NBN could add $3800 in benefits: Deloitte

A new Deloitte Access Economics report prepared for the federal government estimates households will be worth $3800 more in 2020 through improved productivity from the National Broadband Network (NBN).

The report analysed six areas of potential benefit, including communications, e-commerce, online services, employment, quality/price changes and travel savings.

The report stated improved productivity could result in $1930 in benefits and teleworking $634 in benefits in 2020.

The report stated productivity benefits could include improved communication tools, online and lower cost marketing, online shops that reduce the need for bricks and mortar and reduce occupancy costs and cloud technologies than can reduce IT spending.

“There are variations in benefits according to whether people live in the city or a regional area, mostly relating to travel," the report stated.

"That said, broadband, particularly in regional areas, will open up opportunities to allow regional residents to better participate in the digital economy."

The report outlined several case studies, including a project manager who travels interstate and overseas for work.

According to Deloitte, in 2020 the single professional would be able to use multi-party video conferencing and no longer need to travel for face-to-face meetings. This would save on travel time and costs and allow the project manager to study a master’s degree via an online virtual class.

However, Deloitte said that not all the benefits of the NBN would be visible.

“Many of the benefits will emerge gradually, as consumers find price discounts and variety online, as more employees are allowed to telework, and as people get more accustomed to accessing services online,” the report stated.

“There will be a lot of change from the broadband revolution and there will be a gradual transition this decade.”

Guy Cranswick, advisor at IBRS, has cautioned that the Deloitte report needs to be read with “caveats” and he is sceptical about the findings of the report for two reasons.

“One is the sponsor of the report -- [the federal government] -- and it's wise to produce results the sponsor wants. Secondly, these future results of technology are always good which is not the reality we live with,” he said.

“Having read hundreds over these type of reports over the years there is never a downside, a failed or an ambiguous result, associated risks, incidental costs that were not factored -- it is always going to be an advantage.”

Cranswick said the biggest limitation of the report is that the NBN is not fully completed yet, which means the end results cannot be accurately measured.

He said the report is likely to be used for political gains and said ultimately any reports on the NBN need to be a work in progress as new data about the network and its benefits becomes available.

“These reports intend to demonstrate that expenditure will yield positive results and they tend to [be] simplistic mechanistic arguments -- more bandwidth equals more teleconferencing and [that] means less road traffic which means more savings,” Cranswick said.

“Show me how and where human behaviour with technology is that clear cut?”