Economic benefits of business mobile broadband usage: $7.4b per year

Stuart Corner
Wednesday, 04 March 2009 08:02

IT Industry - Market

Dr Paul Patterson of Concept Economics, under commission from Telstra, has estimated that use of mobile broadband services by business and government could produce an annual productivity dividend to the Australian economy of $7.4b

According to the report: "Our modelling indicates that, in the long term, annual real household consumption will be 1.4 percent greater than it would be in a scenario without mobile broadband services. This translates to gains of $7.4b per annum, of which approximately $5.4b can be attributed to Next G. Real GDP increases by 0.9 percent more than it otherwise would without mobile broadband, with average real wages increasing by more than 1.0 P percent."

The report does not appear to have made any attempt to determine how dependent the estimated benefits are on the speed of the mobile broadband service available.

The result was arrived by surveying a number of organisation using mobile broadband and applying their feedback on productivity gains to an economic model of the Australian economy. In-depth interviews were conducted with fifteen business and government users covering the health, education, local government, resources, and energy sectors, as well as with three SMEs. Telephone interviews were conducted with 40 local government/council respondents and an online survey of 305 SMEs was undertaken.

Some interviewees estimated impressive benefits. "Glenn Mason, the CIO of GrainCorp, has indicated that GrainCorp has achieved productivity realisation estimates of over $1.5m thanks to the deployment of the Telstra Next G network," the report said. "These savings are the result of increased employee productivity, a reduction in temporary office set-up time and the kilometres travelled by software engineers."

Colin Valnoti, the IT manager for the Hinchinbrook Shire Council, said: "The Telstra Next G solution has enabled the water and sewerage plant in the Shire to improve its productivity...by being able to remotely identify where a pump is failing and go straight to the site to fix it. On average, this saves the supervisors 15 hours a week management and travelling time. Translated to dollars, this would equate to over $50,000 a year."

He added "The Telstra Next G solution enables the Council to have one IT manager on call 24 /7, 365 days a year. To provide this same level of service without the Telstra Next G solution, we would be looking at a team of three at an additional cost to the Council of around $100,000."

To get an economy wide estimate of the benefits, Patterson used the TERM (The Enormous Regional Model) of Australia developed by the Centre of Policy Studies at Monash University. He also attempted to estimate the percentage of the workforce that would benefit form mobile broadband, concluding "we estimated that mobile broadband could be potentially beneficial to 88 percent of the workforce in the finance and insurance sector down to 31 percent of the workforce in the accommodation, cafes and restaurants industry...We then assumed that in the long term approximately 80 percent of workers who could potentially benefit from mobile broadband would eventually acquire such a service....Over all industry it is calculated that approximately 55 percent of the workforce would eventually acquire a mobile broadband service."

Patterson expects this level of penetration to be achieved by about 2018.