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Thursday, 02 December 2010 15:36

Survey finds businesses eager for NBN and expecting big changes

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A survey of over 500 Australian businesses undertaken by Macquarie Telecom has found them positive towards the NBN, eager to exploit its perceived opportunities and anticipating it to have a substantial impact on the way they do business. However they appear relatively unconcerned about its potential to engender new threats to their businesses.

Most businesses surveyed expected the NBN would transform their business, improve their competitiveness and expand their target market both geographically and by customer type.

Macquarie Telecom says the study - 'Australian Business Expectations for the National Broadband Network' - is the first research of its kind to be undertaken in Australia. According to CEO, David Tudehope, "Rolling out the NBN will not only help create a strong future for Australian businesses and provide a platform for economic growth, but will also stimulate new skills and job opportunities unrestricted by geographic location.

He added: "While the report shows that many businesses are expressing strong expectations for positive business transformation from the NBN, as an industry we need to be focused on bringing the NBN to life for all Australian businesses."

The survey also threw up some paradoxical results. Over half of those surveyed expected to expand their customer range from consumer-only or business-only to include both consumers and businesses. And roughly the same percentage expected it to change the products and services they offer.

Yet far fewer seemed to have contemplated the other side of the coin: One in four respondents had not considered the role that the NBN might play in attracting new competitors to the market, and only one in five thought new competitors a likelihood.

For example one of the five case studies in the report, online DVD rental company Quickflix, is eagerly awaiting the ability to deliver movies over the NBN, and the report says: "Quickflix estimates a 'massive' upside to its subscriber base under the NBN, potentially increasing from around 100,000 to 1,000,000." The NBN however will provide easy access to the market for many more providers of video content eager to capture Australians' eyeballs.

Macquarie Telecom engaged Access Economics to analyse the survey results and review relevant research on the economic impacts of fast broadband networks around the world.

Access Economics summarised the survey's finding by saying "The survey responses indicate that many businesses are already thinking about the ways in which the NBN may change their business model from a qualitative perspective; this may be via new product offerings, new and more diverse ways of communicating with consumers and suppliers or leveraging new technologies and services provided by third parties'¦

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"The survey also suggests that a significant number of businesses are uncertain about the potential applications of the NBN to their own business model. This is likely to change over time as these applications and the NBN itself are rolled out. Until such time, there is a role for those at the forefront of development, such as Macquarie Telecom, to stimulate discussion about the ways in which businesses can use the NBN to increase their productivity."

Access Economics concluded that the absence of any mature projects of the scope of the NBN anywhere in the world, made the quantification of the NBN's impact speculative at best.

It said in the report: "The full potential of the NBN to date remains largely unquantified. Indeed, the effects of al ICT technologies, including broadband, on productivity growth have been difficult to separate and quantify because of its relatively recent development and rapidly evolving nature as well as the difficulties of isolating the impact of broadband from ICT developments more generally.

"In the case of the NBN, this challenge is heightened by the absence of past experience. No precisely equivalent network has been developed anywhere in the world, and the nature of potential applications and ways of doing business under speeds of up to 1Gbps are yet to be fully uncovered."

Nevertheless, Access Economics director, Ric Simes, said: "Whilst the NBN is in its infancy and we can only estimate the potential of superfast broadband in Australia, the meta-research findings in the report show productivity gains from fast broadband networks around the world, even with significantly slower broadband speeds.

"Given its increased reach, speed and capacity, the NBN can therefore be expected to drive productivity gains of an order of magnitude even greater than those experienced as a result of earlier ICT/broadband innovation."

The Macquarie survey sample was spread across businesses of all sizes but heavily weighted towards the very small (44 percent had less than five employees) and 38 percent turnover of less than $5m).

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