Media Release: Motu report misses the point, says TUANZ

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15 December 2016

The recent report into the impact of broadband on productivity gains produced by researchers Motu misses the point, says TUANZ.

Motu’s report focuses on companies signing up for UFB between 2010 and 2014 – a period of fast growth in UFB uptake which saw usage more than doubled to 22% of all private sector firms with more than six employees.

However Motu has concluded that there is no gain in terms of productivity for those companies at all during the study period.

With respect, we feel Motu has studied the wrong companies at the wrong time and come to the wrong conclusion.

TUANZ CEO Craig Young says the real benefits of Ultra Fast Broadband won’t be seen in those companies that already had access to fibre services, but more likely in the vast number of Small to Medium Enterprise companies that are the true beneficiaries of the UFB project.

“Larger companies have had fibre for years. They tend to have already made the jump to faster broadband and they also tend to have their own IT infrastructure and services, so any benefit they see has already accrued by this point in time. Those companies signing up for UFB were more likely doing so to achieve a cost reduction in terms of broadband pricing, not productivity gains.”

Those SME companies that sign up for UFB are more likely to see a boost in terms of productivity, but only once they put UFB to work, not simply because they’ve signed up for UFB.

“Companies will take time to realise they can do business in different ways once they’ve got UFB installed. Previously they might have emailed their suppliers or business partners but with UFB they can share data more efficiently through cloud-based services, or by providing access directly into their own inventory or back end systems, for example.”

SME business owners, along with schools and medical facilities, are the real target market for UFB in terms of business use.

“TUANZ has long advocated for a public awareness campaign for SME owners so they can see the benefits of UFB and the RBI services. They need a lot more assistance in realising the positives of faster connectivity and we are working with MBIE and others in promoting those benefits.”

Regional economic development is the obvious opportunity for promotion, as regional fibre deployments have given the regions a leg-up in terms of competitiveness over central city companies.

“We have seen Whangarei, Tokoroa and Hamilton all complete their UFB builds and there’s a great opportunity to really make the most of it and build out our regional businesses.”

Xero founder Rod Drury has recently announced the accounting company is building a 30-seat call centre in Napier as part of his desire to see the regions prosper and TUANZ would like to see other companies follow suit.