UFB and RBI investment can pay for itself

UFB and RBI investment can pay for itself

Consumer surplus from the applications will be at par with New Zealand earnings from wine exports, says Alcatel Lucent study.

The investment in UltraFast Broadband (UFB) and Rural Broadband Initiative (RBI) will pay for itself, with more than $5 billion added to the country’s GDP over the 20-year life of the build out programme, says Alcatel-Lucent New Zealand CEO, Andrew Miller. A study conducted by Alcatel Lucent says the combined consumer surplus of using high speed broadband applications significantly outstripped the GDP impact of building the networks for these two programmes. “The combined consumer surplus of the applications considered in the study reached nearly $33 billion over the 20-year period and continued to grow year-on-year,” says Miller.

The study, Building the Benefits of Broadband, which was presented at the Future of Broadband Conference in Auckland, claims New Zealand can turn this consumer surplus into almost $48 billion by increasing the speed of application adoption by 20 percent over the baseline, and increasing the total level of application uptake by 20 percent over the baseline.

It estimates the combined GDP impact of the build, and the consumer surplus from the applications, are worth about the same to New Zealand as the money the country will earn from wine exports.

The report lists the savings for the next 20 years in four areas:

Business services-related savings - calculated at $14.2 billion through improved productivity, lower travel-related costs, lower network and communication expenses, and savings (as well as new revenues) from the cloud-enablement of applications.

The dairy industry is expected to gain $9.1 billion due to increased dairy farm productivity.

Healthcare will get a $5.9 billion consumer surplus from lower hospital admission and test costs, fewer emergency room visits, lower travel-related costs, lower long-term prescription drug costs, faster access to physicians and faster care delivery leading to savings in government expenditure on healthcare.

Education will generate a $3.6 billion consumer surplus as a result of lower costs of skill enhancement, as well as reduced cost of course materials and savings on field trips.

The study zeroed in on the boost of teleworking following the rollout of high-speed broadband, particularly fibre-based broadband.

Fibre solves a number of the connectivity, performance and security issues that currently hinder a broad embrace of teleworking among New Zealand businesses, it says.

A city council with 5000 staff, for instance, can subsidise a UFB connection to employees’ homes. It will then use that UFB connection to provide a separate and secure VPN connection with low-latency, application-based quality of service. It would connect employees to cloud-based work applications such as video conferencing, virtual desktop, document sharing, collaboration tools, unified messaging and voice over IP.

Executive leadership is needed to overcome the obstacles to teleworking, the paper points out. The CEOs, CIOs and CFOs of large organisations need to become “champions” of teleworking and communicate the value it delivers to shareholders and employees. Organisations need to have the right IT tools in place to ensure employees can be productive when they’re working away from the cubicle.

Organisations have to implement ‘hot desks’ to realise savings in real estate, while managers need to learn how to effectively manage staff when they are working offsite.

Alcatel-Lucent uses its own workforce as a case study for this. It has 700 employees in New Zealand, and while many staff work five days a week from its offices in Auckland, Hamilton, Wellington and Christchurch, more people are taking advantage of the company’s support for teleworking.

The company says it has a teleworking policy with guidelines for both staff and managers and ensures home working environments are safe and productive.

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