M2M & Telematics

1. M2M & Telematics A market opportunity M2M System Telematics Consultants

2. M2M SystemTelematics Consultancy Lars Odlén • MSc, MBA • 20 years in product & process development • 8 years of wireless M2M • Led M2M developments in several industries • Extensive international business experience

3. What happens in the wireless world ? M2M System Telematics Consultants

4. Voice market saturates M2M System Telematics Consultants

5. Churn increases M2M System Telematics Consultants

6. ARPU decreases M2M System Telematics Consultants

7. 3G mobile-phone woes The introduction of third-generation faces technical and financial difficulties. M2M System Telematics Consultants

8. Pass the painkillers DO MOBILE phones cause headaches? In the case of third-generation (3G) telephones, the answer is undoubtedly yes—even though nobody is yet using them. Instead, they are causing technical and financial pain for all the companies around the world that are trying to build 3G networks. The idea behind 3G was to offer subscribers exciting new features, such as video clips and high-speed Internet access, for which they would be prepared to pay far more than they now do. Operators have spent vast sums—around $125 billion in Europe alone—buying licences to enable them to offer such services (see chart), and have run up huge debts in the process. Building the networks will cost about the same again. It is a huge gamble—and one that is looking riskier by the minute. This has serious financial repercussions. Given the expense of the 3G licences and infrastructure, the operators want to launch their services and start generating revenue as quickly as possible. But the uncertainty has hit their share prices; and the debt burden has led to cuts in their credit ratings that have made it harder for them to raise money. Britain’s BT, for instance, was forced to sell prized Japanese and Spanish assets to Vodafone this week, to reduce the massive debts it incurred when buying 3G licences. BT, whose long-serving chairman, Sir Iain Vallance, stood down last week, now plans a huge rights issue that may further upset its long-suffering shareholders. Worse even than these cash travails, the initial projections of how much operators could expect to charge for 3G services now look highly optimistic. It has become clear that 3G will take far longer than expected to become profitable, so operators will sink deeper into debt along the way. Amid all this uncertainty, it is clear that it will be several painful years, rather than months, before 3G becomes widely available. Even if the operators can meet their debt burdens and build the networks, it is not at all certain that they will be able to make much money from them. Today’s headaches might then seem mild compared with those that are to come.

9. What the future might hold • No market growth • SOW (Share of wallet) not increasing • All playes offer same • Mobile communication becomes a comodity • Mobile com just another utility • Customers wants more for less • Technology migration require heavy investments • ARPU likely to decrease M2M System Telematics Consultants

10. When the future looks uncertain, why not rely on the past - You have a GSM network - You have spare capacity M2M System Telematics Consultants

11. Without investments Additional revenues • Now • Without investment • Without cost M2M System Telematics Consultants

12. Your future subscribers might not be persons, but machines Telematics M2M System Telematics Consultants

13. By 2005 there will be more machines communicating than people NTT DOCOMO President Keiji Tachikawa For the UK market this equals +100 million £ per annum, at almost no marginal cost (1p/msg, 200 msg/yr) There is a finite number of people but An ever growing number of machines M2M System Telematics Consultants

14. growth in machines % of devices that will be communications enabled M2M System Telematics Consultants Source : Merrill Lynch, June 2000

15. Voice Telemetry & Telematics Data total projected market penetration 284% 171% 142% 118% 93% 72% 57% 41% M2M System Telematics Consultants

16. recognising the opportunity • within the next ten years, telemetry in its various guises will reach into all areas of industry i.e. food, retail, leisure engineering and transport • invasive as mobile voice currently is today • Eventually everything will be connected M2M System Telematics Consultants

17. a glimpse into the future • telecom will pervade all aspects of life • human to human • human to machine • machine to machine • machine to human communication interaction transaction control building the connected world M2M System Telematics Consultants

18. What is Telematics • The fourth phase of the IT revolution • All devices communicate • Geography becomes irrelevant • Enables ”Business in real time” • A Productivity driver • Drives re-engineering and new business models A new tool for mankind M2M System Telematics Consultants

19. Wireless End to End Wireless Telemetry solutions Computing Internet Source Ericsson

20. Three phases of wireless Step one (in progress) Extending existing systems and processes to the field. Nissan saves 40% on sales costs by giving wireless access to pricing and inventory. HBOC (drugs) reduced incorrect shipments by 80% through wireless in their warehouses Step 2 (in development) Re-engineering business. NTT DoCoMo increased vending operator’s profits 70% by introducing Cashless Payment . Teclion saved 50% of service visits by remote monitoring. Step three (tomorrow) Creation of new business models that would not have been possible without wireless

21. Sounds great, but how do we get to making money • Understanding the market • End customers • Intermediary • Competitors • Environment • Economics • Understanding the application • Value chains • Players • Change drivers • Enablers • Technical requirements M2M System Telematics Consultants

22. understanding who has to be involved • It's like a team • the different players and the interaction between them is referred to as "the value chain" M2M System Telematics Consultants

23. the value chain supplier systems integrator service supplier network operator end user M2M System Telematics Consultants

