Telecom

Telecommunication in General:

In 2002, Afghanistan’s prospects for telecom appeared bleak. The political instability and profound poverty following 23 years of continuous conflict suggested that Afghanistan would have neither the economic means nor political will to restore its shattered communications infrastructure. After just two years, dramatic progress has been made. The government has approved a sector development action plan; put in place a progressive policy and regulatory roadmap; and attracted an estimated $130 million in private investment. In this short time, more than 170,000 mobile users have been added – increasing the number of people with access to telephone by a factor of five.

Throughout 2004 the Ministry of Communications have begin implementation of several major projects that promise to make a profound impact on the country’s overall pace of change and continued progress toward civil security. A new telecommunications law under the recently ratified constitution will separate the government’s role from service operation; establish an independent regulatory authority; identify clear property rights for the private sector; and define market-oriented rules for interconnection and the issuance of licenses and tariffs.

Significant commercial projects are also being initiated by the state carrier, Afghan Telecom, with the assistance of the international donor community. A national satellite network will be commissioned to link provincial capitals and major towns as well as outlying district areas. Local access networks are being expanded with wireless systems acquired through international competitive tenders, and a planed fiber optic backbone is expected to progress from feasibility and planning to implementation, with active private sector participation. Despite the overall level of market risk, Afghanistan has embraced a liberal approach to the private sector and telecom growth in the near term is expected to be strong.

Telecom Policy Environment:

Afghanistan began its telecom reconstruction program in June 2002 following a national assembly known as the loya jirga. At that time, a new Minister of Communications was appointed, H.E. Massoom Stanekzai, and the Karzai government set in motion a strategy to enlist information and communications technologies in support of the broader effort to rebuild the nation. Telecom is seen as essential to stimulating economic activity in all sectors, promoting democracy and civil security, and restoring administrative control.

Afghanistan is committed to following international best practices in telecommunications sector reform and has embraced a market regime based on aggressive market liberalization, transparent regulation, fair competition and private sector participation. Currently communications between the central government and regional authorities are ineffective. The Government and Bank of Afghanistan have limited ability to collect taxes and customs duties, establish a modern banking system or effectively manage personnel payments and the national money supply. On a political level, reliable communications is considered critical to the success of the planned national elections and to increasing Kabul’s administrative power throughout the country. Communications is also regarded as an important enabler that lays the foundation for a recovering Afghanistan that will be vibrant, productive and strong.

a. Policies Adopted by MoC:

In October 2002, the Ministry published a national Telecommunications Development Strategy that outlines the key infrastructure development initiatives the Government seeks to accomplish. The Strategy is a roadmap of principle objectives for the sector, and forms the basis for the Government’s appeal to the international donor community for funding.

In October 2003, Afghanistan approved a comprehensive Telecommunications and Internet Policy that was ratified and published by the Cabinet. Both the Strategy and Policy projects were facilitated through a technical assistance grant from USTDA awarded to Network Dynamics Associates.

The Policy was developed through an engagement process that brought together a wide range of constituencies from official Afghan government sources, multilateral funding agencies, bilateral donors, non governmental organizations, expatriate Afghan-Americans, and concerned Afghan citizens. The themes and substance of the Policy thus reflect a broad spectrum of discourse, and are calibrated closely with the Government’s overall economic development and market liberalization goals.

b. Private Sector Investment:

c. International Assistance:

The U.S. government has also taken a largely hands-off approach to underwriting Afghanistan’s telecoms, despite the obvious need for emergency support following the war. In late 2003, it was recognized that much of the Afghan government’s difficulties with administrative control, revenue collection and stabilizing domestic security were linked in part to the absence of effective communications. Equally important, the holding of national elections requires an ability to communicate with remote polling locations. In October 2003 the $87 billion supplemental spending bill approved by Congress included a slice of funding for Afghan telecom-related projects embedded in a provincial reconstruction plan. The MoC is the coordinator for an integrated effort that combines diverse requirements of the MoC, the Ministry of the Interior (police and judiciary), and the Ministry of Urban Affairs. This “Rebuild, Reconnect, Reunite” initiative is meant to assist with preparations for national elections; make improvements to civil security and police operations; and reestablish the central Government’s presence in the regions. It will also enable the Ministry of Finance to more efficiently manage financial flows. The U.S. is estimated to have committed $25 million and the UK £20 million ($37 million), for a total of about $62 million. About a third of the total is expected to be applied toward communications facilities.

