The world is more connected than ever. Some six billion people were online in 2025, according to the International Telecommunication Union (ITU). Yet 2.2 billion remained offline, mostly in low- and middle-income countries. Even that figure understates the challenge: the GSMA estimates that more than three billion people live within mobile-broadband coverage but do not use mobile internet.

That is the gap between coverage and meaningful connectivity. A network signal may be present, but a household may lack an affordable smartphone, reliable power, digital skills, safe access or data it can use often enough to make a real difference.

For years, USAID helped address parts of that problem. It rarely financed national networks directly; instead, it supported the less visible work around them – regulatory reform, training, pilot schemes, investment mobilisation and programmes aimed at people commercial networks struggle to reach.

That support is now sharply diminished. In March 2025, Secretary of State Marco Rubio said 83% of USAID programmes had been cut, with remaining work transferred to the State Department. The implications extend well beyond the development sector: for operators, governments and technology suppliers, the loss may be felt in the projects that make difficult markets viable in the first place.

“USAID had pretty much nothing to do with telecommunications” in the narrow sense, says Steve Rynecki, a former USAID Economic Growth Lead for Asia. “It became very apparent that it was instrumental in a country’s economic growth that you had to incorporate digital into your government development planning and all that plumbing that goes along with that.”

More than a funding source

Rynecki’s career tracks the shift from early ICT projects to today’s debates over cloud infrastructure, low-Earth-orbit satellite services and AI. USAID’s role, he says, was to convene governments, development partners and technology companies around projects that none would necessarily undertake alone.

That could mean assessing a country’s ICT readiness, training policymakers, helping create a universal-service fund, or giving a technology company the confidence to run a pilot in a remote community.

“USAID was kind of like the seal of approval,” Rynecki says. With its local relationships, an agency-backed proposal could help a technology company secure government support and community participation for an initiative in a difficult or rural location.

He points to Mongolia as an early example. As the World Bank planned a national mobile network, USAID’s Last Mile Initiative examined whether the rollout could extend beyond the country’s population centres. The work helped demonstrate a business case for reaching remote communities, he says – a reminder that the final stretch of connectivity is not always commercially obvious at the outset.

The disappearance of that convening role matters as governments and operators confront a new set of infrastructure choices. Rynecki says USAID could bring competitors together under a shared development objective: one company providing training, another cybersecurity expertise, another a digital-learning platform. Private companies remain active, but they are less likely to coordinate around the same social outcomes without an outside partner.

“The private sector is just going to do what the private sector does,” he says. “But again, it’s going to be who can afford the access, and is everyone going to benefit equally from it?”

Interrupted work

For Sonia Jorge, founder and executive director of the Global Digital Inclusion Partnership (GDIP), the most immediate loss is the interruption of long-running relationships with governments and local institutions.

“It was a whole agency that disappeared,” she says. “Everything that the digital development folks at USAID were doing basically stopped being done.”

Jorge says that in Kenya, USAID-supported work had helped bring connectivity and digital-inclusion opportunities to remote counties. The loss is not confined to individual users, she argues. Schools, hospitals and local governments also need reliable digital infrastructure to deliver services and remain accountable to the communities they serve.

GDIP was involved in the Women in the Digital Economy Fund, a multi-partner initiative backed by USAID alongside organisations including the GSMA, Gates Foundation, Reliance Foundation and Microsoft. The programme supported women-centred technology solutions and women-led organisations across South Asia and sub-Saharan Africa.

While elements supported by non-US funders have continued, Jorge says the USAID-backed component was terminated. The fund had paired investment in solutions with policy and regulatory support intended to remove barriers to scale.

“The link that is so strong to make projects successful and impactful has disappeared,” she says.

GDIP’s work on the Pacific component of the Digital Connectivity and Cybersecurity Partnership was also interrupted, according to Jorge. The programme covered 12 Pacific countries and ranged from policy frameworks to investment support across first-mile, middle-mile and last-mile connectivity. She says GDIP was unable even to complete small tasks already under way using US funding.

The consequences, she says, are already visible in countries including Ghana, Mozambique, Kenya, Uganda and Pacific island states where planned work has slowed or stopped.

Coverage is not enough

Jorge’s central argument is that the telecoms industry should be cautious about treating nominal coverage as the end goal.

Meaningful connectivity, she says, requires affordable access, adequate network quality, a device capable of using relevant services, regular use and the skills to participate safely and productively online. A basic connection may allow a call or a mobile-money transaction, but it may not be enough for telemedicine, education, public information or an online business.

“Coverage is not enough,” Jorge says. “If you invest in infrastructure and then people cannot afford to buy the services that that infrastructure supposedly provides, you’re not going to go that far.”

This is particularly acute for women, low-income households and rural communities. USAID-backed programmes were often designed to support women entrepreneurs, local digital businesses and services tailored to excluded groups – areas where a commercial case exists in the long term but may not meet an investor’s return threshold today.

The funding shock also comes as digital infrastructure becomes more central to other sectors. Jorge says delays in expanding connectivity can hold back health, education and agricultural programmes that increasingly depend on digital systems.

“We are cutting the oxygen to feed that digital economy,” she says.

Can the market replace USAID?

Neither Jorge nor Rynecki argues that government aid should replace private investment. Operators, vendors, cloud providers and investors will remain the main builders of digital infrastructure. But both say market incentives alone will not reach every community or address every barrier to use.

Jorge argues that businesses will naturally invest where returns are adequate. In the most remote or low-income areas, public policy, universal-service funds, concessional finance and targeted subsidies are needed to bridge the difference.

“The only way private sector makes those decisions and accepts either no margin or a much lower margin is through their corporate social responsibility or through their foundations,” she says. “That’s very limited.”

She argues for greater investment in digital skills – what she calls digital citizenship – as well as more innovative subsidy and financing programmes for devices and services. Such measures can help users participate safely and build demand on networks that might otherwise remain underused.

Rynecki sees a similar need for blended approaches: community-run models, better-governed universal-service funds, credit guarantees and partnerships that lower risk for commercial players. However, he is sceptical that other donors can replace the scale and convening power lost with USAID’s withdrawal.

The retreat also has a geopolitical dimension. Rynecki argues that USAID’s digital work was intended, at least in part, to support open and competitive internet ecosystems. Without it, he says, developing markets may find it easier to accept integrated offers of infrastructure, cloud services and financing from other major powers.

That does not mean countries lack agency. Nor does it mean that any single supplier is inevitably the wrong choice. But it does make the need for competitive options more urgent.

“A vacuum begs for it to be filled,” Rynecki says.

For developing-market telecoms, the practical test will be whether the next phase of investment reaches beyond the places where the commercial case is already strongest. The global connectivity challenge is no longer simply to build more networks. It is to ensure that people can afford, use and benefit from them – and to find out who will fund the work required to make that possible.