1. GINA WP2.2 Business Model and Initial Commercial Feasibility Study November 5 th 2009 Dublin GNSS for INnovative Road Applications

2. GNSS for Innovative road Applications Company’s logo Progress Status of D2.2 – Business model and initial commercial feasibility study 04/10/2015Page 2 GINA WP2 – Analysis of Applications / Services Service concept definition Trials sample definition Competitive scenario analysis and framework Business model definition Value chain structure and key players assessment Addressable market and market potential Progress statusRemarks Completed Partnership strategy for EETS provider developed in WP4.2 EDAS role to be analysed Completed Preliminary costs estimation done with Giroads reference values: analysis to be refined with costs inputs from GINA partners – Capex to be evaluated D2.2 Chapters To be completed after cost structure consolidation Defined scenarios for sensitivity analysis Completed Revenues generation potential Cost structure definition Profitability Sensitivity scenarios

3. GNSS for Innovative road Applications Company’s logo Content 04/10/2015Page 3 GINA WP2 – Analysis of Applications / Services Business model definition Value chain structure and key players assessment Addressable market and market potential Revenues generation potential Cost structure definition Sensitivity analysis

4. GNSS for Innovative road Applications Company’s logo Page 420091105_GINA_PM2_WP2.2_v0 High Level Architecture CENTRAL INFRASTRUCTURE SERVICE CENTER GALILEO/ EGNOS OBUs SERVICE CENTER EXTERNAL DATA SOURCES Mobile Network (GPRS/UMTS) Internet secure connection The On Board Units receive the signal from the GNSS system and communicate through GPRS/UMTS signal with the Central Infrastructure, deployed to provide all basic and common services to the system

5. GNSS for Innovative road Applications Company’s logo Page 520091105_GINA_PM2_WP2.2_v0 EGNOS/GALILEO OPERATING COMPANY EETS PAN-EUROPEAN SERVICE PROVIDER Key Economic Flows in Service Provisioning OPERATING COMPANY GNSS SERVICE PROVIDER Guaranteed service END USER/CUSTOMER (Private + Business) Service bundle Service fee Fee per bundle *When applicable for the specific type of Service according to Business Model definition TOLL CHARGER 1, 2…N SERVICE PROVIDER TELCO Fee per subscriber Payment for usage Fee per subscriber* Payment for usage INFRASTRUCURE OWNER PUBLIC INSTITUTIONS Service/product flows Economic flows

6. GNSS for Innovative road Applications Company’s logo Content 04/10/2015Page 6 GINA WP2 – Analysis of Applications / Services Business model definition Value chain structure and key players assessment Addressable market and market potential Revenues generation potential Cost structure definition Sensitivity analysis

7. GNSS for Innovative road Applications Company’s logo Page 720091105_GINA_PM2_WP2.2_v0 GINA High Level Value Chain Regulation and Supervisory Authority Signal provisioning and guarantee Content generation Service provider Telecommuni -cation channel Vehicle / OBU manufacturer Customers GSA European commission States members Operating Company GNSS service provider EDAS Service Provider Roadmap databases Navigation algorithms Infomobility Turistic/ service DB Weather information Personal data access Entertainment Vehicle assistance Driver assistance Wireless transmission of telematics services Vehicle integrators Car manufacturers On Board Unit manufacturers Private clients (Consumer and Business) Institutional clients Road infrastructure management companies Police Municipalities Enhancers / Facilitators Important partnership for the Service Provider

8. GNSS for Innovative road Applications Company’s logo Page 820091105_GINA_PM2_WP2.2_v0 Key Players assessment Regulation and supervisory authority Signal Provisioning and guarantee Content generators Telco Vehicle / OBU manufacturer Customers Role in the value chain Possible enhancers Possible partnership EETS Service Provider Public and istitutional clients To develop vehicle related contents (roadmap database, navigation algorithms, traffic DB…) and non-vehicle related contents (weather info…) Standardization and enforcement To define the general legislative and regulatory framework, incentivising the use of GNSS technology in the road sector To guarantee the signal service To allow to EETS users to pay tolls in all EU with a single on-board equipment (OBE) and a single contract To make communication channels available at the required SLA To make available OBUs according to EETS requirements at decreasing costs -

