Broadband & technology as NZ's growth engine Graham Mitchell, Chief Executive Officer Rutherford Innovation Showcase 27 Sept 2011
Topics for today: ICT, broadband & productivity NZ broadband vs peers UFB deployment update Case study: UFB & productivity for business Summary September 2011 2
Broadband: Enabling Productivity World Bank: investment in Broadband flow through to productivity: 10% increase in telecommunications penetration via Broadband (1) : Expected to increase economic growth by 1.2% to 1.4%. 1.5 1.38 1.12 1.21 High income economies 1 0.73 0.81 0.77 Low & middle income economies 0.60 0.5 0.43 0 Fixed Mobile Internet Broadband Indirect / induced benefits: 1.71x capex boost into GDP (2) Sources: (1) Broadband Infrastructure Investment in Stimulus Packages, Qiang, World Bank 2009: http://www.worldbank.org/ (2) Studies of US, Germany and UK, Raul Katz, Professor at Columbia Business School September 2011 3
ICT: Driving Productivity Telstra Australia Productivity Index 2011: 350 Corp & Govt leaders surveyed Productivity a top priority for 76% Only 24% measure productivity UFB an enabler for business productivity: Collaboration within enterprise & with partners Supply chain & process improvement Remote working etc. ICT investment can be hard to translate into measurable productivity improvement. But UFB will clearly help. July 2011 4
NZ building strength in ICT: ITU ICT Development Index ranks 152 countries by ICT access, use & skills International Telecommunications Union: ICT Development Index 2010 2010 rank 2010 score 2008 rank 2008 score Overall New Zealand 12th 7.43 16th 6.65 Australia 14th 7.36 14th 6.78 Access sub index New Zealand 19th 7.53 24th 6.92 Australia 24th 7.22 25th 6.89 Use sub index New Zealand 14th 6.35 14th 5.08 Australia 9th 6.57 9th 5.47 Skills sub index New Zealand 8th 9.40 6th 9.24 Australia 11th 9.21 9th 9.19 NZ 3 rd in Asia Pacific Behind S. Korea & Hong Kong Ahead of Japan & Australia Strong result from NZ in 2010 worldwide index, up 4 places to 12 th Source: International Telecommunications Union Measuring the Information Society 2011 www.itu.int September 2011 5
Productivity: Enabling infrastructure UFB lifespan 40 50 years General purpose technology: Some uses obvious, others not yet developed Local stakeholders examining potential use: E.g. BERL report, July 2011 UFB benefits to GDP expected in: Financial & business services (Auckland), & Integrated primary industries, specialised mfg and ports (BoP) UFB is enabling infrastructure; new applications & forms of usage will emerge. Source: BERL report for Auckland & Bay of Plenty Councils, July 2011. September 2011 6
NZ Broadband vs peers: Akamai 16 14 12 Average Connection Speed (Mbps) Fibre Rich 10 8 6 Ranked 27 Ranked 30 4 2 NZ well behind leaders on Internet speeds, but also slightly ahead of Australia Source: Akamai State of the Internet, Q4 2010. September 2011 7
UFB Initiative Areas and Partners: Queenstown Tokoroa Auckland Pukekohe, Waiuku Hawera Levin, Kapiti Greymouth New Plymouth Ashburton Invercargill Hamilton Nelson Timaru Oamaru Dunedin Wanganui Rangiora Whangarei Waiheke Island Blenheim Taupo Tauranga Christchurch Gisborne Napier Hastings Palmerston North, Feilding Masterton Wellington Whakatane Rotorua Candidate Areas Deployment on track to reach 50,000+ premises by 30 June 2012. % of UFB 2 15.3 1 1.6 24 69.4 6 13.7 33 100.0 September 2011 8
UFB pricing for Business: $1,500 $1200 $750 Early 2011 market prices (CBD & Metro) $600 $380 $455 100 Mbps 1 Gbps Year 1 UFB price Symmetric services at lower prices Enabling much wider access for Councils, Businesses, Health providers etc. Lower prices for fibre will help businesses collaborate & innovate. Note: Wholesale prices per month ex GST. September 2011 9
UFB productivity benefit: Enabling new apps, improved processes: Higher speed WAN tails & better WAN mgt Cloud computing, VMWare etc. IP Video Conferencing, collaboration Centralising IT, reduced cost Symmetric UFB products: Business continuity / disaster recovery Extending Remote Working Coordination across multiple sites September 2011 10
UFB usage: Case Study September 2011 11
Case study learnings: UFB productivity benefit: Cloud computing High speed WAN tails Collaboration across sites Export oriented (ERP, sales & marketing) Supply chain improvement Centralising IT, reducing Cost CFH / TUANZ survey: 80%+ of surveyed businesses intend to take up UFB within 1 year of availability Source: CFH / TUANZ, Dec 2010 September 2011 12
Summary: ICT & broadband closely linked to productivity NZ mid field in broadband UFB deployment underway Productivity case studies September 2011 13