Paul Brislen: Markets now just a click away

Ten years ago, someone from Manukau City Council called me to ask what would it take to make Manukau a city of the future. Easy, I said. Every time you dig up a road, put down a concrete tube or similar duct and make it open access for any network operator that comes along. You'll organically grow the infrastructure of the city without much disruption.

"That's not very sexy," came the reply and the conversation ended on a disappointing note for all concerned not long afterwards.

Today we have the Government committing around $1.5 billion of public money to provide fibre broadband services to around 70 per cent of the country, matched by similar funds from the industry. We'll spend the better part of this decade building a network to provide high-speed broadband to schools, hospitals, businesses and, ultimately, our homes.

One of the major stumbling blocks in these early days seems to be ratepayers who don't want the footpaths dug up, or the tree roots disturbed and a transport agency that wants to treat roads as places where cars and trucks drive instead of utility corridors which we can all use for the city's economic development.

Auckland's economic future depends wholeheartedly on the development of a world-class infrastructure to deliver online services to consumers and businesses.

The areas of growth identified by Ateed include health tech, creative and export education and they all need decent broadband to really blossom.

Internationally, we lag somewhere towards the back of the pack in terms of price, speed, latency and the perennial problem for New Zealand broadband users, data caps. British consumers are being offered plans roughly double the speed of New Zealand's standard today with unlimited calling in the evenings and weekends and no data caps for as little as £3.25 (NZ$6.36) a month. In New Zealand the average price for broadband on a similar plan runs to around $100 a month with a vastly inferior data limit.

What can broadband do for business in terms of return on investment?

That's hard to quantify, but the latest MYOB Colmar Brunton research suggests companies that move their services into what is now called "the cloud" (services based on the internet instead of buying software and running it locally) are more likely to have work in the pipeline (45 per cent more likely), have increased their revenue (13 per cent more likely) and are 33 per cent more likely to be hiring staff than companies that haven't made the move.

Two markets stand to make the most out of broadband. Small to medium-enterprise (SME) business will finally have access to the kinds of services corporates have had for years. Costs will fall, capability will increase and SMEs will be able to spend money on areas like research, marketing and staff training instead of tech support.

Here at TUANZ we've been spending around $25,000 a year on IT services - I'm replacing all of that starting with our website and event management system and by this time next year I'll have slashed our spending on IT and associated support costs by 90 per cent. I couldn't do that without having decent broadband.

The other sector that stands to gain the most in terms of productivity gains is the rural sector. Today rural New Zealand is woefully underserved in terms of telecommunications. Many farmers still conduct a large chunk of their business via fax and if their city cousins could see the average farm's IT use, they would be appalled. This year the National Animal ID (NAID) programme will see most of the dairy herd in New Zealand receive electronic ear tags and next year all the deer get them as well. The tags will allow track and trace capability which is vital for everything from assuring customers they're getting actual New Zealand lamb through to emergency procedures during a disease outbreak.

The next few years will see an explosion of similar innovations throughout our business world. Today we have an internet of individuals; by 2020 we'll have an internet of things, with everything that can having an online presence. Air conditioning, security, electricity meters, garage doors, cars, truck and trailer units, irrigation systems, cows, deer - all these and much more will be monitored online, with the increase in productivity that goes with it.

All of this is great if you only want to deal with New Zealand suppliers or customers - but what about the rest of the world?

For that we need increased international capacity. Today we have one provider of international capacity on the scale we need - Southern Cross Cables. We need a second cable if only to help drive down the price of bandwidth because without it, we're never going to be able to realise the promise of a digital economy. But beyond all of that we need something else.

We need people trained to build, maintain and develop the networks. People trained to use them, to get the most out of this possibility on offer. We need to increase the number of graduates coming out of our tertiary education system so that we have the knowledge and the skills needed to reach our potential.

Education Ministry figures show the number of bachelor graduates in all ICT-related fields has dropped by one third since 2005. The number of new entrants taking up ICT-related courses has dropped by an even larger number and if that trend continues, we'll drop the ball. We won't have the human resources available to build our digital economy.

Of all the countries in the world, New Zealand stands to make the most from this move to the internet. We have a well-trained workforce, we aren't that expensive and we're good at it. With the internet, we're no longer at the far end of the world - we're as close as any other provider. Our markets are just a click away instead of being a ship's voyage away and we can compete with the best from around the world - if we have the infrastructure.

What Google wants

I asked a man from Google what it would take to get a development centre or similar set up here in Auckland. I was expecting him to say tax breaks or similar, but Google has enough money. Instead he listed four things: green electricity; lots of international broadband; an environment that would attract the engineers, and an education system churning out graduates at such a rate that Google could cherry pick the top 1 per cent.

Paul Brislen is CEO of TUANZ, the Telecommunications Users Association.