Executive summary
Afghanistan’s mobile operators are meeting the 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. By end-2001, as a result of the US-led military action, the Taliban had been removed from power and a broad-based transitional government was established. 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.
By 2003 recovery had commenced. 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. Coming into 2012 there were four major mobile operators (and one minor one) competing in Afghanistan’s telecom sector; between them they were claiming a total of 18 million subscribers, representing an overall mobile penetration of almost 60%. All four major operators were carrying market shares in excess of 20%.
Afghanistan – key telecom parameters – 2011 - 2012
Category
| 2011
| 2012 (e)
|
|---|
Fixed-line services:
|
|
|
|---|
Total number of subscribers
| 214,700
| 250,000
|
Annual growth
| 53%
| 16%
|
Fixed-line penetration (population)
| 0.7%
| 0.8%
|
Fixed-line penetration (household)
| 4.9%
| 5.7%
|
Internet:
|
|
|
|---|
Total number of subscribers
| 130,000
| 150,000
|
Annual growth
| 44%
| 15%
|
Internet subscriber penetration (population)
| 0.4%
| 0.5%
|
Internet subscriber penetration (household)
| 4.0%
| 4.5%
|
Mobile services:
|
|
|
|---|
Total number of subscribers
| 17.6 million
| 20.0 million
|
Annual growth
| 25%
| 14%
|
Mobile penetration (population)
| 58%
| 65%
|
(Source: BuddeComm)
Market highlights:
- Afghanistan’s mobile market continued on its positive expansion path in 2011, with an annual growth rate of 25% coming into 2012;
- With mobile penetration having passed the 50% milestone 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 positive mood surrounding longer term internet growth;
- On a broader front, however, the ongoing political and civil unrest continues to be of concern to the country and its people, with any deterioration in the situation certainly having an impact on the telecom sector;
- In this regard, the withdrawal of foreign troops over the coming year or so may cause some winding back in foreign investment and even the withdrawal from the market of some foreign companies.
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 and developments;
- Infrastructure;
- Mobile market;
- Internet market;
- Operators;
- Scenario forecasts (fixed, internet, mobile subscribers).
