From Connectivity to Cost Recovery: Building Sustainable, Scalable Digital Ecosystems

Digital access alone does not guarantee economic advancement. In fact, without proper frameworks, connectivity can potentially impede rather than enhance productivity.

This digital paradox manifests in multiple dimensions. For connectivity operators, there is little commercial incentive in providing internet service to remote areas with low population density. For administrators, the initial excitement with new connectivity projects often gives way to the practical reality of unsustainable maintenance costs once initial funding cycles conclude. Last but not least, for users in remote communities with limited exposure to alternative economic opportunities, internet access often translates primarily into entertainment consumption and social media engagement.

This multifaceted challenge urges a reimagination of digital development beyond the ability to be online. Internet access as a long-term fundamental right must be financially viable and economically productive.

Operators and Market Viability: Commercial Disincentives in Low-Density Population Areas

The fundamental economics of connectivity infrastructure presents significant challenges in remote and rural areas. Traditional telecommunications companies operate on business models that require substantial user density to justify infrastructure investments. In remote regions, high deployment costs combined with low population density creates a fundamental market failure that has left many without adequate connectivity.

The challenge is compounded by ongoing maintenance costs. Even when initial deployment funding is secured through grants or development initiatives, the long-term operational expenses in remote areas remain prohibitively high. Physical infrastructure in challenging environments requires more frequent maintenance, while the logistics of reaching remote sites adds substantial costs that cannot be easily recovered from small user bases.

Satellite Technology: Overcoming Geographical Barriers Despite High Costs

Satellite technology has emerged as a promising solution for bridging the connectivity gap in remote areas, particularly with the advent of Low-Earth Orbit (LEO) satellite constellations. These systems can deliver broadband-level connectivity to virtually any location, regardless of terrain or distance from urban centres.

However, significant barriers remain. The upfront costs of satellite equipment can be prohibitive for low-income communities, with terminal costs often exceeding USD 500. Additionally, monthly service fees, while competitive with urban broadband in some markets, can still represent a substantial portion of household income in economically disadvantaged areas.

States and connectivity providers are increasingly recognising satellite's role in comprehensive connectivity strategies. While fibre remains the gold standard for connectivity, satellite can provide immediate relief while longer-term infrastructure is developed, especially in regions where terrain makes traditional infrastructure deployment challenging.

Post-Funding Sustainability: Ensuring Long-Term Impact

A key consideration in remote connectivity initiatives is sustaining operations after the initial deployment phase. Connectivity projects typically begin with robust funding for infrastructure establishment – usually spanning three to five years. However, the true measure of success lies in what happens after this initial period.

The transition from deployment to long-term operations is a critical opportunity for sustained innovation and community empowerment. Successful initiatives increasingly incorporate sustainability planning from the outset, developing governance structures and revenue models that ensure infrastructure remains operational and effective for years to come.

User Online Activity: From Passive Consumption to Digital Productivity

Entertainment-Focused Internet Usage

For new users, social media and entertainment platforms (e.g. video streaming and gaming) often serve as the primary gateway to the internet. While entertainment and social connection are legitimate uses of connectivity, there are several factors that contribute to entertainment-focused usage patterns:

• Limited awareness of productive digital opportunities: Many new internet users are simply unaware of how connectivity can enhance their economic activities.

• Ease of use of entertainment platforms: Social media and video platforms are designed for immediate engagement with minimal learning curves, while productive applications often require more skills development.

• Network effects of social platforms: The social nature of platforms like Facebook or TikTok creates powerful incentives for adoption as users seek to connect with friends and family.

• Content relevance: Entertainment content is often more immediately relevant and engaging that productive applications, particularly when the latter are not adapted to local languages, cultures, and economic contexts.

Addressing this issue does not necessarily require restricting entertainment uses but rather expanding awareness and capacity for productive digital engagement alongside them.

Digital Risks and ‘Fake News’

Rapid expansion of connectivity without corresponding digital literacy exposes newly connected communities to a range of vulnerabilities. These digital risks manifest primarily through misinformation and cybersecurity threats, both of which can undermine the economic and social benefits that connectivity promises.

As mentioned in an earlier thought piece, misinformation spreads rapidly due to a combination of limited digital literacy, uncritical trust in digital sources, language barriers in fact-checking resources, and the amplifying effect of close-knit social networks. In 2017 alone, the United Nations Capital Development Fund noted that cybercrime cost Africa an estimated USD 3.5 billion in direct losses.

The threat landscape is multifaceted:

• Information evaluation challenges: Without developed critical thinking skills for digital environments, users struggle to distinguish credible information from fake news, leading to potential health risks, community conflicts and even violence in extreme cases.

• Technical vulnerabilities: Phishing attacks, malware, and device compromise exploit users’ limited familiarity with digital security norms, potentially rendering expensive devices unusable – a devastating outcome for those who have invested significant resources.

