The benefits of an ultra-fast fibre future
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- Austen Owens
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1 The benefits of an ultra-fast fibre future New Zealand s Ultra fast broadband initiative is one of the most radical and pioneering broadband upgrades anywhere in the world. This once-in-a-lifetime infrastructure upgrade is all about the success of NZ helping Kiwi communities, people and businesses thrive with access to faster broadband. Broadband is seen as an increasingly essential service and New Zealanders believe a better internet experience is vital to our future. Fibre is the best available technology to improve our broadband experience. It delivers large amounts of data further and faster than the copper cables that currently deliver most telecommunications services. Faster broadband provides a powerful platform for innovation and growth. NZ has the highest level of broadband penetration for our wealth (GDP) but we re behind in terms of speed and fibre penetration. We re ranked seventh in the world for Internet use, but only 17th for its economic utilisation, so we re missing out on the benefits. Faster, more consistent broadband speeds will help people and businesses use the Internet to be more efficient and effective. It will help families and communities connect to each other and to society. And it will help businesses get products and services to the rest of the country, and the rest of the world.
2 The benefits of an ultra-fast fibre future Supporting research: A 2012 study by Alcatel Lucent s research arm, Bell Labs, into the social and economic impacts of UFB and RBI for NZ showed that the economic activity generated from building UFB and RBI will grow our GDP by $5.5bn over 20 years that s a $1.37 GDP impact for every $1 invested. The Bell Labs study showed that over 20 years, we ll save up to $33bn from doing things more efficiently and effectively online. Here are some examples of the way we ll save time and money in healthcare, education, business and agriculture: In healthcare: we ll see more video-conferencing between doctors, specialists and patients, resulting in faster access to physicians, faster delivery of care and remote diagnostics. These changes will reduce emergency room visits, hospital admission, the need for tests and the costs of long-term prescription drugs. Estimated savings = $6bn. In education: we ll see technology in classrooms improving learning, lowering costs and giving kids and teachers throughout the country access to national resources such as Te Papa, as faster more consistent broadband speeds enable better video-conferencing. Estimated savings = $3bn. Business: we ll see improved productivity, lower travel costs, greater flexibility for people to work from home, lower network and communication expenses, and saving from putting applications into the cloud. Estimated savings = $14bn. Agriculture: Savings will come from broadband applications that improve milk solid production applications such as online farm management and herd management tools and automated farm data collection and analysis tools. Estimated savings = $9bn These sectors (agriculture, small to medium business, education and health) are significant for the NZ economy but amongst the lowest early adopters of fibre. The benefits are enormous if these sectors can create opportunities and partnerships to develop the right applications.
3 The economic and business benefits of an ultra-fast fibre future Faster broadband provides a powerful platform for innovation and growth. Fibre is the best technology to improve broadband experience. Studies show that the greatest benefits (in terms of export growth, job creation and profitability) are captured by small-to-medium businesses through access to exports, new customers, services and innovation. Business will benefit from greater productivity as fibre technology is combined with other information and communication technology resources to enable: more frequently and lower cost communication with suppliers, customers and business partners worldwide; greater use of online channels to connect with markets and customers; better, more efficient remote working; access to specialist functions like accounting programmes and remote back-up in the cloud. International studies demonstrate the power of better broadband to boost GDP and reduce unemployment: A 2008 study in the US on broadband and GDP found increasing broadband penetration by 10 % would increase GDP by 0.18%. A 2010 World Bank study found that broadband adoption from zero to full penetration can increase employment for a region by 1.8%. New Zealanders love the Internet and 86% of us are online every day either buying (72%), or researching our buying options (80%). But nationally, only 35% of our small businesses have a website right now and very few offer online purchasing and are missing out on opportunities to reach customers and grow.
4 The economic and business benefits of an ultra-fast fibre future Supporting research: A McKinsey survey of more than 4,800 SME s across 12 developed broadband markets showed the Internet s potential to accelerate growth and make export markets more accessible. For example: Businesses with a high web presence delivered annual growth 2x that of companies with a low web presence. Web savvy SME s made twice as much money through exports as a percentage of total sales, and created more than twice the number of jobs. This applied across all sectors from retail to manufacturing. On average the survey showed the Internet enabled a 10% increase in profitability across countries. The impact on profits came half from increased revenues and half from lower cost of goods sold and lower administrative costs. Countries where SMEs have a strong presence on the Internet benefit from a greater contribution from the internet to their national economy. Interestingly, 75% of the expected benefits flow to traditional businesses not pure dotcom companies. Chorus research shows that NZ will drive business uptake of fibre by linking the advantages of fibre to clear business benefits such as improved productivity, saving time, reducing costs or increasing revenues.
5 The social benefits of an ultra-fast fibre future Ultra-fast broadband will help New Zealanders connect with each other, their communities and society. Through the greater use of high-definition video people will: have greater flexibility to work from home and run their home-based businesses effectively. This will also help reduce travel time, traffic congestion and air pollution; have better access to Internet-based education and health services, saving time and costs; be able to connect more easily with governments and the essential social services and information they need. Ultra-fast broadband will aid workforce engagement by: keeping our ageing workforce working and engaged in the workplace with the option to work from home and work remotely; providing more employment opportunities for youth and rural workers; attracting and retaining more female, Maori and Pacific Island workers; boosting digital literacy in different age and socio economic groups. Ultra-fast broadband will provide NZ governments with more efficient and less expensive ways to deliver essential services such as education, public safety and emergency services. For example: In healthcare, more video-conferencing between doctors, specialists and patients will result in faster access to physicians, faster delivery of care and remote diagnostics. These changes will reduce emergency room visits, hospital admission, the need for tests and the costs of long-term prescription drugs. Estimated savings = $6bn. In education, technology in classrooms will help improving learning, lowering costs and giving kids and teachers throughout the country access to national resources such as Te Papa, as faster more consistent broadband speeds enable better video-conferencing. Estimated savings = $3bn.
6 Trends in broadband consumption New Zealanders are positive about ultra fast broadband, with Chorus research showing 67% are likely to sign up when it s available. In the home, we are seeing massive growth in internet-enabled devices, multi-tasking across multiple devices, the use of new modes of communication and demand for interactive, high definition video The growth in multiple devices consuming high definition video is predicted to drive a six-fold increase in internet video traffic in just five years By 2016 total NZ data traffic will be 5 times larger than in 2011 (NZ Traffic forecasts Cisco). Video traffic will be 74% of all consumer internet traffic in And in 2016, the average NZ Internet user will generate 21.3GB of Internet traffic per month up 347% from 4.8GB in Forecasts suggest we ll be consuming 44GB of Internet traffic per household per month in 2016, up from 9GB in 2011.
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