Virus impact over each market - telecom operators, government agencies and regulators' responses - revised forecasts for the next 5 years.
Last updated: 20 Apr 2020 Update History
Report Pages: 113
Analyst: Sebastien De Rosbo
Afghanistan continues to be confronted by challenges. After many years of war and civil strife, an encouraging aspect of the country’s efforts to rebuild has been the considerable success evident in the creating of a functional telecommunications sector virtually from nothing. The telecommunications network now covers over 90% of the population.
Efforts are being made to roll out fixed-line services, but the country’s telecommunications services rely heavily on its mobile infrastructure.
Fixed-line broadband market penetration has not grown significantly over the last five years. Over the next five years to 2024 growth is expected to continue but overall market penetration will remain extremely low.
Afghanistan is making good progress on the roll-out of the government project for a nationwide optical fibre backbone. The work on the ‘Wakhan Corridor Fibre Optic Survey Project’ officially started with the first phase of a plan to install a cross-border fibre link connecting Afghanistan with China.
Afghanistan’s mobile market experienced 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. However, there were positive signs of recovery in 2019, with slow growth despite the uncertainty created by the presidential election. Overall, the mobile market has experienced reasonable growth since 2014, with mobile penetration rising from 55% in 2014 to 60% in 2019 and the number of subscribers reaching 22.9 million.
Further moderate growth is predicted over the next five years (through to 2024), though this assumes stable governance and an improving economic environment. Subscriber penetration is expected to reach 69% by 2024, with the market estimated to grow at a CAGR of 5% between 2019 and 2024.
Afghanistan has seen a strong increase in mobile broadband penetration over the past five years, with penetration reaching to 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, though stronger growth is anticipated over the next five years in line with operator investments in 4G and increased competition among operators encouraging lower pricing for end-users and improved service offerings. Mobile broadband penetration could reach 35% by 2024, with a subscriber base of 14.8 million. A CAGR of 12% is forecast between 2019 and 2024.
BuddeComm notes that the outbreak of the Coronavirus in 2020 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 Ltd (TDCA), Etisalat Afghanistan, MTN Afghanistan, Wasel Telecom.
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David Brown, Ventura Team
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