AFGHANISTAN'S FIBER-OPTIC CABLE: PROBLEMS AND PROSPECTS

UNCLAS SECTION 01 OF 02 KABUL 003767 SENSITIVE SIPDIS DEPT FOR SCA/FO, SRAP, SCA/RA, EEB/CIP AND SCA/A DEPT PASS AID/ANE DEPT PASS OPIC FOR MORRIS E.O. 12958 N/A TAGS: ECPS EINV PREL AF SUBJECT: AFGHANISTAN'S FIBER-OPTIC CABLE: PROBLEMS AND PROSPECTS Ref: KABUL 2920 KABUL 00003767 001.2 OF 002 ¶1. (SBU) Summary: Afghan officials have reported for months that a fiber-optic cable would soon link Afghanistan's population centers and neighboring countries, but they now admit the cable is far from complete and international connections rarely function. Uzbekistan and Tajikistan continue to charge exorbitant prices for traffic, resulting in a wholesale price per gigabyte at least 50,000 times (sic) greater than in some developed countries, according to Minister of Communications and Information Technology Amir Sangin. Security concerns have also prevented cable construction in the South. Afghan officials and private sector leaders recognize the value of the cable and broadband Internet service but will need USG help to market this valuable product and to conclude agreements with Afghanistan's neighbors. End Summary. Fiber-Optic Cable Construction: Domestic Delays - - - - - - - - - - - - - - - - - - - - - - - - ¶2. (SBU) The ongoing fiber-optic cable project connecting Afghanistan with its neighbors is critically needed to lower the cost of Internet service. The Ministry of Communications and Information Technology (MCIT) has issued licenses to 20 Internet service providers, but reliance on expensive satellite links has kept broadband Internet out of reach for most Afghans. MCIT Minister Amir Sangin reported November 21 that the cable extends from Kabul to Herat and into some eastern provinces, but construction south of Kabul has stopped indefinitely due to security along the route. The Kabul-Jalalabad portion of the cable is especially important because it connects to Pakistan, one of few international routes for Internet traffic. Road construction has accidentally cut the cable between Kabul and Jalalabad several times (reftel),but USAID contractors have repaired cuts that are their responsibility. Sangin said the Ministry of Public Works-sponsored rebuilding of the Saracha Bridge on the Kabul-Jalalabad route cut the cable yet again, but workers quickly repaired it and he expects the cable to resume operation shortly. Greedy Neighboring Countries - - - - - - - - - - - - - - - ¶3. (SBU) State-owned Afghan Telecom, the cable's owner, has negotiated with Tajikistan and Uzbekistan for months to arrange alternative international service via their cables. Sangin said Uzbekistan committed to provide service in late summer, but then doubled its price, delaying service until November 22, when traffic began flowing. Tajik authorities signed an agreement to connect their cable with Afghanistan's and are receiving payment, but are not actually providing service. Sangin said he was shocked on a recent trip to Hong Kong to hear broadband service there costs $13 per gigabyte per month. Pakistan, the cheapest bandwidth provider for the Afghan cable, charges $650,000 (sic) per gigabyte per month, while Uzbekistan and Tajikistan charge $950,000 and $1 million (sic) per gigabyte per month, respectively. He concluded that this explains why it is unlikely Internet will ever achieve the same penetration in Afghanistan as in nearby countries. Plenty of Customers, Not Enough Salespeople - - - - - - - - - - - - - - - - - - - - - - ¶4. (SBU) The cable's largest customers are currently military entities, which previously relied on expensive satellite service to send data to headquarters in Europe and the Middle East. U.S. Forces Afghanistan (USFOR-A) is now connected to Germany via the Uzbek link. Despite the cable's revenue potential, Afghan Telecom has struggled to lease space on the cable to commercial customers due to its low managerial capacity. The World Bank previously supported salaries for experienced, expatriate managers, but that assistance expired in October. Comment: The Way Forward - - - - - - - - - - - - - ¶5. (SBU) Minister Sangin has indicated that concluding international agreements for cable traffic is his top priority and requested assistance through USAID's Economic Growth and Governance Initiative (EGGI) program. EGGI advisors will assist Afghan Telecom in preparing a business plan and advancing optical fiber agreements with neighboring countries. Additionally, USFOR-A is considering supporting an advisor to Afghan Telecom to build its technological and business capacity. Properly managed, the cable is Afghan Telecom's most valuable asset and therefore more attractive potential target for privatization in the future. End Comment. KABUL 00003767 002.2 OF 002 EIKENBERRY