Future proofing M2M

Georg Schildener, Deutsche Telekom AG m2m Forum 2011 / Milan / May, 5th 2011

Deutsche Telekom at a glance. Three Challenges to Future Proof M2M.

1) The Complexity Challenge. 2) The Relationship Challenge. 3) The Pricing Challenge.

Whats Next?

Deutsche Telekom, a Global Player.

The only operator with seamless transatlantic footprint. Deutsche Telekom Footprint
Integrated markets (majority shareholdings) Main emphasis: mobile communications (majority shareholdings)

Albania Bulgaria Germany Greece United Kingdom Croatia FYROM Montenegro Netherlands Austria Poland Romania Serbia Slovakia Czech Republic Hungary USA

AMC (via Cosmote) Globul (via Cosmote) Deutsche Telekom OTE, Cosmote (via OTE) Everything Everywhere* T-Hrvatski Telekom Makedonski Telekom (via Magyar Telekom), T-Mobile MK (via MakTel) Crnogorski Telekom (via Magyar Telekom) T-Mobile Netherlands T-Mobile Austria Polska Telefonia Cyfrowa (PTC) Romtelecom (via OTE), Cosmote Romania (via Cosmote) Telecom Srbija (via OTE) Slovak Telekom, T-Mobile Slovensko (via Slovak Telekom) T-Mobile Czech Republic Magyar Telekom, T-Mobile Hungary (via Magyar Telekom) T-Mobile USA

*JV with France Telecom.

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Deutsche Telekom A Pioneer in Enablement.

We enable Business Competitors MVNO M2M

We are the leading mobile wholesale provider in Europe and we create mutual benefits.

Textbox Headline

Consumer Electronics

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Deutsche Telekom at a glance. Three Challenges to Future Proof M2M.

1) The Complexity Challenge. 2) The Relationship Challenge. 3) The Pricing Challenge.

Whats Next?

The Complexity Challenge: The M2M Value Chain.

Complex M2M delivery model includes players from different industries. M2M Value chain & Ecosystem
Machine / Box supplier Modem Supplier Communication Provider System Integrator Sales / Cust. Care

Enabler

Appl. Provider

M2M Providers need enablement to cope with the complexity of the value chain => Partnering is essential now and going forward

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The Complexity Challenge: Case Study.

Public Sector: Truck Toll System. Mastering the Complexity Challenge
Nationwide Truck Toll System in Germany Toll Collect is a consortium of Deutsche Telekom, Daimler and Cofiroute. Commissioned by the German Federal Ministry of Transport, Toll Collect has established and operates a turn key toll system that charges fees for trucks on designated German freeways (usage based). A GPS unit built into the truck transfers data via GSM module, toll terminals automatically charge via Internet. In addition toll bridges and mobile control stations prevent toll abuse. Our service System solution supply Data center operation / Incident support Toll-billing calculation Technical consulting SIM card supply and qualified SIM card administration process

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Deutsche Telekom at a glance. Three Challenges to Future Proof M2M.

1) The Complexity Challenge. 2) The Relationship Challenge. 3) The Pricing Challenge.

Whats Next?

The Relationship Challenge: Global deployment.

Globalization requires central interfaces & handling of the connectivity. Communication and Service Provisioning
Relationship Challenge Many partners produce centrally and deploy globally. Thus customers are not willing to deal with multiple SIMs in the production process. M2M customers want one key account manager who deals with them across geographic markets. M2M Customers want security on future deployments. Relationship Solution Create one point of contact for M2M customer in sales and after sales. Create one contract to support the entire solution of the customer and work with the customer on service evolution. Have 1 SIM for the whole footprint, thus realizing economies of scale, simplification of production and service.

M2M Customers need one simple interface to manage their multinational operation => Customers require one Central Interface now and going forward

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The Relationship Challenge: Case Study.

