A Model for Bringing Internet Access to the World

Working with the World Economic Forum, BCG designed a way to accurately predict a program’s investment requirement.

Worldwide, some 3.9 billion people lack access to the internet, setting them behind connected citizens in terms of economic opportunities, education, health care, and other benefits. An initiative by the World Economic Forum aims to close this digital divide.

Called Internet for All, the initiative provides platforms for public-private collaboration at the global, regional, and national levels. The goal is to help leaders from government, donor organizations, the private sector, and civil society develop innovative ways to broaden connectivity.

As part of the initiative, the Forum worked with BCG to develop an investment model that can quantify the costs of making internet service more available in a specific country or region. As a result, stakeholders can determine the right level of investment at which the economics work to deliver a sustainable program.

In 2016, four countries in Africa launched programs to deliver internet service to their citizens, using the Internet for All framework: Kenya, Rwanda, South Sudan, and Uganda. To do so, each government applied the Internet for All’s four-step approach:

  1. Define the target. First, countries need to quantify their ambitions in terms of new users to be brought online over a defined period of time. The governments of the four African countries set a goal of bringing 25 million new users online by the end of 2019. The BCG model was used to determine the level of investment needed to meet this goal.
  2. Confront the interventions. The second step of the process is to address the main barriers to internet access, which World Economic Forum research has identified as insufficient infrastructure, limited affordability, poor digital skills, and a lack of relevant online content. In our example, the governments confronted each challenge. In terms of infrastructure, they decided to expand 3G and 4G mobile coverage. To improve affordability, the program would focus on mobile phones rather than home-based service. To improve digital skills, they would train two people per family. And to generate more local content, the program would create a technology park.
  3. Assess the investment required. Each intervention must be assessed to determine the total investment required. For the four countries in question, implementing all interventions to achieve the target of 25 million new users would cost $1.83 billion, or $64 per person, according to BCG’s model.
  4. Determine the business case. Lastly, the Internet for All approach requires that officials determine whether the business case is realistic. In this case, the original investment of $1.83 billion would not be sustainable within the three-year timeline. Yet the four governments determined that by applying several policies, they could reduce the cost by 23%, to $1.39 billion, or $49 per person. This new strategy makes for a financial feasible business case. (The policy initiatives included sharing some infrastructure, making some low-frequency spectrum available for 3G and 4G coverage, and removing the value-added tax on low-end smartphones.)

One lesson is already clear: Although the barriers are high and business cases can be tough to justify, targeted, intelligent interventions can make a huge difference in expanding internet access, potentially swinging a negative business case into positive territory. The investment model has shown its effectiveness, and it is being applied to subsequent projects in South Africa, Jordan, and Argentina. For the unconnected citizens in those countries, there is significant cause for optimism about the future.

Read the full report, Internet for all