Internet connectivity is emerging as one of the fundamental pillars of societal well-being. As part of the sustainable development goals, the United Nations aims, “to significantly increase access to information and communications technology”, and will strive, “to provide universal and affordable access to the Internet in the least developed countries by 2020”.

While 5G, IoT, and other technological advancements are rapidly entering the market in many nations, there are still over three billion people who don’t have access to the Internet. A majority of those without access are in developing regions where concomitant factors of poor national governance, a dearth of relevant infrastructure, and lack of inward investment, serve to limit the populations’ access to basic connectivity.

Closing the digital gap in the global economy is a significant opportunity for the entire telecommunications value chain. But doing so sustainably is not easy. To increase Internet access, the following issues need a resolution: -

1. Availability – One of the biggest reasons why many people don’t access to the Internet is due to the lack of adequate infrastructure. All other issues don’t even come into play without the availability of network and other infrastructure, such as regular electricity supplies, to provide Internet access.
2. Affordability – refers to the cost of service, the cost of the handset or device used to access the internet. Also, access to affordable electricity is necessary for running and recharging devices.
3. Applicability – are there good quality, localized content and services available to support consumers gaining access for the first time? Much of the Internet content is developed for and consumed by relatively affluent global audiences. For marginal communities, this content is irrelevant and unreadable.
4. Capability – Government policies need to support digital development as well as people’s ability to take-up services based on aspects including awareness of the value of internet services, literacy etc.

            Exhibit: Counterpoint Research - Barriers to Connectivity

Conventional telecommunications business models will not provide the solution. The cost to cover the unconnected far exceeds the potential returns on the required investment. Nevertheless, telcos can contribute by using innovative infrastructure solutions. And there are alternatives, including shared network models that allow telcos to offset some of the risks and provide smaller businesses with opportunities to develop regional or even community-level solutions.

We have analyzed multiple initiatives around the world and found relatively few, sustainable, attempts to build Internet access for users that have otherwise been denied access due to issues of affordability or access to infrastructure. The leading examples include Reliance Jio in India, MTN across several African markets, and Telefonica in several Latin American markets.

Each operator was facing a distinct set of issues, and each is solving those issues in a range of different ways. For example, Reliance Jio has pioneered a new device type – the smart feature phone – and is using deeply discounted data services and subsidized handsets to build a large subscriber base rapidly. It can monetize this subscriber-base through an Internet-like business model. MTN is segmenting the unconnected population and is developing new, low-cost infrastructure that radically changes its cost profile. This enables it to provide sustainable and affordable Internet access. Telefonica is pioneering a partnership approach to overcome difficulties of geography to provide access to previously unconnected communities. These approaches need not be unique but do require concerted efforts by telecom providers to reach across the digital divide and provide access to a large section of the population that would otherwise be unable to connect to Internet-based services.

Nevertheless, not all the unconnected will be able to obtain benefits from Internet access in the foreseeable future. This is because of issues related to the applicability of content and services to the current situation of some populations. Also, the capability will hinder a section of the population from reaping the benefits of Internet access. A collaborative approach from all the ecosystem players is needed to connect the next billion.

The analysis is an excerpt from the detailed report “Achieving the Sustainable Internet Access for the next Billion”. The report analyses multiple initiatives around the world to find sustainable attempts to build internet access for users that have otherwise been denied access due to issues of affordability or access to infrastructure.