4 LOS ACONTECIMIENTOS DE LA NOCHE DEL GRITO EL 15 DE SEPTIEMBRE Y DEL INFORME DE GOBIERNO EL DÍA

According to a recent Cisco study, Global Consumer Internet traffic is expected to

grow 4x from 2011 to 2016, from 21 to 81 petabytes per month, representing a 32% 5-year CAGR.

Table 6 Internet Video & Gaming Traffic Driving Global Internet Bandwidth Consumption, Petabytes per Month

File Sharing: includes peer-to-peer traffic from all recognized P2P systems such as BitTorrent & eDonkey as well as web-based file-sharing systems

Internet Video: Includes short-form (i.e. YouTube), long form (i.e. Hulu), live, video-to-TV (i.e. Netflix through Roku), online purchases and rentals webcams and web-based video monitors (excludes P2P video downloads)

Web, email, data: includes web, email, instant messaging, and other data traffic (excludes file sharing)

Gaming: includes casual online gaming, networked console gaming, and multiplayer virtual world gaming

VoIP: includes traffic from retail VoIP services and PC-based VoIP, but excludes wholesale VoIP transport

Source: Cisco

Internet Video is currently the largest segment of consumer Internet traffic at 10 Petabytes a month (57% of total global Consumer Internet Traffic), yet it should continue to grow at a robust clip (34% ’11-16 CAGR) to reach an estimated 44 petabytes per month in 2016. As expected, mobile video traffic is growing rapidly off a lower base – from 308 petabytes per month in 2011 (3% of global consumer Internet video traffic) to 7615 petabytes in 2016 (17% of global segment traffic). Areas with the fastest Internet video traffic growth include the Middle East & Africa (88% CAGR), Latin America (59% CAGR) and Central & Eastern Europe (48% CAGR). The Asia Pacific and North American regions make up the bulk of consumer Internet video traffic today at a combined 7,325 petabytes per month, or 70% of the worldwide total (39% Asia-Pacific; 31% North America). But while the Asia Pacific share remains virtually unchanged through 2016 (~38% in 2016), North America’s share of worldwide consumer video traffic is expected to decline to roughly 18% by 2016 as the more mature / penetrated region grows slower than the overall market – 20% ’11- ’16 CAGR for North America vs. 34% for the worldwide total (see Table 8 for a Summary Sheet).

Global Consumer Internet Traffic 2012 - 2017, Petabyte per Month

b y geography 2012E 2013E 2014E 2015E 2016E 2017E '12 - 17 CAGR

Asia Pacific 9,033 11,754 14,887 18,707 23,458 29,440 27%

Western Europe 5,086 5,880 6,804 7,810 9,197 10,953 17%

North America 6,834 8,924 11,312 14,188 17,740 21,764 26%

Latin America 2,656 3,382 4,049 4,588 5,045 5,487 16%

Central & Eastern Europe 2,194 2,757 3,433 4,182 5,015 5,897 22%

Middle East & Africa 410 640 944 1,334 1,816 2,432 43% Total 26,213 33,337 41,429 50,809 62,271 75,973 24% Global Consumer Internet Traffic 2012 - 2017, % of Total Bandwidth

b y segment 2012E 2013E 2014E 2015E 2016E 2017E

Internet Video 57% 60% 62% 65% 67% 69%

File Sharing 24% 21% 19% 16% 14% 11%

Web, Email & Data 20% 19% 19% 19% 19% 19%

OnlineGaming 0% 0% 0% 0% 0% 0%

Global Consumer Internet traffic is expected to grow 4x from 2011 to 2016, from 21 to 81 petabytes per month, representing a 32% 5-year CAGR.

Internet Video and Online Gaming are the segments with the strongest growth, with CAGRs of 34% and 52% respectively.

page 46 of 70 Jefferies US Internet Team, Jefferies Equity Research, [email protected] Please see important disclosure information on pages 67 - 70 of this report.

Online Gaming consumer traffic is growing the fastest, albeit off a small base (currently <1% of total traffic) – 77 petabytes in 2011 increasing to 630 petabytes in 2016 (52% 5- year CAGR). As with the video segment, mobile gaming traffic is growing rapidly off a very low base with a 65% 5-year CAGR – from 4 petabytes per month in 2011 (5% of global consumer Internet gaming traffic) to 49 petabytes in 2016 (8% of global segment traffic). Fixed (landline, Wi-Fi, etc.) Internet gaming traffic continues to grow nicely also with the continued emergence of premium digitally download content (PLDC) for both connected consoles and tablets.

As we canvas the Q2 results for the Interactive Entertainment sector, digital revenues continue to represent a growing portion (roughly 53%) of the overall total, growing at roughly 24% Y/Y.

Again, the Asia Pacific and North American regions make up the bulk of consumer Internet gaming traffic today at a combined 60 petabytes per month, or 78% of the worldwide total (48% Asia-Pacific; 30% North America). The share of gaming traffic for the two regions remains consistent through 2016 growing 300bps to 81%+.

As we have highlighted with the Internet Video and Gaming traffic, mobile bandwidth usage is growing rapidly, albeit off a still low base, from 399 petabytes per month in 2011 up to a projected 8,244 petabytes in 2016, representing an estimated 83% 2011-2016 5- year CAGR. Fixed Internet traffic is growing from 20,134 petabytes per month in 2011 to a projected 73,722 petabytes per month in 2016, a 30% 5-year CAGR on a large base representing 98% of consumer Internet traffic in 2011 moving to 90% of that traffic in 2016 (obviously with mobile traffic growing the 10% reciprocal).

Table 7 Global Consumer Internet Traffic 2011-2016, Petabyte per Month

Source: Cisco

The Asia Pacific region currently generates the most consumer Internet traffic, representing roughly 40% of the global total, and should essentially maintain that share through 2016. Over the next 5 years or so, North America should grow slightly slower than the overall global market (24% 5-yr CAGR for North America vs. 32% for total worldwide growth) which is driving its share of global consumer Internet traffic from 26% in 2011 down to an estimated 19% by 2016. Meanwhile, the regions with the strongest traffic growth outlook are the Middle East & Africa, Latin America, and Central & Eastern Europe, with 5-year projected CAGRs of 73%, 53%, and 42%, respectively (see Table 8 on the following page).

Global Consumer Internet Traffic 2012 - 2017, Petabyte per Month

b y network 2012A 2013E 2014E 2015E 2016E 2017E '12 - 17 CAGR

Fixed 25,529 32,097 39,206 47,035 56,243 66,842 21%

Mobile 684 1,239 2,223 3,774 6,026 9,131 68% Total 26,213 33,336 41,429 50,809 62,269 75,973 24%

‚There were five Exabytes information created from the of civilization through 2003, but information is now created every days and the pace of growth

-- Eric Schmidt, Google, August

page 47 of 70 Jefferies US Internet Team, Jefferies Equity Research, [email protected] Please see important disclosure information on pages 67 - 70 of this report.

Table 8 Summary Sheet – Global Consumer Internet Traffic Growth, 2011-2016

Source: Cisco Visual Networking Index - Forecast and Methodology, 2012-2017. Cisco Systems, 6/2013