RCS THE GLOBAL PERSPECTIVE DAVID O BYRNE, PROGRAMME DIRECTOR - GSMA

RCS LAUNCH STATUS 60 RCS Launches 90 Announced 100% launched Multiple RCS launches Forecast to go from one to multiple launches in 2018 RCS launched RCS launch forecast for 2018

Millions The 3 Waves of Communications and Messaging 1000 WhatsApp 900 800 700 Facebook Messenger We Chat 600 500 400 300 200 100 0 AIM 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 imessage KIK LINE Viber SnapChat BBM Telegram Nimbuzz! Tango

Millions Mobile Messaging Has Reach! 4500 Global SMS/MMS 4000 3500 3000 2500 2000 1500 1000 500 WhatsApp Facebook Messenger We Chat 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

The US in Unique Monthly active users as % of wireless phone users 1, USA (%) Text messages OTT Instant messaging Penetration of IM per country, 2017 82% 82% 82% 82% 33% 44% 50% 55% 89% 88% 84% 73% 66% 58% 55% 2014 2015 2016 2017 Number of SMS 2 sent per month per wireless phone user 1, USA (#) 229 211 191 177 2014 2015 2016 2017 Source: Ovum, Juniper, Statista, GSMA; Delta Partners analysis; Note (1): Unique subscribers; (2) Excludes A2P

US Sees Higher Usage of SMS/MMS vs Other Countries Number of SMS sent per month per subscriber, 2017 177 93 31 20 10 4 3 Source: Ovum, GSMA; Delta Partners analysis; Note (1): Unique subscribers; (2) Excludes A2P

Volume. Bn RCS BUSINESS MESSAGING REVENUE To protect and grow messaging revenue: Operators need to deploy RCS and move from Messaging to Messaging as a Platform 60000 50000 40000 30000 VOLUME Bn 7000 6000 A2P Business Messaging OTT 20000 10000 5000 4000 3000 2000 SMS 0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 1000 0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 *Sources: GSMAi, Portio research, company press releases, industry estimates. No estimations for OTT A2P before 2016 P2P SMS Messaging P2P OTT Messaging A2P SMS Messaging A2P OTT Messaging A2P SMS is still growing (~5% CAGR) to reach $74bn by 2021 OTT apps do not yet rival SMS for penetration or trust

EXPANSION OF OTT PLAYERS BUSINESS MESSAGING SOLUTIONS Aggressive expansion in Business Messaging (A2P) from OTT players Apple, WhatsApp and Facebook have all launched business messaging, with forecasts indicating the volume of OTT business messages already exceeds that of business SMS (Portio Research). OTT messaging providers are aggressively targeting digital marketing revenue, monetising their scale and reach, already surpassing premium SMS Business messaging traffic volumes, capturing the attention of Brand investment. VOLUME Bn OTT 7000 6000 5000 4000 SMS 3000 2000 1000 0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

RCS BUSINESS MESSAGING VS OTT POSITIONING RCS Business Messaging WhatsApp Facebook Apple Business Chat Messenger Evolution from SMS A2P with rich content Massive potential reach & SMS fallback Trusted MNO channel Business pays to send to end users P2A chatbot support Independent & open Allow businesses to reach opted-in users Customer service and notifications WhatsApp Business app for SMEs WhatsApp Enterprise API for larger businesses Pricing now published Chatbot platform Primarily P2A initiated Businesses can pay FB to market to FB users Free to send messages Opens up imessage for users to engage brands Prime use case is Customer Service User always in control Deep integration to ios for great UX

DIGITAL ADVERTISING REVENUE POTENTIAL FOR OPERATORS Proxy size of the addressable digital advertising market for operators ($b) 399 346 248 285 329 85 87 88 Revenue operators could capture in the future through advertising Non-mobile digital ad spend 86 86 247 217 144 185 Mobile ad spending A2P Revenue 109 54 56 59 62 64 Revenue operators capture today from A2P 2016 2017 2018 2019 2020 2016 Source: http://strathcom.com/wp-content/uploads/2016/11/emarketer_worldwide_ad_spendingemarkerters_updates_estimates_and_forecast_for_2015202/pdf

Code of Conduct David O Byrne GSMA October2018 Future Networks Programme

CHARGING MODELS Per event Replicating existing SMS model Initial launches using this model this emulates the current A2P SMS model Session based Time based (5m, 1d, 1w, etc) or series of messages (i.e. 10 messages = 1 session) Discount scheme? Based on feedback from initial launches session(s) will be defined Access based Flat fee for unlimited messages to the base or Access to base + charge per unique user Other models may be deployed depending on demand Revenue share Outside scope of interconnect likely to be fulfilled through commercial arrangements

RCS BUSINESS MESSAGING: RECOMMENDED GOOD PRACTICES The RCS Business Messaging: Recommended Good Practices (formerly known as MaaP Code of Conduct) is a key enabler for the scale up and adoption of RCS Business Messaging Services Promotes the adoption of consistent RCS and RCS Business Messaging practices by all ecosystem participants Details 9 Principles that clarify how RCS will handle issues such as: Unsolicited A2P RCS messages Combating spam, fraud and grey routes Customer complaints Data privacy Publication on GSMA.com/future networks