Colloquium was conducted by Sriganesh Lokanathan.

Data was collected from Jan – Apr 2009.

Profile of Afghanistan. 25 Mn Population. Land locked country.

MoU per year 399 incoming, 414 outgoing. Due to high prices.

Most investment from FDI. 55Mn comes from local sources additional 40 mn came from Afghan telecom. 6 year CAGR stands at around 131%.

2 regulatory bodies work on the telecom sector, the ministry of commincation and Information technology andtheAfghanistan Telecom Regulatory Authority.

Telecom act only introduced in 2005. ATRA started in 2006 asindependent regulator. Operators preceded the regulator in 2003.

1 fixed operator. Unified licensing therefore can go into any form of technology.

4 Mobile Operators
Roshan – 2003
AWCC – 2003
MTN – 2005
Etisalat – 2006

4-5 small operators for rural areas – Local Fixed Service Providers (LFSP). Only 2 were functioning quite well. They are local monopolies? Yes. Mobiles have the option of going to these areas but they havent.

How are the LFSP selected? Some through biding process but some through beauty contests. Operates on CDMA technology. Monopoly in practice but its not meant to be monopolies. burden is on Afghan telecom to provide them interconnection.

Many ISPs almost 100 licenses were issued, but only about 19 are operational.

Mobile SIMS/ 100 in 2008: 30.72

Access to fixed lines/ 100 in 2008 : 0.18

Penetration mostly in the main cities

TRE figures: Only the numbers for mobile will be presented

Sample size around 12. Reflect a micro state numbers.

Market entry: very hgh figures, 4.4. Low variance.
Policy is to encourage private sector. Low barriers to entry. No issues with network rollout or rights of way (eg. placement of base stations). No infrastructure sharing, but regulator wants to start it out.
Only the fixed operator has a unified licence all mobile operators operate on GSMA.

Allocation of scarce resources: 3.5 High variance of 0.93 suggest different viewpoints with respect to spectrum.
MTN & Etisalat given less spectrum than previous two operators. 4Mhz in 900 band versus 8 Mhz in 900 band for Roshan & AWCC. Additional spectrum was to be requested based on subscriber numbers
Issues with frequency interference and resolving inferance issues takes about 4-5 months after approaching the regulator.
Lack of Frequency Allocation Table till 2005.
No issues with numbering. ATRA established number plan with provision for atleast 5 more operators. No one seemed to have a problem with it.

Interconnection: 4.0. Low variance of score 0.22
Interconnection is Mandatory for all license holders and must be given at technically feasible location. ATRA determines interconnection rate. Telecom Act doesn’t specify method but ATRA uses BULRIC method
Rates:
Until January 2007: USD 0.05 / minute
January 2007 – December 2008: USD 0.029/ minute
January 2009 onwards: USD 0.026/ minute
ATRA mentions rates as high due to fuel & security for towers outside of Kabul. Technically if one is using BULRIC’s (Bottom-up) it should be low. Its the most efficient.
No disputes b/w fixed and mobile operators with respect to interconnection. Fixed and mobile termination rates are the same.
However some disputes b/w LFSP providers and Afghan Telecom about the rates. Burden is on Afghan telecom to ensure interconnection.
Access to international backbone? There is no backbone they can rely on locally. Internationally they were building a Optic fibre ring network connected to Iran, Uzbekistan, Pakistan and maybe India. Funding came from World Bank and some money came from Afghan Telecom. Afghan telecom was supposed to manage it. Not sure if its up and running.

Ranmalee Gamage: Afghan IDD rates came down in Sept 09. All operator can carry their international traffic in and out.
Incoming international is 23 mins, while out going in 12 mins.

Regulation of anti competitive rules: 2.4
Telecom Act covers: Issues related to competitive process, Determination of SMP (SMP is 40% of market share determined), Abuse of SMP status issues, Guidelines dealing with anti-competitive practices
However it hasn’t translated into specific rules & regulations, which means regulatory regime is arbitrary and unpredictable
Complaints have been about clarity of rules. The rule for SMP: operator with atleast 40% of gross revenue from a specific market. But no-one meets that definition right now.
Two operators are engaged in preatory pricing but no one has complained Mainly because they are small players

Universal Service Obligation: 2.3. Lowest score.
About USD 26-40 mn (different sources) available disbursement by 2008.
Universal service charge of 2.5% of net revenues on all operators since 2003
Universal Access Policy (UAP) as well as Manual of operating procedures for utilization of the Telecom Development Fund (TDF) came out only in late 2008. Low TRE score reflective of past confusion (probably):. Pressure to expand from regulator without any help earlier
Perception of lack of capacity at the Universal Access Department (UAD) to administer the UAP

Tariff Regulation: 2.7. High variance of the score.
Difficult to explain the low score. Results not reflective of ground realities
Just cause mobile tariffs are high compared to the region doesn’t answer the reason for the low score
Prior approval of tariffs required for SMP, but there is no SMP. All other required to file tariffs
In principle ATRA can regulate, but so far no record of it intervening
Some predatory pricing but only by small operators

Quality of Service: 2.5. Low variance of 0.45 suggests most find the regulatory environment with respect to QoS as being poor
No benchmarks or rules have been established by ATRA and was only being addressed from late 2008 onwards
Poor perception of regulator’s capacity on QoS
Network congestion is an issue

Policy recommendations for the Afghan Telecom Sector.
Regulatory Capacity: Poor perception of the regulator’s capabilities especially in monitoring and enforcement of rules. This translates into: Lack of clarity on procedures, Some level of arbitrariness on decisions, Lack of comprehensive competition legislation, More important as the sector matures.
Issues related to “forced” utilization of new countrywide optic cable for backhaul traffic by all operators but managed by Afghan telecom
Capacity building for ATRA is necessary as they lack the knowledge and the know how in terms of technical and economic regulation.
More clarity on USO
Lack of clarity of QoS parameters. Benchmarks were only recently established, but still not enough. Fines are arbitrary