Digital fibre could add USD $163bn to NZ economy by 2033

A new report from Deloitte suggests that digital fibre infrastructure could contribute USD $163 billion to the New Zealand economy by 2033.

The report, titled "Unleashing the power of digital fibre infrastructure in New Zealand," indicates that while investments in fibre infrastructure have already transformed connectivity for New Zealanders, the economic potential of this infrastructure is far from fully realised. According to Deloitte's research, this infrastructure could add the economic value in net present value terms over the next decade.

Liza Van der Merwe, Lead Partner at Deloitte Access Economics, commented on the current state of New Zealand's digital fibre network. "As New Zealand's digital fibre network matures, following the successful rollout of Ultra-Fast Broadband (UFB), the true extent of fibre's impact on productivity is emerging. The report shows digital fibre infrastructure has already delivered $31 billion of economic benefit to New Zealand between 2011-2023 and grew the economy by $8.8 billion in 2023 alone," she stated.

New Zealand's Treasury has identified productivity as the country's main economic challenge, linking the capacity to raise wages and improve living standards to the ability to enhance output per worker.

"Unleashing the power of our fibre network can enable innovation, unlock business transformation and uplift productivity in New Zealand," Van der Merwe continued, noting the report's outline of six critical dimensions to achieving increased productivity.

These dimensions include improving digital equity through enhanced fibre access in households, promoting innovation with artificial intelligence, accelerating small business digital transformation, expanding exports, enhancing government services with digital technology, and regular regulatory reviews.

Chorus, the largest provider of fibre infrastructure in New Zealand, concurs with the findings regarding increased data consumption. The company observed that average monthly data usage in June surpassed previous peaks during the COVID-19 lockdowns.

Mark Aue, CEO of Chorus, remarked, "Today's report from Deloitte serves as a powerful testament to the critical role fibre plays in our economy and communities. This isn't just about economic value; having access to high-capacity connectivity has radically transformed how we live, work and play over the past decade."

He added, "The challenge is how we, as a nation, fully harness the world-class infrastructure we've invested in. Demand for reliable, quality, high-speed internet will only increase with the exponential growth driven by on-demand video streaming, the shift to ultra-high-definition content, and the widespread adoption of generative AI/VR and cloud-based applications. How New Zealand takes advantage of fibre will define our success in unlocking the full productivity benefits and ensuring we remain competitive on the global stage."

Van der Merwe emphasized the importance of productivity, stating, "Productivity is not just a nice-to-have, it's a fundamental driver of New Zealand's long-term economic wellbeing. The report makes it clear that digital fibre infrastructure has escalating significance to the future prosperity of our economy – but we need to stay ahead."

"As a collective, we must commit to unleashing its full potential for New Zealand's success now and in the future," she concluded.

The report also advocates for a structured plan with measurable outcomes for New Zealand's digital fibre infrastructure, drawing parallels to the European Union's recent digital targets for 2030. The full report is available on the Deloitte New Zealand website.