1. Connected Car Come of Age Pavan Mathew, Head of Connected Car Telefonica Digital CTIA 2013, Las Vegas May 22 nd 2013

2. © Telefónica S.A | All rights reserved m2m Industry wide agreement that the connected car is a big opportunity, and a key market within M2M for operators… Devices 50bn People 7bn Places 1bn

3. © Telefónica S.A | All rights reserved m2m Devices 50bn People 8bn Places 1bn Industry wide agreement that the connected car is a big opportunity, and a key market within M2M for operators Audi connect service as the second largest factor behind their purchase decision – just behind design and ahead of engine performance. - Telematics Update - OEMs have already deploy solutions or have plans to deploy during 2014 - Telefonica - E-call recommendation for network operators for 2015 - European Commission - Vehicles 1,1bn Estimated Revenues from Telematics Market in 2012 $2.3 Billion

4. © Telefónica S.A | All rights reserved m2m Everyone agrees connected car is a big opportunity, and a main market within M2M for operators… Estimated Revenues from Telematics Market in 2012 $2.3 Billion … however mass adoption and revenue has been a challenge… 2005 ForecastCurrent Forecast Audi connect service as the second largest factor behind their purchase decision – just behind design and ahead of engine performance. - Telematics Update - OEMs have already deploy solutions or have plans to deploy during 2014 - Telefonica Market Research- E-call recommendation for network operators for 2015 - European Commission- Devices 50bn People 8bn Vehicles 1,1bn

5. © Telefónica S.A | All rights reserved m2m Standardization Customer Management Service customization Cost Model …due to challenges in business model HW cost impact on vehicle retail price Data network roaming costs Multiple players in the value chain Prepare infrastructure to sell services (Business process and tools) Billing & invoicing capabilities a cross countries Manage customer relationship Flexibility on service/bundles Adapt user experience of digital services to car uses case (70% of customers are solo drivers) Standardize Systems to attract developers Interfaces to make services/devices work seamlessly

6. © Telefónica S.A | All rights reserved m2m Partnership between OEMs & Telcos is critical to address these challenges Standardization Customer Management Service customization Cost Model Telco are actively working on cost reduction in data roaming costs and SIM pricing Sharing revenues is lading to new model where risk are share among main stakeholders 1:1 customer relationships Extensive knowledge in CRM & data mining Unique position to bill & invoice customers Content, apps, agreements with content distributors… Extensive knowledge in Ux, and digital services & apps business models Experience in standardization processes & forums

7. © Telefónica S.A | All rights reserved m2m Supported by Service Delivery Platform Telefonica is developing its proposition to meet the challenge MANAGED CONNECTIVITY. Best in class connectivity, leveraging our unique footprint and selected roaming partners with one global SIM FOUNDATIONAL SERVICES Addresses forthcoming global regulations and customer expectations  eCAll  bCall  Stolen Vehicle  Navigation  Point of Interest DIFFERENTIATING P&S Bringing in advanced digital product and services to the automotive industry  Advanced Data Management: Hosting Analytics  Insurance Telematics  Fleet Management  Media Content  Location Based Advertising DEVELOPER ECOSYSTEM. Offer Telefonica's developer ecosystem to the connected car, allowing the OEM to manage the user experience Power by

8. © Telefónica S.A | All rights reserved m2m Meeting customer and OEMs needs the DriverOEM New revenue streams Vehicle differentiation Improved service loyalty Transforming the car into a service, transforming the service into a business opportunity With a Unified user experience controlled and branded by the OEM Gain insight on driver behaviour do to better target cross-selling offers and services Address regulations eCall (Mandatory in EU by 2015), Contran 245, GLONASS, global connectivity Quality improvement & warranty reduction Gain insight prior to saleable vehicles & Over-the-air fixes reduces warranty saving Improved CRM Support new customer interactions and vehicle information tracking in order to develop a personalized relationship based on drivers’ preferences and behaviors. Increased safety & security Easy and practical services Unified user experience Feel secure on the road and vehicle operation Access easy-to-use navigation, infotainment services in a safe way with a smooth user experience OEM branded experience

9. © Telefónica S.A | All rights reserved m2m OnStar & Telefonica partnership Single Global Supplier – Ease of Managing Project, Accountability Global SIM – Improved Logistics and Manufacturing Chain Global Project Team – Sales, Post Sales Project Management Legal And Regulatory – Global Cooperation Future Development – Long Term Relationship!!!

10. © Telefónica S.A | All rights reserved m2m & More to come THANK YOU!