The Rise of M2M Devices Heterogeneous Uses/Heterogeneous Requirements

Robert Pepper Vice President, Global Technology Policy 3rd BEREC Stakeholder Forum 15 October 2015

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Service Adoption Forecast

Cisco VNI Forecasts are complementary and statistically aligned.

Fixed & Mobile IP Traffic Forecast

Cisco Visual Networking Index (VNI) – 10th Year Global IP Traffic Growth & Service Adoption

Residential Mobile

Business

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VNI Projections and Actuals (Global) Actual Growth Has Been Within 10% of Projected Growth

34.2%

0%

5%

10%

15%

20%

25%

30%

35%

40%

2009-2014 CAGR

Projected in 2010 Actual

Compound Annual

Growth Rate (CAGR)

Source: Cisco VNI Global IP Traffic Forecast, 2014–2019

35.6%

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Global Connected Device Growth by Type By 2019, M2M Connections Will be More Than 40% of Total Connections

0

5

10

15

20

25

30

2014 2015 2016 2017 2018 2019

Other (4.9%,3.6%)

Tablets (3%,4%)

PCs (11%,6%)

TVs (11%,12%)

Non-Smartphones (32%,13%)

Smartphones (15%,19%)

M2M (24%,43%)

Source: Cisco VNI Global IP Traffic Forecast, 2014–2019

Billions of Devices

* Figures (n) refer to 2014, 2019 device share

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Europe Connected Device Growth by Type By 2019, 50% of Total Connections in Europe Will be M2M

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0

2014 2015 2016 2017 2018 2019

Other (8.4%,8.0%)

Tablets (4%,5%)

PCs (13%,12%)

TVs (12%,13%)

Non-Smartphones (19%,15%)

Smartphones (14%,15%)

M2M (29%,50%)

Source: Cisco VNI Global IP Traffic Forecast, 2014–2019

Billions of Devices

* Figures (n) refer to 2014, 2019 device share

*Note Europe defined as Western Europe + CEE, excluding Russia

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Europe Internet Traffic by Device Type M2M Traffic Only About 3% by 2019

0

5

10

15

20

25

30

35

2014 2015 2016 2017 2018 2019

Other (0.2%,0.2%)

Non-Smartphones (0%,0%)

M2M (1%,3%)

TVs (8%,7%)

Tablets (6%,29%)

Smartphones (7%,25%)

PCs (79%,35%)

Source: Cisco VNI Global IP Traffic Forecast, 2014–2019

Exabytes per Month

* Figures (n) refer to 2014, 2019 device share

*Note Europe defined as Western Europe + CEE, excluding Russia

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Europe IP Traffic & Service Adoption Drivers

More Devices & Connections

More Internet Users

Faster Fixed Broadband Speeds

More Video Viewing

Source: Cisco VNI Global IP Traffic Forecast, 2014–2019

By 2019:

2014 2019 2.6 Billion 4.7 Billion

2014 2019 21.9 Mbps 46.9 Mbps

2014 2019 514 Million 596 Million

2014 2019 58% of Traffic

78% of Traffic

IP Broadband Growth Drivers

*Note Europe defined as Western Europe + CEE, excluding Russia

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Global M2M Connections / IoE Growth By Vertical Connected Home Largest, Connected Health Fastest Growth

Wide Range of Device Requirements

Source: Cisco VNI Global IP Traffic Forecast, 2014–2019

-

2

4

6

8

10

12

2014 2015 2016 2017 2018 2019

Other* (38.2% CAGR)

Energy (31.9% CAGR)

Manufacturing & Supply Chain (8.9% CAGR)

Retail (10.5% CAGR)

Connected Cities (28.2% CAGR)

Connected Health (49.4% CAGR)

Connected Car (37.3% CAGR)

Utilities (21% CAGR)

Connected Work (Ent Mgmnt) (29.4% CAGR)

Connected Home (23.1% CAGR)

Billions of M2M

Connections

*Other includes Agriculture, Construction & Emergency Services

48%

17%

11% 8% 7% 4%

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•  Agriculture – livestock, soil monitoring, water and resource conservation, temperature control for milk tanks +

•  Construction: Site and equipment monitoring

•  Emergency services and national security

•  New energy sources – monitoring and power generation support apps

•  Smart grid and distribution

•  Micro-generation– generation of power, by residential, commercial and community users on their own property

•  Mining and extraction •  Manufacturing and

processing •  Supply chain •  Warehousing and

storage

•  Retail goods monitoring and payment

•  Retail venue access and control

•  Slot machines, vending machines

•  Environment and public safety – closed-circuit TV, street lighting, waste removal, information +

•  Public space advertising •  Public transport •  Road traffic

management

•  Health monitors •  Assisted living – medicine

dispensers + •  Clinical trials •  First responder

connectivity •  Telemedicine

•  Fleet management •  In-vehicle entertainment

systems, emergency calling, Internet

•  Vehicle diagnostics, navigation

•  Stolen vehicle recovery •  Lease, rental, insurance

management

•  Electric vehicle charging •  Smart metering

•  Office building automation

•  Building security •  Office equipment –

printers + •  Routers + •  Commercial appliances

•  Home automation •  Building security •  Network equipment –

printers + •  Network infrastructure –

routers + •  White goods •  Tracking applications •  Household information

devices

Connected Car Connected Work Connected Home Connected Health Utilities

Other Energy Retail Connected Cities

Manufacturing & Supply Chain

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$4.3T Private Sector

$2.1T Public Sector

$6.3T* Economic Value

Based on 61 Real-World

Use Cases

Value Sources

France $729B

Spain $349B

UK $706B

Germany $914B

Italy $544B

What is the IoE Opportunity in Europe?

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$736B Private Sector

$177.8B Public Sector

$914B Economic Value

Based on 61 Use Cases

Value Sources

Smart Factories

$121B

Physical/Logistical Security

$61B

Smart Grid $31B

Supply Chain Efficiency

$37B

What is the IoE Opportunity in Germany?

Smart Buildings

$19B

Others: Connected Commercial Vehicles, Connected Healthcare, Smart Parking, Smart Street Lighting, Public Transport, etc.

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$43.7B Private Sector

$18.5B Public Sector

$62.2B Economic Value

Based on 61 Use Cases

Value Sources

Physical/Logical Security

$3.2B

Smart Grid $3.3B

Smart Factories

$4.7B

Supply Chain Efficiency

$2.2B

What is the IoE Opportunity in Portugal?

Others: Connected Healthcare, Smart Parking, Smart Street Lighting, Public Transport, Smart Farming, etc.

Connected Commercial

Vehicles $1.1B

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50% 45% 47% 48%

52% 55%

59% 61%

54% 58%

61%

68% 72%

46% 41%

31%

17% 13%

0%

10%

20%

30%

40%

50%

60%

70%

80%

M2M Share of Devices (2019)

Source: Cisco VNI Global IP Traffic Forecast, 2014–2019

Global (43%)

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Key Takeaways •  IP-enabled M2M devices fastest growing •  Wide range of M2M devices for wide range of uses

•  Majority non-mobile •  Heterogeneous device requirements

•  E.g., distance, power, bandwidth, duration, latency •  Heterogeneous environments •  Heterogeneous spectrum requirements •  Heterogeneous regulatory requirements/regulators