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Telecommunications in Afghanistan
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On the surface, Afghanistan’s nascent telecommunications sector could be considered a success: Four providers have invested more than US$1 billion in building a mobile phone network in one of the world’s poorest countries. It wasn’t so long ago that Afghans would have to travel to neighboring Pakistan to make an international call.
The Afghan government under former President Burhanuddin Rabbani focused on building a telecom network for the war-ravaged nation in the mid-1990s. “The situation in Afghanistan had become so bad,” says Ehsan Bayat, founder of Afghan Wireless Communication Company (AWCC), the country’s first mobile phone provider, “that someone had sold the ’93′ country code to a porn company.” The nation was able to regain its country code, and the government installed a few hundred lines and small public calling shops.
While the Taliban’s takeover of the government in 1996 and ensuing U.S. sanctions halted Bayat’s plans of creating a mobile phone network, the idea was quickly revived after 9/11, following the ouster of the regime. But a major obstacle remained: finding companies willing to work in Afghanistan. “We had a design to build a GSM network, and companies like Ericsson and Siemens that were working in Pakistan just were not interested in Afghanistan,” Bayat says. Eventually, Bayat found a company from which to buy machinery. In 2002, AWCC was able to set up a satellite system with Worldcom in Guam.
Afghanistan’s mobile phone industry has since exploded from no users in 2002 to five million to date. When first introduced to the market, a SIM card and handset were priced at nearly US$300. Today, a SIM card goes for US$1 and handsets are available for as little as US$10. The number of users is expected to reach 10 million within the next two years. Users spend an average of US$12 a month.
Building a communications system in a country with battered infrastructure comes with heavy costs. Each of the four mobile phone operators that now hold government GSM licenses made initial investments of up to US$300 million. AWCC, majority-owned by the U.S.-based Telephone Systems International, received the first such license in 2002. The government took a 20% stake in AWCC and signed a 15-year contract with the company. In less than a year, AWCC had signed up 50,000 mobile phone users, surprising even its initial investors.
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