Smart Metering Implementation Programme _ A road to a Smarter Home European Utility Week| October 16, 2013

Smart Home? First step towards Smart Home_ Introduction_ Sub-stations Meter Home/ Building GenerationRetail SellingDistribution Power Plant CT The first step toward Smart Home is Smart Metering and the use of intelligent meters to measure and manage energy consumption at home

How has consumption being measured up to now? Context_ Manual readings or walk / drive-by User consumption reports Consumption estimation

Which are the main Smart Metering benefits?_ Consumers Goverment / Country Less and more efficient energy consumption Precise invoice Value added services Utilities Efficient demand planning Less operation costs Investment deferment Regulation compliance Increased customer loyalty Better environmental management Less dependencies on external energy resources Competition increase

Smart Metering is not a question of “IF”, it’s a question of “WHEN” and “HOW”_

Context_ Smart Metering momentum is determined by: European Directive: UK Spain First Brazil Legislation (Feb’14) Regulatory Stimulation Fraud Incentives / subsidies Avoiding Penalties Operating Savings Positive Business Case Standardization Interoperability Leadership: Government / utilities Model Definition Support to energy efficiency Energy dependency on external providers Country Conditions Communications and metering environment development level x

Success Case UK_ Telefónica is involved in the largest Smart Metering project in the world Million managed meters K million € Years contract Million communication hubs 42 1, ,4

Cellular Communications Hub (CH) combined with RF Mesh Low investment in infrastructure: use of already deployed cellular network Mature communications technology in continuous evolution Future proofed solution (3G) ready for value added services Secure and scalable solution Telefónica solution_ overview UK _ success case BTS

SMIP Benefits_ Comply with sustainability policies Improve customer service Drive innovation to Smart Home Reduce energy consumption

UE directive: 80% SM deployment in 2020 UK Mandate: 100% SM deployment in mill. Meters (electricity and gas) 30 mill. homes National Programme for SM implementation Project summary_ Success Case: UK _ 42 mill. Meters (electricity and gas) 23,4 mill. homes Communication Services Provider Managed Connectivity and communication hubs 2 of 3 regions (Central and South)

13 SMIP programme opens the door of the Digital Home to value added services_ DIGITAL HOME In-home display eHealth Digital Home sustainabilit y Security Preventive Heaters maintenance Water Meters

Why Telefónica?_ Model based on existing communication networks to assure cost efficiency in long term projects Global Leader company with footprint in 25 countries 314 million accesses Deployed network in continuous evolution (“future-proof”) Scalability and Security Standardization and interoperability opening doors to innovation and development e2e solutions with industry partners Teléfonica can address transforming projects of energy smart grids and smart homes_

13 Thanks for your attention_ Emilio Martínez de la Fuente | Telefónica Digital Head of Smart Metering | Global M2M