1. Digital transformation through mobile technology_ Dr Mike Short VP Telefónica Mike.short@telefonica.com

2. Full network operations (21) Service reach (152) €57 billion revenue 24 countries 313 million customers 120,000 employees A world leading provider of integrated mobile, fixed & ICT services Telefónica a leading company in global telecoms

3. 19731983 Motorola DynaTAC 8000X 2003199920072013 Motorola International Motorola StarTAC Nokia 8110 Motorola Razr Nokia N80 Nokia 1200 Apple iPhone Samsung Galaxy SIII BlackBerry Z10 Samsung Galaxy S4 First mobile call 4G Nokia 2110 1993 Nokia Communicator O2 Xda The mobile phone turns 40 2014 3G 2G1G

4. Everyone now has the power to innovate in a digital world thanks to the marriage between the two great innovation platforms of the 21st century: internet and mobile. Dr. Mike Short, VP Telefónica, Financial Times, April 2013

5. Smartphone users still rising As people convert from mobiles to smartphones there’s a huge upside still to happen SmartphonesMobile phones Global Mobile Users 2013 estimates 1.5Bn 5Bn 4Bn 3Bn 2Bn 1Bn Source: Morgan Stanley Research estimates. One user may have multiple devices. Subscription numbers may be higher than User numbers.

6. differently_ see the world

7. analog _ from

8. digital_ to

9. unconnected_ from

10. connected_ to

11. We’re communicating more than sleeping The average UK adult is now spending more time using media than they are sleeping. 8h 41m communicating versus 8h 21m sleeping 8hrs 41m Source Ofcom August 2014

13. We’re even better connected_  6 million UK 4G mobile subscribers  73% of premises are in areas with 4G coverage 4G MobileSuperfast BroadbandPublic Wifi  11m O2 wifi users  10,000 hotspots  26.1 million superfast fibre broadband connections  Up 58%

14. Smart metering_ A stepping stone to the smart home Coverage targets 80% 2015 97% 2017 99% 2021

15. Smartphones are used everywhere 97% 85% 72% 64% 61% 59% 52% 44% 28% 16% Home On the move Work In-store Coffee Shop Public Transport Restaurant Social Gathering Airport Doctors School Source: Google Survey on Internet Usage, H1 2013

16. Time spent per day by O2 UK smartphone users, by application Source: UK Smartphone Data 2012 (O2 users only) 25 mins 17 mins 16 mins 14 mins 12 mins 11 mins 10 mins 9 mins 3 mins Browsing the internet Social networks Listening to music Playing games Making calls Email Texting Watching TV/Films Reading books Taking photos 128 TOTAL MINUTES PER DAY

17. Not so long ago, people just danced at concerts. Now they click, video, share & tweet_

18. Media + Data Upload + Sharing from mobiles = Ramping fast and is still in early stages Explosive growth but still early stage. PhotosVideoAudioData upload Ramping fastStill emerging NowFirst

19. Mobile traffic as % of total Internet traffic Global mobile Internet traffic as a % of total Internet traffic 2009-2013 Source: Statcounter Global Stat 5/13. Forecast Actual Q1 14

20. YouTube uploads reach 100 hrs per minute 6 years ago it was nada. Source: YouTube 100hrs per min No. hours of video uploaded to YouTube every minute

21. Technology cycles Mainframe computing 1960s Still early cycle on smartphones & tablets. Now wearables coming on strong, faster than the typical 10-year cycle. 1970s1980s1990s2000sToday Mini computing Personal computing Desktop Internet computing Mobile Internet computing Wearable/ Anywhere Internet computing

22. Sensor-enabled wearable technology Where technology meets fashion 3 rd party apps API partners Accessories Development Platform Less distracting when receiving alerts, reminders and messages Attention-getting Voice or gesture control Hands-free Low power consumption Instant wake Background working/sensing Always on Wifi 3G/4G Bluetooth NFC Connected GPS Accelerometer Compass Camera Environment aware Source: MIT, KPCB

23. Attract Getting online and being seen through all channels Both internal and external audiences Work smarter Productivity and efficiency Business growth Sell and serve smarter Serving customers better. Getting closer to them: being more responsive and interactive Retain Outsourcing the business model and IT to be more efficient, agile and productive Grow The Digital Business

24. Social Media of businesses use social media* 74% IoD and O2 survey

25. Is your web site mobile ready?

26. Businesses are moving to ‘mobile first’ Source: Constant Contact, June/July 2014 More than ¾ of small businesses are using mobile technology Up from 66% in 2013 77% 34% 60% Mobile web sites are leading the charge Have interest in mobile- optimising their web site in the next 6 months 32%

27. Other areas to explore Business messaging Location-based marketing

28. O2 Wifi gives us a channel for direct communication with customers and visitors Large carousel Search bar Promo boxes Apps of the day Personalised page Screen fold

29. With a growing audience reach and profile Gender and age distribution 39% 61% Over 3m active on their smartphones and tablets in leading venues like Debenhams, over the last 30 days. 11m registered O2 Wifi users

30. Mobile cloud services

31. Moving to digital through the cloud

32. Connectivity. Devices. Digital Technology enables you to do most things anywhere through connectivity_

33. Summary_ Consumer behaviour, expectations and distribution channels are all changing. Businesses need to respond to stay ahead Digital technology is a key enabler for better engagement, improving customer relationships and business transformation Web mobility, Apps and Cloud based services are all providing new and cost effective solutions Internet of things and video solutions will add to this. Is your Business digital?

34. webcasts.com/powerhour Virtual online events Inspiration: Finding (and protecting) time to work on our businesses Discovery: how technology can help improve your overall productivity and allow your business to stay ahead of the game Know how: Boost your digital business knowledge about the latest O2 digital products and learn how they can make your business more efficient

35. thebusiness.o2.co.uk Thank you