Smart Homes & End User Engagement track: Emerging Trends and Opportunities

Emerging Trends and
Opportunities
Smart Homes & End User
Engagement track_
TEF. Digital
04.11.2014
DISCOVER, DISRUPT, DELIVER
Emilio Martinez de la Fuente
Head of Utilities & Building Energy Efficiency
Telefonica M2M Global Unit

1 Wireless Connectivity Technology
2 The role of M2M and End User Engagement opportunities
3 Generating new revenue streams from M2M

Connectivity
Wireless connectivity
technology

Wireless connectivity technology
Connected everywhere, anytime … anything_
devices at 2020
26bn
Connected
Total Connectivity
everywhere
7,6bn
World population
at 2020
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

Bandwidth Security
Coverage Availability
Highly
scalable
Multiple
access
technologies
management
Global
footprint
Quick time to
market
Flexible
pricing
Low
maintenance
costs
Low entry
cost
Single point of
contact
Characteristics_
Technical Commercial

What does cellular technology offer_
Global standard
High scalability
More than 5
billion
connections
worldwide
Based on Global
System for
Mobile
Communications
(GSM)
Affordable cost
Cost is
decreasing
continuously
Real-time
communications
Average latency
in the
milliseconds
range
Trusted
technology
Deep
understanding of
security,
information
privacy, QoS
and overall
experience
Trusted by
public and
private markets
Customer
experience
More than 27
years of
experience
dealing with
people and
businesses

How is connectivity addressed for Utilities_
1 PLC
PLC
Concentrator
Cellular
2 3
BTS
RF Mesh
RF
RF
RF
RF
RF
RF
6 Satellite
SAT gateway
4 RF Short Distance
SD RF
5 RF Long Distance
LD RF
Diverse models with different strengths and weakness

Where is each connectivity model positioned_
1
2
3
4
5
6
7
PLC: very popular in some countries
LPWA: early stage technology
RF short distance: for specify models, using a 2nd 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
Wifi: Potential solution for VAS like Digital Home
RFLD
4
Cellular
6 6
(2G, 3G, 4G)
7
WiFi
6
6
VAS enabled
PLC
1
CDMA
2 4
LPWA
3
RFSD
(multihop)
RF Mesh
5
6
6
Bubble size represent the potential to address Utilities’ needs
- Range +
- Bandwidth +

No single technology
to cover every utility need

What is an optimal solution?
Hybrid models

1
2
3
4
5
6
7
PLC: very popular in some countries
LPWA: early stage technology
RF short distance: for specify models, using a 2nd 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
Wifi: Potential solution for VAS like Digital Home
RFLD
4
Cellular
6 6
(2G, 3G, 4G)
7
WiFi
6
6
VAS enabled
PLC
1
CDMA
2 4
LPWA
3
RFSD
(multihop)
RF Mesh
5
6
6
8
Bubble size represent the potential to address Utilities’ needs
- Range +
- Bandwidth +
8
Hybrid (cellular +
RFMesh / LPWA)
RF mesh first w. cellular backhaul
• Maximizes coverage while keeping costs low
• VAS enabled only for those covered with the Cellular
network

What is to come_
10 Km
100m
Data Rate (Mbps)
Range
10m
Cellular
Short range low throughput Short range high throughput
1 10 100
?
1m
Low Power Wide Area
… Ideal networks for M2M
 Low cost chipsets & communications
fees
 Low battery consumption
 High reachability
 Bandwidth
… and connectivity technologies have room for improvement

TIME
Penetration / ubiquity
Mainframe
Networking
Personal Computer
Portability
Internet
Mobility
Apps
Social
Ubiquity
1960 1970 1980 1990 2000 2010 2020
Virtually
any object
can be
connected
M2M is the next BIG business
Many believe M2M is the next generation
of personal computing_
Source : Morgan Stanley Research

Is the technology that establishes intelligent
communication between things…
Enables companies to
reduce costs and provide
a better service, while
improving the quality of
life of people
m2m

…with impressive impact in daily things_

Great benefits to companies, individuals and society…
Efficiency
Productivity
Cost Reduction
Quality of Service

End User Engagement
How is M2M being accepted by final users_
Connected “things” have started to proliferate…

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
• Build consumer confidence and awareness
• Increase consumer willingness to use smart meters
• Assist vulnerable, low income and pre-payment consumers
Objectives

End User Engagement
Smart Metering: changes in consumer behavior_
UK government has a specific plan lead by the Central Delivery Body (DCB)
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%_
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
2-3%_ 3%_
was most significant in delivering
savings, with savings of around 3% DISCOVER, DISRUPT, DELIVER
Centralized
Engagement
Program
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%_
(*) American Council for an Energy-Efficient Economy
(**) European Smart Metering Industry Group
(***) The Energy Demand Research Project
than the IHD which
electricity
electricity
electricity gas

End User Engagement
Smart Metering experiences involving the end user_
1,9 million smart meter program.
Multiple types of market research (tracking and in-depth)
Dedicated smart meter call center team
Output
 51% program support
 96% smart meter
acceptance
1,4 million smart meters deployed.
90-60-30 day communication strategy
Deployed a mobile app with billing functionality
Reduce Your Use program
Customer satisfaction tracking
“Biggest Energy Saver” Pilot
Output
 0,16% complain rate
 500k participants in
Reduce Your Use
program

M2M
Generating new
revenue streams

Generating new revenue streams
M2M allows to take advantage of new
possibilities on a vast variety of fields_
Consumer
Electronics
Smart Cities
Utilities &
Sustainability
Transport Smart Home Security
Health
Industrial
Solutions

Smart Home, a greenfield to offer VAS_
Consumer
Electronics
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.
Smart Cities
Transport Security
Health
Energy management
and climate control
Industrial
Solutions
Utilities &
Sustainability
Smart Home
Security and Access
Control
Insurance
Audio-visual and
entertainment
Microgeneration
Control &
automation
Electric Vehicle

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.

Diverse competitors working towards the
opportunity_
Utilities Telecommunication
companies
Security
Companies
Device
manufacturers
Niche
players

Utilities’ opportunity to add smart
home VAS to the portfolio_
Smart Metering and the use of intelligent meters to measure and manage
energy consumption at home can be a first step towards Smarter Homes
Sub-stations
Home /
Building
Generation Distribution Retail Selling
Power Plant
CT
Connectivity
Smart
Meter
Once deployed, connectivity can be leveraged to
support many other Value Added Services

Emilio Martinez de la Fuente
Head of Utilities & Building Energy Efficiency
Telefonica M2M Global Unit

Smart Homes & End User Engagement track: Emerging Trends and Opportunities

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