Universal connectivity holds significant development opportunity but many areas, especially rural areas, remain unserved or underserved. However, current investment models for broadband connectivity are not commercially viable for uncovered areas due to the high cost of deployment and low demand. Policy and regulation can shrink the connectivity gap to some extent by removing obstacles to network deployment and by raising demand for broadband, but these are both inadequate and too slow in responding to the urgent need to close the gap. Both the base of contributors and the scope of investment to support deployment and adoption need to be broadened.

Several options are available to broaden the base of contributors:
  • Identifying new contributors: New contributors can include digital companies, such as those with an e-commerce or other online focus, along with other companies deriving benefits from broadband, multilateral development banks, corporate social responsibility funds, and philanthropic donors. Contributions can come in a variety of forms, including investments and in-kind contributions such as digital skills training.
  • Earmarking existing contributions: These contributions from ICT sector participants to support connectivity and adoption include mandatory contributions such as operator licence fees, spectrum licence fees, digital taxes, fees to access rights of way for infrastructure, and equipment import duties. Further contributions could include digital taxes and other regulatory levies.
  • Reforming USFs: Reform can be achieved by setting clear objectives, implementing regulations, and providing a sound governance structure. Further changes in focus could include adding coverage obligations in spectrum licences and enabling direct operator investment rather than USF payments.
Several options are available to broaden the scope of investments:
  • Operating expenditure: In addition to capital expenditure, contributing to operating expenditure can make a business plan more sustainable. These can include direct subsidies or incentives such as tax reductions and can include in-kind contributions.
  • Risk protection: Governments and international institutions can offer guarantees and loss-guarantee schemes or insurance that limit risks beyond the investor’s control, for example, political or currency risks.
  • Demand-side support: Governments can ensure demand by becoming an “anchor tenant” with a future contract for connectivity in an underserved region. Indirect support for demand can be provided by subsidizing the cost of a device or data plans, increasing digital literacy, and developing locally relevant content.