Executive summary
Despite what seems to be a never ending war, the mobile operators in Afghanistan are successfully meeting a fundamental need of people to communicate.
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.
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 back to the Soviet occupation in 1979, the other a newer, Chinese-built system. By 2003 recovery had commenced; 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 2011 there were four major mobile operators (and one minor one) competing in Afghanistan’s telecom sector; between them they were claiming a total of 14.5 million subscribers by June 2011, representing an overall mobile penetration of 48%. All four major operators were carrying market shares in excess of 20%.
Afghanistan – key telecom parameters – 2010 - 2011
Category
| 2010
| 2011 (e)
|
|---|
Fixed-line services:
|
|
|
|---|
Total number of subscribers
| 140,000
| 155,000
|
Annual growth
| 8%
| 10%
|
Fixed-line penetration (population)
| 0.5%
| 0.5%
|
Fixed-line penetration (household)
| 3.5%
| 3.6%
|
Internet:
|
|
|
|---|
Total number of subscribers (e)
| 90,000
| 130,000
|
Annual growth
| 30%
| 44%
|
Internet subscriber penetration (population)
| 0.3%
| 0.5%
|
Internet subscriber penetration (household)
| 2.5%
| 4.0%
|
Mobile services:
|
|
|
|---|
Total number of subscribers
| 14.0 million
| 15.0 million
|
Annual growth
| 16%
| 7%
|
Mobile penetration (population)
| 47%
| 50%
|
(Source: BuddeComm)
Market highlights:
- Afghanistan’s mobile market continued on its positive growth path in 2010, with an annual growth rate of more than 16% coming into 2011;
- With mobile penetration close to 50% in 2011, the mobile market continues to demonstrate considerable resilience in what has been a most difficult environment;
- The country’s four major mobile operators continue to provide healthy and energetic competition in the mobile market, with all four operators being well represented in terms of market share (all four have at least 20% of the total subscriber base);
- The country’s internet market is growing steadily (although available statistics are limited); with a major surge in internet users reported by the International Telecommunication Union (ITU) in 2009, there was a likelihood of continuing strong growth in 2011 and beyond;
- 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.
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.
