Monday 21 September 2020

Afghanistan has a Healthy Mobile Ecosystem but No Plans for 5G yet

Afghanistan continues to be confronted by challenges due to the instability following years of war and civil strife. Their efforts to establish a functional telecommunications sector virtually from nothing are encouraging. The telecommunications network now covers over 90% of the population.

Efforts are being made to roll out fixed-line services, but the country’s telecommunications services rely heavily on its mobile infrastructure. Fixed-line broadband market penetration has not grown significantly over the last five years. Over the next five years to 2024 growth is expected to continue but overall market penetration will remain extremely low.

Afghanistan is making good progress on the roll-out of the government project for a nationwide optical fibre backbone. The work on the ‘Wakhan Corridor Fibre Optic Survey Project’ officially started with the first phase of a plan to install a cross-border fibre link connecting Afghanistan with China.

Afghanistan’s mobile market experienced reasonably strong growth between 2012 and 2017 but faced a serious slowdown in 2018, with the number of subscribers falling 8% year-on-year. This was partly due to increasing violence in the country (creating population displacement as well as damage to infrastructure), and also to a downturn in the regional economy. However, there were positive signs of recovery in 2019, with slow growth despite the uncertainty created by the presidential election. Overall, the mobile market has experienced reasonable growth since 2014, with mobile penetration rising from 55% in 2014 to 60% in 2019 and the number of subscribers reaching 22.9 million.

Further moderate growth is predicted over the next five years (through to 2024), though this assumes stable governance and an improving economic environment. Subscriber penetration is expected to reach 69% by 2024, with the market estimated to grow at a CAGR of 5% between 2019 and 2024.

Afghanistan has seen a strong increase in mobile broadband penetration over the past five years, with penetration reaching to 22% in 2019 compared to only 1% in 2013. The sector is still at an early stage of development and penetration remains relatively low compared to other Asian nations, though stronger growth is anticipated over the next five years in line with operator investments in 4G and increased competition among operators encouraging lower pricing for end-users and improved service offerings. Mobile broadband penetration could reach 35% by 2024, with a subscriber base of 14.8 million. A CAGR of 12% is forecast between 2019 and 2024.

As of most recent figures from 2018, mobile phone service is available to 90% of the population (ATRA, 2018). Interestingly, there are 26,351,256 active mobile service subscribers out of a national population of 36,373,176, which suggests that mobile phones currently have 72% market penetration–five times that of ISP usage. For Afghans, smart phones are preferred to computers as they are cheaper and better value when equipped with Internet functionality. Smart phones have become the preferred way for Afghans to access the Internet.

Therefore despite all the challenges Afghanistan has a highly competitive mobile market that continues to flourish. The mobile sector has been boosted by the absence of effective fixed-line alternatives. There are now 5 mobile GSM operators competing in Afghanistan’s telecom sector: Afghan Wireless (AWCC), Etisalat, MTN Group, Roshan and Salaam Network (Aftel).

2G/GSM is on 900 and 1800 MHz, 3G started 2012/3 on 2100 MHz and 4G/LTE services have started 2017 on Afghan Wireless on 1800 MHz (band 3) with other providers announcing it too.

Meanwhile 3G/4G subscriptions doubled from 2.6 million in June 2016 to 5.7 million at the end of March 2017.

Afghan Wireless (AWCC) was Afghanistan's first mobile communications company today it has over 5 million subscribers.  They recently topped Afghanistan’s fastest mobile internet networks based on analysis by Ookla of tests taken with Speedtest® covering the first half of 2020.

Ookla reported that Afghan Wireless achieved a speed score of 6.81 Mbps with average speeds of 8.32 Mbps for download and 3.74 Mbps for upload on 4.75G+ LTE-capable devices to become the only Ookla certified network in Afghanistan. Speedtest is Ookla’s flagship product, and is the most accurate way to measure internet performance and network diagnostics.

Etisalat was the first mobile provider to launch 3G services and now has 3G coverage in 21 provinces of Afghanistan. They now provide voice and data services to approximately 3.5 million subscribers in 34 Afghan provinces and more than 200 districts supported by more than 12,000 retail outlets

Etisalat, which is in competition with Afghan Telecom (Salaam), but the two operators complement  each other by sharing infrastructure. Currently Etisalat share 60 to 70 mobile towers with Aftel.

MTN Group despite have a strong presence and 6.5 million subscribers is due to share its shares and exit the country.  The company is accused of bribing the Taliban militants in Afghanistan to ‘safeguard’ its telecom towers. MTN Group is due to sell its shares in Syria, Yamen and Afghanistan to other telecom providers in order to end its operations in the Middle East and Afghanistan.

Roshan claim 6.5 million subscribers, covering 34 provinces with their network. They actively contribute to the country’s long-term development with more than $750 million invested in Afghanistan to date. They directly employ more than 900 people – 97% Afghan nationals and 19% female – and provide indirect employment to more than 35,000 people.

Finally Afghan Telecom’s wireless network, called Salam, is the latest player to enter the mobile communications market. With more than 2 million customers out of a total population of around 36 million in Afghanistan, Salam currently has a market share of nearly 11 per cent. The company is looking to grow this by a further 5 per cent. Afghan Telecom plans to roll out 4G services and expand its share of a crowded market dominated by foreign players such as Etisalat. They are working with a mix of vendors including Huawei, ZTE and Cisco to launch their 4G services.

 Afghan Telecom will not be the first operator to offer 4G services in Afghanistan. Its main competitor, Afghan Wireless — the first wireless communications company in the country — rolled out a 4G network in 2017.

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