Budget 2019: Rural Connectivity ISPs Must be Incentivized

Budget 2019: Rural Connectivity ISPs Must be Incentivized

The first budget of new Indian Government is expected to further accelerate the government’s ambitious ‘Digital India’ plans, especially to connect the remote areas of India. The dream of a fully connected India has been impaired by many challenges. It remains critical that the government addresses certain barriers that have hindered Internet Service Providers (ISPs) to offer rural connectivity.

High Bandwidth costs

The bandwidth costs have been a challenge that is consistently faced by Internet Service Providers (ISPs) making the entry barrier high. A subsidy for bandwidth offered to providers who want to further drive broadband growth to the unconnected villages should be a priority.

License Fee dilemma

A license fee waiver is the need of the day. Bringing down the costs for ISPs will boost internet proliferation in untapped, unreached areas.

High GST

A high GST of 18 percent is another barrier to the rural connectivity dream. There have been talks of a lower GST for the telecom sector, however, it has yet to be materialized.


The government’s USO (Universal Service Obligation) fund which aims to connect the unconnected villages must also provision in part for ISPs for them to be able to meet connectivity in all rural areas.

The government’s intention for digitally connecting every part of the country is evident. However, incentivizing ISP’s, especially the smaller players, and offering subsidies will give a push to those going the last mile. These can surely become the enablers to drive the digital revolution in rural areas.

Rural connectivity rests on the premise that digital technology promotes empowerment, entrepreneurship, innovation, inclusion and an exponential growth. With these reforms, internet connectivity is bound reach the remotest rural areas and transform the ecosystem on a larger scale. From entertainment OTT options to e-healthcare and digital education initiatives, ease of penetration for financial services – connectivity will facilitate a truly smart rural ecosystem.

With the upcoming budget, the government must support connectivity players with subsidies and incentives that will give the much-required push for realizing the Digital India dream in totality.

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