/Budget 2019: For last mile rural connectivity ISPs must be incentivized

Budget 2019: For last mile rural connectivity ISPs must be incentivized

Budget 2019

The first budget of the new government is expected to further accelerate the government’s ambitious ‘Digital India’ plans, especially to connect the Indian hinterland. The dream of a fully connected India has been marred by many challenges. It thus remains critical that the government addresses certain barriers that have, in many ways, hindered Internet service providers to offer last mile rural connectivity.

High Bandwidth costs

The bandwidth costs have been a challenge that is consistently faced by internet service providers 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

For ISPs who want to reach the last mile, a license fee waiver is the need of the day. Bringing down the costs for providers 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 last mile connectivity in 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.

At LM Energy & Software Pvt. Ltd ( IConnectWe) we have been providing internet connectivity to the remotest areas of Rajasthan connecting 8 lakh people in the state and in the process empowering communities and villages. This impact can be multiplied and replicated throughout the country if the government is more supportive to ISPs.

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, and 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.

The author is Founder and Director, LMES IConnectWe – an organization committed to bridging the rural-urban divide by bringing a technology revolution via connectivity.

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