A Survey of Rural Telecommunications Users in New Zealand

Nature of investigation

As part of the development of a Rural Broadband Strategy, the Ministry of Economic Development has undertaken a survey of rural households to get a better sense of the drivers for the uptake of broadband by rural users.

The survey sample of 326 rural households was small, and was intended to simply provide a snapshot (rather than a full representation) of rural broadband usage.

It is important to note that the survey questions and methodology were not scientific and caution should be taken prior to adopting the survey results as representative of the wider rural population.

Methodology

A questionnaire was mailed out to rural households via Federated Farmers in April 2007. Questionnaires were also disseminated by the Ministry of Economic Development at Fieldays in June 2007.

In total, 326 questionnaires were completed by "rural" households. Classification as "rural" was on the basis of self-identification.

Broadband uptake

Of the 326 rural households surveyed:

• 5% had no internet access;
• 60% had a dial-up connection; and
• 35% had a broadband connection.

These figures suggest that internet users were overly represented in the survey. A recent nationwide survey from Statistics New Zealand reported that 64% of rural households had internet access (compared to the 95% from Ministry of Economic Development’s rural broadband survey). The nationwide survey found:

• 36% of New Zealand households had no internet access;
• 31% of New Zealand households had a dial-up connection; and
• 33% of New Zealand households had a broadband connection.

However, this overrepresentation of internet users in the rural broadband survey should not affect an analysis of the drivers for the uptake of broadband in rural regions.

Of those households with access to the internet, 37% of rural households utilised a broadband connection, compared to 52% of households in the nationwide survey.

Household income and broadband uptake

The median gross annual household income for those completing the rural broadband survey was $50,000-$70,000.

Of the 326 rural households surveyed:

• 58% with a gross household income below $30,000 had broadband access;
• 24% with a gross household income of $30,000-$50,000 had broadband access;
• 37% with a gross household income of $50,000-$70,000 had broadband access;
• 30% with a gross household income of $70,000-$100,000 had broadband access;
• 35% with a gross household income of $100,000-$200,000 had broadband access; and
• 44% with a gross household income over $200,000 had broadband access.

It is important to note that many rural households (particularly farms) are able to minimise their taxable income by writing off business expenses such as broadband access. Therefore the statistics should be taken lightly.

Household expenditure on information and communication technologies

Of the 326 rural households surveyed:

Home landline

• The average monthly expenditure on a home landline was $136 (excluding any internet subscriptions);
• 84% claimed at least part of their household landline as a business expense.

Cellular

• 82% had cellular phone coverage at their primary place of residence;
• 89% had a cellular phone;
• Of those with cellular phones, the average monthly expenditure of households was $86.

Sky television

• 58% of households subscribed to Sky Television;
• Of those with Sky Television, the average monthly subscription was $65.

Broadband

• Of those households with a broadband connection, the average monthly price paid was $61;
• 79% of households with broadband access claimed at least part of their broadband charge as a business expense;
• The average maximum monthly subscription that households without a broadband connection would be willing to pay for a basic broadband package (256Kbps download) was $39.

Broadband technologies

Of the 114 rural households surveyed with a broadband connection:

• 49% had DSL broadband;
• 26% had satellite broadband;
• 23% had wireless broadband; and
• 3% had cellular broadband.

The following table provides a breakdown of the broadband technology by region:

Broadband drivers

Reasons for broadband usage were measured using a 5-point scale, from "1" for the most session time to "5" for the least session time. The following table summarises the relative weightings for the 114 households surveyed with a broadband connection:

Using a 5-point scale, where "1" indicates that respondents strongly agree with the proposition and "5" indicates they strongly disagree; the following considerations were rated by those users who did not have a broadband connection:

Main points

The results of the survey are fairly inconclusive, in part due to the small survey sample and the over-representation of internet users in the sample group. Nevertheless, some interesting points can be drawn from the survey, including:

• there appears to be a lack of awareness of the availability of satellite broadband as an alternative to DSL broadband, with respondents citing an inability to subscribe to any form of broadband as the key reason why they had yet to purchase a connection;
• it appears that the value proposition may not be sufficiently strong for many rural households to subscribe to broadband. Despite respondents claiming to value high speed broadband, respondents were willing to spend considerably greater sums of money on their monthly landline bill, cellular subscriptions and Sky TV subscriptions than on a broadband connection;
• those households who had broadband subscriptions were paying over 50% more for a broadband connection than other households were willing to pay for a connection; and
• the use of broadband connections for business applications appears to be relatively high (as opposed to personal applications). In addition, 79% of surveyed households claimed their broadband subscription as a business expense.

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