introducing it? CME Sharing Initiative 21 st of July 2016

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1 What is the e and why introducing it? CME Sharing Initiative st of July 0

2 cards as a connector between mobile phone and provider have experienced a huge evolution in the past years next evolutionary step is the e Function of cards Connector between mobile phone and provider mobile phone Subscriber Identity Module provider Storage of required network data for the usage of mobile services and authorization, like International Subscriber Identity (IMSI) to identify network participants Series of numbers and algorithms for the encryption of data Temporary, network relating data Additional Data Storage like Phone directory, SMS, call history One is assigned to one operator, which can not be changed

3 cards as a connector between mobile phone and provider have experienced a huge evolution in the past years next evolutionary step is the e Evolution of cards evolution 99 Full size card Size of cards was reduced over the past years Mini card Micro card 0 x smaller Next evolutionary step is the introduction of the embedded (e) 0 0 tbd Nano card e Soft Saving 90% space Saving 90% space compared to Nano card (including the slot and contacts)

4 e is a hardware-based and non-removable in which the personal e profile is provisioned remotely Key Characteristics of the e e is a non-removable hardware integrated in the device e euicc-id: Standard to replace today s card, can be assigned to multiple operators MNO A Operator profile ON The required data are stored in a personal e profile MNO B Operator profile OFF e e profile is transferred over-the-air to the device First devices have hit the market in Q 0 MNO A operator profile Title ICCID MSISDN IMSI Other information MNO B operator profile Title ICCID MSISDN IMSI Other information

5 e is not the same as a Soft and differs from current solutions in the market Dispelling prejudices e is not a Soft ( functionality carried out by hardware, not by software layer) e is not the same as Apple (standard with multi IMSI; not supported by all operators) e requires the same registration process as standard cards (tariff, signature, credit check, etc.)

6 Introduction of e is mainly driven by and MNO demands Drivers for the e e MNO Demand for smaller devices (BB, handset manufactures) Demand for more resistant / smaller devices (BB / BC, IoT) Convenient switch of operator (difficult with integrated, e.g. Cars, IoT cases (Container)) Digitalization of the last physical Element (Digital Sales Channel) Elimination of physical distribution Enabling new business models (Roaming, growing interconnectedness, IoT)

7 The rapid ordering process, flexible change of providers and use of up to five devices with the same profile make the e more customer-friendly Improvements in Customer experience Delivery and activation of Simcards card h 9h until delivery Order Confirmation Dispatch Delivery Online Shop Confirmation Contract Bu y + PIN PU K Immediate edelivery e Order Online Shop Bu y edelivery Confirmation PIN PU K Rapid and comfortable ordering / activation process using over-the-air / edelivery Easy and flexible change of providers Customers are able to use multiple devices with the same e profile

8 Introduction of the e affects almost every function in the value chain and leads to many changes handling daily work Impacts on areas of the MNO business Logistics Virtualization of provisioning Reduction of logistic costs Implementation of advanced features (e.g. multi ringing ) ) IT Tariff database-impact for in-life use cases New system needed on global level Provisioning server (handling of profiles) Operations Many standard processes need adoption, including training Interfaces to new systems needed (e.g. provisioning server G&D) ing / Sales IoT-ready proposition needed for new device categories (e.g. wearables) Improve POS and online CX Lead to new On- sales channel s New device categories will appear New type needs to be implemented ) Customers are able to use separate devices with the same e profile 8

9 OEMs market power increases while MNOs are loosing role as key player in market and must handle growing dependencies from other players Impact on the power of market players with e A. Past status Access B. Current status with open market devices Access C. e with open market devices * Access Handset Subsidies Service - Slot distribution Open Dev. Service - Slot distribution Open Dev. Service embedded -Mgmt. (SM-DP) MNOs dictate content of devices, highly customized operator devices Though s are produced by manufacturer, operators define content Apple, Google, MS define content through OS and apps OEMs focus on direct Sales Channel Introduction of only tariffs Though MNOs still involved in e spec, the only physical product element and important touchpoint disappears MNOs own greatest share of market power power of OEMs is increasing MNOs lose another branded touchpoint and weaken retail * - Outlook 9

10 A complete loss of control might be a potential future scenario. That is why MNO need to clarify role definitions for a future operating model Impact on the power of market players with Soft C. e with open market devices* Access D. Open devices with Soft* Access E. Open market devices, Soft and OEM as MVNO* Access Open Dev Service embedded -Mgmt. (SM-DP) Open Dev. Service Soft n.a. Open Dev. OEM as MVNO Soft n.a. Though MNOs still involved in e spec, the only physical product element and important touchpoint disappears From MNO perspective similar (C.), however, fight for role in management OEMs offer network access as global MVNOs MNOs are losing direct customer access and become bitpipe for OEMs MNOs lose another branded touchpoint and weaken retail OEMs will gain power over s and devices OEMs own major power over device, and end customer access * - Outlook 0

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