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Is NZ internet slowing down small Kiwi businesses?

20 Oct 2014

New Zealand’s frustration with our internet services is not limited to households. Research shows that limited access to fast internet, connection costs and reliability are having an impact on our small businesses.

The latest MYOB Digital Nation report shows a third of SME business operators from around the country are unhappy with their access to the internet and the cost of their connection.

In the nationwide survey of over 1,000 business operators, 38% of SME operators reported dissatisfaction with the cost of their plan, while 33% were dissatisfied with speed and reliability. Levels of dissatisfaction have remained constant over the year.

The report says rural SMEs (44%) are much more likely to be dissatisfied with their internet access compared to those in metropolitan areas (27%). Otago/Southland based operators were more dissatisfied with the cost of their internet plan at 51%, compared to 25% of Waikato based operators, who have the lowest dissatisfaction levels.

James Scollay, MYOB Business Division general manager, says access to the internet is extremely important for modern businesses, especially those operating in more remote areas.

“The internet provides a platform for engagement in both the domestic and the international market – even for the smallest business with a unique product or service to sell and story to tell."

Scollay says that good internet services level the playing field for smaller businesses, enabling them to build awareness, create a depth of customer engagement and connect with new markets.

The report also showed the amount of operators with a UFB connection is increasing.

One fifth of SME operators (19%) say they are currently connected to UFB, up from 14% in the March Business Monitor. On the other hand, 72% were not connected to UFB and 8% did not know.

The research asked SME business operators what benefits UFB has had on their business, with speed and reliability proving most significant.

An increasing proportion of operators saw a number of benefits of UFB however, particularly:

  • Improved internet connection (up from 56% to 63%)
  • Reduced costs associated with telecommunications (up from 27% to 33%)
  • Better video conferencing (up from 15% to 21%)
  • Enabling more people to work remotely (up from 11% to 17%)
  • Enabling more e-commerce activity (up from 9% to 14%)
Over half the operators (57%) not currently connected to the UFB believed it would make a positive impact on their business.

“In this survey, we are seeing growing numbers of businesses taking advantage of the benefits of the internet – especially high speed connections,” says Scollay. However he says there are factors holding the country back, including access to cheaper, high speed data and connectivity, particularly in our vital rural sectors.

“MYOB believes that becoming one of the world’s most connected nations could make a real difference, not just to business owners and operators, but their employees and communities as well – opening new opportunities, increasing skills and supporting higher productivity and greater returns.

“It would be a tragedy if the growth potential businesses have identified through the use of the internet is stymied by an infrastructure that doesn’t keep pace with the needs of businesses, or expensive plans that price them out of the market.”

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