Insight on financial services in Latin America from Telefonica Digital

1. - Value From a “Society Need”
Points of difference
 Distribution Network
 Market strength - Consumer
Leading OBs
2015 Revenue target Financial
Services + Advertising*
€ Bn 0.8-1.1
*According to guidance criteria
MR. EDUARDO CARIDE
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2. The opportunity
LATAM Markets Attributes
Market Attributes
Mobile phone Telefónica Relative Banking
penetration (1) Position* (1) level (2)
137% #2 40% The LATAM market opportunity
 High mobile penetration but only
79% #1 28% ≈ 35% of consumer are banked
 High costs of financial
transactions for consumers and
82% #2 20% businesses
 Unprofitable for banks to serve
128% #1 49% the bottom of the pyramid
106% #2 28%
Data from (1) Telefónica’s Internal Analysis, (2) % total population with any banking product Source: IFC (International Financial Corporation) and IMF (International Monetary Fund)
* Definition: Market share of mobile accesses
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3. The Social Need
Low income segments face difficulties to Governments and businesses face costly
make their payments processes to handle cash
Security concerns Transporting and
counting cash
Transportation Distributing social
costs funds
Long queues to Collecting payments
pay bills from merchants
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4. A compelling value proposition …
“Simplify your Life”
Service attributes Service portfolio
Operates anywhere, anytime Money transfer to other mobile
phones
As simple and fast as sending an SMS
Airtime top-ups
Works on every phone
Bill payments
No upfront fees. Only pay if you use
Merchant payments
Load or withdraw money at thousands
of service points Disbursement of social funds
Coupons and offers
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5. …with a strong partner ecosystem
 Customer data base
 Pay salaries  User Interface
MasterCard  Messaging network
 Collect and OBs
as a key strategic player  Distribute funds  Brand trust
Integration with the financial
system for connecting the Govts /
Banks
banked and the unbanked Businesses
Strong brand and payments
 Ecosystem
expertise architect  Regulatory coverage
 Accept payments  Custody of funds
 Pay suppliers,  Interconnection
Access to MasterCard’s 4.2 M salaries, etc.
merchants and transaction points
Merchants Channel
in the region
 Registration
 Cash in / cash out
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6. Wanda launched in Argentina
Wanda is generating strong initial traction in pilot cities
23k registered
9th of April users
23rd of May
Initial partners…. …with a strong funnel of Day
additional opportunities
Friends & family Soft Launch Commercial launch May
• Transportation
• Retailers Movistar employees City of La Plata Across 5 cities
• Social fund disbursement
• Etc. Focus first on product rollout then market acceleration
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7. Also delivering strong value for the core business
Reinforce Mobile Centricity Reduce Churn
 Bundling of mobile and financial
 Reinforce Movistar’s positioning as services increases barriers to exit
market innovator
 Benchmarks point to churn
reduction
 Higher stickiness and 24x7 top up  Wanda as a top up channel
channel lead to an ARPU increase
 Potential cost reduction using
 Benchmarks point to ARPU increase this channel
Increase ARPU Reduce Top Up Costs
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8. Moving rapidly to expand our reach
 Before the end of the year we plan to expand to 4 additional markets, with a total
addressable market of 135 M customers
Q2 Q3 Q4
July August September October November December
ARGENTINA PERU MEXICO BRAZIL COLOMBIA
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9. Financial Services in LATAM conclusions
 Social needs are creating a huge opportunity for mobile
payments in LATAM
 Telefónica has the best internal assets and partner
(MasterCard) to address the opportunity
 The wallet for the unbanked people will strengthen our core
business, enhancing loyalty and incentivising consumption
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10. Get in touch
Explore our Hub: http://www.telefonica.com/digitalhub
Track us on Twitter: http://www.twitter.com/tefdigital
Watch our latest videos: http://www.youtube.com/telefonicadigital
Look us up on LinkedIn: http://www.linkedin.com/company/telef-nica-digital
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