After a two year review period, the World Bank is preparing to disburse technical assistance grants and low-interest loans totaling approximately $22 million. A significant portion will be applied toward establishment of a “Government Communications Network” to provide a satellite backbone facility for Afghan Telecom (an apparent reversal of the Bank’s policy not to lend to public sector telecom operators), reconstruction of the main international earth station in Kabul, and restoration of a microwave link to Pakistan.

Telecom Market Overview:

Afghanistan has an estimated 85,000 working telephone main lines for a population of approximately 25 million. This equates to a teledensity of about 0.34 main lines per 100 population, one of the lowest levels in the world. This capacity in early 2004 represents a doubling of the teledensity in 2002. In August 2003, the MoC signed a contract with Huawei and ZTE for a total of 87,000 lines. Approximately half of the new lines are estimated to be in installed. Additional tenders for switching are under consideration; the pace of expansion is expected to be governed primarily by access to investment capital. The government hopes to have 180,000 lines in service by the end of 2004, and replace all remaining analog facilities. Kabul has by far the greatest number of installed and active lines.

Mobile growth has been extremely rapid, reaching an estimated 170,000 subscribers as of 2Q04. Two private sector operators have been licensed to operate, both using the GSM standard: Afghan Wireless Communications Corp (Afghan Wireless) (http://www.afghanwireless.com/) and Telecom Development Company Afghanistan Ltd., which operates under the brand name Roshan (www.roshan.af). The Policy indicates that no other providers of GSM mobile telephony services will be introduced before January 10, 2006.

Afghan Wireless inaugurated GSM services in Kabul in April 2002. Since that time, the company has invested an estimated $75 million, grown to 90,000 subscribers and 800 employees, and has deployed operations in Herat, Mazar-i-sharif and Kandahar. Traffic on the network quickly exceeded all expectations. In late 2003 Afghan Wireless completed a $14 million upgrade of its switching platform to accommodate accelerating demand, utilizing a 100,000-line Siemens switching platform that replaced smaller switches from the U.S. vendor, Tecor. Afghan Wireless is 80 percent owned by Telecommunications Systems International (TSI) of the US and 20 percent by the Afghan Ministry of Communications.

Roshan began operations on July 27, 2003. It secured an estimated 60,000 subscribers in its first six months of operations, and surpassed its first-year operating targets within several months of project launch. It is estimated to have nearly split the market with Afghan Wireless. The firm is a consortium led by the Aga Khan Foundation for Economic Development (AKFED), the economic development arm of the Aga Khan Development Network (AKDN), which holds 51 percent. Other shareholders include Monaco Telecom International with 35 percent; MCT, a US telecom holding company with networks in Central Asia, with 9 percent; and the balance of 5 percent is owned by Alcatel. Its initial capital base is $55 million and will enable the firm to provide coverage in Kabul, Herat, Kandahar, Mazar-i-Sharif, Jalalabad and Kunduz. It has begun providing coverage on the main highways linking the cities. Roshan plans a total investment of at least US$120 million.

As of 1Q2004, the MoC was in the final stages of a competitive tender for a national satellite hub station and associated backbone network linking all 32 provincial capitals. Funding for the “Government Communications Network” (GCN) project for Afghan Telecom is slated to be provided by World Bank. The Afghan Assistance Coordination Authority (AACA), an arm of the government, released a tender in December 2003 for initial connectivity to 18 provinces. The project also includes local networks are terminating offices.

