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Afghanistan Rehabilitating the Telecom Sector

Date: 5/12/2008 12:34:00 PM

In 2002, Afghanistan had a barely functioning communications network
• Over 99 percent of the population had no access to telecom services
• Only five major cities had telephone services
• Kabul accounted for about 2/3 of 57,000 functioning lines in the country
• Communications was mostly by face to face or by sending messages by hand
• The country had little or no access to the internet.
• Postal services were also recovering from years of conflict

Example of Impact:
The IDA financed Emergency Telecommunications Rehabilitation Project and the ARTF financed Telecommunications Project and other projects supporting Afghanistan’s telecom sector have played an important role in facilitating Afghanistan’s national development by contributing to the following:

• Eight out of 100 Afghans now have access to a telephone, compared to less than one out of 100 in 2002. Services are also more affordable now. Mobile prices have dropped from about US$400 in 2002 to less than US$50 today and calling costs have fallen from $2/min to $0.10/min.

• The number of telephones in Afghanistan has increased from 57,000 in 2002 to 2.16 million in 2006. All provinces are now connected. Videoconferencing between Kabul and the provincial capitals is now possible.

• Better communication services have provided an impetus for private sector development by opening up new economic opportunities for individuals and small and medium enterprises. The telecommunications sector itself provides employment - directly or indirectly - to over 20,000 Afghans.

• A billing system – almost absent earlier – has been introduced and now covers 25 provinces. Afghan Telecom’s revenues have increased from less than $3 million in 2003 to more than $20 million in 2006.

• The sector has attracted over US$ 300 million in private investments (60 percent of all foreign direct investment in Afghanistan). From a single operator in 2002, Afghanistan’s now has four licensed private mobile operators, a unified service provider, and seven operational private internet service providers.

• World Bank (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

Challenges Remaining:
• Commercial power supply has yet to be provided to the earth satellite station. The station is expected to become fully operational in March 2007
• 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
• Access needs to be improved in rural areas
• The quality and range of services also needs to be improved considerably and prices further reduced

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