9. GNSS for Innovative road Applications Company’s logo Content 04/10/2015Page 9 GINA WP2 – Analysis of Applications / Services Business model definition Value chain structure and key players assessment Addressable market and market potential Revenues generation potential Cost structure definition Sensitivity analysis

10. GNSS for Innovative road Applications Company’s logo Potential market - EU Actual Members 04/10/2015Page 10 GINA WP2 – Analysis of Applications / Services For the addressable market the Business Case has analysed the last available data relevant to the European market of cars, buses, light commercial vehicles, light, medium and heavy trucks, using CAGR of the last 4 years to project data till 2012 and an adjusted value to project data from 2012 to 2022. The analysis took into consideration the countries belonging to EU27.

11. GNSS for Innovative road Applications Company’s logo Forecast for circulating cars in Europe (2008-2022) 04/10/2015Page 11 GINA WP2 – Analysis of Applications / Services EU 27 cars market expected to increase from 235 Mln in the 2008 to 275 Mln in the 2022 with a CAGR equal to 1,13% Relative weight of the first 7 countries (Germany, Italy, France, GB, Spain, Poland, Netherlands) out of the total EU market decreases from 78% in 2008 to 75% in 2022 Source: Euromonitor + Anfac report February 2009

12. GNSS for Innovative road Applications Company’s logo Forecast for circulating LCV, Trucks and Buses in Europe (2008-2022) 04/10/2015Page 12 GINA WP2 – Analysis of Applications / Services EU 27 commercial vehicles and trucks market expected to increase from 33 Mln in the 2008 to 42 Mln in the 2022 with a CAGR equal to 1,6% Relative weight of the first 7 countries (Germany, Italy, France, GB, Spain, Poland, Netherlands) out of the total EU market decreases from 78% in 2008 to 71% in 2022 Source: Euromonitor + Anfac report February 2009

13. GNSS for Innovative road Applications Company’s logo Market potential vs Penetration - Private segment 04/10/2015Page 13 GINA WP2 – Analysis of Applications / Services Data referred to EU27 GINA Penetration (%) No. of cars in EU27 (Mil)

14. GNSS for Innovative road Applications Company’s logo Market potential vs Penetration - Business segment 04/10/2015Page 14 GINA WP2 – Analysis of Applications / Services Data referred to EU27 GINA Penetration (%) No. of LCV, Trucks & Buses in EU27 (Mil) Light Commercial Vehicles (W< 3,5 tons) Light- Medium Trucks (3,5<W<16 ton) Heavy Trucks (W>16 tons) Buses

15. GNSS for Innovative road Applications Company’s logo Content 04/10/2015Page 15 GINA WP2 – Analysis of Applications / Services Business model definition Value chain structure and key players assessment Addressable market and market potential Revenues generation potential Cost structure definition Sensitivity analysis

16. GNSS for Innovative road Applications Company’s logo Price assumptions 04/10/2015Page 16 GINA WP2 – Analysis of Applications / Services For the private segment, an all inclusive flat fee structure is assumed from the end customer side. On the operators’ side, since they can benefit from cost and investments savings, a fee per subscriber can be assumed. Since aggressive penetration pricing is a key success factor for the mass market diffusion in the consumer segment as highlighted in previous project (Vert and Giroads), the price can be in the range 6-15 €/month. For the business segment a more flexible approach shall be adopted due to the different type of customers to be served, spanning from large delivery companies operating on international basis with hundreds of vehicles to small companies operating on local basis with few vehicles. In the preliminary business model anyhow a flat fee is assumed for simplicity reason with a price in the range 100-130 €/month. Also for the business segment, on the operators’ side, a fee per subscriber is assumed.

