From connection to opportunity: Why investing in digital infrastructure matters

Juho Uusihakala Senior Development Impact Adviser juho.uusihakala@finnfund.fi

Access to affordable, high-speed internet is no longer a luxury but a prerequisite for economic participation and social inclusion. Yet, in many emerging markets, the digital divide remains stark. This is why Finnfund invests in companies like Fibertime, which is rolling out fibre connectivity in a pay-as-you-go model across South African townships.

Recent research by Stellenbosch University’s Bureau for Economic Research (BER), supported by Nokia, confirms what we anticipated in our original impact assessment: fiber internet can be truly transformative when business models are designed to serve lower-income communities. Two studies conducted in Kayamandi, a low-income township, provide rare causal evidence of the benefits of fibre connectivity.

What the research shows

I have highlighted three major developments confirmed by the BER study:

Lower connectivity costs and broader online activity: Households with home fibre spent less on mobile data without increasing total connectivity costs. More importantly, they shifted from using the internet mainly for communication to more productive activities, such as online learning and job search.

I love the description often used by Fibertime, that the difference between mobile and fiber broadband is analogous to bottled versus tap water! Both serve a purpose, but it becomes very expensive if you need to water a tree with bottled water. This, I believe, explains the rationale and beauty of fixed, unlimited connectivity.
Improved employment outcomes: Among residents already engaged in paid work, fibre access significantly increased the likelihood of moving into more stable, formal sector jobs.
Entrepreneurship boost: Fibre connectivity more than doubled the probability of self-employment in early-connected homes. Affordable broadband lowered barriers to running small businesses, from making payments to communicating with customers.

A typical Kayamandi dweller is likely to be a black woman between 26 and 35 years of age, single parenting, high school completed and looking for a job or joggling between jobs. For them, getting a permanent job or increasing profitability of self-employment is like winning in lottery.

These findings underscore a critical point: digital inclusion is economic inclusion. Fibre doesn’t just connect homes, it connects people to opportunities.

Why this matters for impact investors

For Finnfund, investing in digital infrastructure is about more than technology. It’s about enabling upward mobility, fostering entrepreneurship, and reducing inequality. The ability to search for jobs online, access educational resources, and run a business from home can change lives especially in communities historically excluded from the digital economy. Meaningful internet access also unlocks digital financial services, telemedicine, and e-commerce, creating new pathways for inclusive growth. By bridging geographic and economic gaps, connectivity empowers individuals and businesses to participate fully in the global digital economy.

The BER studies validate our thesis: investments in connectivity can deliver measurable social and economic impact. While fibre alone cannot solve structural employment challenges, it removes key frictions -information gaps, transaction costs – that limit participation in the formal economy.

There are millions of brilliant, ambitious young people who don’t want pity or philanthropy. They just want decent internet. And our job is to help them to get just that.

The role of partnerships

Nokia’s support for this research highlights the importance of collaboration between technology leaders and impact investors. By combining expertise and resources, we can accelerate digital inclusion and ensure that connectivity reaches those who need it most.

As demand for digital services grows, so does the need for inclusive infrastructure. Our investment in Fibertime is part of a broader strategy to support businesses that expand access to essential services in Africa and beyond. The evidence from Kayamandi confirms we are on the right track: closing the connectivity gap is a powerful lever for sustainable development.

Now with the AI revolution rapidly spreading across the globe, investments into digital infrastructure are even more critical to ensure that inequalities in opportunities do not grow further.