Presentación a cargo de Carlos Mira, Presidente de Arthur D. Little, en el marco de la 30ª edición de los Encuentros de Telecomunicaciones y Economía Digital.

1. Telecoms Through the
Ecosystems Lens
7 September 2016
30 EncuentroTelecomunicaciones y
Economía Digital

2. 2
The challenge
We are living through a technology and
business revolution, which is having an
irreversible impact on consumer habits,
blurring of industry boundaries and
disruption of the status quo
Source: Arthur D. Little

3. 3
Ecosystems provide a broader view of the world
The challenge – Need a broader view
Source: Arthur D. Little
Enhanced realityStandard view
Linear view Ecosystem view
Allows us to see:
• Processes
• Nodes
• Materials flow
• Costs
Allows us to see:
• End 2 end view of value creation
• Full visibility over the nodes and all
interactions that create and deliver
value
• Assess where to play, how to play, how
to win

4. 4
“Digital” and ecosystems have enabled a superior business design
Ecosystems – A richer point of view
Source: Arthur D. Little
Value (Supply) chain Ecosystems
Hierarchal, product-oriented
push-pull centric
Customer is the final link of the chain
Focused on value creation
for the network
Users are part of the ecosystem
Key
attributes
Leading tip: Orchestrator
Outer-layer: Key nodes
Inside layer: Contributing Nodes
Tractor client/OEM
Module suppliers
Components
Materials
supplier

5. 5
Ecosystem players are leading value creators
Ecosystems – Track record of success
Rank Company
1 Exxon Mobil
2 General Electric
3 Gazprom
4 Citigroup
5 Microsoft
6 BP
7 Royal Dutch Shell
8 Bank of America
9 HSBC
10 Wal-Mart
…. …
32 IBM
131 Apple
Rank Company
1 Exxon Mobil
2 Apple
3 PetroChina
4 ICBC
5 BHP Billiton
6 Royal Dutch Shell
7 Microsoft
8 Nestlé
9 Petrobras
10 IBM
… …
13 General Electric
17 Wal-mart
37 Google (Alphabet)
62 Amazon
Rank Company
1 Apple
2 Alphabet
3 Microsoft
4 Exxon Mobil
5 Berkshire Hathaway
6 Amazon
7 Johnson & Johnson
8 Facebook
9 General Electric
10 Wells Fargo
… …
13 Alibaba
17 Wal-mart
31 IBM
Ranking of public corporations by market capitalization
Q2 2006 Q2 2011 Q2 2016
Ecosystem
player
Source: FT 500 Global List, Arthur D. Little

6. 6
Ecosystems are not new – nor easy
Describing Ecosystems – Success or failure
Source: Arthur D. Little
Play Outcome
Windows + Intel
(Wintel)
ecosystem
dominates the
market
Steve Jobs is
forced out in
1985
1985-1995 - PC
The device game has become an ecosystem game orchestrated by platforms
2013-18 – Smartphone OS
2007-2010 – Mobile phone
Play Outcome
Android: 86% vs.
iOS: 13% share
(Q2 2016)
Watch this space
Closed HW
Controlled OS
Policed
ecosystem
Open HW
Freemium OS
Multiplatform play
Play Outcome
Products
Value chain focus
Poor developer
community
Experience
Platform focus
Rich developer
community
Nokia continues
to play the
telecoms to lose
90% of market
value in 6 years
Apple ecosystem
built on iOS,
iTunes, Appstore
Closed HW
Closed OS
Charge for SDK
Open HW
Open OS
Free SDK
Top-dog
Top-dog
Ecosystem
Challenger
Top-dog
Ecosystem
Challenger
Ecosystem
Challenger

