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Telefonica mwc barcelona



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  • 1. Capturing the opportunities fromthe New Digital WorldA view from the topBarcelona, February 15th, 2011César AliertaChairman & CEO
  • 2. Index 01 A growth and dynamic industry 02 ICT sector challengesMWC, Barcelona 2011 2
  • 3. A growth and dynamic industryMWC, Barcelona 2011 4
  • 4. ICT industry : back to solid growth rates (Bn USD) 2010F CAGR CAGR ICT Market 2007-10F 2010F-14F North America 1,042.9 1.3% 4.4% Europe 916.0 -3.5% 2.3% Asia & Pacific 894.0 6.3% 5.4% Latin America 263.6 5.9% 6.1% Middle East and 212.4 3.5% 4.8% Africa Worldwide 3,329.0 1.5% 4.3% Source: Gartner Market Databook (Oct 2010)MWC, Barcelona 2011 6
  • 5. CustomersWe are very positive about our industry future Apps Devices Customers Great Digital Apps & Opportunity Devices ServicesMWC, Barcelona 2011 8
  • 6. Customers Telco industry growth will be driven by Fixed and Mobile Apps Devices Broadband Total accesses Net adds of accesses (Million) 2010F – 2014FCAGR4.1% 91% Emerging markets 2.018 Mill7.3% 85% Mobile6.6% CAGR 2010 - 2014 MBB: 31% FBB: 11%* BB: Fixed BB + 3G+ suscribers)Source: Pyramid Data Forecast (Jan 2011)MWC, Barcelona 2011 10
  • 7. CustomersImproved user interface devices and M2M new applications Apps Devicesare boosting demand growth From Internet of People to Internet of ThingsMWC, Barcelona 2011 12
  • 8. CustomersMassive smartphone uptake Apps Devices Worldwide Smartphone Installed Base* (Million) CAGR 2010-2014 Emerging Economies*: 32% Advanced Economies: 24% Source: Strategy Analytics Emerging markets: Latin America, Eastern Europe, MEA, and Asia Pacific (ex-Japan, South Korea and Australia)MWC, Barcelona 2011 14
  • 9. Customers Digitalization of the real economy broadens the scope of Apps Devices our market Customer expenditure breakdown 2009Source: U.S. Bureau of Economic Analysis - U.S. national income and product accounts (NIPAs) (Aug 2010) MWC, Barcelona 2011 16
  • 10. Telco players have a key role to play in the ICT ecosystem Telco as service platformsMWC, Barcelona 2011 18
  • 11. ICT sector challengesMWC, Barcelona 2011 20
  • 12. CustomersThis growth opportunity is supported by networks Apps Devices Customers Networks Apps & Devices ServicesMWC, Barcelona 2011 22
  • 13. NetworkDevelopment of NGN and upgrade of existing ones is needed Apps Devicesto allow the exponential broadband growth Technology evolution TODAY Broadband capacity /user FTTH NG-GPON FTTH GPON IMT VDSL Advanced ADSL2+ LTE ADSL HSxPA UMTS EDGE Price no longer a barrier for uptake of mobile data Time Heavy investments are needed - Who is going to invest? 24
  • 14. Mobile data growth increases the importance of the Fixed network For the evolution of mobile network… … Fixed network will be key BACKHAUL Every Mobile Base Station will have to LTE Nodes capacity be connected by Fiber Fixed NetworkNew Wireless AccessTechnologies require bigger > x10network capabilities POINTS OF PRESENCE Massive Points of Presence in buildings (home/enterprise) # Nodes (long term)New Wireless Network > x10 MULTIMODEArchitecture need sites nearerto the customers Intensive Use of Technologies usually characterized as “fixed” ones: WiFi, all-IP, video…Growth of mobile traffic >> x10 INTERNATIONAL Strength of capacities in submarine cables and satelliteMWC, Barcelona 2011 26
  • 15. Network Expected traffic increase will require incremental CapEx, Apps Devices both in Fixed and Mobile Networks A.T. Kearney EU 27 Capex required estimation Cumulated 2010 - 2014 Bn € CapEx Trendline Additional CapEx required at current level ~ 10 Fixed Internet Network ~26 + ~ 116 in FTTx accesses Mobile Networks (3G and LTE) ~ 65 ~ 21 Bn€Source: Oppenheimer, A.T. Kearney analysis. FTTx investment assuming 50% household coverage by 2014 MWC, Barcelona 2011 28
  • 16. Telcos are the main contributors to investment and employment in our industry e European Market Latam Market ra tiv st Illu Investment Employment Investment Employment (CAPEX) (CAPEX) Telco 37 billion€1 2.0 million2 13 billion€ 0.7 million IT 3 billion€1 2.9 million3 0.4 billion€ 0.5 million Internet 0.03 billion€1 10,0005 0.01 billion€ >3,000 Content and service providers hardly contribute to network costs1 The 2009 EU Industrial R&D Investment Scoreboard2 European Business. Facts and figures. Edition 2009. Eurostat. EU-27 in 2005 5 Estimated Google’s employees in Europe from 20,222 worldwide (December 2008)3 European Business. Facts and figures. Edition 2009. Eurostat. EU-27 in 2006 for Business services-Computer and related activities Digiworld-2009. IDATE 6 Online advertising – Western Europe – Strategy Analytics International Office 30 30
  • 17. Current regulation doesn’t guarantee necessary investments Telco operators Regulated Fragmented Not regulated Concentrated Communications, Apps. & Services Device suppliers Internet playersMWC, Barcelona 2011 32
  • 18. Conclusions Our industry has very positive growth prospects, driven by mobile data New business models are needed to finance network investments that will make sustainable the whole internet ecosystem based on a virtuous circle of growth . Cooperation within the industry is essential to get the most of the digital world New engagement of telecom operators with content providers is needed to be able to deliver contents with new quality requirements Regulation should allow the recovery of network costs, promoting investment, traffic efficiency and fostering new services developmentMWC, Barcelona 2011 34