Today’s announcement that the Government will spend $43 billion to build a national fibre-to-the-home broadband network has shocked and thrilled the business community.
After decades of labouring with notoriously slow broadband speeds, Australian businesses can look forward to connecting to a network that will super-charge their business processes, spur innovation and help to reduce costs.
As Prime Minster Kevin Rudd said this morning, high-speed broadband allows businesses – particularly small businesses – to level the playing field.
Here is SmartCompany’s sector-by-sector guide to how your business will benefit from the new NBN.
Interactive advertising and marketing agencies will be rubbing their hands together this morning, and dreaming of the creative opportunities a faster broadband network will open up.
Technologies such as video and Flash, which even now remain unstable and slow, will become prevalent, allowing advertisers to showcase brands, demonstrate products and position themselves as industry experts.
John Butterworth, chief executive of the Australian Interactive Media Association, says the NBN “seems to solve all the problems we’ve been putting with for 10 years. We’re trying to cram 21st century data volumes down 19th century network.”
Prime Minister Kevin Rudd emphasised that the NBN will lead to a massive improvement in internet services to rural and regional areas. This will have huge flow-on effects for the agribusiness sector, such as real-time monitoring of remote properties, faster transfer of crucial data such as pricing and quality information, and improved processes such as logistics, purchasing and communications.
The building of the NBN will involve the creation of up to 37,000 jobs at its peak, with the vast majority of those jobs likely to be in the construction and engineering sector.
“The company that’s the investment vehicle is going to have to contract out the construction, and there will be all sorts of construction companies and related businesses lining up for that,” says David Kennedy, telecommunications analyst at Ovum.
While larger construction firms such as Leighton Holdings and United Group have experience in telecommunication infrastructure, there is likely to be plenty of work for smaller companies who support these giants.
While there are no direct benefits to the food and beverage sector, a faster NBN will allow businesses experimenting with online ordering and shopping to continue to innovate.
Improved logistics, ordering and scheduling processes will also create productivity benefits and should reduce costs. And as Coca-Cola Amatil chief executive Terry Davis likes to say, national building projects always helps create thirsty and hungry workers.
The immediate benefit for the finance sector will be around funding the NBN. Arranging the private funding needed to get the NBN will be a long and complex process, and investment banks and advisers are likely to enjoy something of a fee bonanza.
This is also another sector that will enjoy benefits from the improved speed and stability of the NBN, including faster processing of transactions, the ability to move data much faster, and even better access to real-time market information.
The health sector will be a huge winner from a faster and more stable NBN. Patients will be able to be diagnosed and monitored via the web, with medical experts around the country or even the world able to advise on treatment, and even direct surgeons in real time working in operating theatres.
Critical patient diagnostic information – such as a test results and medical images – will be able to be sent around the world in seconds. Innovative new home and aged care services are likely to be developed, allowing health professionals to consult with clients in their homes via the web.
David Markus, founder of IT consulting firm Combo, is predicting a boom in cloud computing and software-as-a-service as a result of the new NBN. While this industry remains in its infancy, the cost benefits and potential productivity gains are huge. Improved broadband services should also help mitigate concerns around the speed and stability of cloud-based services.
Michael Malone, chief executive of internet service provider iiNet, is over the moon with Government’s announcement for one very good reason – the fact that the new NBN is open access, and not controlled by Telstra under highly regulated conditions, will create huge opportunities for internet service providers to compete with Telstra and other big players.
A faster network will allow these companies to offer more services and products and more content. Innovations in this sector will have huge flow-on benefits across the business landscape.
The rise and rise of internet broadcasting and online gambling will only be spurred by the NBN. Entertainment companies such as movie, music and television businesses will be able to deliver content far more easily (including live content), although the constant battle against illegal downloading is likely to get tougher.
Other winners include sporting organisations, which have had trouble selling their internet media rights in the past – they will suddenly find their product is worth a lot more than it was yesterday. Online gambling businesses will also see turnover increase as internet broadcasting improves.
Manufacturers are not obvious winners from the new NBN, but like many sectors they will benefit from an increased ability to link in with global networks.
Most Australian manufacturers are linked in to global supply networks, and the ability to make a greater contribution to product design and innovation, technical analysis and engineering functions should help our local firms stay competitive.
The NBN will have a huge impact on media, says telecom analyst Paul Budde. Media companies will have access to infrastructure without having to go through gateways. ‘You won’t have to pay 50% to Telstra,” he says.
It will also increase the transfer of advertising from traditional channels to online. Imagine in a couple of years 10 million people on the fibre-to-the-home network. “This creates the mass market that advertising needs to really develop,” he says.
TV will also change. “You will be able to have access to thousands of channels all over the world. You are not struck with old broadcasting channels or times. If you want to watch the news at 1:57pm or All Saints at 12:55am, you can.”
Fibre-to-the-home will create all sorts of opportunities for property developers to take the “smart house” concept to another level, integrating the web into all sorts of household appliances and functions, from heating and cooling systems to home security and entertainment. Smart developers will be looking at opportunities to tap into this technology as quickly as possible.
The development of the NBN will coincide with the Government’s increasing focus on climate change, which should help create opportunities for the energy and utilities sectors. Energy metering and monitoring will become far easier, allowing energy companies to tailor product offerings to customers based on their energy usage profile.
Online retailers will welcome anything that improves customer experience, and will be rejoicing at the NBN proposal – faster broadband means more people online, which increases the potential online shopping population.
On top of this, online retailers are likely to invest heavily in new content to showcase their wares, such as videos with product demonstrations and customer reviews.
The big telcos may be upset at being shafted by the Government, but smaller telecommunications players are certainly welcoming the announcement. Andy Fung, chief executive of MyNetFone, describes the announcement as “unbelievable” and says that because the network is open access, all telcos will now be able to compete on a level playing field.
“I think MyNetFone will benefit, and so will a lot of other service providers. It is going to be a pure wholesale network, which is good as it provides equal access. Because then what you can do is really deliver innovative services, and the market will then determine the success and failure of services.
“In theory, there will be more price competition as a result. Innovations and competitions are going to occur as a result, and at the end of the day, that’s what the Government should be looking at. “
This sector could be one of the few losers. Paul Budde says businesses will spend a lot more time talking to customers and suppliers via video.
“The jerky video that businesses see when doing video conferencing will disappear. Sound won’t drop out. Businesses will be able to look the customer in the eye at teleconferencing meetings.”
Demand for transport and travel services, which has dropped markedly in the downturn, could be further diminished when the NBN is up and running.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
