We are living in a connected world

From developed to From basic content to

emerging markets From fixed to mobile
data explosion

Internet Users BB Connections Exabytes per year

167 Mill
30
2005 746 Mill

Developed markets Developing markets Fixed Mobile

2015 ~3 Bn 2.7 Bn 966

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 Technology cycles are getting shorter…
>60% of
Broadband speed world’s
population with
Today 3G
10Gbps
FTTx GPON
LTE coverage
100Mbps
FTTH >65% of
world’s
population by
52Mbps 2019
VDSL
24Mbps 1Gbps IMT
ADSL2+ Advanced
1Mbps
ADSL 30Mbps Asia
FIXED thinking of
LTE
5G
2Mbps
UMTS
384Kbps
EDGE 32 Gbps
80Kbps Data radio
MOBILE GPRS pilot
University of
Southern
California
Source: Ericsson 7
… specially in the world of devices
Units (Mill)

Record technology
Smartphones PCs & Tablets Wearables
adoption | 1st weekend

300

x14
10 x8.2 Tablets
9
x26.9
200 80

Notebook PCs
60
2013-2017
sales
3.8 4 100 40
Desktop
20 PCs
0.8 1
0 0
1st iPhone 1st iPhone iPhone iPhone Q1 09 Q1 14 Q1 07 Q1 09 Q1 13
iPod 3G iPad 4s 5s 6 & 6+

Has happenned Upcoming future

8
 The cost of digital storage and computation power keeps on
declining…

Price per Gigabyte Storage Costs

$569 38% Anual

$527
Computation Costs
Price per
1 Mill transistors 33% Anual

$0.05

$0.02
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

Source: John Hagel, Deloitte, 2014.

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 …leading to richer device capabilities at much lower prices

Mobile devices capabilities Smartphone Pricing

1,000
Display pixels $450
(000)
100

$400
10
App processor
(Gbps)
1
$350
Modem downlink bitrate
0.1 (Mbps)

$300
0.01
1995 2000 2005 2010 2015 2008 2009 2010 2011 2012 2013

Source: Ericsson, IDC, 2014.

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 Technology is making Internet of Things possible and impacting
different industries’ business models
Smart Cities 3D Printers
SpaceX rocket carries the first ever zero-g
3D printer to the Space Station, to
manufacture any part that needs

x3.3
replacement

2012-2020
Market x5.8
2013-2017
Market

Connected Cars Drones

Dancing drones in
89% of new cars with Ecommerce drones
Cirque du Soleil in Europe by DHL
connectivity by 2024 spectacles

x3.5 x14
2013-2017 2014-2024
Sales Market

M2M connectivity will generate $69 Bn by 2024, at 21% CAGR

Source: Strategy Analytics for Smart Cities, Analysys Mason & BI for connected cars, Live Science for Drones and Strategy Analytics for 3D Printers.
Reinforcing our position in B2B to capture the opportunity

| Capture the B2B opportunity

Revenue B2B Revenue mix

| B2B Org y-o-y | Traditional Core Digital

Increasing 48% 37% 15% 40% 43% 17%

top line &
evolving the
69% 28% 4% 58% 36% 7%
revenue mix 0,0% 0,1%

2013 H1 14 FC 14
56% 36% 8% 48% 42% 10%

2012 FC 14

 New contracts:  Global segment vision and

organization & 4 Global Projects

Global Global
A new and FDE Product SMEs
reinforced
120 countries
global Sales Global
organization Transformation Operating Model

 SMEs turn around in H2 on new proposals:

Movistar Fusión Empresas

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