I thought this was sufficiently interesting from an engineering, economic and topicality perspective to merit a post. Basically another nail in the coffin of the myth that the PSTN is more reliable than the Internet. R

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November 12, 2001

THE COMMUNICATIONS

Afghan Phone Links Are an American Legacy

By SIMON ROMERO

While the Soviet-built conventional telephone network in Afghanistan has suffered significant damage in recent bombing raids, a more sophisticated telecommunications system built by a United States company in the late 1990's remains in service and is an important link to the outside world, according to a report expected to be released today.

The system is operated by the Afghan Wireless Communication Company, which grew out of a venture between the Afghan Ministry of Communications, controlled by the Taliban, and Telephone Systems International of Mount Olive, N.J. Afghan Wireless provides service in the Afghan capital Kabul and the city of Kandahar, the Taliban's political base in the south.

Afghan Wireless, which is now entirely controlled by officials in Kabul linked to the Taliban, continues to provide local, long distance and international calling services, according to a report by Pyramid Research, a company in Cambridge, Mass., that focuses on telecommunications in developing countries.

The endurance of Afghan Wireless's operations is the latest chapter of involvement in Afghan telecommunications services since 1998 by United States and British investors. Telephone Systems International, the New Jersey company that initiated the investment, exited the venture in 1999 after the United States banned Americans from doing business in Afghanistan.

It is not clear why the United States' bombing of Afghanistan has left Afghan Wireless's network still functioning relatively well, given its strategic importance to the Taliban. The Defense Department declined to comment specifically on Afghan Wireless or its network.

"If something is a military target, it's liable to go down," said Lt. Col. Ken McClellan, a spokesman for the Defense Department. "If it's not considered a military target, then it won't go down."

Afghan Wireless generates about $1.8 million a year in revenue, assuming that the government, its main client, pays its bills. The company uses relatively inexpensive technology, which is wireless but not mobile. Customers have what appears to be standard telephone service at their homes or other fixed locations. But the signals are carried by a network of wireless transmission towers and switches, said Joseph Braude, a senior analyst with Pyramid Research.

"Afghan Wireless has provided the Afghan government and nongovernmental organizations with a less expensive alternative to satellite telephones," Mr. Braude said in an interview.

After the United States imposed sanctions in 1999 on trade and investment in the parts of Afghanistan under Taliban control, Telephone Systems International sought approval from the Treasury Department to continue doing business in Afghanistan, according to a letter from Michele R. Hart, the company's lawyer, to the Treasury's Office of Foreign Assets Control.

According to a copy of the letter, Ms. Hart provided the Treasury with details of Telephone Systems International's investors, which included Ehsan Bayat, an Afghan migr living in New York, and the Wilken Group, a holding company with telecommunications investments in several East African countries.

The Wilken Group's own investors include Lord Michael Cecil, a member of a prominent English family. Lord Michael's dealings in Afghanistan, which included pulling together investors for Aghan Wireless, is described in the current issue of Talk Magazine.

Ms. Hart also said in her letter that Telephone Systems International had signed agreements with DeTeSat, a unit of Germany's Deutsche Telekom, for the supply of satellite receiving and transmitting equipment and with TMB Systems of Britain to buy telephone exchanges.

Such deals by American and European telecommunications companies are common in the developing world, even in the poorest countries. But Telephone Systems International's involvement in Afghanistan raised eyebrows when it reached a deal with the Taliban to build a network in 1998.

Gary Breshinsky, a former investor in Telephone Systems International, said the company signed an agreement with the Taliban in September 1999 at the Intercontinental Hotel in Kabul. At the time, the White House said it looked favorably on the project as a way to ease the controls the Taliban had imposed on Afghanistan's communications with the rest of the world.

"We were providing one of the poorest countries on the planet with a state-of-the-art telephone network," Mr. Breshinsky, who lives in Hackettstown, N.J., said in an interview. "The old network left behind by the Russians was atrocious."

Mr. Breshinsky, a former satellite- telephone salesman, said he ended his involvement with Telephone Systems International soon after the United States imposed sanctions against Afghanistan.

Mr. Bayat and Lord Michael, the other foreign investors in Telephone Systems International, could not be reached for comment. Telephone Systems International stopped work on the project in July 1999, according to a news release on Afghan Wireless's Web site.

Mr. Braude, the Pyramid Research analyst, said telephone interviews with the people who use Afghanistan's conventional telephone system in Kabul and towns elsewhere suggested that many telephone lines had been destroyed in Kabul. But they say that damage to lines in the towns is minimal.

Before the bombing campaign, the Soviet-built analog network in Afghanistan had less than one telephone for every 100 inhabitants. Afghan Wireless has operated about 9,000 telephone lines in Kabul and Kandahar since introducing service two years ago, Mr. Braude said.

Much of the company's success in signing up customers can be attributed to cheaper prices in relation to calls made on satellite telephone services. International calls with Afghan Wireless cost 40 cents to $1.50 a minute, compared with $2 to $4.50 a minute on satellite telephone systems.

-- \_ Roger De Salis rdesalis(a)cisco.com