Mind the B-Gap: India leads on digital inclusion, but affordability remains the next frontier for telco growth

India, 18 June 2025: Millions of would-be customers remain offline across Asia’s fastest-growing digital economies. This is not a lifestyle choice; it’s because telcos are overlooking them — and a big growth opportunity in the process. In India, Vietnam and the Philippines alone, over 600 million people still lack affordable access to the internet. CloudMosa, a pioneering cloud and mobile technology company, today released its inaugural B–Gap Barometer report, exploring the barriers keeping people offline in markets with network access as well as attitudes to potential solutions.

 

 

Based on insights from senior telecommunication leaders across the digitally ascending markets of India, Vietnam, and the Philippines, the report maps telcos’ 2G-to-4G migration, identifies persistent barriers to digital inclusion, and outlines how decision-makers are rethinking innovation and business strategies amid network transitions. The research also reveals the shift we’re seeing in digital inclusion becoming a strategic business priority, underscoring affordable access as the next frontier for growth. With India contributing the highest number of sole telco decision-makers surveyed, the report offers a uniquely authoritative lens on the country’s progress and its potential.

 

India has emerged as a regional frontrunner in closing the digital divide, driven by its world-class digital infrastructure and bold inclusion initiatives. But while 4G and 5G rollouts gain momentum, nearly 300 million people in India still remain on 2G networks or offline altogether, not due to infrastructure gaps, but because they can’t yet afford a device that brings them online or upstream. Achieving digital inclusion requires (A) connectivity + (B) affordable devices with compelling applications. That affordable device divide — what CloudMosa calls the “B–Gap” — represents both a social challenge and a massive commercial opportunity. As appetite to move up the digital value chain increases, Indian telcos are uniquely positioned to unlock new growth by acknowledging and adapting to the needs of the 2G consumer segment.

 

 

Forty percent of Indian telco leaders say that up to half their company’s user base is still dependent on 2G. For many, the barrier isn’t coverage but cost. Feature phones remain the preferred device for millions globally, prized for their affordability, simplicity and reliability. This trend is especially pronounced in India, where 75% of users continue to rely on these devices, compared to 21% in the Philippines and 20% in Vietnam. Meanwhile, more than half of Indian telcos cite the cost of expanding rural networks as their top operational hurdle. These figures make it clear that for India, inclusion depends on affordability, and that means inexpensive devices must be part of the solution.

 

While the rest of the world is rushing towards 5G, these users present the region’s most overlooked commercial opportunities. Indian telcos are uniquely positioned to move them up the digital value chain and tap new sources of revenue while driving broader progress in education, employment, economic mobility, and social inclusion.

 

 

As telcos continue to grapple with legacy network costs, stagnant average rate per user (ARPU), or how to expand to underserved markets, digital inclusion is no longer a CSR initiative. It is becoming a critical commercial strategy to reach more users across digitally ascending markets.

 

A staggering 97% of industry players across the three markets surveyed pointed to digital inclusion as a central component of their business strategy, with the biggest driver being bridging the digital divide (71%), followed by aligning with CSR goals (56%). More than half (53%) see inclusion helping with market expansion, customer retention and loyalty. The benefits are multifaceted, but the bottom line is clear: digital inclusion is a business growth engine that telcos can’t afford to ignore.

 

Indian telcos are also more likely than their regional peers to connect inclusion with business growth. Compared to 89% in Vietnam and 93% in the Philippines, Indian telcos show the strongest belief in the alignment between inclusion and long-term commercial value. This reflects growing recognition that the next wave of customer acquisition and loyalty will come from first-time internet users — and that affordability-driven solutions will be the key to reaching them.

 

While tech affordability has long been a challenge, key players are now presented with a solution in the form of cloud-based mobile devices to reach wider communities. Developed by CloudMosa, Cloud Phone is a breakthrough solution that transforms low-cost feature phones into modern, internet-capable devices. By shifting computing and data processing to the cloud, Cloud Phone delivers seamless online experiences that were previously out of reach for users on basic handsets.

 

Telco leaders feel positively about this technology in helping to bridge the gap for billions of people worldwide who still lack crucial access. Among Indian telco leaders, the appetite for these solutions is especially strong. Ninety-six percent believe cloud-based feature phones can help close the B–Gap, while 89% see the ability to run premium apps on basic devices as a game-changer. India also leads all markets in openness to refurbished and simplified smartphones, reflecting a broader consumer readiness to engage digitally, as long as access is affordable. As the report shows, India’s telcos are not just confronting the B–Gap — they’re actively looking for ways to close it. Cloud-based devices offer a way forward: a scalable, high-margin solution that supports both commercial growth and national inclusion goals.

 

 

For Indian telcos, the question is no longer whether to prioritize digital inclusion, it’s how to do so profitably and at scale. Traditionally viewed as low revenue customers, 2G feature phone users now represent a significant untapped opportunity. With cloud-based solutions reducing device and data costs, telcos can serve this segment profitably, offering app-based services on feature phones that operate like smartphones.

 

India has already proven its leadership in digital innovation. With the right partnerships, pricing models, and cloud-first mindset, it has the opportunity to lead the world in turning inclusion into impact and opportunity into long-term growth. Solutions such as Cloud Phone offer a high-margin innovation platform that helps telcos unlock new growth while advancing national digital transformation goals and supporting inclusion.