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

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

3. The mobile phone turns 40 1973 1983 1993 1999 2003 2007 2013 2014 1G 2G 4G 3G First mobile call Motorola DynaTAC 8000X Samsung Galaxy SIII Nokia Communicator Nokia N80 Motorola International Nokia 2110 BlackBerry Z10 O2 Xda Nokia 1200 Motorola StarTAC Motorola Razr Samsung Galaxy S4 Nokia 8110 Apple iPhone

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 Global Mobile Users 2013 estimates 5Bn 4Bn 3Bn 2Bn 1.5Bn 1Bn Smartphones Mobile phones Source: Morgan Stanley Research estimates. One user may have multiple devices. Subscription numbers may be higher than User numbers.

6. see the world differently_

7. from analog_

8. to digital_

9. from unconnected_

10. to connected_

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

13. We’re even better connected_ 4G Mobile Public Wifi Superfast Broadband • 6 million UK 4G mobile subscribers • 73% of premises are in areas with 4G coverage • 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% 97% 99% 2015 2017 2021

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

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

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 First Now Photos Video Audio Data upload Ramping fast Still emerging Still emerging Explosive growth but still early stage.

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

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

21. Technology cycles Still early cycle on smartphones & tablets. Now wearables coming on strong, faster than the typical 10-year cycle. 1960s 1970s 1980s 1990s 2000s Today Mainframe computing Mini computing Personal computing Desktop Internet computing Mobile Internet computing Wearable/Anywhere Internet computing

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

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

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

25. Is your web site mobile ready?

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

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

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

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

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. 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 • webcasts.com/powerhour

35. Thank you thebusiness.o2.co.uk