Presented by Strategic Networks Group president Michael Curri at the Gigabit City Summit, Jan. 14, 2015, in Kansas City, Mo.

1. ©StrategicNetworksGroup,Inc.2014
Bridging the Small Business Digital
Divide Through Utilization
Gigabit City Summit
Kansas City, Missouri
January 14, 2015

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Revenues from network subscriptions
- Investment, operations & maintenance costs
= PROFIT
Operators
Local Economy
Increased productivity and competitiveness,
increased revenues, new jobs,
better quality of life, etc.
- Investment, utilization programs and support
= BENEFITS FOR THE COMMUNITY
Why We Build Broadband Networks
“Off-
balance-
sheet”

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Broadband Means Jobs
Broadband is responsible for 42.8% of all new jobs since 2013
Percent of New Jobs
Related to Internet
By Size of Employer Group
Small businesses
create 8x more
Internet jobs
relative to
large firms
Source: SNG Digital Economy Database, n = 2,536 (Commercial businesses in IL, KY, NC, NE, GA; 2012 to present)
60.4%
47.4%
40.0%
37.4%
41.9% 42.8%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
0 - 19 20 - 49 50 - 99 100 - 499 500 or
more
Total

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Economic ROI from Public Investments in Broadband
Contribution to GDP 10 x the initial public investment
Number of Jobs created and saved Variable
Fiscal revenues increase 3 to 4 x the initial public investment
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… as well as ROI For Our Communities
SNG projects have revealed common return on investment (ROI) multipliers
from broadband investments
Average multipliers identified from economic impact studies conducted by SNG.

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The Digital Divide in 2015
is about Our Businesses
• Traditionally, the digital divide has been about
home use…
– Availability
– Expense
– Connection Speed
• The digital divide in 2015 centers on small
businesses
– There is a “gap in awareness and understanding”

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The Smaller the Organization,
The Lower the Internet Utilization
6.22
6.79
7.08
7.20
7.63
5.00
6.00
7.00
8.00
1 - 4 5 - 9 10 - 19 20 - 49 50 or more
Number of Employees
Average DEi Score
8,431 commercial enterprises (2012-14)

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Availability Adoption Utilization
This is Problematic Because…
Utilization Growth
BUT Availability is Our Primary Industry Focus …

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8Source: SNG Digital Economy Database, n=3,341 (Businesses in CA, CT, MD, NC, NE, OH, SC, VA; 2012 to Present)
Faster does not solve other, more significant barriers
Internet Speed Is NOT the Utilization Barrier
20.1%
17.4%
15.9%
30.0%
41.0%
18.2%
0.0% 10.0% 20.0% 30.0% 40.0% 50.0%
Loss of personal contact with clients
High cost of development/maintenance
Lack of internal expertise and knowledge
Privacy concerns
Security concerns
Available Internet is too slow

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Also Contributing to the Digital Divide?
Ultra-Fast (Gigabit) Broadband is…
• Not universally understood
• Not universally accepted as a
platform for innovation that requires
maximum bandwidth
• Not seen as a utility
– Ultra fast networks are different than
traditional broadband… benefits need
to be understood to drive adoption
and utilization

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Gap in Understanding Starts with
Marketing a Feature… Not a Benefit

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Marketing just ‘Speed’
Leaves Small Businesses in the Dark
Target Market Demand Drivers Feature Benefit Result
Households
Netflix, Gaming, Multiple
household users, and Devices
Speed
Enhanced
lifestyle
Uptake
Large
Businesses
Collaboration, Security and
Backups, Cloud Applications
Speed
Competitiveness
Collaboration
Uptake
SMEs
Email, websites, basic online
tools, all accomplished with
“basic” service
Speed
How does fast
Internet impact
my bottom line?
Limited
Uptake

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In the Broadband equation,
the quality of each input affects the outcome
Utilization Average
Lagging
Technology
Technology Low Utilization Poor
UtilizationTechnology BENEFITS
Cannot Only Focus on Technology

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Increased Utilization Grows Revenue
Businesses underutilizing the Internet miss significant revenue opportunities
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
4 up to 5 5 up to 6 6 up to 7 7 up to 8 8 up to 9 9 up to 10
21% 22%
26%
32%
35%
43%
%ofRevenuesattributedfromInternetusage
Level of Broadband Utilization (DEi score)
Contribution of Internet to Revenues
by Level of Utilization
Source: Strategic Networks Group, Inc. 2014. N = 2,606

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Why Drive Utilization?
For an individual business or organization, increasing utilization
by 10% means:
Increasing revenues by 24%
Decreasing costs by 7%
For a Community or Region, it means :
Allowing businesses to be more competitive
Creating a demand for high-skilled workers
Adding fiscal revenues
Average multipliers identified by SNG from over 12,000 data records collected in 2009-10.

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Small Business Utilization: Revenue Impacts
Revenue Impact % of Revenue
Selling Goods or Services 24.3%
Customer Service and Support 24.1%
Advertising and Promotion 20.2%
Website for Organization 17.1%
Organizations less than 50 employees, average percent of
revenues created by utilization:

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Driving Utilization:
Community Financial Impacts
Economic Impact for every 100 businesses trained in
North Georgia project who adopt Internet Applications:
Industries
Aggregate additional
revenues (annually)
All Industries $7.2 Million
Manufacturing $17.5 Million
Professional and Tech Services $2.7 Million
Tourism $4.8 Million

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The Takeaway: Make a Compelling Case
For Broadband Benefits
Support training of Internet
applications
Help businesses understand benefits
of gigabit broadband (not just speed)
Develop a “business case” for
businesses to take action

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A DEi Scorecard is delivered to each
business and organization
Individualized ‘broadband assessment’
that:
‒ benchmarks competitiveness against
peers (by size and industry sector)
‒ estimates ROI from increased utilization
‒ provides links to local advisors and
support
Data based on the individual’s current
broadband utilization against industry
average
Shared with local economic development
agencies so they can raise awareness,
increase adoption, and drive utilization
The SNG Business Case: DEi Scorecard

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Michael Curri, President
Strategic Networks Group, Inc.
+ 1.613.234.1549
mcurri@sngroup.com
Let’s connect !
www.sngroup.com
Thank You