17. GNSS for Innovative road Applications Company’s logo Revenue stream 04/10/2015Page 17 GINA WP2 – Analysis of Applications / Services Consumer Business Price assumptions: Price of bundle package for Consumer segment decreasing from 2012 to 2022 from 10 to 6,5 €/month Price of bundle package for Business segment decreasing from 2012 to 2022 from 80 to 60 €/month Average fees from motorway operators equal to 12 €/year/customer flat from 2012 to 2022 PRELIMINARY

18. GNSS for Innovative road Applications Company’s logo Content 04/10/2015Page 18 GINA WP2 – Analysis of Applications / Services Business model definition Value chain structure and key players assessment Addressable market and market potential Revenues generation potential Cost structure definition Sensitivity analysis

19. GNSS for Innovative road Applications Company’s logo Cost structure elements 04/10/2015Page 19 GINA WP2 – Analysis of Applications / Services The cost structure is referred to the GINA Service Provider, i.e. the company that sells the service packages to the final customers by aggregating inputs of specific service providers. Costs are evaluated under the hypothesis that the architecture as a whole as well as the single system components change, in terms of costs and performance, with the number of final users. The Architecture cost structure assumes to have a “Smart OBU” in order to be compliant with Privacy issues. Main costs element are the following:  Telecomunication costs  EGNOS/Galileo Service costs  OBU costs  SG&A  Operating costs  Depreciation of capital expenditures

20. GNSS for Innovative road Applications Company’s logo Telco costs 04/10/2015Page 20 GINA WP2 – Analysis of Applications / Services The communication channel among the OBUs and the main infrastructure will be done by GPRS/UMTS. Reports will be sent daily for each vehicle with only the RUC data (smart OBU). This optimizes bandwidth and server usage. It should be taken into account that VAS have different communication needs from RUC. Depending on the type of VAS there might be the need of a continuous real-time communication – which would considerably increase the cost for frequent users - (e.g. navigation, traffic information) or information which can occur on-the-spot (e.g. ecall) or can be dumped on a daily basis (e.g. PAYD). Communication among service centers will be through a secure internet access. For the business plan purpose the following assumptions are made:  Communication process will decrease with subscribers increase due to better tariff negotiation;  Business segment will require higher communication costs vs. consumer segment;  3 hours of communication time per day per vehicle (based on average time of private car usage of 2 hours per day and average time of business segment vehicle usage of 8 hours per day)  Increase factor of 2 for the communication time to take into account peak condition versus average situation  Average of 7 euro/month/subscriber for communication costs

21. GNSS for Innovative road Applications Company’s logo Signal operating costs and guarantee costs 04/10/2015Page 21 GINA WP2 – Analysis of Applications / Services About the signal operating and guarantee costs, reference is made to GIROADS study relevant to EGNOS System operating costs, that provides the following figures: System operations costs between 30 and 35 million euros per annum (indicative cost allocation for the road domain between 3 and 15 million euros per year); Galileo Concessionaire costs for GNSS services equal to 1,5 € per annum per OBU EDAS costs have not yet been analysed: input from GINA partners for a cost estimation is necessary

22. GNSS for Innovative road Applications Company’s logo OBU costs 04/10/2015Page 22 GINA WP2 – Analysis of Applications / Services Actual costs range for commercial OBUs spans from 175€ to 600€ but a precise benchmark among different vendors has to be carried out Price of OBU is highly depending on the overall market quantity since production costs are highly affected by scale economies Therefore actual costs/prices of OBU can be used only as reference since strong cost/price decrease is expected along the business plan horizon Besides, installation costs (actually around 60€/OBU) could drastically be reduced in case of partnership with car manufacturers since it can be supposed that cars commercialized in the future will be already equipped with an OBU suitable for EETS The actual assumption of the Business Case is that at regime condition the cost supported by the EETS provider will be the lease rate for an OBU costing 100 €, with a leasing of three years at 10% interest rate