7. 7
Hospitality ecosystem is being changed from within and outside
Describing Ecosystems – Hospitality
Source: Arthur D. Little
Note: (1) Online Travel Agency
Traditional hospitality ecosystem Disruption from collaborative economy
Research
To Book
Commercial-
ization
Operations
Real
estate
Airbnb: a marketplace platform,
key node and orchestrator
of the ecosystem
Property management
platforms*
Visible nodes of
airbnb ecosystem
2 million listings in +34.000 cities of 191 countries
with 500.000 individuals & property managers,
contributing nodes of airbnb ecosystem
* Check-in service; reception 24/7; cleaning partners; handymen; hospitality pros – for airbnb, Homeaway,VRBO, Booking.com
Sale of properties to investors in exchange
for long term management contracts
Professional hotel
Operators

8. 8
TheTelco ecosystems game – creating value beyond connectivity
Describing ecosystems - Healthcare
The healthcare ecosystem has characteristics for a major digital
transformation
Healthcare
providers
Doctors
Nurses
Physician
assitants
R&D and University hospitals
Governments and
regulators
Payers
Private
Ancillary Medical
services
Pharmacies
Specialized
treatment and
diagnostic
Home care
Ambulances &
Emergencies
Service providers
Health information Operations management Financial services
IT Infrastructure Hospital Medical Devices
Hospitals & Primary Care Centers
Public Private
Public
Government
Regulators
Patients
Providers
&
Payers
Technology &
Infrastructure
Clients
Chronic care Acute care Home care Ongoing care
Highly fragmented1
Information intensive2
High failure costs
3
Highly regulated
4
Information asymmetries
5
Source: Arthur D. Little

9. 9
Ecosystem participants interact to create mutual value
Describing Ecosystems – Principles
Source: Arthur D. Little
Explore and produce
new forms of
value
Encourage new
users interactions
Be flexible and
adapt
Principle 1
Always reward
value created for
users
Incentivize fair and
mutually satisfactory
interactions
Principle 2 Principle 3
Recognize status
quo is
continuously
challenged
Create value
outside to protect
value inside
Principle 4
Constant evolution
and adaption
Win-Win play is key
for node survival
Simplicity,
transparency, trust
Follow value – not
status
Build trust to
succeed and survive
Transparency and
openness in all
interactions
Simplicity wins

10. 10
Current structure is siloed
The Telecommunications ecosystem - Entertainment
CDN CDN CDN
Content
libraries
Production
Co.
Entertainment
Platform
Entertainment ecosystem:Telcos in connectivity or silo play
Carrier network
Telco
entertainment
platform
Devices and
Set top boxes
Interaction
Node
Key:
Source: Arthur D. Little

11. 11
An ecosystem play could create new spaces and efficiencies
The Telecommunications ecosystem – Entertainment
Source: Arthur D. Little
Carrier network
CDN CDN CDN
Carrier platforms
Telco
entertainment
platform
Devices and
Set top boxes
Other
Platforms
Interaction
Node
Key:
Content
libraries
Production
Co.
Entertainment
Platform
Entertainment ecosystem:Telcos in ecosystem play

12. 12
The challenge: Connectivity platform and Ecosystem player
Ecosystem development in Telecommunications
• Focus on NEW-connectivity
• Infrastructure and efficiency game
• Highly regulated and standardized
environment
• Utility multiples and valuations
• Operational transformation risks
• Create value beyond connectivity
• Software, data, platform and
collaboration game
• New vision, capabilities, organization
• Attractive multiples and valuations
• Cultural transformation risks
Connectivity platform Ecosystem Player
High reward?
Reinforces the current business?
What does it take?
How to do it?
Manageable risks?
+
Can you build sustainable
differentiation?
Will new developments change
the status quo?
(virtualization, 5G, e-SIM, …)
Source: Arthur D. Little

