Doubling Australia’s digital dividend
nbn CEO Bill Morrow spoke today at the American Chamber of Commerce, highlighting the support of US companies and their importance in the nbn™ network rollout.
It won’t surprise you to know that the Australia – United States relationship is one that is very close to my heart. And it’s critical to nbn’s success.
We couldn’t have done what we have done in terms of building the nbn™ network here in Australia without the support of great American companies like ARRIS, Cisco, ViaSat, Space Systems Loral and Corning.
The outstanding telecommunications technologies that have been produced in the US are helping us build a better network for all Australians.
Of course, the traffic is not all one-way, it was the CSIRO here in Australia that played a critical role in the development of wi-fi technology, which has revolutionised global communications.
From planning to real connections
As you know, I have the honour of leading the largest infrastructure project in Australia’s history – the nbn™ network.
And I’m leading it right when the rubber’s hitting the road: when all those years of planning and building are turning into real connections for real people all over Australia.
Today, nearly 5 million premises can connect to the nbn™ network. That number has doubled over the last year and means we’ve built one million homes in just over three months.
At the same time, 2,144,210 families and businesses are now using the nbn™ network’s multi-technology mix to access the internet at speeds of up to 1Gbps.
500,000 on the Fixed Wireless network
As you may have seen in the media recently, our Fixed Wireless network is now serving 500,000 premises across this country.
It has been recognised as a world leader by international observers.
New research by Ovum shows that as a country Australia is investing twice as much on regional broadband than any other country in the world.
Just last month, nbn™ Fixed Wireless took Darby, Tasmania, to the world when the international pro-mountain biking industry descended on the region for the Enduro World Series.
Without our network in that isolated place, the news emerging from the region would have been delayed and lost currency. In fact, many of the visitors said that the connectivity was so good that it was better than in places like California where other events have been held.
End user satisfaction
Now, if you read the papers and listen to the radio, you’d be forgiven for thinking that nbn has nothing but unhappy end users – that couldn't be further from the truth.
Our own independently conducted research shows that nearly half of those on the nbn™ network say that their connection is much better than they expected – another 38% say that their nbn™ connection is either meeting or beating their expectations.
Indeed, only 6% of end users say their nbn™ connection is not meeting expectations.
That figure is still 6% too high, but the figures demonstrate that, while there is a lot of noise in the media from unhappy end users, these are very much the minority.
The vast majority of people on the nbn™ network are having a great experience and for those that aren’t, we are working hard to improve their experience.
The nbn™ Fixed Wireless network is one way we’re delivering great experiences and it has made great progress, as has the broader network. By mid-year we will be half way through the network rollout. Next year, we’ll be three quarters of the way.
And, by 2020, we’ll complete the nbn™ network… and Australia will become the world’s first fully connected continent.
An age of opportunity
I hope you agree that our progress makes for an exciting story, but it’s a story that already gets a lot of coverage.
For that reason, I’d like to shift gears today and talk about the future.
Let’s look at some of the latest tech news headlines from the last few weeks.
In the US, the Kitty Hawk – a ‘flying car’ backed by Google’s Larry Page – has had its first outing. And Elon Musk has spoken about a tunnelling project that could reinvent transport.
Locally, the CSIRO has suggested that medical technologies and pharmaceuticals could add $18bn and 28,000 new jobs to Australia’s economy in eight years.
Local payment platform, zipMoney, has signed a partnership deal with Spotify.
A Melbourne fintech – Airwallex – secured $17m of VC funding from global giant, Sequoia Capital, Mastercard and Tencent.
These stories are just a tiny sample of what’s happened in the tech world in just the last few weeks.
And they all point to a simple truth: Australia is now in an Age of Opportunity.
A once-in-a-lifetime chance to reinvent our society and accelerate our growth and global standing, but we need to work hard to grab this opportunity with everything we’ve got.
If we don’t, we might wake up in ten years and find we’ve been left behind.
I mention this because it highlights the importance of vision. The need to think, talk, plan and build for the longer-term.
How do we, as a nation, make the most of technological change and, in particular, the nbn™ network?
You see, the nbn™ network is an enabler, not a solution in itself.
It will give Australia an enormous competitive advantage and an opportunity to reinvent ourselves. To create a nation that truly benefits from the accelerating change going on around us.
But the real benefits of the nbn™ network – of universal, high speed connectivity – won’t magically materialise.
They need to be created. And, in some cases, they will take many years to realise.
So, we need to start imagining our future right now.
We need vision. And we need it today.
Now, with that said, let’s talk about the opportunities and challenges we face as a nation, how the nbn™ network can help, and what we need to do now to fully realise our potential.
In particular, I’m keen to focus on two questions:
- How can we create the industries, jobs and skills we need to prosper over the next ten to twenty years?
- How can we leverage the nbn™ network to finally conquer one of Australia’s greatest disadvantages… the tyranny of distance.