• Economic exploitation: Online fraud and scams target users unfamiliar with common deception patterns, often resulting in financial losses that can be catastrophic in low-income communities.

• Privacy and identity risks: Excessive data collection, privacy violations, and identity theft can have long-term consequences for personal security and economic opportunity, undermining the benefits connectivity is meant to deliver.

To address these issues, internet access must be matched by robust internet security measures, where both preventive education and protective systems work in tandem. Digital safety education must be integrated into connectivity initiatives from the beginning, while platforms and services need to implement security-by-design principles that protect even users with limited security awareness. Such measures are fundamental for digital economic ecosystems and critical infrastructure to thrive and effectively support rural productivity and growth.

Mexico to Malaysia: Cost Recovery Models in Action

Despite the challenges outlined above, there are several remote connectivity initiatives, which have successfully implemented cost-recovery mechanisms to remain sustainable and beneficial to the communities that they serve, such as:

• Tecnologías Indígenas Comunitarias (TIC) in Mexico – a community-owned network, which operates under a social telecommunications concession that allows it to provide mobile voice and data services in remote indigenous communities. TIC currently operates 16 telephony networks and 32 mobile virtual network operator (MVNO) local cooperatives in Oxaca, Mexico.

• Digital Village 365 (Kampung Digital 365) in Malaysia – a private sector-led initiative addressing rural digital and economic inclusion among Malaysia’s indigenous (Orang Asli) communities. Initiated by co-founders of an e-commerce platform and courier service provider (Shopla365 and Parcel 365), Digital Village 365 combines internet access, solar-powered electricity, a secure e-payment system and logistical support to create a sustainable, cost-recoverable digital ecosystem benefiting over 2000 users in 10 Orang Asli villages.

These initiatives share common features that underpin their effectiveness, scalability and longevity:

• Appropriate Technology and Infrastructure Tailored to Local Conditions: TIC deploys wireless mesh and small-scale cellular networks suited to indigenous communities in Oaxaca, while Digital Village 365 leverages satellite internet combined with solar-powered electricity to overcome grid limitations in remote Malaysian villages. This context-sensitive approach ensures solutions are practical and reliable.

• Skills Development and Diversified Income Generation: TIC builds technical capacity through community training to operate and maintain networks, while Digital Village 365’s Entrepreneur Transformation Programme equips villagers with skills in agriculture, small business, and crafts. These income-generating activities create revenue streams that support operational costs, enabling cost recovery without relying solely on external funding.

• Reinvestment of Revenues: Sustainable financial models are integral to TIC and Digital Village 365, with revenue reinvested into maintenance and sustainable operations rather than extracted as profit.

• Community Ownership and Engagement: The success of these initiatives is underpinned by persistent and time-intensive efforts of building trust to introduce new technology, adapting to local needs, and fostering ownership Both TIC and Digital Village 365 involve local community members as active participants – whether as network operators, local agents, or entrepreneurs – ensuring that the community has a direct stake in the success and maintenance of the infrastructure, nurturing accountability and long-term sustainability.

Way Forward: Productive Connectivity for Economic Self-Sufficiency

The successes of TIC in Mexico and Digital Village 365 in Malaysia represent just the tip of the iceberg of what can be achieved when digital ecosystems are effectively integrated with local economic systems. Similarly, Welchman Keen’s Economic Micro Hub stands out as a signature productivity solution for connectivity. Their modular, community-driven model with built-in cost recovery mechanisms enables governments to not only engage and deliver essential services to remote communities, but also support rural economic opportunities and growth.

Governments can build on and add value to these local-level initiatives by integrating these efforts within their broader development strategies. This integration may involve the coordinated advancement of transportation, logistics, energy, and financial infrastructure, which together enable rural communities to fully leverage digital connectivity. For example, reliable transport networks facilitate the movement of goods ordered online, while solar energy solutions provide power in off-grid areas. Community spaces equipped with connectivity and power serve as hubs for digital activities, and financial agent networks bridge digital and cash economies.

Such an integrated approach has the potential to generate significant secondary economic benefits, creating jobs in transport, logistics, tourism, retail, and infrastructure maintenance – sectors accessible to those with limited digital skills and vital for building resilient rural economies. Moreover, the growth of local digital service providers – such as digital literacy trainers, technical support, content creators, and e-commerce enablers – further embeds digital opportunities within communities, fostering employment and skills development.

Achieving this level of integration requires government readiness characterised by coordinated cross-ministerial planning, multi-level governance frameworks, adaptable regulatory environments, and data-driven decision-making to align investments with local priorities. Though seemingly complex, such integration is achievable by meticulously optimising existing resources and placing public-private partnerships at the fore of comprehensive digital ecosystems.