23. GNSS for Innovative road Applications Company’s logo SG&A 04/10/2015Page 23 GINA WP2 – Analysis of Applications / Services About SG&A, the Business Plan uses the following assumptions: Commercial costs:  Commissions to sales agent (either belonging to third parties or to an own sales force network) equal to 5% of total revenues (based on telecom benchmark where commissions go from 4 to 8% of revenues)  Fixed share of commercial costs equal to a percentage of the steady state revenues (assumed to be reached in 10 years after GINA launch) Marketing costs: 0,5% of the revenues (based on telecom benchmark) for advertising and promo costs for product launch, customer retention initiatives and brand/product awareness building Administration, Finance & Control: staff of 600 employees for the pan-European service provider at regime condition (average of 20-30 employees per country) costing 80k€ each Other costs: rent and other minor costs assumed to be 10 M€ at regime condition In analyzing the deployment of EETS (taking into consideration the need to establish agreement with Toll Chargers in the different EU Member States), the possibility to focus on strategic corridors or areas could optimize the SG&A costs

24. GNSS for Innovative road Applications Company’s logo Operating costs 04/10/2015Page 24 GINA WP2 – Analysis of Applications / Services Operating costs based on Giroads costs strucure To be finalized based on GINA architecture and partners review

25. GNSS for Innovative road Applications Company’s logo Depraciation of Capital expenditures 04/10/2015Page 25 GINA WP2 – Analysis of Applications / Services Capital expenditure cost elements are referred to Hardware, Software, Development costs and depreciation. Depreciation assumptions for the different type of expenditures are the following: Hardware: 5 years Software: 3 years Other material: 5 years Other not material: 15 years

26. GNSS for Innovative road Applications Company’s logo Regime Cost Structure 04/10/2015Page 26 GINA WP2 – Analysis of Applications / Services PRELIMINARY

27. GNSS for Innovative road Applications Company’s logo Content 04/10/2015Page 27 GINA WP2 – Analysis of Applications / Services Business model definition Value chain structure and key players assessment Addressable market and market potential Revenues generation potential Cost structure definition Sensitivity scenarios

28. GNSS for Innovative road Applications Company’s logo Scenarios for sensitivity analysis 04/10/2015Page 28 GINA WP2 – Analysis of Applications / Services In order to carry out a preliminary sensitivity analysis, price and penetration values will be changed in comparison with the base scenario analysing the following different scenarios: Best case Worst Case Penetration rate: 10% higher than base case (assuming that the enforcement strategy will be successful and stakeholders playing the role of GINA enablers will work properly) Price: 5% higher than base case Penetration rate: 20% lower than base case Price: 15% lower than base case Base Case Reference prices of the business model, decreasing along the overall time horizon Penetration rate consolidated in Giroads final report (to be noted that these penetration values look already “aggressive” considering also the Galielo overall project status

29. GNSS for Innovative road Applications Company’s logo Milano Municipality involvement in GINA 04/10/2015Page 29 GINA WP2 – Analysis of Applications / Services Mid September 2009: established a first contact with AMAT (Mobility, Transportation & Environment Agency of Milano Municipality) October 30 th, 2009: meeting with AMAT Representatives (Dott. Valentino Sevino and Dott. Paolo Campus) with the aim of illustrating GINA project and evaluating possibility for a direct involvement of Milano municipality Milano municipality main areas of interest are:  Traffic Data collection and management for traffic control and info distribution to drivers;  Fleet management (taxi, public transportation, car sharing fleet);  Tracking of commercial vehicles and management/optimization of logistic flows within urban areas Next steps:  Prepare a report for Mobility, Transportation & Environment Councillor, Mr. Croci  Arrange an official meeting with Milano municipality by the end of 2009 with the participation of GSA  Invite officially Milano municipality at the Stockholm workshop of March 2010

30. Thank you