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  • May 9th, 2005
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Afghanistan's telephone market is going to get very crowded when the government issues two more GSM mobile licences, one of the country's two operators said on May 04. The Telecommunications Ministry invited bids last week for two new GSM licences, saying it wanted to attract competition and develop the country's telecommunications. The new operators are expected to launch services by early next year. The chief of the leading mobile operator, Roshan, said the government had always said there would be a third operator from the beginning of 2006, but he had not expected a fourth.

"What surprised me is that, I believe without much consultation, they've decided to go for four," Karim Khoja, chief executive officer of Roshan, told Reuters.

"My belief is now, with the regime that the government has taken, where it's going to license two more operators, you've got an over-subscription of services," he said.

Roshan, started by the Aga Khan Fund for Economic Development, Monaco Telecom International and US-based MCT Corp, has been operating in Afghanistan for 18 months.

With the country's landline system virtually non-existent after decades of conflict and neglect, Roshan and the other GSM provider, Afghan Wireless Communication Company, have about 800,000 subscribers, or three percent of the population.

That total is expected to grow to one million by the end of the year, Khoja said.

The Telecommunications Ministry says the new licences will generate revenue for the government in fees, attract more than $200 million in new foreign direct investment and create thousands of skilled, well-paid jobs.

State-owned Afghan Telecom, which provides a mobile service using CDMA technology, will also be eligible for a GSM licence early next year. That raises the prospect of five operators in a country of about 25 million people with an annual per capita income of about $200.

"We have no problem with a third operator. We think competition is good, but when you start having five operators ..." Khoja said.

"I ask the question: is the government being opportunistic in trying to cash in, on the only sector that actually has proven itself, without having done the true analysis to see."

Khoja listed a litany of difficulties any new operators would face, including security worries, transport and power problems, graft and a heavy tax burden.

"Trust me, getting a licence is the beginning of the pain," he said.

"My customer service people get put into prison weekly, and I have to go to a minister, because we won't give free sim cards and free air time."

The new operators would also be stepping into a competitive market, he said.

"When we came in to Afghanistan 18 months ago you used to pay $3 a minute for an international call, $1.50 for a local call and you used to have to pay $350 to have the access unit to get the service."

"Today, you can go into a bazaar and you can basically get service from one of the two operators for about $60, with a phone and sim card, and you're paying 10 cents a minute anywhere in the country and, at most, 50 cents for international calls per minute. Very, very competitive."

The deadline for the submission of bids is July 16 and a final announcement and award will be made on August 22, the government said. The new companies are expected to launch their services by January.

Copyright Reuters, 2005


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