SMEs unsure whether National Broadband Network will deliver actual business benefits: Report

Small businesses are still unsure about how the National Broadband Network will benefit them, with 31% believing it will have just a minimal impact on how they do business, a new survey reveals.

The revelation comes as NBN chief executive Mike Quigley has expressed disappointment in comments from Opposition leader Tony Abbott suggesting the Coalition will abandon the NBN altogether if it wins government next month.

The Pacnet Broadband Barometer report reveals the current state of internet usage among Australian SMEs, and shows they are altogether confused about how the massive infrastructure project will actually benefit them.

The survey shows 37% of SMEs believe the network will provide better access to public information, although 33% said this wasn’t the case, while 34% believe the network won’t increase global competitiveness.

“Overall… a majority of respondents answered “yes” or “maybe” when probed about their agreement with various statements of benefit of the NBN,” the report states.

“These results indicate businesses want to feel positive about the project but with such an even spread of responses we can see that in reality they have no strong opinions.”

“It’s clear that businesses need greater information and transparency about the network and how it will impact their business before the true benefits can be appreciated.”

The Pacnet study covers a number of areas relating to SME internet usage, including ease of access and speeds. However, many businesses don’t feel the NBN will improve on current standards with only 30% believing the network will offer lower costs.

Ovum research director David Kennedy says there will definitely be benefits, but specific service benefits will be hard to identify until the network is actually up and running.

“I think it’s clear the NBN will deliver benefits in areas that are currently underserved by networks, so we’ve got that at the very least. There will also be benefits in the operational costs of the network, meaning it will be cheaper to operate than current networks.”
“But in terms of benefits for specific services, it’s just very unpredictable at the moment. It’s very hard to forecast what new services the NBN will support, given it offers extremely high-bandwidth and I think that uncertainty is reflected in this support.”

Various tech analysts have suggested the NBN will be able to support electronic health record systems, along with high-end videoconferencing and other types of business facilities. But Kennedy says we can’t be certain of how these services will work until the network is up and running.

“It really is a wait-and-see type of approach. I think the SMEs have made an assessment of the NBN so far, and have realised it can’t be factored into the decisions they’re making at the moment.”

This uncertainty has been amplified by opposition leader Tony Abbott, who has continually stated the coalition will abandon the NBN if it wins government next month. Quigley says it would be a “real pity” if the network wasn’t built.

“Very few countries in the world have the capability to do what we are doing, so it really was quite visionary of the Government, which is what interested me, obviously, I taking on the job… I think it would be an opportunity lost,” he told the Australian Financial Review.

“Telstra’s copper network has been around for a long, long time. It’s not easy to build these networks.”

Quigley also said he wanted to make sure there is a clear difference between the NBN Company, and retail ISPs, saying “there is absolutely no intention on NBN Co.’s part of having a relationship with end users”.

Meanwhile, the Pacnet report demonstrates although Australian SMEs now rely on the internet to do business, they aren’t using it properly. An “alarming discovery” is that only 35% of businesses have a back-up internet connection.

It also says 43% have no plans to obtain a second connection in the next 12 months. AMI research analyst Vu-Thanh Nguyen said in the report this was extremely risky.

“Many SMEs are relying on the internet for critical daily communications. Increasingly, their day-to-day activities also depend on internet-based business applications.”

“Therefore, it is very risky to put all your eggs in one internet basket. Businesses would be in a much safer position to have two separate internet connections connected through a simple solution like dual WAN router.”

However, the report also said businesses are benefiting from faster internet, with SMEs now connecting at speeds 20 times faster than they were using in 2006. About 43% of businesses connect to the internet at between 2-10Mbps, it said.