New research released by Ericsson, Arthur D. Little and Chalmers University of Technology today shows that doubling a country's broadband speed boosts its GDP by 0.3%, and that the benefits accrue with subsequent doublings.
What does with mean for Australia with its trillion dollar econonmy ($1039B in 2009, $925B in 2010)? According to Measurement Lab, the median download speed in Australia is a mere 4.23Mbps. This means that Australia could double its broadband speeds four times (4 -> 8 -> 16 -> 32 -> 64Mbps) and still be under the 100Mbps download speeds that the National Broadband Network (NBN) will deliver. Such a 16-fold increase in broadband speeds would amount to ~1.2% of GDP growth stimulus, or ~$12B per year. If so, the $43B NBN would pay for itself in under 4 years. Even a modest 0.5% increase in GDP (~$5B/year) would pay for it within a decade.
For those of you still wondering what we're going to do with all that bandwidth, take a look at this chart plotting TV image resolution by year.
This shows the evolution from the original 405 line system in 1936 to 1080p in 2004, a 10-fold increase in image size from 0.2 Megapixels to 2 Megapixels (data here). What's interesting is that the real action has happened in the last decade, with the advent of high definition (HD) TV, first 720p and more recently 1080p. Further, the TV/video industry is hardly about to stop innovating any time soon; the next standard, is likely to be so-called "4K" with whopping 12 Megapixel images!
And video will be just one of many applications that benefit from faster broadband.