Afghanistan - Telecoms, Mobile, Internet & Forecasts

Additional Information

Executive summary

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 (e)
Fixed-line services:
Total number of subscribers101,000120,000
Annual growth25%19%
Fixed-line penetration (population)0.4%0.4%
Fixed-line penetration (household)2.7%3.1%
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 million16 million
Annual growth124%53%
Mobile penetration (population)36%52%
(Source: BuddeComm)

Key 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;This report provides an overview of the trends and developments in the telecommunications markets in Afghanistan. Subjects covered include:

Key Statistics;
Market and Industry Overviews;
Regulatory Environment;
Infrastructure;
Mobile Market;
Internet Market.