Skills, jobs and industries
Last year, CEDA released a report forecasting that 5 million Australian jobs could be lost in the next ten to fifteen years. That’s about 40% of all the jobs in Australia.
These jobs will be lost to robotics, automation, algorithms, the cloud, artificial intelligence and a range of other innovations. Technology is going to redefine every industry and every job. And, along the way, it’s going to make many of them redundant.
Now, on one level, this is a frightening future.
But, thankfully, technology doesn’t just take industries and jobs. It opens the door to new ones as well.
And the nbn™ network will play an important role in helping us walk through that door.
Universal, high speed connectivity gives us a unique opportunity to create new technology-based jobs and industries.
It gives us the opportunity to explore, build and scale new techniques in health, education, entertainment, manufacturing and just about every other industry you can name.
It gives us an important competitive advantage. In 2020, as I’ve said, we’ll be the first fully connected continent in the world. That puts us ahead of the vast majority of our trading partners.
And the nbn™ network will help us conquer – once and for all – a disadvantage that has dogged Australia for its entire history.
The tyranny of distance
Isolation has always been a disadvantage for Australia. It impacts us in two ways:
The first is our geographic location. It hampers our global competitiveness by complicating transport, travel and time differences. It makes dealing with the world’s major markets more complex and expensive.
The second is Australia’s massive size and the challenges this creates for regional Australians.
Between them, agriculture and mining contribute over 70% of Australia’s total export earnings.
These earnings aren’t generated in the cities. They come from the farms and mining operations dotted all over regional Australia.
Despite this enormous contribution, regional Australians don’t enjoy the same benefits as the many other Australians who live in cities.
Critical services, like education and health, are more difficult to access.
And employment prospects aren’t as strong.
In fact, many things are harder in regional Australia.
And that includes the internet. For regional Australians, the internet used to mean patchy connections. Slow connections. And, for many, no connection at all. This stifles communication, lifestyle and, perhaps most importantly, productivity.
But we now have the opportunity to change that. Through the nbn™ network, almost 1 million rural premises now have access to high speed internet. And almost half of those are in remote or isolated areas.
Through the nbn™ network, we can conquer this tyranny of distance once and for all.
And, in doing so, we can double our digital dividend.
That means we can improve the opportunities for regional Australians and dramatically increase Australia’s global competitiveness, economy and employment at the same time.
Let me give you an idea of what this could look like.
To begin with, we can help more local innovators build their businesses by giving them broadband access.
In Byron Bay, there’s a company called Flow. They’ve created an exciting new beehive that literally gives you fresh honey on tap.
In February 2015, Flow listed their beehive – called the Flowhive – on crowdfunding website, Indiegogo. They were hoping to raise $70,000 US dollars.
In two years, Flow has used Indiegogo to sell tens of thousands of units all over the world and raise over $13m US dollars! The Flowhive is now the largest crowdfunding campaign in Indiegogo’s history.
Let me make an obvious point about this. If you don’t have Internet access, you can’t crowdfund. The nbn™ network makes it possible for all Australians to pitch their ideas to the world.
Another way we can double our digital dividend is by enabling innovations based on the strengths of regional Australia in areas such as agri-tech and mining technology. One terrific example is the recently-announced $210 million investment in the Food Agility Co-Operative Research Centre. The investment includes cash and in-kind contributions from the Federal Government and businesses, such as KPMG, NAB, Bosch and IAG.
This investment will improve collaboration between business, universities and government. It will spearhead the digital transformation of Australia’s agri-food sector, through new technologies such as automation and the Internet of Things.
Initiatives like this can have an enormous impact on our future. They could:
- Improve our food supply;
- Create new skills and jobs in regional Australia;
- Create new exportable innovations;
- And increase our global competitiveness in the agri-food sector – a sector that is expected to skyrocket in the years to come due to population growth.
And, again, the universal broadband access provided by nbn is key. It not only makes innovation possible, but it could give our regional innovators an advantage over many of our trading partners.
Another opportunity involves creating new industries that negate the tyranny of distance. Cloud-based services are a prime example of this. As I mentioned in a speech last year, we’re already seeing a growing number of Australian companies build global markets for their cloud-based services.
With our high levels of education and technical literacy, the cloud is a real opportunity for Australia. And, importantly, it’s an opportunity that anyone, anywhere can grab. You don’t need to live in the city to become a global player in cloud-based services.
A fourth major opportunity is to build on our hard-earned leadership position in education. We are already a world leader in attracting international students. And we’re also leading many education projects overseas. We can build on this by driving innovation in e-learning, virtual classrooms, virtual reality and other ed-tech capabilities.
Again, this could deliver a double dividend to Australia. First, it would open the access to high quality education for regional students. Second, it could create new export opportunities for schools, teachers and ed-tech innovations.
We can take our teachers to the world, no matter where those teachers live.
These examples are just the start. The opportunities created by the nbn™ network are enormous, but we need to grab them. Otherwise, they’ll pass us by.
