The Impasse of Afghanistan’s ICT Strategy

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In a recent report, the USAID praises the progress Afghanistan’s telecommunications networks which, after billions in investment from foreign donors–mainly the United States government, grew from non-existence in 2002 to 64% Tele-density and 85% population coverage in 2012, with over 17.4 millions telephone subscribers. These appreciable improvements are part of Kabul’s effort to transition Afghanistan into an information society, and, officially:

To make affordable communication services available in every district and village of Afghanistan through enabling market economy, so that all Afghans, men and women alike, can use ICT to expeditiously improve government, social services, foster the rebuilding process, increase employment, create a vibrant private sector, reduce poverty and support underprivileged groups and to make Afghanistan a forefront member of the E- global society

Forgoing the details and challenges of building an adequate telecommunications infrastructure in what is widely considered the most politically and geographically treacherous region in the world, Afghanistan’s ICT sector development is very limited and crumbling.

Building a network that provides 85% population coverage–note: not service–was made possible by foreign aid and a Coalition post-war restructuring initiative with the hopes that private sector communication providers would buy-in and take over service operations once a skeletal infrastructure was set up. It was a “top-down” development strategy aimed at creating a private investment opportunity. In theory, one would think this could work; Coalition organizations and the Afghan government working together to clear the barriers-to-entry and increase the economies of scale in a tumultuous region. Initially, it did: telecom companies like MTN, Rashan and Wasel Telecom bought portions of the market-share from Afghan Telecom, the government set-up provider. But, as we often discuss in class, the “If you build it, they will come” approach is flawed; and as the report makes clear–albeit, in its footnotes–the telecom providers stopped short in their investments due to lack of potential growth.

The low demand for mobile and internet technologies is influenced by the usual suspects: they’re new and unfamiliar to the majority of the population, they’re too expensive, there’s an utter-lack of local/applicable content, etc. But the largest deterrent is the available services’ poor quality–something that is not likely to be improved unless there’s potential market growth. The skeletal infrastructure is prone electrical blackouts and generally weak/slow service. That is where the private telecom companies and ISPs were supposed to come in and improve off of the government’s initial efforts. The problem is that Afghans are seemingly unwilling or unable to pay for better services that would be provided by private companies. The report states,

Due to the absence of consumer interest reports, companies will often deliver the lowest costing level of service at the highest price that the market is willing to pay. If telecom companies had market data indicating that consumers were willing to pay for better service delivery, the ICT environment would undergo a further improvement in the quality of service on par with international consumer standards….The lack of reliable infrastructure and the fact that the majority of ISPs’ rely on expensive satellite communications has forced prices for high speed Internet connectivity to remain steep. The prohibitive cost of connectivity, along with other factors such as poor literacy levels, lack of computer and network access, and limited production of local content, keeps Internet services out of reach for the majority of Afghans.

Simply put, private service providers aren’t investing more in the ICT infrastructure because they no longer expect future financial benefit. The private providers don’t have billions in aid to cover their losses and continue infrastructure development, so they stopped improving and growing. Thus, the Afghani people are stuck with sub-standard ICT services, preventing the majority from wanting to take advantage of such an amenity because of its inadequacy. It has become a perpetual cycle.

The answer to this developmental gridlock may be more effort and money from multilateral organizations to further increase the economies of scale; the World Bank is in the midst of $130 million improvement of fiber optic cables project, connecting the 23 provincial capitals. The good news is that it seems Kabul is taking ICT very seriously–the Ministry of Communications and Information Technology has released a myriad of reports that outline the goals and challenges ahead–and they are many. Building a proper ICT network from scratch in the midst of conflict is rather challenging. From these reports, one gets a sense that in order for ICT networks to work and grow effectively, everything else in the country needs to be in order, from energy supply to private sector readiness and health, education to political stability. For Afghanistan, only time will tell.

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