Additionally, and also in December 2003, MoC issued a separate tender for a Districts Communications Network satellite project to provide basic connectivity to all 355 Districts in Afghanistan, managed by the UN Mission in Afghanistan. Public switched network communications in rural areas are virtually non-existent. Many outlying communities, particularly in areas with large refugee populations, only have push-to-talk access over radio frequency (RF) systems operated or donated by the UN, USAID and other relief organizations. The planned District network is a part of the “Rebuild, Reconnect, Reunite” effort for provincial facilities. It will connect the new Hub Station in Kabul to small earth stations providing basic 4-line connectivity to each location. The first phase will provide links between Kabul and 8 districts (Mohammad Agha (Logar Province), Sayed Karam (Paktia Province), Muqur (Ghazni Province), Ghorband (Parwan Province), Nahreen (Baghlan Province), Yakawlang (Bamyan Province), Maiwand and Shorabak (Qandahar Province). The second phase of the project will cover 78 border districts. The third phase will cover 269 remaining districts. The network will be owned and operated by the MoC through its operating entity, Afghan Telecom, though the government is entertaining operations and maintenance proposals.

The government of India, lead by TCIL, its telecom consulting operation, will build wireless local loop networks in 11 Tier 2 cities, under a build, transfer, operate scheme. The project for 200,000 lines is supported by a $14 million tied aid grant and only Indian companies are participating in the tender, announced in January 2004.

The MoC is currently in the planning stages for specifying a national fiber optic ring. The MoC proposes to build a 3300km backbone linking many of the principal cities of Afghanistan, mainly following the route of the national roadway system. The cities include Kabul, Maidansher, Ghazni, Kandahar, Herat, Qala e Naw, Maimana, Shiberghan, Mazar e Sharif, Aibak, Polikhomree and Charikar. The backbone will also form the basis of a “Digital Silk Road” by providing connectivity to regional cable routes:
.. Herat to Iran and Turkmenistan;
.. Kandahar to Pakistan;
.. Mazar-e-Sharif to Uzbekistan; and
.. Kunduz to Tajikistan.
Due to the mountainous terrain of the countryside, an estimated 85% of the route will be covered by buried fiber optic cable.
Companies working in Afghanistan
Afghan Telecom (landline)
Roshan
AWCC
Areeba
Etisalat

Afghan Telecom:

In addition to the 4 mobile licensees, the MCIT, specifically the licensor the Afghanistan Telecommunications Regulatory Authority (ATRA), also formally licensed Afghan Telecom in April 2006 to provide unified telecommunications services.

Afghan Telecom has implemented 165,000 digital lines using CDMA WLL in 24 provinces, connecting all provincial capitals as well as all districts via satellite network providing voice, Internet and video conferencing services in Afghanistan.
For more information click http://www.afghantelecom.af/
COMPLETED PROJECTS:

The following projects were successfully conducted and implemented by the Ministry of Communications and Information Technology.

RUNNING PROJECTS:

The following projects are currently undertaking and being implemented by the Ministry of Communications and Information Technology.

ROSHAN:

Operator Name Telecom Development Company Afghanistan Ltd.
Network Name ROSHAN
Technology GSM 900
Network Status Live June 2003
Roaming Partners http://www.gsmworld.com/roaming/gsminfo/roa_aftd.shtml

Coverage Map http://www.gsmworld.com/cgi-in/ni_map.pl?cc=af&net=td

AWCC:

Operator Name Afghan Wireless Communication Company
Network Name AWCC
Technology GSM 900/1800
Network Status Live April 2002
Roaming Partners
http://www.gsmworld.com/roaming/gsminfo/roa_afts.shtml

Coverage Map http://www.gsmworld.com/cgi-in/ni_map.pl?cc=af&net=td

AREEBA:

Operator Name Areeba Afghanistan
Network Name Areeba
Technology GSM 900/1800
Network Status Live July 2006
Roaming Partners Areeba Afghanistan has not declared any active roaming agreements with other network operators.
http://www.gsmworld.com/roaming/gsminfo/roa_afar.shtml

Coverage Map Will be provide later

Web Site www.areeba.com.af

ETISALAT:

Coverage Map Will be provide later
Web Site www.etisalat.af

Afghanistan Launches the Privatization of Afghan Telecom