Portugal Telecom has a structured approach to innovation management that includes incremental, planned, and exploratory innovation projects with varying time horizons and risks. They invest heavily in R&D and have successfully launched new services in areas like IPTV, mobile payments, and machine-to-machine communications. Portugal Telecom partners with technology leaders, SMEs, and universities to drive innovation and aims to have a competitive time-to-market for new technologies and services.

1. Portugal Telecom | Technology & Innovation Conference | 0
INNOVATION MANAGEMENT
Lisbon, 29 & 30 October 2012

2. Portugal Telecom | Technology & Innovation Conference | 1
IMPORTANT NOTICE
This release contains forward-looking statements within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995. Such forward-looking statements are not statements
of historical facts, and reflect goals of the company's management.
The words "anticipates," "believes," "estimates," "expects," "forecasts," "intends," "plans,"
"predicts,”"projects" and "targets" and similar words are intended to identify these forward-
looking statements, which necessarily involve known and unknown risks and uncertainties.
Accordingly, the results of operations of the company to be achieved may be different from
the company's current goals and the reader should not place undue reliance on these
forward-looking statements. Forward-looking statements speak only as of the date they are
made, and the company does not undertake any obligation to update them in light of new
information or future developments.

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1.6
3.6
2.9
2.01.9
0.80.70.50.40.2
Meo, an IPTV
case-study
Best European
fibre optics
network
1st prepaid
card with
unlimited
communi-
cations
90% coverage
by YE2012
INNOVATION IN PT’S DNA
Investment in RDI1
2011. Percentage of revenues
4th country with
100% broadband
coverage
1 Research, Development and Innovation
SOURCE: Companies’ financial reports

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2009

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STRUCTURED APPROACH TO INNOVATION
Business
Development
Coordination of
cross segment,
structural projects
Incremental
Innovation
Planned
Innovation
Exploratory
Innovation
Time Horizon
Risk
LowMediumHigh
MediumShort Long

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STRUCTURED APPROACH TO INNOVATION
Business
Development
Coordination of
cross segment,
structural projects
Incremental
Innovation
Planned
Innovation
Exploratory
Innovation
Time Horizon
Risk
LowMediumHigh
MediumShort Long

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MARKETPLACE OF IDEAS
Users+7,000
Ideas+6,000
Comments+50,000
Investments+165,000
Implementations+250

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ENGAGEMENT OF THE ENTIRE ORGANISATION
76
58 +18pp
20112008
Do you feel aligned with PT’s strategy?
Percentage of employees

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STRUCTURED APPROACH TO INNOVATION
Business
Development
Coordination of
cross segment,
structural projects
Incremental
Innovation
Planned
Innovation
Exploratory
Innovation
Time Horizon
Risk
LowMediumHigh
MediumShort Long

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PLANNED INNOVATION METHODOLOGY
Market
transitions
Idea
Generation
Value
proposition
GO / NO-GOChallenge
Business
Modelling

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Personal SME/SoHo CorporateResidential
My Contents Everywhere
Home Mgmt
Gaming
My Communities
Contextual Advertising
e-Education
Entertainment
e-Health
MEDIUM TERM INNOVATION ROADMAP
Cloud Computing
Mobile Wallet
Security
Fleet and Workforce Mgmt
Machine-to-MachineMobile Apps

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STRUCTURED APPROACH TO INNOVATION
Business
Development
Coordination of
cross segment,
structural projects
Incremental
Innovation
Planned
Innovation
Exploratory
Innovation
Time Horizon
Risk
LowMediumHigh
MediumShort Long

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EXPLORATORY INNOVATION AREAS
New Interaction
Paradigms
Entertainment
Digital
Empowerment
Digital
Persona
Consumer
Labs
GreenTech
& Bio Tech
New Work
Forms
Internet
of Things
Digital
Agents
Service
Platforms

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ECOSYSTEM OF PARTNERSHIPS
Technology Leaders Distinctive SMEs R&D Centres and Universities

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STRUCTURED APPROACH TO INNOVATION
Business
Development
Coordination of
cross segment,
structural projects
Incremental
Innovation
Planned
Innovation
Exploratory
Innovation
Time Horizon
Risk
LowMediumHigh
MediumShort Long

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M2M
Smart Street
Lighting
Water Smart
Metering
Vending
Machines
Tracking Home Mgmt WellbeingFleet Mgmt
Elevators /Lifts

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HOME MANAGEMENT
Access/Control
Utilities
Management
@ Home
Anywhere
DomoticsSecurity

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INTEROPERABILITY
e-HEALTH
PACS
Mobile Health
Units
Magic Eye
WORKFLOW TELEMEDICINE WELLBEING

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INTEROPERABILITY
e-HEALTH
PACS
Mobile Health
Units
Magic Eye
WORKFLOW TELEMEDICINE WELLBEING

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VIRTUALISATION
CONTENT DEVICES PLATFORMS
e-EDUCATION

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MULTIPLATFORM (WEB, MOBILE, TV)
CONTEXTUAL ADVERTISING
Interactive TV spots Web & Mobile advertising
Profiling Context Location

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MOBILE WALLET
P2PTRANSFERS
M PAYMENTS
MTICKETING
M CARDS

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STRUCTURED APPROACH TO INNOVATION
Business
Development
Coordination of
cross segment,
structural projects
Incremental
Innovation
Planned
Innovation
Exploratory
Innovation
Time Horizon
Risk
LowMediumHigh
MediumShort Long

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TWIN PROGRAMME IN BRAZIL

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KEY MESSAGES
STRUCTURED APPROACH to investment in innovation
An integrated INNOVATION ROADMAP
SUCCESSFUL LAUNCHES in new opportunity areas
PARTNERSHIPS with world-class companies
Competitive TIME-TO-MARKET

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INNOVATION MANAGEMENT
Lisbon, 29 & 30 October 2012