VZCZCXYZ0006
OO RUEHWEB

DE RUEHBUL #0597/01 0481303
ZNY EEEEE ZZH
O 171303Z FEB 10
FM AMEMBASSY KABUL
TO SECSTATE WASHDC IMMEDIATE 5660

UNCLAS E F T O KABUL 000597 
 
NOFORN 
SENSITIVE 
SIPDIS 
 
DEPT FOR EEB/CIP, S/SRAP, SCA/FO, SCA/A 
 
E.O. 12958: N/A 
TAGS: ECPS EAID PGOV PREL AF
SUBJECT: AWCC BETS ON DRAMATIC MARKET EXPANSION 
 
REF: A. 09 KABUL 2962 
     ¶B. 09 KABUL 3863 
 
Classified By: A/CDDEA Stephen Cristina for Reasons 1.4 (b) and (d). 
 
¶1.  (SBU/NF) Summary:  Afghan Wireless Communication Company 
(AWCC), one of the Afghanistan's largest cellular providers, 
plans to invest millions of dollars in dramatic 
infrastructure expansion in 2010.  The company will build 
nearly 400 new towers, mostly utilizing its own capital, but 
40 will be funded by the Afghan Government-run 
Telecommunications Development Fund (TDF).  New towers will 
be clustered in Kabul, Kandahar, Herat, Jalalabad and Kunduz. 
 AWCC currently provides communication services to nearly 
every Afghan bank and will debut a mobile money transfer 
product in the first half of the year.  AWCC hopes lower 
rates and better coverage will encourage existing customers 
to talk more, and new customers drawn by recent service 
expansions have far exceeded AWCC's expectations.  If future 
sites are equally successful, AWCC could overtake Roshan as 
the cellular market leader.  The company's optimism rests on 
Afghanistan's still-increasing demand for cellular service 
and a market that is growing by more than 1 million users per 
year. 
End summary. 
 
BETTING THE FARM ON INCREASING CUSTOMER DEMAND... 
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¶2.  (SBU/NF) Owned by an American citizen and headquartered 
in Fort Lee, New Jersey, AWCC was the first wireless operator 
to enter Afghanistan but has fallen behind rival Roshan in 
recent years.  Roshan claims approximately 2.3 million 
customers, while AWCC hovers closer to 2 million.  During a 
February 10 meeting with Econoffs, AWCC Managing Director 
Amin Ramin and Director of Business Operations Vishal 
Rattanpal said the company will utilize its own capital 
funding for the vast majority of new cellular towers. 
Seventy will be built in Kabul to enhance indoor and outdoor 
coverage and provide data capability to existing subscribers. 
 (Note:  Both AWCC and Roshan offer market of internationals 
and businesspeople.)  Sixty towers will be erected in 
Kandahar province, while multiple towers will go up in Herat, 
Jalalabad and Kunduz. 
 
¶3.  (SBU/NF) In addition to expanding its infrastructure, 
AWCC will lower prices to entice existing users to talk more, 
Ramin said.  On February 10 he held a press conference to 
announce a new pricing plan of 200 minutes of calling per day 
for a daily charge of 25 Afghani (50 U.S. cents).  This rate 
is Afghanistan's lowest and reflects the increasing amount of 
time users spend talking on their cellular phones.  Note: 
AWCC's new Amcit Commercial Development Director has previous 
experience in East Africa where he successfully launched a 
similar marketing plan with dramatically successful results. 
Based on his discussions with Econoffs, we expect to see 
additional marketing innovations which will expand the 
average Afghans' access to more affordable telephone and 
internet service in AWCC's service package in the near 
future.  End note. 
 
...WITH A LITTLE HELP FROM THE AFGHAN GOVERNMENT 
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¶4.  (SBU/NF) In addition to self-funded expansion, AWCC is 
utilizing GIRoA Telecommunications Development Fund (TDF) 
support to build 40 towers in areas thought to be 
commercially unfeasible (reftel A).  Funded by a tax on every 
carrier, the TDF is administered by the Afghan 
Telecommunications Regulatory Authority (ATRA) and designed 
to expand rural service.  Ramin said the first tower, in 
Nuristan province, is already operational, and a site in 
Jalalabad is ready for construction but security concerns 
have delayed progress.  Four TDF-funded towers each are 
planned for Badakhshan, Paktiya and Zabul.  Rattampal said 
that at one site recently constructed in Badakhshan, AWCC had 
expected 500 customers to subscribe to service.  Within the 
first week, 5,000 people living near the site were utilizing 
AWCC's network ) a powerful indicator of the ever-increasing 
market potential for Afghan wireless providers. 
 
¶5.  (SBU/NF) Four TDF-supported sites in Dai Kundi province 
are planned, but massive snowfall, including a major 
avalanche near the Salang Tunnel, has prevented their 
construction.  Additionally one village in the Sang-i-Takht 
district of Dai Kundi reportedly confiscated AWCC's truck as 
it pass through, along with $250,000 worth of equipment the 
truck was carrying.  Villagers insisted the AWCC engineers 
erect the tower in their town, rather than the district 
center.  AWCC has asked the provincial governor and police 
 
chief of help with no success.  Post will follow up at the 
provincial level and urge action by law enforcement officials. 
 
BANK PARTNERSHIPS WILL LEAD TO M-MONEY SERVICES 
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¶6.  (SBU/NF) AWCC provides communication services to 
virtually all of the Afghanistan's banks, including Kabul 
Bank (the nation's largest), Azizi, Bakhtar, Maiwand, 
Pashtany, Ghazanfar and Afghan United banks.  Ramin said that 
Kabul Bank, using AWCC-provided technology, will open 200 new 
branches and hire an additional 5,000 employees.  Many of 
these branches will be on ANSF bases, enabling ANSF employees 
who do not already do so to receive their salary through 
direct deposit and withdraw cash at their base.  AWCC's 
technical support allows customers of each bank to check 
their balance, initiate a balance transfer and request a 
stop-check order using their cellular phones. 
 
¶7.  (SBU/NF) In addition to its current banking services, 
AWCC plans to launch a mobile money transfer platform in the 
spring, to compete with Roshan (reftel B).  AWCC plans to 
import a successful product from a third-party company and 
implement it locally.  Ramin said the company was in 
discussion with the Ministry of Interior and the Ministry of 
Defense to explore the possibility of regarding paying 
Ministry employees through mobile money transfer.  Post will 
continue to encourage the Afghan Government to support mobile 
money transfer initiatives, which has the potential to drive 
more Afghans into a more formal and transparent financial 
system and aids efforts to combat corruption and illicit 
finance. 
 
¶8.  (SBU/NF) AWCC's planned expansion is well-timed to market 
forces.  The number of Afghan cellular subscribers has grown 
by more than 1 million per year, and AWCC's recent experience 
suggests that the 60 percent of Afghans who do not own 
cellular phones would like to.  Coupled with Roshan, a 
stronger AWCC could force smaller rivals MTN and Etisalat out 
of the Afghan market.  End comment. 
Eikenberry