Having recently moved to Auckland from London, I have been surprised by the discussion surrounding New Zealand’s internet access. It seems to be generally accepted that NZ’s internet access is poor and lagging behind the rest of the world.
However, from my experience as a consumer, the internet connection in NZ seems to be much the same as my internet connection in London. I can use Facebook and Skype to keep me in contact with friends and family; Linkedin and Twitter to keep me in touch with business contacts; BBC World News to keep me up to date with global economic and political developments and I can watch films and programmes via streamed video content on demand.
Admittedly I live in Auckland, not a rural area. And it is true that rural areas fare much worse when it comes to internet connection and broadband access. But this is the case for any rural area in any country. In the UK, for example, well over 2 million people do not have access to the internet or broadband. Worse still, some areas in Cornwall in the South West of England cannot even get TV coverage now because of the recent switch from analogue to digital transmission.
Rather than being disappointed by NZ’s internet access, I have been encouraged by the amount of activity focused on addressing NZ’s present and future internet needs. It is well recognised by government and the business sector that high speed broadband is essential to allow NZ to be able to take advantage of the next generation of business and consumer products and services.
There are already two major government initiatives proceeding within NZ that hope to address this – the Rural Broadband Initiative (RBI) and Ultra-Fast Broadband (UFB). The RBI, led by Telecom NZ and Vodafone NZ, will offer 80% of rural households and businesses and 93% of rural schools much faster speeds and better internet access. The UFB, led by Crown Fibre Holdings and Chorus, will also provide major improvements to internet access for schools, hospitals and businesses. Most corporate locations will be covered by fibre by 2014 and the roll out of the two projects should be finished by 2015.
In addition to this, there are three major international infrastructure initiatives that will greatly enhance NZ’s connectivity to the rest of the world. Firstly, Southern Cross, owned by Telecom NZ, SingTel and Verizon and currently the only subsea cable provider in NZ, announced in January 2012 that it is ready to expand the capacity of its subsea cable network to meet the growing demand for high-bandwidth services and applications like video and cloud. These improvements should be felt by July 2012.
Secondly, Pacific Fibre, a company with some of NZ’s top business leaders and serial entrepreneurs like Sir Stephen Tindall , Rod Drury and Peter Thiel on its board, announced in 2010 that it is to build a new subsea cable system running 13,600 km across the Pacific, at a cost of US$400m. Pacific Fibre’s undersea cable system will connect Australia to NZ and then to the USA. This should be launched by early 2014. Also Vodafone NZ and Pacific Fibre have signed a multi-million dollar agreement for the supply of international bandwidth on the new cable system.
Thirdly in September 2011, Axin, the Australasia agent for China Communications Services Corp, which is itself owned by China Telecom, announced that it has teamed up with Huawei Marine to build a new submarine cable between Auckland, Sydney and the US. Finance for the project, estimated at US$100 million, has already been approved by the Export-Import Bank of China.
These investments into NZ’s telecommunication systems coupled with the international cable projects will bring huge benefits and opportunities for growth to the NZ economy. Businesses will be able to integrate fibre, copper and mobile and deliver applications and services that leverage this infrastructure, in areas such as video-conferencing , collaboration, cloud computing, remote working and business continuity.
As well as all this, NZ is now in a great geo-political position. With the rise of China, NZ has moved from being a remote country at the bottom of the world to being part of the dynamic Pacific Rim. One of the main reasons I moved to NZ, apart from the great schools and weather, was to tap into the dynamism that China and the other economies in Asia are creating in the region. The centre of the economic world is shifting east. China is now the largest exporter of capital and the fastest growing economy in the world.
At a time when many western economies are adopting a risk-averse approach, choosing to hoard cash at the expense of capital investments, China has US$3 trillion of foreign reserves that it is looking to invest in just these types of large-scale projects. NZ is well placed to tap into this potential source of capital investment. NZ and China have a free trade agreement and China is now NZ’s second largest trading partner.
When taken together, it does seem a little premature to be worrying about NZ lagging behind or turning into an internet ghetto, cut off from the rest of the world. Many NZ businesses will soon have the potential to become global suppliers, turning NZ into a net exporter of digital products and services. This investment in NZ’s digital future will mean that NZ can not only compete on an equal footing with the rest of the world in the digital space but could actually move ahead of the pack.