Afghanistan Communication Profile 2012

02/11/2010- In what has certainly been a challenging task, Afghanistan has built some positive momentum in its effort to put national telecom infrastructure in place and to offer effective telecom service throughout the country. The process involved in achieving this, however, has not been a smooth one. The 2001 war in Afghanistan destroyed telecommunications infrastructure that had already been suffering serious disrepair due to neglect by the pre-war Taliban government. The nation’s network of telephone lines was left barely functioning. There were only 12,000 telephones in the capital city, Kabul, with its population of almost 2 million residents.

Pakistan’s capital, Islamabad, and the Pakistani border town of Quetta. Typically, the few telephone services that were in place had not been maintained for 20 years. Setting up an international call could take hours. There existed the remnants of two basic fixed networks, one dating back to the Soviet occupation in 1979, the other a newer, Chinese-built system. By end-2003 recovery had commenced and there were around 37,000 fixed lines in the country, with about 20,000 of these to be found in the capital, Kabul.

In an important strategic move, the government announced in 2005 that licences were to be issued to allow the private sector to establish independent telephone companies. This initiative was called the Local Fixed Services Plan (LFSP). The main objectives of the LFSP licences were to facilitate faster rollout of services to small towns and rural areas and to provide an investment opportunity for small-medium local investors across the country.

The other major impact on telecommunications in Afghanistan came with the introduction and subsequent expansion of the mobile telephone service. In 2003, growing off a low subscriber base, the country’s mobile network operated exclusively at the time by the Afghan Wireless Communications Company (AWCC), started to attract customers at an extraordinary rate. The launch of a second mobile service, operated by Roshan, boosted the market even further and strong subscriber growth continued through 2004 and into 2005. By 2010 there were four mobile operators competing in Afghanistan’s telecom sector; between them they were claiming a total of 13.6 million subscribers by March 2010, representing an overall mobile penetration of 48%. All four were carrying market shares in excess of 20%.

Market highlights:

• * Afghanistan’s mobile market continued on its positive growth path in 2009, with an annual growth rate of more than 30% coming into 2010;
• * With mobile penetration fast approaching 50% by mid-2010, the mobile market has been demonstrating considerable resilience in what has been a most difficult environment;
• * The country’s four mobile operators continued to provide healthy and energetic competition in the mobile market, with all four operators being well represented in terms of market share;
• * The country’s Internet market appears to be growing (if the available statistics are accurate), with a major surge in Internet users reported in 2009 and the likelihood of this continuing through 2010;
• * On a broader front, however, the ongoing political and civil unrest will continue to be of concern to the country and its people, with any deterioration in the situation certainly having an impact on the telecom sector.

Telecoms, Mobile, Internet and Forecasts

Afghanistan is building some positive momentum in its effort to put national telecom infrastructure in place and to offer effective telecom service throughout the country. The process involved in achieving, however, this has not been altogether smooth. The 2001 war in Afghanistan destroyed telecommunications infrastructure that had already been suffering serious disrepair due to neglect by the Taliban government. The nation's network of telephone lines was left barely functioning. There were only 12,000 telephones in the capital city, Kabul, with its population of almost 2 million residents. In 1998, electricity was restored in a few buildings in Kabul and some fixed telephone lines dating back to the 1950s were reconnected in the capital and in Kandahar, via manual exchanges in Pakistan's capital, Islamabad, and the Pakistani border town of Quetta. Typically, the few telephone services that were in place had not been maintained for 20 years. Setting up an international call could take hours. There existed the remnants of two basic fixed networks, one dating to the Soviet occupation in 1979, the other a newer, Chinese-built system. By end-2003, it was estimated that there were a total 37,000 fixed lines in the country, with about 20,000 to be found in the capital, Kabul. In an important strategic move, the government announced in May 2005 that licences were to be issued to allow the private sector to establish independent telephone companies. This initiative was called the Local Fixed Services Plan (LFSP). The main objectives of the LFSP licences were to facilitate faster rollout of services to small towns and rural areas and to provide an investment opportunity for small-medium local investors across the country. The other major impact on telecommunications in Afghanistan came with the introduction and subsequent expansion of the mobile telephone service. Growing off a low subscriber base, in 2003 the country's mobile network operated exclusively at the time by the Afghan Wireless Communications Company (AWCC) started to attract customers at an extraordinary rate. The launch of a second mobile service, operated by Roshan, boosted the market even further and strong subscriber growth continued through 2004 and into 2005. Coming into 2009, there were four mobile operators competing in Afghanistan's telecom sector and they were claiming a total of 10.5 million subscribers between them with an overall mobile penetration of 36%. All four were carrying market shares in excess of 20%. Afghanistan - key telecom parameters - 2008 - 2009 Category20082009 Fixed-line services: Total number of subscribers101,000130,000 Annual growth25%30% Fixed-line penetration (population)0.4%0.4% Fixed-line penetration (household)2.7%3.4% Internet: Total number of subscribers (e)55,00065,000 Annual growth10%18% Internet subscriber penetration (population)0.2%0.2% Internet subscriber penetration (household)1.4%1.7% Mobile services: Total number of subscribers10.5 million12.1 million Annual growth88%38% Mobile penetration (population)36%43% (Source: BuddeComm) Market highlights: The year 2008 saw Afghanistan's mobile market continue on its positive expansion path, with annual growth coming in at 66% for the year; With 36% mobile penetration by March 2009, the mobile market had passed the 10 million subscriber milestone in early 2009; The country's four mobile operators continued to support healthy and energetic competition in the mobile market during 2009, with all four operators being well represented in terms of market share; On a broader front, however, the ongoing political and civil unrest the country had been experiencing, was becoming more concerning in the course of 2009.