Vehicle Telematics: Consumer Electronics. Mastering the Relationship Challenge
Strategic partnership in navigation business Real-time navigation and routing services like LIVE traffic, local search, mobile speed control etc . NAVIGON live services on NAVIGON devices with embedded Telekom SIM connectivity. Launch in 15 countries simultaneously (October 2009). What more? Deutsche Telekom integrates NAVIGON software into smart phones - on iPhone NAVIGON software 2 years for free with a 24 month subscription. Our service Deutsche Telekom enables connectivity needs with one contract / one SIM for 15 countries. Worry-Free use of real-time services around Europe without additional roaming costs for users. Push of NAVIGON software via Integration into DT App portfolio.

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Deutsche Telekom at a glance. Three Challenges to Future Proof M2M.

1) The Complexity Challenge. 2) The Relationship Challenge. 3) The Pricing Challenge.

Whats Next?

The Pricing Challenge: M2M is different.

Value per bit differs according to application. Fire Alarm Electronic Signage

Entire service offering requires a couple of bytes, transferred reliably and fast.

Service offering requires large bandwidth, but transfer can be at offpeak hours.

Greatly varying value per bit makes mere pay for MB a nonsense proposition => Operators to provide individual Pricing for individual needs

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The Pricing Challenge: Rates for individual demands.

Different applications require different business models. Project individual pricing - illustrative
Required data volume High Predictability of data volume Fixed Lifespan of solution Long Frequently Usage abroad Invoicing Daily

Monthly

Low

Variable

Short

Rarely

One-time

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The Pricing Challenge: Lifetime Fee (LTF).

LTF - How to enable predictable traffic ? Market demand
Requests for a Life-Time-Fee offer from several industries with longer-lasting appliances. One Price for all and for life.

We need one fixed price for the lifetime of the M2M solution which we can integrate into the calculation of our production costs.

Demand for LTF based on a clear, individual requirement for connectivity which support the customers cost calculation .

Prerequisite

For the entire (solution) system design: Life-Time of solution Traffic volume Regional spread LTF is not a flat model to support unlimited traffic. LTF shall not be misused, thus is designed for the connectivity behavior of the solution. => future proof through update of commercials if needed

What it is NOT!

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The Pricing Challenge: Case Study.

Vehicle Telematics: Navigation / traffic information. Mastering the Pricing Challenge
BMW Connected Drive BMW Connected Drive stands for intelligent connection between driver, vehicle and environment. Connected Drive delivers services like emergency call, breakdown service, information services, traffic information, internet access and more. Divers/ End-Users can choose which Connected Drive package they want to use (BMW Assist, BMW Online, BMW Internet) . Our service All services are available via one global M2M SIM chip inside BMW vehicles. Deutsche Telekom enables voice and data communication world wide*. BMW can manage connectivity and services via DT M2M interfaces directly.

*except US 2011-05-05_m2m Forum_v01.ppt May. 5th, 2011 15

Summary: Future Proofing M2M.

The Complexity Challenge

A new approach to Business models is needed to enable connected devices.

The Complexity Solution

Delivery Value Chain is complex. Doing everything alone will not work.
The Relationship Challenge

Partnering is key

The Relationship Solution

Global customers need a central partner. Customers need one simple interface to manage their multinational operation.
The Pricing Challenge

Central Interface
The Pricing Solution

Price per MB does not cut it. Solutions evolve over time and need constant business model support. Pricing needs to accommodate change.

Business Model Innovation

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Deutsche Telekom at a glance. Three Challenges to Future Proof M2M.

1) The Complexity Challenge. 2) The Relationship Challenge. 3) The Pricing Challenge.

Whats Next?

What is next ?

Future Proofing M2M in real life conditions. T-City and Solution Business
T-City

Joint project of DT and the city of Friedrichshafen, launched in 2007 Real life conditions, customer feedback and scientific research Improvement for the futurequality of life (residents) and business conditions

DT Solution Business

Energy Health Automotive

For more information visit: www.t-city.de

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Questions Welcome

Deutsche Telekom AG Georg Schildener International Mobile Wholesale Cell: +49 151 1222 3022 eMail: georg.schildener@telekom.de