Benchmarking Broadband - Chorus

Benchmarking Broadband

New Zealand’s path to generating global broadband envy September 2013

New Zealand’s broadband story

Benchmarking Broadband – New Zealand’s path to generating global broadband envy P3

Users are not getting the best experience available

We are a broadband growth leader in the OECD

Fast broadband availability has increased significantly

And while we love the internet we are not using it to be more productive

► Lines capable of >10Mbps have increased from 27% to 90%

► High speed capability now covers 64% of broadband lines

► We will be a top ten OECD fibre leader when UFB build is completed in 2020

► In 2012, we were the *highest-growth broadband market

► NZ is now 16th in the OECD for broadband penetration

► We have the highest level of broadband penetration for our wealth

► Peak and average broadband speeds lag the world

► Contributing factors include home wiring/ WiFi equipment, devices, backhaul provisioning, content servers

► Many users are not on the best broadband available

► 7th in the world for internet usage, 17th for economic utilisation

► Fibre opportunity is for $33 billion in economic gains over 20 years

*OECD broadband connections per 100 population

NZ can be a leader – it has happened before


NZ in top 5 for OECD

Broadband growth for

the first time

2nd country in the world to operationally separate the

incumbent Telco

A global pioneer with UFB launch

First to structurally

separate incumbent

Ernest Rutherford transmitted a signal 18 metres across the physics department – 1yr before the first

wireless transmission

Eftpos in retail only

5 yrs after 1st ATM launch

Fastest internet growth

in the world (91-93)

1st nation in Asia Pacific with a full

connection directly into the

US internet backbone

2nd in the world for

phones per population

Internet growth 1% compared to international

average 7-9%

ITU report sees NZ drop from 12th to 21st for ICT

access

22nd of 30 OECD

countries on Broadband

uptake

2007 2008 2009 2011 1894 1939 1984 1989 1993

1999 2003 2004

IMPACT Leveraging our innovative spirit, diversifying New Zealand’s capabilities, taking New Zealand to the world and realising the benefits of the internet

New Zealanders have the speed and performance to do

what they want

Ensure we use the internet as a tool for connecting,

creating and innovating

Getting more people on better

broadband

Ensure quality broadband is

available to as many as possible

To realise the potential benefits of broadband we need to perform across all areas


Availability Uptake Experience Usage

Top 10

Top 10 for user experience

Top 10 country for internet economic

impact

Productivity, innovation, business use

Top 10 market for broadband

penetration

Top 10 market for fibre-to-the- home coverage

Chorus believes we can be a top 10 market in these areas


Availability Uptake Experience Usage

How New Zealand measures up against the world

P7 Benchmarking Broadband – New Zealand’s path to generating global broadband envy

Fibre to the home target of 75% moves us into the leadership quadrant for coverage


100% -

95% -

90% -

85% -

80% -

75% -

70% -

65% -

60%

Sta

nd

ard

Fix

ed

Bro

ad

ban

d

-10% 10% 30% 50% 70% 90% 110%

Fibre to the home/Building Coverage

Source: Point Topic, iDate, Chorus, OECD

- - - - - - -

Poland

Slovakia Slovenia

Malaysia Latvia

Hungary

US

Europe Spain

Germany

Australia

UK France Netherlands

Denmark Sweden

Portugal Portugal Target

South Korea Singapore

Japan target

Japan Hong Kong

NZ today

NZ 2020

Estonia

We are maintaining our lead on the OECD average for broadband uptake


Wired Broadband Penetration Rates

Bro

ad

ban

d C

on

nect

ion

s p

er

10

0 p

op

ula

tio

n

Source: OECD, Chorus

New Zealand

OECD

0

5

10

15

20

25

30

35

Uptake

May 2006: Government announces separation of Telecom and regulatory change

March 2008: first launch of local loop unbundling

December 2010: UFB officially launched

September 2007: Broadband overtakes dial-up

Our broadband experience lags the world and improvement is slow


Ookla

(S

peed

test

.net)

Akamai Source: Akamai, Ookla

50 -

45 -

40 -

35 -

30 -

25 -

20 -

15 -

10 -

5 -

0 - - -

-

-

-

-

-

0 2 4 6 8 10 12 14 16

Average Download (Mbps)

Exp

erie

nce

Hong Kong

Netherlands South Korea

Japan Switzerland

Sweden Singapore

Denmark

Portugal United Kingdom

United States

Germany

Canada

Australia

Italy

Malaysia

NZ today

The prize at stake


$32.8 bn

Y1

Business

$1,000

$800

$600

$400

$200

$0

Y3 Y5 Y7 Y9 Y11 Y13 Y15 Y17 Y19

Agriculture

Healthcare

Education

Source: Alcatel Lucent ‘Building the Benefits of Broadband’

$14.2bn $9.1bn $3.6bn $5.9bn

The prize at stake (cont.)


Business Agriculture Education Healthcare Sector

Potential savings

Top 10

What will success look like for New Zealand?


Fibre demand explodes: at

least a third of users in UFB

areas on fibre by 2020

1

NZ creates global broadband

envy as a centre of excellence for

broadband innovation and productivity

2

Better broadband means better

education, health and rural results; and we bridge the

digital divide

3

NZ experiences economic

and export growth based

on internet innovation and

productivity

4

Our broadband benchmarks - today


Area Measure Rank

Availability (households passed)

VDSL: 51% 7th of 33

Point Topic

FTTH: 8% 23rd of 37

iDate

Uptake (per 100 population)

Broadband: 28.6 Growth: 8.1%

16th of 34 3rd of 34

OECD

FTTH: 0.2 Growth: 123%

28th of 34 16th of 34

OECD

Experience Average Down-load: 4.4Mbps 43rd of 173

Akamai

Average Down-load: 13.2Mbps 47th of 182

Ookla

Impact

Social Impact 3rd of 66 World Wide Web

Foundation

Economic Impact

17th of 66 World Wide Web

Foundation

Average download speeds reported by Akamai and Ookla differ as they measure different aspects that influence download performance.

Why broadband is vital


We face growing social challenges

NZ needs a new, sustainable roadmap for growth

Technology can transform our future

► Exports are just 30% of the wealth we create – mostly from unprocessed commodities

► We work harder and earn less than most developed markets

► Our GDP is growing more slowly

► Ageing population

► Demand for skilled workforce

► Digital divide

► Urban/regional/rural divide

► Connecting the world to NZ

► Enabling innovation across communities

► Up-skilling our workforce

► Empowering small business

Chorus believes NZ can create global broadband envy

► Our fibre to the home to 75% of New Zealand is bold

► Our broadband coverage and capability is high by international standards

► We need to measure our progress

Documents

Benchmarking Broadband - Chorus