Can carriers deliver content and
not just capacity?
Julien Lehmann
Telefónica Global Delivery Services
Product and Marketing Director
Contents
• The best position to face the future
• The strategy to add value and not just “provide capacity”
• The Telefónica Global Delivery Services Example
• Conclusion
01
The best position to
face the future
Telefónica, S.A.
3
Numbers
1989
2010
2000
Clients
About 12 million
subscribers
About 68 million
customers
Services
Basic telephone
and data services
Wireline and mobile voice,
data and Internet services
Spain
Operations in
16 countries
About 71,000
professionals
About 149,000
professionals
Revenues: 4,273 M€
Revenues: 28,485 M€
EPS (1): 0.45 €
EPS(1): 0.67 €
Geographies
Staff
Finances
About 288
million
customers
Integrated ICT
solutions for all
customer segments
Operations in
25 countries
About 270,000
professionals
Revenues: 60,737 M€
EPS(1): :
2.25 €
(1) EPS: Earnings per share
4
Telefónica is today a leader in the Latin American Telco market …
Data as of June 2011
1
2 Argentina: 22.6 million
2
1
Brazil: 79.8 million
3 Central America: 7.3 million
2
2 Colombia: 12.3 million
1
1
Chile: 12.4 million
2
Ecuador: 4.5 million
2
Mexico: 21.2 million
1
Peru: 17.5 million
2
Uruguay: 1.8 million
2
Venezuela: 10.4 million
1
Wireline market rank
Mobile market rank
Total Accesses
(as of Jun11) 190.4 Mill.
Notes:
- Central America includes Guatemala, Panama, El Salvador, Nicaragua and Costa Rica
- Total accesses figure includes Narrowband Internet accesses of Terra Brazil and Terra Colombia, and Broadband
Internet accesses of Terra Brazil, Telefónica de Argentina, Terra Guatemala and Terra Mexico
5
… enjoys a significant footprint in Europe …
Wireline market rank
Mobile market rank
Data as of June 2011
1
4
1
1
Spain: 47.4 million
2
UK: 22.9 million
4
Germany: 24.0 million
2
Ireland: 1.7 million
2
Czech Republic: 7.7 million
3
Slovakia: 1.0 million
Total Accesses
(as of Jun11) 104.7 Mill.
6
… and it is widening its horizons for growth through strategic,
industrial and business alliances
Strategic & Industrial alliances
• The largest worldwide strategic alliance in the industry.
Combined accesses nearly 625 million (June 2011), which is
about 10% of world’s population
• 2nd integrated operator in China with a countrywide 3G
licence (European standard)
• Mutual investment agreement
• Telefónica: 9.7% in China Unicom
• China Unicom: 1.37% in Telefónica
• Joint cooperation in different areas such as service
provisioning, equipment & devices acquisition, R&D+i,
sharing of best practices …
• Largest Telecom alliance in Europe, with ~18.5%
market share (1)
• Combined presence in 7 European countries
• Combined accesses in Europe in June 2011 (millions
of customers):
• Telefónica …………………………………….. 104.7
• Telecom Italia …..………….………………… 62.3
• Total industrial alliance ..……….… 167.0
(1) Market share in Western Europe+Czech Republic+Slovakia Telco market as of
Pyramid Research’s Global Market Data Forecast Q4 2010
Business alliances
RCS-e
…
7
The long term value of Telefónica’s business is
recognised by the markets, so placing it within the
Top 5 in the global Telco sector
Telco sector worldwide ranking by market cap (US$ bn)
199.7
China Mobile
173.3
at &t
Telefónica
102.1
América Móvil
100.8
99.9
Verizon
NTT
Deut sche Telekom
France Telecom
European
integrated Telco
by market
capitalisation
144.3
Vodafone
NTT DoCoMo
1st
80.0
71.3
67.1

50
Among the
largest companies
in the world by
market
capitalisation
55.0
Source: Bloomberg 07/31/2011
8
02
A strategy to keep on our
successful track record
Telefónica, S.A.
9
The world is today a Networked Society, and it will get more and better
connected every day …
The new environment
which drives demand
 Increasingly powerful
devices
From Internet of People
to Internet of Things
The great digital opportunity
Customers
Devices
Bn
50
50,000 M
 Social networking
 Huge increase of digital
contents
 User Generated Contents
Traffic
 Hundreds of thousands of
applications
 e-World: e-Health,
e-Learning, e-Financial
Services, e-Travel
 M2M : smart metering,
e-Car, e-Logistics,
vending
 Everybody and
everything connected
5
0.5
0
1875 1900 1925 1950 1975 2000 2025
Apps. &
Services
Devices
Places
People
Machines
And telecommunications are the basis and
the enabling factor for the Networked Society
10
… because Telcos have a key role to play in the
ICT ecosystem
Beyond Applications: Advanced platforms for quality service delivery
Adding comprehensive
connectivity & service management
Payment for distribution
and additional services
Content, advertising, ondemand services & apps
Payment for segmented
bundles of services
Revenue sharing
Third Parties
Partners complementing
our capabilities
End Users
Telco as
Service Platform
Demand unified and
simple services
11
03
The Telefónica Global Delivery
Services Example
Telefónica, S.A.
12
The evolution of the CDN market
Content delivery disconnect
Content
Provider
CDN
Provider
Telco
Consumer
QoS disconnect
Content delivery connected
Content
Provider
Telco CDN Enabled
End-to-End QoS
Consumer
Offering new opportunities to content providers for
monetization, B2C and CRM
CDN
14
Telefónica Global Delivery Services
• Improve the experience of your customers
Web
Dynamics
Video
• Increase the visibility of your content
• Flexibility and availability guaranteed in any
conditions
Advanced
analytics
• Offload your origin server and reduce your
infrastructure cost
Smart
Download
Private
Delivery
What makes us different ?
Deep network control
• High granularity and
proximity to the end users
• Integration of the CDN
control within the network
control unit
• Reach to up to 730 million
users
• Global & local sales force
Next generation technologies
• Based on the past
experience of other CDN
actors
• New technologies oriented
to video optimization
• Open APIs
• A network of trusted
partners
16
Telefónica’s CDN Position in the market
CDN Investment
Throughput
(Tbps)
2012
2011
Number of PoP’s
Continent
Source: Player public information
17
Country
City Level
Capacity deployment: 2011-2012E
TGDN Deployment on 2011
TGDN Deployment on 2012
Do you want to be part of the CDN of the future?
• Telefónica is opening its technology to you
To decrease time-to-market thanks to experience
To get revenue from day 1 thanks to existing clients
To get better performance thanks to existing POPs
04
Conclusion
Telefónica, S.A.
20
No it’s NOT just capacity !
Telefónica keeps on investing heavily in added value services
that keep on changing the way we live, work and
socialize
The Telefónica Global Delivery Services are set to be
the leading online experience optimizer
It is not just about us, you have an opportunity to be part
of it for the benefit of the whole value chain
Thank you
Julien Lehmann
Julien.lehmann@telefonica.es
Telefónica, S.A
Telefónica Global Delivery Services
22