and 460 samples covering 450,000 consumers suggested savings from around 5-6% from interventions without IHD, to an average of 8.7% with an IHD. 8,7%_ electricity EDRP*** conducted trials that are more closely to 2% to 4% of energy savings. For gas, it was the provision of a smart meter rather than the IHD which was most significant in delivering savings, with savings of around 3% 2-3%_ 3%_ electricity gas (*) American Council for an Energy-Efficient Economy (**) European Smart Metering Industry Group (***) The Energy Demand Research Project
21 M2M Genera&ng new revenue streams
22 Genera&ng new revenue streams M2M allows to take advantage of new possibili&es on a vast variety of fields_ Consumer Electronics Smart Cities Utilities & Sustainability Health Transport Smart Home Security Industrial Solutions
23 Genera&ng new revenue streams Smart Home, a greenfield to offer VAS_ Stands for the automatic control of different systems in a home. The systems can range from energy management and HVAC, audio-visual and entertainment, communications, lighting, to security and assisted living systems. Audio-visual and entertainment Consumer Electronics Smart Cities Utilities & Sustainability Health Energy management and climate control Microgeneration Control & automation Electric Vehicle Security and Access Control Transport Smart Home Security Industrial Solutions Insurance
24 Genera&ng new revenue streams End users demand connected services_ Over 49% of households without security are willing to pay about $10 monthly for self-monitored or $15 monthly for professionally monitored security 44% of households without monitoring and control capability are willing to pay $13 monthly for such a service 40% indicated an interest in remote energy management services and nearly 30% are also willing to pay something $10 per month for them on average Source: Strategy Analytics Smart Home Systems: Consumer Attitudes and Adoption Report analyzing the results of a survey of more than 6,500 consumers in France, Germany, Italy, the UK and US in 4Q 2012.
25 Genera&ng new revenue streams Diverse compe&tors working towards the opportunity_ Utilities Telecommunication companies Security Companies Device manufacturers Niche players
26 Genera&ng new revenue streams U&li&es opportunity to add smart home VAS to the porsolio_ The use of intelligent meters to measure and manage energy consumption at home can be a first step towards Smarter Homes Genera&on Distribu&on Retailer Power Plant CT Sub-stations Once deployed, connec&vity can be leveraged to support many other Value Added Services Smart Meter Home / Building Connectivity
27 Emilio Martinez de la Fuente Head of Utilities & Building Energy Efficiency Telefonica M2M Global Unit
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