The world’s first fully connected continent
I mentioned earlier that the nbn™ network will make Australia the world’s first fully connected continent.
Now, I know that sounds like a boast, but it’s more than that. It’s a challenge to every single Australian.
We will be the world’s first fully connected continent in just three years. What are we going to do with that advantage?
The first step, of course, is for nbn to complete the rollout and deliver the broadband connectivity that Australia needs.
There’s been a lot of talk about nbn™ network speeds, with some people demanding that nbn deliver gigabit speeds for today’s end-user.
Now, the reality is that very few Australians have a use for gigabit speeds in today’s world. The fact is, the applications that demand this amount of data simply aren’t at scale yet.
This became evident in a recent story about Kansas City, which has now had gigabit speeds via Google Fiber for four years.
What we are now seeing there is that gigabit internet has not led to the bonanza many expected.
One barrier to the gigabit speeds in Kansas City is the $400 AUD construction fee that the resident has to pay.
As Matthew Marcus, the Executive Director of the Kansas City Startup Foundation has said, “The fact is, it’s really difficult to consume one gigabit of speed.”
Google has now placed a hold on their Google Fiber platform to re-assess the economics.
In our own uptake patterns, people are gravitating to speeds that meet their needs.
83% of all our activated homes have opted for 25Mbps or less. In other words, only 17% have chosen 100Mbps.
That is not due to premiums imposed by nbn; those higher speeds are only slightly more at eight dollars per month over the billing period – around $2 per week.
And, believe it or not, our Fibre-to-the-Premises customers are doing the same thing. 79% of them have opted for the lower speeds.
Clearly, installing gigabit speeds today would be a significant investment with little chance of being recouped.
This is fiscally prudent and it is our commitment to Australian taxpayers.
Having said that, things will change.
Ongoing advancements in technology and content mean that the demand for faster internet will continue to grow in the years to come. And our business model allows for this.
We are trialling the technologies we will use. We’ve built the network so it’s readily scalable. And, as the need grows, we will put those technologies in place.
Importantly, we’ll fund these upgrades ourselves; we won’t need to call on taxpayers.
So, that’s the focus of nbn. But, beyond that, what do we all need to do to ensure our future?
What’s our vision? What do we want to be in 20 years’ time? And how will we make the most of the nbn™ network and the advantages it creates?
To achieve this, I think there are four things we need to do as a nation.
The first is learn
What does the world of the future need?
And how can we turn our emerging digital advantage into long-term global demand?
In today’s world, tectonic shifts in demand happen virtually overnight. We need the skills to quickly identify and respond to these needs better than anyone else.
The second is think big
How can we lift our heads up and look beyond today?
How can we change our culture and start to see ourselves as a global technological leader?
How do we convince ourselves that anything is possible for an nbn-enabled Australia?
The third is talk
We need to get the conversation going – with Government, industry and in the community.
How can we identify the skills and projects that will drive our prosperity in ten and twenty years’ time?
How do we, as a nation, explore and decide on the future opportunities we’ll commit to?
On that score, I saw a concerning statistic just recently.
According to the OECD, Australia ranks well below the average for firms collaborating on innovation: with universities, suppliers and international organisations.
This is a serious roadblock on our path to the future.
I’d like to applaud the Government’s National Innovation and Science Agenda for its focus on addressing this issue and for taking leadership on innovation.
My hope is that we can now take this agenda a step further by identifying the specific fields in which Australia will chase global leadership.
Which brings me to the fourth step: commit
What are the investments and policies we need to bring these opportunities to life?
What do we need to do in areas such as education and research?
What are the roles of Federal, State and Local governments? Of business and of our communities?
And, importantly, how do we get everyone working together?
In short, how do we create a platform that will deliver a brighter future for Australia than any of us could imagine?
The opportunity for a smart country
The world is heading into an era of unprecedented technological change. Everything will be transformed – from the way we live our lives to the way we run our businesses.
This change creates the opportunity for a smart country to really ascend and become a global technological powerhouse.
And Australia is perfectly placed to do this. We’re well educated. We’re technically literate. We’re resourceful. And we’ll soon have universal broadband access that puts us ahead of almost all our trading partners.
So we now have two options in front of us.
The first is to leverage technology and the nbn™ network to start building our long-term global competitiveness and prosperity.
That will drive new trade opportunities, new growth and equal opportunities for regional Australians.
As I’ve said, it will allow us to ascend as a global technological powerhouse.
The second is to do nothing.
That will mean lost opportunities, weaker growth, reduced trade and employment opportunities and a growing city/country divide.
I’m confident that, together, we’ll all make the right decision.
Check your address to see if you can connect to the nbn™ network.
A previous version of this article incorrectly stated: "2,144,210 million families and businesses are now using the nbn™ network’s multi-technology mix".
This was a typographical error and has been corrected to: "2,144,210 families and businesses are now using the nbn™ network’s multi-technology mix".
Last updated on 30 January 2018