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FM AMEMBASSY KABUL
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RUEHIL/AMEMBASSY ISLAMABAD 2975
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UNCLAS SECTION 01 OF 04 KABUL 001201 
 
SIPDIS 
 
DEPARTMENT FOR SA/FO, SA/A, EB 
TREASURY FOR PARAMESWARAN 
NSC FOR AHARRIMAN, KAMEND 
CJTF-76 FOR POLAD, CENTCOM FOR CG CFC-A 
COMMERCE FOR AADLER, JNELHYBEL, SHAMROCK 
 
SENSITIVE 
SIPDIS 
 
E.O.12958: N/A 
TAGS: ECPS EINV ECON PREL OPIC EAID PGOV AF
SUBJECT: Afghanistan: Ambassador Gross Promotes 
Transparent, Competitive Telecom/ICT Sector Growth 
 
REF: (A) Kabul 497 (NOTAL) 
(B) 05 Kabul 3803 
(C) 05 Kabul 3728 
 
KABUL 00001201  001.2 OF 004 
 
 
8 
 
¶1.  (U) Summary: Ambassador David Gross, U.S. Coordinator 
for International Communications and Information Policy 
visited Afghanistan February 25-27, 2006 to meet with 
senior Afghan government officials, including Vice 
President Massoud and the newly created Parliamentary 
Committee on Communications, as well as private sector 
representatives in the information and communications 
technologies (ICT) sector. During his visit, Ambassador 
Gross emphasized the importance of private investment to 
the development of the telecom sector and the need for the 
GoA to be consistent and transparent in its policies in 
order to encourage further investment.  He offered 
continued USG cooperation with the Ministry of 
Communications and assistance in obtaining technical 
support and/or training from countries such as India and 
multilateral organizations such as the International 
Telecommunication Union.  End summary. 
 
-------------------------- 
Minister of Communications 
-------------------------- 
 
¶2. (U) Ambassador Gross and Robert Watts of EB/CIP/BA met 
with Minister of Communications Amirzai Sangin, whom 
Ambassador Gross had met at the World Summit on the 
Information Society in Tunis earlier in February. Sangin 
was upbeat about the progress of the Afghan 
telecommunications sector and praised USG assistance in 
this area, especially for the District Communications 
Network, which is bringing telephone, internet and fax 
service to almost 350 villages in Afghanistan (Ref B) and 
for technical assistance in the creation of the independent 
Afghanistan Telecommunications Regulatory Authority (ATRA.) 
(Note: Both initiatives are being funded by USAID. End 
note.) 
 
¶3. (U) Sangin also appreciated U.S. Trade and Development 
Agency (USTDA) assistance on the GoAs fiber optic ring 
project (Ref B) which included approximately USD 500,000 in 
funding for a feasibility study and technical assistance in 
preparation of the project bid package.  The Ministry asked 
for USTDAs further help in monitoring project 
t 
implementation.  Sangin noted that the GOA is still 
evaluating bids for the award of the tender, but plans to 
move forward on the first phase shortly.  Sangin hopes that 
the completion of the ring will allow Afghanistan to be a 
transit point for regional telecom traffic and enable 
widespread domestic broadband ICT connectivity that would 
otherwise not be available. 
 
¶4.  (SBU) Ambassador Gross stressed the need to maintain 
transparency in the award process for the ring project.  He 
also emphasized the need to put to good use the Telecom 
Development Fund (TDF) the Ministry has created through a 
2.5 percent levy on the net revenue of private sector 
mobile service providers, which already totals $5 million. 
(Note: Companies contributing to the fund have voiced 
 
KABUL 00001201  002.2 OF 004 
 
 
concern that it has sat unused and could be a magnet for 
corruption within the Ministry. End note.)  Ambassador 
Gross suggested that this fund could be used for expansion 
of rural access to telecommunications, which is a Ministry 
priority. 
 
¶5. (U) Minister Sangin welcomed past support from the 
International Telecommunications Union (ITU) and agreed to 
work with Ambassador Gross at the World Telecommunications 
Development Conference in Doha March 7-15 to seek continued 
support from the ITU for capacity building.  Ambassador 
Gross suggested developing a partnership between ATRA and 
the well-run Telecom Regulatory Authority of India, which 
the Indian Government has shown an interest in.  Ambassador 
Gross also noted the training opportunities for Ministry 
staff being provided through the U.S. Telecommunications 
Training Institute. 
 
----- 
ATRA 
----- 
 
¶6. (SBU) Ambassador Gross visited the operations of the 
Telecommunications Regulatory Board, which will formally 
become ATRA on March 21, and met with its newly appointed 
members.  ATRA has 75 employees and is hiring 30 more to 
manage spectrum and licenses for Afghanistan's telephone 
network, wireless providers, 150 FM stations and 50 TV 
stations.  It will also set regulatory policy and will 
therefore have a substantive impact on the growth of the 
telecom sector (Ref A.) 
 