24. the value chain • it's very complex • many interested parties • a lack of standards • specialists and ways of working are specific to particular vertical markets • however overall framework is similar in all markets M2M System Telematics Consultants

25. What can an operator do? Help others play !

26. Competitors Automation Utilities Vending Security Automotive M2M System Telematics Consultants

27. Opportunity Automation Utilities Vending Security Automotive Generic middleware platform M2M System Telematics Consultants

28. Business model step 1 Trough SI /AP End customers in various vertical markets Solutions and applications providers Operator M2M System Telematics Consultants

29. Business model step 2 The telematics wrapper End customers in various vertical markets Operator Partners M2M System Telematics Consultants

30. Telematics means New customers Substantial volume growth Low investment Low uppkeep High profit segment Low churn Broadening of Brand name M2M System Telematics Consultants

31. Cases CASES M2M System Telematics Consultants

32. Case Operator M2M System Telematics Consultants

33. M2M System Telematics Consultants M2M System Telematics Consultants M2M System Telematics Consultants M2M System Telematics Consultants

34. Developing a telemetry managed solution M2M System Telematics Consultants

35. Overview • What is the Orange Managed Solution? • An end to end process for developing a new system • A Gateway to simplify the technical connection • A single point for customer support • Not restricted to a specific market M2M System Telematics Consultants

36. Measures Reads Controls Remote Moving Fixed Existing New Components Device Modem Managed Gateway Software • GSM Radio Access • Uses SMS • GPRS and 3G in the future? • Connects applications to a telemetry devices • Converts SMS messages to XML • Buffers Data • Internet Accessible • Operated and Managed for Orange • Customer Specific • Back-end System • May be an ASP • ERP • Records • Controls • Co-ordinates M2M System Telematics Consultants

37. Device Integrator Connects the Device to the Orange Managed Gateway using a GSMModem Parties • System Integrator • Connects the Customer’s Computer System to Orange Network using the Managed Gateway and the Internet Device Modem Managed Gateway Software M2M System Telematics Consultants

38. How does it work? Customer’s Data Centre Customer’s Bespoke Software Customer’s Remote Devices Sensors, GPS, etc

39. Customer Support How does it work? Customer’s Data Centre Customer’s Bespoke Software Customer’s Remote Devices Orange Managed Gateway Managed Gateway API Middleware Unix Sensors, GPS, etc Server Farm

40. Customer Support How does it work? Customer’s Data Centre Customer’s Bespoke Software Customer’s Remote Devices Orange Managed Gateway System Integration GSM Modem + SIM Managed Gateway Device Integration API Middleware Unix Sensors, GPS, etc Server Farm

41. Customer Support Internet Bill Orange SMS Telemetry Data (Compressed) How does it work? Customer’s Data Centre Customer’s Bespoke Software Customer’s Remote Devices Orange Managed Gateway System Integration GSM Modem + SIM Managed Gateway Device Integration API Middleware Unix Sensors, GPS, etc Server Farm

42. Orange Telemetry Managed Solution will build on existing Orange Telemetry Offerings System Integration • Wholesale Telemetry: Unbranded airtime via wholesale deals with Telemetry Service Providers. (Claire Betty) • Telemetry Kit: Orange branded modem and airtime (Roger Hill and Sam Mitchell) • Telemetry Managed Solution: Full lifecycle telemetry solution, including monitoring, integration, and hardware. Device Integration High VolumeMessaging GSM Modem Airtime OrangeTelemetryManagedSolution OrangeWholesaleTelemetry OrangeTelemetry Kit

43. Advantages • Reduced development time • Scalable, High performance messaging • Reduced message latency • No single point of failure • Removes complexities of modem hosting • Flexible, horizontal approach • Easy Migration path from SMS to GPRS • End to End monitoring and support • Base for ASP development

44. Key Features • Orange will be a ‘One Stop Shop’ for new telemetry products • Reduced product development time • Quicker customer connection • Not restricted to specific industries • Easy Migration path from SMS to GPRS • End to End monitoring and support • Built using ‘Off the Shelf’ technology • Designed for the b2b marketplace

45. Case Lift service M2M System Telematics Consultants

46. What is the biggest saving in lift service? Not to visit the lift ! • Unmanned visits • Need based service intervals • Preventive maintenance  Reduces annual service visits by 50% M2M System Telematics Consultants

47. GSM based monitoring/alarm system M2M System Telematics Consultants

48. ICU™ (Information Communication Unit) • Emergency telephone • Rapid connection • Automatic identification • Redial • Service need • Starts • Fault symptoms • Statistic • Customer reports • Cost reduction • Quick installation • No telephone line M2M System Telematics Consultants

49. IT system architecture Service engineers Alerts Backreports Reports Customer info SMS WWW Regional offices WAP GSM SMS ICU data Voice Lift GSM network GSM Field Customers WWW PSTN Reports Internet Call centre Machine reports Customer IT system WWW Firewall publish- ing CRM SMS system server & db Head office M2M System Telematics Consultants

50. Extranet log-on M2M System Telematics Consultants