smart homes & end user engagement track: emerging trends and opportunities

DISCOVER, DISRUPT, DELIVER

Emerging Trends and Opportunities

Smart Homes & End User Engagement track_

TEF. Digital04.11.2014

Emilio Martinez de la FuenteHead of Utilities & Building Energy

EfficiencyTelefonica M2M Global Unit


1 Wireless Connectivity Technology

2 The role of M2M and End User Engagement opportunities

3 Generating new revenue streams from M2M

ConnectivityWireless connectivity technology


Wireless connectivity technologyConnected everywhere, anytime … anything_

Total Connectivity everywhere

26bn

Connected devices at

2020More connections than

people

7,6bn

World population at

2020

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


SecurityBandwidth

Coverage Availability

Highly scalable

Multiple access

technologiesmanagem

ent

Global footprint

Quick time to market

Flexible pricing

Low maintenance

costs

Low entry cost

Single point of contact

Wireless connectivity technologyCharacteristics_

Technical Commercial


Wireless connectivity technologyWhat does cellular technology offer_

Global standard

High scalability More than 5

billion connections worldwide

Based on Global System

for Mobile Communicatio

ns (GSM)

Affordable cost

Cost is decreasing continuously

Real-time communicatio

ns

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


Wireless connectivity technologyHow is connectivity addressed for Utilities_

1 PLC

PLC Concentrato

r

Cellular

BTS

2 3

RF

RF

RF

RF

RFRF

RF Mesh

Satellite6

SAT gateway

RF Short Distance

4

SD RF

RF Long Distance

5

LD RF

Diverse models with different strengths and weakness


Wireless connectivity technologyWhere 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

Bubble size represent the potential to address Utilities’ needs

Ran

ge

+-

Bandwidth +-

4

Cellular (2G, 3G,

4G)

VAS enabled1

2 4

7

LPWA

CDMARFLD

RFSD

(multihop)

5

RF Mesh

3PLC

WiFi

66

6

6 66



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

Bubble size represent the potential to address Utilities’ needs

Ran

ge

+-

Bandwidth +-

4

Cellular (2G, 3G,

4G)

VAS enabled1

2 4

7

LPWA

CDMARFLD

RFSD

(multihop)

5

RF Mesh

3PLC

WiFi

66

6

6 66

8

Hybrid (cellular + RFMesh / LPWA)

8

RF mesh first w. cellular backhaul• Maximizes coverage while keeping costs low• VAS enabled only for those covered with the

Cellular network


Wireless connectivity technologyWhat is to come_

Data Rate (Mbps)

Range

10m

100m

10 Km

Cellular

Short range high throughput

Short range low 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

1960 1970 1980 1990 2000 2010 2020

Personal Computer

Portability

Mobility

Ubiquity

Internet

Networking

Apps

Social

Virtually any object

can be connected

M2M is the next BIG businessMany believe M2M is the next generation of personal computing_

Source : Morgan Stanley Research


Enables companies to reduce costs and provide a better service, while

improving the quality of life of people

m2m

M2M is the next BIG businessIs the technology that establishes intelligent communication between things…


M2M is the next BIG business…with impressive impact in daily things_


M2M is the next BIG businessGreat benefits to companies, individuals and society…

Efficiency

Productivity

Cost Reduction

Quality of Service


End User EngagementHow is M2M being accepted by final users_

Connected “things” have started to proliferate…


End User EngagementSmart 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 EngagementSmart Metering: changes in consumer behavior_

UK government has a specific plan lead by the Central Delivery Body (DCB)

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 change3,8%_

(*) American Council for an Energy-Efficient Economy(**) European Smart Metering Industry Group(***) The Energy Demand Research Project

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 than the IHD whichwas most significant in

delivering savings, with savings of around 3%

2-3%_

3%_

electricity

electricity

electricity gas


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 functionalityReduce Your Use program

Customer satisfaction tracking“Biggest Energy Saver” Pilot

Output

0,16% complain rate

500k participants in Reduce Your Use program

End User EngagementSmart Metering experiences involving the end user_

M2MGenerating new revenue streams


Generating new revenue streamsM2M allows to take advantage of new possibilities on a vast variety of fields_

Consumer Electronics

Smart CitiesUtilities &

Sustainability

Transport Smart Home Security

Health

Industrial Solutions


Consumer Electronics

Smart Cities

Transport Security

Health

Industrial Solutions

Utilities & Sustainability

Generating new revenue streamsSmart Home, a greenfield to offer VAS_

Smart Home

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.

Security and Access Control

Insurance

Audio-visual and entertainment

Microgeneration

Electric Vehicle

Energy management and climate control

Control & automation


Generating new revenue streamsEnd 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.


Generating new revenue streamsDiverse competitors working towards the opportunity_

Utilities Telecommunication

companies

Security Companies

Device manufacturers

Nicheplayers


Sub-stations

Home /Building

Generation Retail SellingDistribution

Power Plant

CT

Generating new revenue streamsUtilities’ 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

Connectivity

SmartMeter

Once deployed, connectivity can be leveraged to support many other Value Added Services


Emilio Martinez de la FuenteHead of Utilities & Building Energy EfficiencyTelefonica M2M Global Unit

smart homes & end user engagement track: emerging trends and opportunities

Technology

connectivity model

connectivity technologies

role of m2m

costs low vas

potential solution

bandwidth securitydiscover

covered areas

costs of deploymentwifi