Afghan telecom risk paying off

By CNN's Diana Muriel
Monday, October 28, 2002 Posted: 10:29 AM EST (1529 GMT)

Internet cafes will open across Afghanistan next year

The failure of Global Crossing, trouble at WorldCom and the massive debt burdens of the European telecom operators have all contributed to a negative investment climate.

But perhaps taking some of the biggest risks of all is Afghan Wireless Communications Company (AWCC).

After more than two decades of conflict in the region, AWCC is building a mobile phone and Internet network throughout Afghanistan with a growth rate that would put many of its Western competitors to shame.

The Afghan capital of Kabul is not known for a proliferation of mobile phones, but AWCC -- the only company granted a mobile licence in Afghanistan -- has been working to change that.

It has invested $60 million to build a mobile network and it has committed another $45 million to expand service over the next 12 months. AWCC, the country's biggest private employer with almost 500 staff, provides services in four other major Afghan cities.

"An investment of this nature will always be a compromise between pure commercial interest and -- emotional may not be the right word -- but emotional interest and the president of TSI telephone system international, the major shareholder, is an Afghan emigre and I know that both these factors play a large part," said Gavin Jeffrey, managing director of AWCC.

Despite the difficulties of operating in a war-torn country -- such as housing telecoms equipment in walled compounds with round-the-clock guards -- AWCC is adding customers at a rate of between 1,500 and 2,000 a month.

Still, Afghan customers are not exactly spoiled for choice. They can buy either one brand of Nokia handset for $290 or one of a range of three by Motorola, which cost as much as $350.

Given the fact mobile phones have become a status symbol, Afghans are tending to choose the most expensive models. "It's good to have one. I've never has a phone," said one mobile handset owner said through a translator.

"In order to keep in touch with my son who lives in England, I asked him to send me money to buy a phone. I am very grateful to the Afghan Wireless Company for providing this service."

Internet access is the next challenge facing Afghanistan's fledgling telecom industry.

AWCC operates just one Internet cafe in Kabul but has plans open outlets across the country next year.

However, the company's monopoly in the mobile phone market will not last for long. The Afghan Government is preparing to award a second licence soon.