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
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1 Wireless Connectivity Technology
2 The role of M2M and End User Engagement opportunities
3 Generating new revenue streams from M2M
ConnectivityWireless connectivity technology
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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
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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
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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
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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
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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
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Wireless connectivity technologyWhere is each connectivity model positioned_
No single technology
to cover every utility need
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Wireless connectivity technologyWhere is each connectivity model positioned_
What is an optimal solution?
Hybrid models
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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
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
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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
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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
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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…
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M2M is the next BIG business…with impressive impact in daily things_
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M2M is the next BIG businessGreat benefits to companies, individuals and society…
Efficiency
Productivity
Cost Reduction
Quality of Service
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End User EngagementHow is M2M being accepted by final users_
Connected “things” have started to proliferate…
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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
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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
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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
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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
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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
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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.
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Generating new revenue streamsDiverse competitors working towards the opportunity_
Utilities Telecommunication
companies
Security Companies
Device manufacturers
Nicheplayers
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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
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Emilio Martinez de la FuenteHead of Utilities & Building Energy EfficiencyTelefonica M2M Global Unit