--------- 
AfghanTel 
--------- 
 
¶7. (U) Ambassador Gross met with Jamal Noorzai, CEO of 
State-owned AfghanTel, which runs the District and 
Government Communications Networks and provides fixed line 
telephone service (Ref B.)  As of January 10, full mobility 
of service has been authorized for its previously limited 
wireless local loop networks and AfghanTel is busy 
developing its network in preparation for a full roll-out. 
AfghanTel was corporatized in September 2005, the first 
step on the road to privatization.  Ambassador Gross 
stressed the need for a transparent, competitive sales 
process in order to ensure that the GOA receives maximum 
revenue for the company. 
 
-------------------------------- 
First Vice President Zia Massoud 
-------------------------------- 
 
¶8. (SBU) Ambassador Gross met with First VP Zia Massoud, 
accompanied by Ambassador Neumann.  While Massoud voiced 
support for free market principles, he expressed 
frustration with still-poor ICT services in remote areas. 
He reported that he had recently met with UAE state telecom 
monopoly Etisalat, which has offered $300 million to 
acquire AfghanTel and promised to expand service to the 
entire country.  Ambassador Gross warned that if the long 
planned sale is not conducted by an open competitive 
bidding process, the GOA will likely forgo significant 
revenue, questions would be raised about transparency that 
 
KABUL 00001201  003.2 OF 004 
 
 
could damage the confidence of other potential investors in 
the sector, and the public confidence in the GoAs broader 
state-owned enterprise privatization process would suffer. 
(Note: Ref A notes 
 
------------------------------------------ 
National Assembly Communications Committee 
------------------------------------------ 
 
¶9. (U) Ambassador Gross met with the newly formed Meshrano 
Jirga (lower house) Communications Committee of the Afghan 
National Assembly, chaired by Khalid Farooqi.  The hour 
long exchange was lively; some committee members clearly 
understood the role of competition in ensuring quality 
service and low prices for consumers, while others, 
including Vice Chair Kohi, called for an entirely state-run 
system. Ambassador Gross emphasized that private sector 
competition is the best way to foster competition and that 
a properly used TDF could be used to help subsidize service 
to remote areas.  He also stressed the need for cooperation 
between the Committee and the rest of the GOA in building 
communications systems so that members can communicate with 
constituents. 
 
--------------------------- 
Ministry of Women's Affairs 
--------------------------- 
 
¶10. (U) Ambassador Gross toured the Cisco Networking 
Academy at the Ministry of Women's Affairs and met with 
Minister Dr. Masouda Jalal. Cisco has set up three 
Networking Academies in Kabul through a Global Development 
Alliance with USAID.  Women account for 32 percent of the 
1000 students enrolled annually country-wide.  Ambassador 
Gross visit to the academy and talk with the students was 
widely covered by the Afghan media. 
 
---------------------- 
Private Sector Players 
---------------------- 
 
¶11. (U) Finally, Ambassador Gross had the opportunity to 
meet with U.S. private sector players involved in ICT in 
Afghanistan.  Roshan CEO Karim Koja gave a readout on 
private sector concerns with GOA policies.  Roshan and 
competitor AWCC, both mobile service providers with U.S. 
equity (Ref C,) have jointly protested what they feel is 
excessive GOA telecom (or ICT) sector-specific taxation. 
Their tax burden currently includes a Business Receipts Tax 
(BRT) that is ten percent of net revenue, a licensing fee 
of an additional ten percent and a TDF fee of 2.5 percent. 
The companies are negotiating a joint settlement that would 
cap their tax burden at 14.5 percent.  Koja also emphasized 
private sector concerns with the privatization of 
AfghanTel, which both Roshan and AWCC insist must result in 
the settlement of AfghanTel's contractual interconnection 
liabilities to the private operators, estimated at USD 5-7 
million.  Both companies also emphasized that if AfghanTel 
is licensed as a mobile operator, it should be treated 
equally to the private sector licensees. 
 
¶12. (SBU) COMMENT: Ambassador Gross visit and message of 
support for private sector investment and transparent, 
competitive GOA policies in ICT was timely.  The well- 
 
KABUL 00001201  004.2 OF 004 
 
 
managed Ministry of Communications, under the leadership of 
technocrat Sangin, has recently come under pressure by GoA 
interests who believe that mobile telecom providers are 
earning excessive profits or who see transparent 
privatization tender discipline as limiting opportunities 
for rent seeking and corruption (Ref A.)  Post welcomes 
follow-up by EB/CIP/BA on promised support to the GoA and 
will continue to encourage the GoA to be consistent and 
transparent in its telecom and ICT policies in order to 
promote further investment in this dynamic sector of the 
Afghan economy. 
 
Norland