During the past three years, rural internet connectivity has been expanding at an unprecedented rate due to the rising affordability of smartphones, affordable data tariffs, increasing government focus on expanding digital connectivity in rural areas and rising coverage of telecom networks in these areas. Further, the changing dynamics after the Covid-19 pandemic and increasing reverse migration have contributed to the growing uptake of internet services in these regions.
The most recent Economic Survey of 2022-23 highlighted this trend and stated that India has added more rural internet subscribers in the past three years (2019-21) compared to urban areas. The number of rural internet subscribers has reached 95.76 million while that of urban internet subscribers has reached 92.81 million.
According to the survey, the government’s efforts to focus on bridging the gap between rural and urban internet penetration have yielded positive results. The growth is attributed to dedicated digital initiatives implemented across rural areas through government schemes such as the BharatNet project, Telecom Development Plan, Aspirational District Scheme, Comprehensive Telecom Development Plan and initiatives in areas affected by left-wing extremism. Today, as the country ramps up the deployment of 5G technology, it has become crucial to enhance internet outreach to rural areas to enable ubiquitous availability of 5G networks.
Changing dynamics post-Covid-19
The digital landscape in rural India has been expanding rapidly post the Covid-19 pandemic. In fact, the Economic Survey highlights that the significant growth in rural India was the primary shock absorber during the Covid-19 pandemic when both business and consumer demands were impacted. This is due to a significant portion of the workforce who reverse-migrated to rural areas, resulting in a surge in internet demand.
Development of digital infrastructure
Over the years, the development of digital infrastructure has played a vital role in scaling up digital adoption in rural areas by enabling the disbursement of funds into the bank accounts of beneficiaries under numerous government schemes. Further, with restricted accessibility to educational institutions during the Covid-19 pandemic, the digital infrastructure in government schools helped enable e-learning for students. According to the Economic Survey, the increase in online schooling for a considerable period post the Covid-19 pandemic led to a rise in internet subscriptions in rural areas and helped mitigate the learning loss significantly. It also facilitated the successful roll-out of mass vaccination in rural areas. The survey highlights that the government’s increased impetus to bridging the gap between urban and rural connectivity is reflected in the 200 per cent increase in rural internet subscriptions between 2015 and 2021 compared to 158 per cent in urban areas.
Creating digital linkages at the grassroots level
As per the Ministry of Communications, out of 644,131 villages (as per the Registrar General of India (RGI) as of November 2019) in the country, around 598,951 (93 per cent) villages have 4G mobile network connectivity while 45,180 villages do not have 4G mobile coverage. The government has launched a project to provide 4G mobile services in uncovered villages to create digital linkages at the grassroots level. The project aims to provide 4G mobile services in 24,680 uncovered villages in remote and difficult areas. Bharat Sanchar Nigam Limited will be executing the project, which is expected to be completed by December 2023. Further, 6,279 villages that have 2G/3G connectivity will be upgraded to 4G under the project.
Telcos expand their rural presence
Telecom operators are stepping up their efforts to leverage the increasing rural internet penetration. Recently, Vodafone Idea Limited (Vi) rolled out the new format “Vi Shops” in Tier III markets across 18 states to scale up its rural presence. The telco has launched Vi Shops across multiple towns in Andhra Pradesh, Bihar, Chhattisgarh, Goa, Gujarat, Haryana, Jharkhand, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Odisha, Punjab, Rajasthan, Tamil Nadu, Telangana, Uttar Pradesh and West Bengal. These shops aim to provide quick support and handholding, along with the entire bouquet of Vi prepaid products and services, to enable an enhanced customer experience and closer engagement.
While Vi has had a strong presence in rural areas, its market share in these areas seems to be declining as Bharti Airtel and Reliance Jio aggressively focus on the rural markets. Recently, Airtel announced its plans to expand its 5G coverage to key rural areas by March 2024. As per Airtel, over 40 per cent of its net 4G subscribers are from rural areas, and the company aims to bridge the coverage gap between its subscribers in the rural and urban regions. Jio has also been actively seeking subscribers in rural areas.
As a result, Vi’s rural subscriber base has been declining over the past few years. According to the Telecom Regulatory Authority of India (TRAI), Vi’s rural market base declined from 157 million in October 2020 to 136 million in October 2021 and 121 million in October 2022. However, Airtel’s subscriber base in rural markets grew from 156 million in October 2020 to 170 million in October 2021 and 177 million in October 2022. Jio’s rural subscriber base has also witnessed similar growth, though it slowed down in 2022. Jio had 171 million rural subscribers in October 2020, which increased to 184 million in 2021 and 185 million in October 2022.
Renewed focus on digital inclusion
Scaling up digital inclusion has become a priority for the government. In a bid to increase digital inclusion, TRAI recently announced plans to release a consultation paper focused on three critical aspects – connectivity, handsets and literacy. According to the regulator, all areas in the country need to benefit from the latest technologies such as 5G, and this can only happen through digital inclusion. While the prices of 2G, 3G and 4G handsets have decreased significantly, the prices of 5G handsets are still high, making them unaffordable for the masses, particularly in rural areas where purchasing power is lower, leading to lower uptake of 5G networks.
Further, the regulator believes that the country needs to develop its own distinguished digital models focused on resolving socio-economic issues as opposed to the models that are popular in other developed nations, which largely focus on the monetary benefits.
Rural all the way
Net, net, the government, private telcos as well as other stakeholders are betting big on the transformation of rural India to ensure ubiquitous access to next-generation technologies across the country. According to Ashwini Vaishnaw, minister of railways, communications and electronics and information technology, the government is investing nearly $30 billion to ensure last-mile network accessibility for 4G and 5G in villages across the country. The investment is in line with the government’s aim to build a robust digital infrastructure in rural areas and create an ecosystem of village-level entrepreneurs.
Improving digital connectivity in rural areas requires specific strategies that take into account the different demographic composition of these regions. Efforts to enhance digital access in rural areas should prioritise addressing regional and gender divides. Given the varying terrains and characteristics of villages across different states, it is important to tailor initiatives to the local context in order to promote digital participation, literacy and adoption. These measures can help rural areas take advantage of the current 5G wave.
Kuhu Singh Abbhi