AKFED-led consortium wins Afghan telecom licence

Kabul, Afghanistan, 7 October 2002 — Afghanistan’s second Global System for Mobile Communications (GSM) licence was awarded on Saturday to an international consortium with strong regional connections led by the Aga Khan Fund for Economic Development (AKFED) and comprising Monaco Telecom International (MTI), U.S.-based MCT Corp. and worldwide telecommunications leader Alcatel. The award of the tender to AKFED will now proceed for ratification by the Council of Ministers chaired by President Hamid Karzai.

Initially targeted at six main cities: Kabul, Herat, Kandahar, Mazar-i-Sharif, Jalalabad and Kunduz, the phased initiative, entailing an initial investment of US$55 million, is expected to expand its network to other cities over the next four to five years. Subsequent phases will raise investment in the GSM network to US$120 million over the coming decade. AKFED will hold 51% of the equity in the operating company, MTI, 35% and MCT, 9%. Alcatel will have a 5% participation in the company and also provide financing for technical equipment.

“Addressing needs in as vital an area of infrastructure as communications is one of the ways in which AKFED is seeking to help jump-start economic development in Afghanistan,” said Karim Khoja of AKFED in Afghanistan. “By working with experienced partners to bring telephony, fax, data transfer, conference calling, voice mail and similar services to an economy in the early thrust of reconstruction, we hope to be able to “leap-frog” older technologies and quickly contribute towards increased efficiencies across a broad spectrum of activity nationally and regionwide.”

Currently, a single operator catering to about 20,000 subscribers is the only alternative to an almost totally destroyed fixed-line network that did not survive the recent years of civil war. The AKFED-led consortium brings to the telecommunications sector in Afghanistan valuable complementary strengths from the region as well as state-of-the-art technology and considerable pertinent experience. Alcatel is already a partner with AKFED in the manufacture of digital telephone exchanges and related software development in South Asia. MTI, besides operating in Monaco, has recent experience of implementing GSM in the post-conflict environment of Kosovo in the Balkans. MCT Corp., who is partnering with AKFED in a GSM venture in Central Asia, will also provide roaming facilities across the wider region through existing operations and licences that it already holds.

The AKFED-led consortium’s business plan calls for major capital expenditure in the early years so as to rapidly establish base sites and assure an equitable focus across the main cities. It will also entail significant attention to the development of qualified human resources to operate and maintain the network.

AKFED expects its involvement in the telecommunications sector to complement and strengthen various development initiatives that have been launched by the Aga Khan Development Network in Afghanistan since the beginning of this year. These range from expansion of rural development and the rehabilitation of infrastructure to microfinance, upgrading educational and healthcare capacity and the revitalisation of cultural spaces of historic importance with a view to improving urban development.

MTI benefits from the resources of Vivendi Universal Group, the world’s second largest media and communications company. Vivendi Telecom International owns 55% of MTI. During the year 2000, telcommunications activity generated Euros5.3 billion of revenues for Vivendi which employs more than 10,000 people.

MCT Corp. based in the USA is a leading provider of mobile telecommunications in Central Asia and Russia where it has been operating since 1991 through 19 ventures with licences covering nearly 70 million people. Its joint ventures, united under the Indigo brand, enjoyed subscriber growth of 130% in 2001.

Alcatel is the world’s leading supplier of telecommunication infrastructures and a market leader in high speed Internet access and optical networks.

AKFED is the economic development arm of the Aga Khan Development Network (AKDN), a group of private, non-denominational development agencies seeking to improve opportunities and living conditions in specific regions of the developing world, especially Africa and Asia. Present in Central Asia since 1995, AKFED is also involved in the microcredit and financial services sectors in Tajikistan and the Kyrgyz Republic. Active in the fields of industry, financial services, tourism development and infrastructure in eighteen countries across South and Central Asia and sub-Saharan Africa, AKFED operates as a network of affiliates with more than 90 separate project companies employing over 15,000 people and controlling assets in excess of US$1.5 billion.

The Aga Khan Development Network, which has been supporting humanitarian assistance and rehabilitation in Afghanistan since 1996, works for the common good of all citizens, regardless of their gender, origin or religion and its underlying impulse is the ethic of compassion for the vulnerable in society. Its programmes in Afghanistan come under a comprehensive development agreement by the Aga Khan and President Hamid Karzai in March of this year.

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