Last updated: 25 Nov 2020 Update History
Report Pages: 100
Analyst: Sebastien De Rosbo
Although Afghanistan continues to be confronted by numerous challenges, largely due to the material effects of many years of war and civil strife, there have been successes in the country’s efforts to rebuild infrastructure and create a functional telecom sector.
Telecom services now cover over 90% of the population, though penetration rates remain relatively low. Efforts continue on rolling out fixed-line services, but these are limited to outside the main urban areas and thus the country heavily relies on mobile network infrastructure.
The government has been supported by the World Bank and a range of other donors to develop a nationwide fibre backbone. Afghanistan now has terrestrial cable connectivity to five neighbouring countries, while work on the ‘Wakhan Corridor Fibre Optic Survey Project’ to connect to China is nearing completion.
The mobile market showed reasonably strong growth between 2012 and 2017 but faced a serious slowdown in 2018, with the number of subscribers falling 8% year-on-year. This was partly due to increasing violence in the country (creating population displacement as well as damage to infrastructure), and also to a downturn in the regional economy. Insurgent activity continues to degrade telecom infrastructure, mainly in damage done to mobile towers. However, there were positive signs of recovery in 2019, with slow subscriber growth despite the uncertainty created by the presidential election. The Covid-19 pandemic contributed to a fall in the number of mobile subscribers in 2020, and the segment is expected to remain under pressure well into 2021.
Afghanistan has seen a strong increase in mobile broadband penetration over the past few years, with penetration reaching 22% in 2019 compared to only 1% in 2013. The sector is still at an early stage of development and penetration remains relatively low compared to other Asian nations. As with the mobile sector, the number of mobile broadband subscribers has been affected by the pandemic though slow growth is expected to return in the sector after 2022.
BuddeComm notes that the outbreak of the Coronavirus is having a significant impact on production and supply chains globally. During the coming year the telecoms sector to various degrees is likely to experience a downturn in mobile device production, while it may also be difficult for network operators to manage workflows when maintaining and upgrading existing infrastructure. Overall progress towards 5G may be postponed or slowed down in some countries.
On the consumer side, spending on telecoms services and devices is under pressure from the financial effect of large-scale job losses and the consequent restriction on disposable incomes. However, the crucial nature of telecom services, both for general communication as well as a tool for home-working, will offset such pressures. In many markets the net effect should be a steady though reduced increased in subscriber growth.
Although it is challenging to predict and interpret the long-term impacts of the crisis as it develops, these have been acknowledged in the industry forecasts contained in this report.
The report also covers the responses of the telecom operators as well as government agencies and regulators as they react to the crisis to ensure that citizens can continue to make optimum use of telecom services. This can be reflected in subsidy schemes and the promotion of tele-health and tele-education, among other solutions.
Afghan Telecom/Aftel/Salam Telecom/Networks, Afghan Wireless Communications Company/AWCC, Roshan/ Telecom Development Company Afghanistan (TDCA), Etisalat Afghanistan, MTN Afghanistan, Wasel Telecom.
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