In 2002, Afghanistan had a barely functioning and very limited communications network. Services were not available to over 99 percent of the Afghan population. The Ministry of Communications operated services in five major cities, with over 60 percent of the 57,000 functioning lines in Kabul. Given the state of communications infrastructure in the country, the Government’s ability to coordinate its own operations was also severely limited. Communications in Kabul and between provinces required either physical transfer of information or meetings. The country had little or no access to the internet.
- International Development Agency (IDA) Telecommunications Project and the Afghanistan Rehabilitation Trust Fund (ARTF) financed the digital transmission network.
- The Memorandum of Understanding signed between Afghan Telecom and the Pakistan Telecommunications Company Limited to route telephone traffic to Pakistan overland has lowered costs for Afghans and increased national and international telecommunications traffic.
- An Earth Satellite Station at Mahtab-Qala on the outskirts of Kabul has been installed and commissioned and converted into the primary international telecommunications gateway for Afghanistan.
The number of telephones in Afghanistan has increased from 57,000 in 2002 to 2.16 million in 2006 and costs have fallen from $2/min to $0.10/min.
Highlights:
- From a single operator in 2002, Afghanistan’s competitive telecommunications market today has four licensed private mobile operators, a unified service provider, and seven operational private internet service providers.
- The sector has attracted over US$ 300 million in private investments (60 percent of all foreign direct investment in Afghanistan)
- Today eight out of every 100 Afghans has access to a telephone, compared to less than one out of 100 in 2002.
- Mobile prices have dropped considerably, making services more affordable for more Afghan people. In 2002, it cost about US$400 to purchase a mobile phone and US$2 for every minute of talk time. Today, an Afghan can purchase a mobile phone for less than US$50 and spends less than 10 cents per minute of talk time.
- All provinces are now connected on the Government Communications Network (GCN), enabling voice and data transfer, and video conferencing between Kabul and the provincial capitals.
- Afghan Telecom has been corporatized and a separate regulatory agency established.
- In 2005, the telecommunications sector contributed to over 20 percent of the Government of Afghanistan’s domestic revenues.
- The telecommunications sector directly or indirectly employs over 20,000 people.
- The total project cost was financed by a US$22 million IDA credit. An additional US$ 6.13 million came from the Afghanistan Reconstruction Trust Fund; and the Public Private Infrastructure Advisory Facility (PPIAF) provided a grant of US$ 480,000.
- IDA support has been catalytic in establishing the policy and regulatory framework for a sector that is largely private sector driven.
- IDA also supported the establishment of an independent regulatory agency and the corporatization of the Government’s telecommunications operator.
- Bringing in lessons of experience from post conflict environments, where wireless communications are the primary telecommunications infrastructure, and where competitive private wireless operators can rapidly provide services under the correct regulatory and policy conditions, IDA support and policy dialogue focused on creating the policy, legal and regulatory institutions to foster privately led wireless roll out.
- The sector has also leveraged resources from USAID to establish a district communications network.
Despite developments in the sector, gaps remain – a 2005 survey suggested that 60 percent of businesses still rated the quality and extent of telecommunications as a serious problem – ranking it behind access to land, water and electricity. Access still needs to be improved in rural areas. There is also a need to considerably improve the quality and range of services and to further reduce prices. The Ministry of Communications has requested follow up Bank assistance to improve telecommunications access in rural Afghanistan, and to leverage the use of Information and communication technologies for development and governance.
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