Benchmarking Broadband. New Zealand s path to generating global broadband envy

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1 Benchmarking Broadband New Zealand s path to generating global broadband envy September 2013

2 New Zealand s broadband story Fast broadband availability has increased significantly We are a broadband growth leader in the OECD Users are not getting the best experience available And while we love the internet we are not using it to be more productive Lines capable of >10Mbps have increased from 27% to 90% High speed capability now covers 64% of broadband lines We will be a top ten OECD fibre leader when UFB build is completed in 2020 In 2012, we were the *highestgrowth broadband market NZ is now 16 th in the OECD for broadband penetration We have the highest level of broadband penetration for our wealth Peak and average broadband speeds lag the world Contributing factors include home wiring/ WiFi equipment, devices, backhaul provisioning, content servers Many users are not on the best broadband available 7 th in the world for internet usage, 17 th for economic utilisation Fibre opportunity is for $33 billion in economic gains over 20 years *OECD broadband connections per 100 population P3

3 NZ can be a leader it has happened before Ernest Rutherford transmitted a signal 18 metres across the physics department 1yr before the first wireless transmission 2 nd in the world for phones per population Eftpos in retail only 5 yrs after 1 st ATM launch 1 st nation in Asia Pacific with a full connection directly into the US internet backbone Fastest internet growth in the world (9193) NZ in top 5 for OECD Broadband growth for the first time 2 nd country in the world to operationally separate the incumbent Telco A global pioneer with UFB launch First to structurally separate incumbent Internet growth 1% compared to international average 79% ITU report sees NZ drop from 12 th to 21 st for ICT access 22 nd of 30 OECD countries on Broadband uptake P4

4 To realise the potential benefits of broadband we need to perform across all areas Availability Uptake Experience Usage Ensure quality broadband is available to as many as possible Getting more people on better broadband New Zealanders have the speed and performance to do what they want Ensure we use the internet as a tool for connecting, creating and innovating IMPACT Leveraging our innovative spirit, diversifying New Zealand s capabilities, taking New Zealand to the world and realising the benefits of the internet P5

5 Chorus believes we can be a top 10 market in these areas Availability Uptake Experience Usage Top 10 market for fibretothehome coverage Top 10 market for broadband penetration Top 10 for user experience Top 10 country for internet economic impact Productivity, innovation, business use Top 10 P6

6 How New Zealand measures up against the world P7

7 Fibre to the home target of 75% moves us into the leadership quadrant for coverage 100% UK France Netherlands Portugal Portugal Target South Korea Singapore Standard Fixed Broadband 95% 90% 85% 80% 75% 70% Germany Spain Europe Australia US NZ today Hungary Denmark Slovakia Estonia Malaysia Sweden Slovenia Latvia NZ 2020 Japan Hong Kong Japan target Poland 65% 60% 10% 10% 30% 50% 70% 90% 110% Source: Point Topic, idate, Chorus, OECD Fibre to the home/building Coverage P8

8 We are maintaining our lead on the OECD average for broadband uptake Wired Broadband Penetration Rates 35 Broadband Connections per 100 population May 2006: Government announces separation of Telecom and regulatory change March 2008: first launch of local loop unbundling September 2007: Broadband overtakes dialup December 2010: UFB officially launched New Zealand OECD Uptake 0 Source: OECD, Chorus P9

9 Our broadband experience lags the world and improvement is slow 50 Average Download (Mbps) 45 Hong Kong 40 Ookla (Speedtest.net) Sweden Netherlands Singapore Japan Switzerland Denmark Portugal United Kingdom Germany United States Canada South Korea Experience Australia 10 NZ today 5 Malaysia Italy Source: Akamai, Ookla Akamai P10

10 The prize at stake $1,000 Business $800 $600 Agriculture $400 Healthcare $200 Education $0 Y1 Y3 Y5 Y7 Y9 Y11 Y13 Y15 Y17 Y19 $32.8 bn Source: Alcatel Lucent Building the Benefits of Broadband P11

11 The prize at stake (cont.) Sector Business Agriculture Education Healthcare Potential savings $14.2bn $9.1bn $3.6bn $5.9bn P12

12 What will success look like for New Zealand? Fibre demand explodes: at least a third of users in UFB areas on fibre by 2020 NZ creates global broadband envy as a centre of excellence for broadband innovation and productivity Better broadband means better education, health and rural results; and we bridge the digital divide NZ experiences economic and export growth based on internet innovation and productivity Top 10 P13

13 Our broadband benchmarks today Area Measure Rank Availability (households passed) VDSL: 51% 7th of 33 FTTH: 8% 23rd of 37 Point Topic idate Uptake (per 100 population) Broadband: 28.6 Growth: 8.1% 16th of 34 3rd of 34 OECD FTTH: 0.2 Growth: 123% 28th of 34 16th of 34 OECD Experience Average Download: 4.4Mbps 43rd of 173 Average Download: 13.2Mbps 47th of 182 Akamai Ookla Impact Social Impact 3rd of 66 Economic Impact 17th of 66 World Wide Web Foundation World Wide Web Foundation Average download speeds reported by Akamai and Ookla differ as they measure different aspects that influence download performance. P14

14 Why broadband is vital NZ needs a new, sustainable roadmap for growth We face growing social challenges Technology can transform our future Chorus believes NZ can create global broadband envy Exports are just 30% of the wealth we create mostly from unprocessed commodities We work harder and earn less than most developed markets Our GDP is growing more slowly Ageing population Demand for skilled workforce Digital divide Urban/regional/rural divide Connecting the world to NZ Enabling innovation across communities Upskilling our workforce Empowering small business Our fibre to the home to 75% of New Zealand is bold Our broadband coverage and capability is high by international standards We need to measure our progress P15

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