13. 13
Which markets/ industries/ ecosystems to target?
The Telco ecosystems game – creating value beyond connectivity
Source: Arthur D. Little
Digital Healthcare Strategic Opportunities for Telcos
Care for
Patients
Measure and
Collaborate
Transform
Workforce
Connect and
Integrate
Transform MOH
Patient Centric Health
Connected Digital
Health
Patient Portals
Personal Health
Records
Alerts & Reminders
Health Risk
Assessment
Chronic Disease
Management
M2M & Connected
Devices
Health analytics &
trends
Health shared services
Primary Care 247
Helplines
Anytime anywhere
healthcare
Training Delivery –
Voice, Video, Text
Health Apps &
Knowledge Portals
Health Information
Exchanges
Master Patient Index
e-Claims Processing
e-Prescriptions
Electronic Health &
Universal Patient
Record
Electronic Health Policy
Regulatory Standards
Inter application
integration
2nd Opinions &
Telehealth
Online Education on
Demand
Collaborative e-
workflows
Doctor Chats &
Community Care
Clinic Management/
Cloud Apps
Digital Health Platform
National e-Health
Registry
Hybrid Healthcare
Models
Near term opportunities Medium term opportunities Long term opportunities
Ecosystem potential forTelcos must be assessed by industry and by market

14. 14
How can Telcos enter the ecosystem game?
Source: Arthur D. Little
1. Examine strategic choices (new connectivity platform … or beyond)
2. Create a strategic framework to reposition the Company
3. Assess ecosystem potential by industry and market - Select a manageable number
4. Identify and assess strategic opportunities (short/mid/long term)
5. Define your role in the ecosystem- and your key partners
6. Plan a phased approach contemplating initial positioning, learning and scaling up
7. Anticipate the evolution of ecosystems – And adapt
The Telco ecosystems game – creating value beyond connectivity
Develop “Eco-Sense” and the agenda

15. 15
How can Telcos enter the ecosystem game?
Source: Arthur D. Little
The Telco ecosystems game – creating value beyond connectivity
Partner capabilities
Extended capabilities
Core capabilities
Ecosystem partners and capability developers
Governance
Talent
Vision, values, leadership, culture
Organization architecture
Capabilities Enablers
+
Data
Services
Processes and systems
Virtualized network
Develop Capabilities and Enablers to create and captureValue
Telcos must Innovate andTransform to create value beyond connectivity

16. 16
How can Telcos build value creation capabilities for ecosystems?
The Telco ecosystems game – creating value beyond connectivity
Source: Arthur D. Little
Ecosystem Partners Capabilities
Horizontal
Capabilities
Virtualized Network (NFV/SDN)
Nucleus
Engines
APIs (closed)
APIs + Mashups (open/closed)
Vertical
Capabilities
APIs + Mashups (open)
Ecosys.
Engines
Ecosys.
Engines
Ecosys.
Engines
Capabilities based on Software + Data + Collaboration
Delivered through Service Interfaces (APIs + Mashups)- open or closed to external partners/developers
Core capabilities designed, developed
and managed byTelco (control,
flexibility, responsiveness, evolution)
Data aggregation by Telco & partners
Data consumed to enrich customer
interactions or enrich ecosystem
Significant part of richness and
functionalities created by external
partners and developers
Transparency and fair reward for
value creation is mandatory to
attract partners and developers
Platforms must create and deliver value beyond connectivity to ecosystems
DataCollection/Aggregation/
Management/Analytics

17. 17
A new approach is needed to succeed creating value beyond connectivity
Some takeaways
• Ecosystem lens provide a superior view of market and industries realities and
helps anticipating trends. It provides new insight into the tremendous value creating
opportunities for Telcos beyond connectivity
• Playing the ecosystem game will require from Telcos a major evolution in
vision, values, culture and organization – which must be driven from the top
and carefully orchestrated
• This will require a comprehensive strategy + technology + innovation approach
that brings together capabilities based on Software + Data + Collaboration
through engagement in ecosystems
• Ecosystem approach is a strategic framework for platform design and build,
and provides alignment and metrics for execution
Source: Arthur D. Little

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Contacts:
Carlos Mira, Presidente
Arthur D. Little S.L.
C/José Ortega y Gasset n. 20 planta 3ª
28006 Madrid
T: +34 91 702 74 34
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E: mira.carlos@adlittle.com
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Arthur D. Little S.L.
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M: +34 639 77 74 68
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Arthur D. Little S.L.
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28006 Madrid
T: +34 91 702 74 00
M: +34616427051
E: ali.salman@adlittle.com