Australian economy critically reliant on National Broadband Network: survey

From construction to implementation the NBN will transform the economy… if the government and industry get it right.

Average bit/data cap size and price per additional MB in $US (Source: OECD October 2007)

Average bit/data cap size and price per additional MB in $US (Source: OECD October 2007)

A survey of business leaders by Australian Industry Group (AiG) and Deloitte has further cemented the critical reliance of Australia’s economy on the National Broadband Network (NBN).

The survey, High Speed to Broadband: Measuring Industry Demand for a World Class Service, questioned 526 CEOs who represent companies that employ around 215,000 people, focusing on the potential of the NBN to transform the nation’s economy.

The NBN has been touted as the biggest public infrastructure investment in Australia’s history, even greater than the Snowy Mountains Scheme with its potential to drive productivity for years to come by supporting innovation and enterprise, providing a channel for delivering education and health services over vast distances, and conveying vast quantities of commercial and private data at high speeds.

Two-thirds of CEOs believe their business will benefit greatly from a faster broadband network, with over a third of businesses expecting it to lead to large increases in financial activity, and a further 45 percent expecting small increases. Telco analyst firm BuddeComm conservatively estimates that the NBN will add over $100 billion to the Australian economy over the next 10 to 15 years.

AiG chief executive Heather Ridout said the NBN will make a critical contribution to lifting productivity at a time when Australia’s productivity performance is lagging.

“Investment in this technology is not important for its own sake. It is because the technology has the potential to transform the way Australian business works, with all the associated productivity benefits,” she said.

Lead partner for media and telecommunications at Deloitte, Damien Tampling, said it won’t be until some time after the NBN is deployed before we truly start seeing its new applications and impact.

“It is clear that job growth resulting from the deployment of a broadband network will stem not only from the immediate demands that arise from the construction, deployment and maintenance of the broadband network, but from the longer term indirect demands that will be associated with new products, services and applications,” he said.

Almost three quarters of all businesses indicated they would likely upgrade to higher speed broadband if available, with regional firms the most hungry for a faster network. Reliability of service was the dominant factor influencing the extent of uptake, followed by the price of service.

“It is imperative that we get the pricing and access regimes for our National Broadband Network right. These are deeply complex issues that provide challenges for government and industry alike,” Ridout said.

The access regime has been the most hotly debated issue surrounding the NBN, with Telstra’s opponents and the former shadow communications minister calling for structural separation of the incumbent, while Telstra has labeled a call for separation a call for no NBN.

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Andrew Hendry

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