Shriti Vadera replaces Stephen Timms' in the post of communications minister at the Department for Business, Enterprise & Regulatory Reform.
She will take over from Timms, who had been in talks with internet service providers (ISPs) in November about how to improve broadband access in the UK and faces the challenge of deciding how the government should encourage private investment in broadband networks.
Gareth Thomas, minister for trade and development, said that the biggest challenge for the government remained encouraging investment from the private sector to build fast broadband networks.
"There is no obvious business case for the private sector to invest in networks," he said.
Thomas said renewing the telecoms infrastructure in the UK was a priority. He had seen positive signs from ISPs that they were willing to talk with government about ways they could make investments together, rather than have the government intervene with potentially "disruptive" effects to the broadband market.
Neil Berkett, CEO of broadband provider Virgin Media, said the government's current "hands-off" approach to regulating investment in broadband was the right one and warned off intervention.
"Regulation is neither necessary nor recommended. It would disincentivise companies from investing in networks," said Berkett.
He said the government had a role to play in educating UK businesses about the technical set-ups they needed to optimise their broadband connections, as well as creating demand for higher speed broadband by informing businesses about how they could best use broadband applications.
Andy Carter, assistant director of the ICT infrastructure and applications policy at the Department of Business, Enterprise & Regulatory Reform, said the decision for government to intervene in encouraging broadband investment in areas where it would be uneconomic for operators to do so, through regulation, was difficult to answer.
"It is not as simple as the government going in and making the investment. Competition in the UK broadband market so far has meant more people are getting faster speeds at a lower price," he said.
He said the government was conscious of the needs of businesses and that regulation could be a key factor in ensuring the gap between rural and urban broadband speeds was not exasperated.