Getting wired Telecommunications industry is drawing investors

Sunday, August 18, 2002

KABUL, Afghanistan -- There are only 12,000 functioning telephones for nearly 2 million people in Kabul. And most calls never go through.

The situation is worse in the provinces.

Wiring Afghans is a colossal challenge that has only just begun.

For starters, the government is scrambling to lure investors to build private cellular networks. The bigger challenge will be repairing and extending the rudimentary, bomb-damaged wireline phone network.

After years of war, Afghanistan is one of the world's poorest countries, and many Afghans have never made a phone call or even heard of the Internet, let alone sent an e-mail.

"We have a big technological gap because no investment has come into this sector over the past two decades apart from very limited investment in telephones," Communications Minister Mohammad Masoom Stanakzai said during a recent interview.

He has big plans to install digital phone lines and fiber optic cables in the war-scarred country -- even though he doesn't even have an Internet connection in his office.

Already, the Afghan government and New Jersey-based Telephone Systems International have formed a partnership, Afghan Wireless Communication Co., and began offering cell phone service in April when President Hamid Karzai called an Afghan refugee in Germany.

No backbone network

But the service from Afghan Wireless works best in Kabul and the cities of Herat and Kandahar. Its links with other Afghan cities and the outside world are tenuous, analysts say.

Outside Kabul, communications are bleak.

"There's no functioning national backbone network," said Ken Zita, president of New York-based Network Dynamics Associates, a consultant to the Afghan Ministry of Communications.

Building one is a delicate job akin to laying oil pipelines, with cables crossing hostile territory still governed by warlords, he said.

The country now has two wireline networks, one dating to the Soviet occupation that began in 1979, the other a newer, Chinese-built system.

Neither extends beyond Afghanistan's borders or interconnects reliably.

The country relies entirely on satellite bandwidth for telephone calls and data transmission to the outside world -- and between most cities inside the country, said Zita and Stephan Beckert of the Washington, D.C., research firm TeleGeography.

Wealthier Afghans are wild about the communications network in the capital, and foreign investors have noticed: Telecommunications is the only sector of the economy attracting private foreign investment.

Though investments have been modest thus far, Stanakzai expects more as he struggles to develop a communications policy for Afghanistan and standard licensing that he says "should not change with political change."

On July 31, the Ministry of Communications announced that two mobile phone licenses would be granted to private bidders in the coming months, opening competition with Afghan Wireless. The deadline for bidding is Sept. 19.

Stanakzai is hoping that foreign competition will make cell phone service available to more people.

It can cost up to $350 to start up a mobile phone account -- a fortune by local standards. If a major telecommunications company like Siemens or AT&T bids for the license, it would likely make mobile phones much more accessible to Afghans.

In the United States or Singapore, people can get mobile phones in the airport when they arrive for as little as $100.

But even new companies might find establishing -- and maintaining -- services in Afghanistan a struggle.

Stanakzai's phone has been ringing off the hook with people calling to complain about digital phone lines they paid for but can't use, because cables were bombed or cut during fighting in Kabul, a medieval-looking city of crumbling mud buildings where horse-drawn carriages compete for cratered road space with cars.

Many people paid for the phones during the Taliban rule and are wondering if they'll ever get phone services, he said.

Afghanistan's Foreign Ministry is perhaps a sign of hope: With two satellite dishes for Internet connections and 135 computers, it's one of the most wired places in Afghanistan.

"We're now teaching 138 students," said the ministry's director of technology, Fawad Muslim, who was a software engineer in Virginia for Leros Technology before returning to Kabul in December.

"But it's going to take a long, long time to get Afghanistan connected."

AP Technology Writer Jim Krane in New York contributed to this report.

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