Roshan to expand in Afghanistan

Telecoms will spend $60bn on networks in war-torn country

Roshan, the largest telecommunications operator in Afghanistan, plans to spend more than US$60 million (Dh220.3m) next year to expand its mobile presence and build a high-speed wireless internet service across the war-torn country. The investment is planned to boost the operator's subscription base to 5 million users from 3.8 million, and to provide the first steps in creating a reliable internet service in Afghanistan, said Karim Khoja, the chief executive of Roshan.

Mr Khoja said the operator would try to build a fibre-optic network across 20 cities in Afghanistan to increase its coverage across rural areas despite the continuing conflict. "Our focus is on return on investment," he said on the sidelines of a telecoms conference yesterday. "Before, we knew that there was a market that was going to grow but now we have to ask ourselves what kind of return on investment we get from everything we do."

The operator's largest shareholder is the Aga Khan Fund for Economic Development with a 51 per cent stake, while Monaco Telecom International and TeliaSonera hold the remaining stakes. After starting operations in 2003, Roshan spent about $450m building its mobile and internet infrastructure and now covers 60 per cent of Afghanistan. But building a telecoms company in one of the world's most dangerous countries remains fraught with risk.

Despite the company's socially responsible initiatives, such as building playgrounds and providing 50,000 free meals a day to children, threats of attack on Roshan's infrastructure by the Taliban insurgency result in about 100 mobile tower stations being temporarily switched off each night. Mr Khoja told of how Roshan started operations in the village of Bamiyan to illustrate its unique way of doing business in Afghanistan.

After beginning a mobile network in the village, farmers reopened a bazaar in that region, which in turn helped to open a medical centre, midwifery clinic and ultimately a hotel that attracted tourists. "We're inherently a development agency," Mr Khoja said. "I can go to my board and say this base station will break even in five years and, by the way, will also bring in all these economic values to the population."

But progress to move the Afghani telecoms market in line with the rest of the region's capability remains slow, Mr Khoja said. Plans to build a 3G network in Afghanistan remain stalled as not enough Afghanis can afford a mobile device capable of using the network. "We don't want to pay that much for a set of frequencies that will not provide return on investment," Mr Khoja said. [e-mail]