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Wireless takes flight in Afghanistan

From CNN Correspondent Diana Muriel

AWCC Afghanistan base tower
AWCC have sold over a thousand subscriptions in Afghanistan, but the connection fee of $170 remains out of reach for ordinary Afghans

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KABUL, Afghanistan (CNN) -- The telecom sector has been a precarious place to make money over the past couple of years.

The failure of Global Crossing, trouble at WorldCom, and the massive debt burdens of the European telecom operators, have all added to a gloomy investment climate.

But taking some of the biggest risks of all is the tiny Afghan Wireless Communications Company (AWCC).

After more than two decades of conflict in the region, AWCC is building a mobile phone and Internet network throughout Afghanistan with a growth rate that would put many of its Western competitors to shame.

Two decades of conflict have left Afghanistan with little in the way of a viable national telephone network.

During the worst of the fighting most people needing to make a call would have to leave the country to get a connection.

But that is beginning to change. In the past 10 months Afghanistan has got itself a fledgling mobile phone service that is also providing limited Internet access.

And while downtown Kabul is one of the toughest cities in the world to find someone using a mobile phone, AWCC is working hard to change that.

Emotional investment

Afghanistan mobile phones
An Afghan mobile phone salesman displays the latest models available at an electronics shop in Kabul

Afghan Wireless has already invested $60 million in building a mobile phone network here -- and is committed to spending a further $45 million over the next 12 months.

The company is also Afghanistan's largest private employer with almost 500 staff, providing services in five major Afghan cities, and adding customers at a rate of 1,500 to 2,000 a month.

Despite a promising start, the firm says it is not expecting to make a profit in the next six months, aiming to reach break-even point in a couple of years.

"An investment of this nature will always be a compromise between pure commercial and emotional interest," says managing director Gavin Jeffrey.

Afghan Wireless is a joint venture between Telephone Systems International Inc. (TSI), a U.S. registered and privately held company, and the Ministry of Communications of the Afghan government.

TSI was founded by the vision and commitment of its president and CEO, Ehsan Bayat, an Afghan emigre who left his homeland for the United States in 1980.

Spoilt for choice

But when it comes to mobile phone handset models, Afghan customers aren't exactly spoilt for choice.

It is either a Nokia priced at $290 dollars, or one of a range of three Motorola models priced up to $350 dollars.

But a mobile phone is after all a status symbol -- and Afghans are tending to choose the most expensive model.

In a country where most people don't have access to any kind of phone, Afghan Wireless customers seem content.

"In order to keep in touch with my son who lives in England, I asked him to send me money to buy a phone. I am very grateful to the Afghan Wireless company for providing this service," said one customer.

Internet access is the next challenge. At the moment, AWCC operates just one Internet cafe in Kabul, but has plans to expand countrywide next year.

Afghan Wireless is the first company to use wireless Internet technology in this Central Asian nation, a decision forced by the sheer vulnerability of telecom equipment in this beleaguered country.

Each base station is contained within a walled compound protected by a round-the-clock guard -- a basic cost of doing business here.

But competition looms as the Afghan government prepares to announce a second license for mobile phone services.

But AWCC remains confident its head start in the business should ensure its future.

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