Presentation at the TIP summit 2017 on the needs for the industry to evolve to connect the unconnected.

1. Patrick Lopez
VP, NETWORKS INNOVATION
TELEFONICA
CONNECTING THE UNCONNECTED IN LATAM
Internet Para Todos

2. 21
countries

3. The need for the industry
to transform

4. IP
SOURCE: CISCO VNI GLOBAL IP TRAFFIC FORECAST,
2016-2021
0
50
100
150
200
250
300
2016 2017 2018 2019 2020 2021
96
122
151
186
228
278
24%CAGR
2016-2021
EXABYTESPERMONTH
Total Traffic Growth

5. 0
10
20
30
40
50
60
EXABYTESPERMONTH
2016 2017 2018 2019 2020 2021
File Sharing 2% 2% Audio 8% 5% Web/Data/VoIP 30% 14% Video 60% 78%
Total Traffic Growth
MOBILE
SOURCE: CISCO VNI GLOBAL IP TRAFFIC FORECAST,
2016-2021

6. SOURCE: SOURCE: CISCO VNI MOBILE, 2017
REGIONS
0 10 20 30 40 50 60 70 80 90 100
MIDDLE EAST & AFRICA 96%
71%
66%
64%
52%
44%
ASIA PACIFIC
LATIN AMERICA
CENTRAL & EASTERN
EUROPE
WESTERN EUROPE
NORTH AMERICA
Total Traffic Growth

7. SOURCE: STRATEGY & RESEARCH AND
ANALYSIS
Telecom Industry Decrease
AVERAGE ARPU COMPOUND ANNUAL CHANGE RATE
0
5
10
15
20
25
30
35
40
45
2006 2011 2016
-1% -2%
-6% -6%
-4% -1%
-4% -4%
-6% -10%
10 YEAR
2006-16
5 YEAR
2011-16
NORTHERN
AMERICA
WESTERN
EUROPE
MIDDLE EAST
LATIN AMERICA
ASIA

8. 0
10
20
30
40
50
60
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
161
183
198
216
229 233 233 236
244 250
SOURCE: GSMA: THE MOBILE ECONOMY, 2017
2.5%
CAGR
2014-2020
4.7%
CAGR
2008-2014
Capex
GLOBAL
MOBILE
$USBN

9. 75%
VIDEO
X2 EVERY
2 YEARS
TRAFFIC
$20/€20s
ARPU
UNLIMITED
VOICE, DATA,
MESSAGING
2020 Outlook

10. How we transform

11. Reorganize the value
chain
Build a virtualized
and programmable
network
Modular open
network fabric
We Need a Change of Paradigm

12. JOINED
OPENCELLULAR
CONTRIBUTING
ONLIFE
PROGRAMMABLE
EDGE
COMPUTING
PLATFORM
JOINED PEOPLE
AND PROCESS
CO-CHAIR ML
GROUP
JOINED
TIP
BOARD
DEPLOYING
OPEN CELLULAR
IN THE FIELD
CO-CHAIR EDGE
COMPUTING
GROUP

13. Adapt, Personalize, Uncover New Markets
Voice
Data
Messaging
Video
IoT
VPN
Gaming
Rural
Voice
Data
Messaging
Video
5G
DISTINCT EXPERIENCES
NEXT BATTLE
PERSONALIZED SERVICES
2G 3G 4G
COVERAGE AVAILABILITY CAPACITY
FOR GRANTED
VOICE DATA VIDEO

14. RURAL
MARKET
DILEMMA
Improve our
rural intelligence
Assemble
innovative
networks
Explore innovative
commercial models
Test alternative
operating models
Our services don’t
reach rural
costumers
Our operations are
not fit for rural
needs
Demand is
unclear
Telco tech is not
optimized for low
density
PROBLEM APPROACH

15. POPULATION
DENSITY
DISTRIBUTION
Data Mining: Satellite imagery
Estimation Model: Neural networks
to identify and count households
Clustering (DBSCAN) to group
households into settlements
Training Sample: Census data to train
and iterate the model
INTERNET COVERAGE
BY TECHNOLOGY &
OPERATOR
Data Mining: Geolocate mobile sessions
Estimation Logic: Generate internet
coverage polygons by technology as
perceived by mobile internet users
Training Sample: Telefonica coverage
and infrastructure information + reported
regulatory data
INTERNET UNSERVED
POPULATION
DISTRIBUTION
Geolocate population distribution
by internet coverage status, by
technology (LTE, 3G, Wifi,
2G/Edge)
Improve Rural
Intelligence
METHODOLOGY SNAPSHOT

16. Assemble Innovative
Networks
1. Commoditized, open and modular radio
nodes for low cost connectivity
2. Open Compute SDN NFV edge
computing platform
3. People and Process
4. OpenCellular deployments
5. Machine learning and AI

17. Innovative
Commercial and
Operating Models
OPERATOR OF MOBILE RURAL
INFRASTRUCTURE
• Leveraging 3rd parties as
channels to extend network,
operations and sales
• Local market knowledge,
operations and relationships
• Nimble, efficient operating model
• Revenue share helps align
incentives

18. We believe there is a large opportunity
to connect the unconnected and underserved
The industry needs to change to address it
We need your help to innovate
If you build it, we will deploy it
Conclusions
(…and buy it)