Gain from the “broadband bonus” relatively high

New Zealand’s gain from the “broadband bonus” relatively high

Media Release – 4 May 2012
(this release is available online at http://tinyurl.com/79ap5nn)

InternetNZ (Internet New Zealand Inc) welcomes the publication of the
OECD report Measuring the Broadband Bonus in Thirty OECD Countries
(OECD Digital Economy Papers No 197).

The report provides estimates of the economic value created by
broadband Internet in the 30 OECD countries including New Zealand over
the period 2005 - 2010.

The study finds that the economic value created by broadband Internet
correlates roughly with the overall size of a country’s Internet
economy, i.e. economic value derived by each of the 30 OECD countries
is broadly proportional to the scale of their respective Internet
usage.

The report attempts to measure increases in economic value of moving
from dial-up to broadband that conventional government statistics do
not capture. It estimates the “broadband bonus” as new economic value
resulting from the transition to broadband Internet by considering
both new gross domestic product (GDP) and new consumer surplus.

This qualitative improvement in understanding economic value shows
that New Zealand is very highly ranked across many of the areas
measured such as broadband as a percentage of GDP per capita; and
broadband bonus per capita and per subscriber.

With the quality adjusted figures New Zealand’s broadband bonus as a
percentage of GDP per capita is 3.03 percent, placing us 5th in the
OECD. In comparison, Australia ranks 21st on the same scale. The
highest gainer is the Netherlands and the lowest the Slovak Republic.

InternetNZ Chief Executive Vikram Kumar says “this research is
starting to show the latent benefits that the Internet is providing to
all countries. It is also showing that New Zealand is benefiting
significantly more relative to most other countries. One key factor
for New Zealand’s results could be our comparatively high level of
broadband uptake despite the comparatively high broadband prices”.

“However, there is no room for complacency. For example, the latest
quarterly ‘State of the Internet’ report from Akamai Technologies
shows New Zealand broadband slipping relative to Australia. For the
fourth quarter of 2011, peak connection speeds for Australia users
from Akamai’s global network of servers reached 21.7 Mbps, a spurt of
25 percent quarter-on-quarter and 42 percent year-on-year, giving the
country the highest growing connection speed in Asia and making it the
sixth fastest country in Asia. Average speed was even better with 4.9
Mbps, an increase of 37 percent over the previous quarter, and 66
percent over the same period a year earlier. On the other hand, New
Zealand had peak connections of 16.1Mpbs, down 3.8 percent
quarter-on-quarter, while the average connection speed was 3.7 Mbps,
down 7.2 percent quarter-on-quarter.”

“InternetNZ has long believed that difficulty in measuring the
economic benefits that the Internet provides has resulted in
underestimates of its benefits. Recognising this, we have recently
contracted two of New Zealand’s leading economic analysis
organisations - Infometrics and NZIER - to undertake complementary
work in this area. These reports will be presented at the upcoming
NetHui 2012 Conference.” (more information on NetHui below).
ends

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