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Rural Insight: Getting online a necessity not a luxury for rural NZ

Tags: Rural Rural Insight

The need for rural New Zealand to be just as well connected to the internet as the cities is growing by the month, as the agricultural sector sweeps up more and more internet capable machinery and equipment.

The “internet of things” is driving a surge in demand for rural bandwidth, boosted by other non-business demands like the arrival of NetFlix and Light Box.

The sector has been highlighted by United States research firm IDC, identifying the New Zealand agricultural sector as having one of the greatest areas of growth potential for the internet of things with over 10 million devices potentially connected within the next 5-8 years.

But some in the rural sector are also concerned this potential may not become a reality as rural connectivity does not keep up with the ability and breadth of machines to be able to talk to each other.

Latest data has about 300,000 rural New Zealanders capable of receiving broad band, or about 50% of the rural population. This number is set to increase by at least 30% under the extended Rural Broadband Initiative.

This has $100 million set aside for investment into further rural internet expansion. The success in the broad band initiative’s first stage is reflected in the number of households with broadband increasing by almost 50% between 2009 and 2014.

Overall New Zealand now enjoys a fixed broadband penetration rate of 33%, above the OECD average of 29%.

Ultimately the government’s aim is to bring broadband to 97.8% of the population by 2019.

Meanwhile for areas where broadband remains difficult to acquire, concerns cover not only the effect on farm productivity, but also the social implications of owning remote farm businesses and not being able to tap into the wider world beyond the farm gate.

Bayleys Gisborne rural property consultant James Macpherson has first-hand experience dealing with buyers of often remote rural properties, who have internet connectivity on their property shopping list.

“In a region where broadband is just so poor, more people are starting to realise they can work around that by going to a local wireless provider, and there seems to be one in most regions these days.”

James says Gisborne.Net, his region’s internet service provider has managed to fill many of the transmission “holes” in the rugged East Coast rural areas. It is a business model growing rapidly in most parts of the country including Wairarapa, Canterbury and Wanganui regions.

“This level of connectivity is proving invaluable, and for many farmers having good connectivity is essential not only for getting data on and off the farm, but also to make it an attractive place for staff to work.

“If you are a three hour drive from Gisborne or Whakatane, you need to be able to offer staff good internet, it is pretty much a required part of our standard of living these days.”

Internet consultant and rural connectivity campaigner Ernie Newman agrees. He sees the potential for a step change in rural broadband in the next 3-5 years which he says can’t come soon enough.

Like many he has welcomed the latest round of government funding known as Rural Broadband Initiative 2, or RBI 2, where $100 million of funding is being provided to lift broadband services to rural areas.

“We are finding the need for broadband is growing faster than it can often be met. But regional internet service providers are doing a very good job of helping meet that need, often at prices lower than what the big companies can do it at.”

He encourages communities in rural areas that may be underserved by wireless internet to band together and approach a regional provider with a case for serving them.

“If they have the critical mass it presents a business case to that provider to bring them internet. It is demand side pull, versus supply side push economics.”

He is also excited by prospect that if certain legislation passes it may become possible to string fibre optic cable along power lines – meaning that every power pole in the country becomes a potential source of urban-grade internet – “you could have Hakataramea Basin getting the same quality internet as Lambton Quay.”

There is also plenty of proof that good connectivity and technology use on farm together can deliver improved returns within the farm gate. A comparison of sheep and beef farms, often those most affected by poor connectivity, has shown those using good decision support software can gain a 78% higher gross margin than the industry average.

Bayleys national country manager Simon Anderson said the increased complexity of farm businesses and the volume of data generated by systems like electronic stock ID and pasture monitoring meant farm buyers were ranking internet capacity as a “must have.”

“It’s no longer a luxury and it is encouraging to see rural communities coming up with work arounds to achieve good internet speeds, helping keep remote farms productive and connected to the outside world.”

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