NZ NBN to add NZ$33bn to economy

New Zealand's Ultra-Fast Broadband (UFB) and Rural Broadband Initiatives (RBI) look set to deliver a NZ$33 billion boost to the New Zealand economy, says an Alcatel-Lucent study released today.

New Zealand's Ultra-Fast Broadband (UFB) and Rural Broadband Initiatives (RBI) look set to deliver a NZ$33 billion boost to the New Zealand economy, says an Alcatel-Lucent study released today.

And if the country can improve its take-up of broadband and the use of applications by 20 per cent, such economic benefits would increase to NZ$48 billion, attendees at a major Auckland conference on broadband heard today.

Andrew Miller, CEO of Alcatel-Lucent New Zealand, told The Future With High Speed Broadband conference in New Zealand that as end users become more familiar with broadband, they demand more innovative applications.

Other studies have shown higher broadband penetration leads to higher economic growth, with a US survey showing 10 per cent more broadband use increased GDP by 1.8 per cent, with similar positive effects on employment, Miller said.

However, this latest survey specific to New Zealand carried out by Bell Labs and revealed today, took a more "grass roots" look at the wider social and economic benefits rather than focus on GDP.

Sampling existing New Zealand and overseas broadband use and applying it to a "social accounting matrix", the study found that the economic activity from just building the UFB and RBI networks will improve the country's GDP by NZ$5.5 billion over 20 years, with NZ$5 billion realised within five years. This represented a return of NZ$1.37 for each dollar invested.

Bell Labs had estimated an overall industry capital investment of NZ$4 billion, which tallies with a projected "NZ$3 billion plus" investment estimated by Crown Fibre Holdings.

Miller said the broadband projects would bring "real benefits to end users" such as remote patient monitoring, online doctor visits and online patient records in healthcare. In education, there would be remote classes, online vocational training and skills enhancement, and remote parent-teacher meetings. There would be more teleworking, better use of cloud computing, VoIP, security, sales training, e-commerce and better online dairy farm management.

Together, such savings over 20 years would have an expected value of NZ$32.8 billion.

Business provided the biggest potential, with savings of NZ$14.2 billion, including a 15 per cent productivity improvement in milk solid production, and health would enjoy savings of NZ$6 billion and education NZ$3 billion.

The combined impact of this on GDP would be 1 per cent — equivalent to New Zealand's wine exports, Miller explained.

"It's not just about the money. In addition to economic benefits, these projects will lead to social benefits," he continued.

These include improved health, better life expectancy, greater school enrolment and more choices for subject study for New Zealand schools.

"There are likely to be 25 million fewer days lost due to sickness and truancy due to more remote learning and greater collaboration between schools and parents," he said.

Miller said that in order to achieve the benefits, New Zealand needed to jump into action on development and make sure any applications created would work seamlessly across devices and broadband systems, be it wireless, fibre or copper.

"To make the most of high-speed broadband in New Zealand, we need to innovate, incubate and collaborate and develop local applications. We cannot afford to wait. We need to accelerate early adoption and increase the uptake. The sooner we start, the sooner we reap the benefits."


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