Afghanistan’s Lack of Dollars Threatens Internet Infrastructure

According to those acquainted with the situation, wireless carriers in Afghanistan that invested billions in the telecom sector under the US occupation are now struggling to collect dollars and pay suppliers, Bloomberg reported.

The majority of substantial payments to companies that maintain communication networks, such as satellites in remote locations, are done in US dollars. According to the people, who begged not to be identified because the topic is sensitive, these have gone unpaid since the US cut off funding and frozen coffers following the Taliban takeover in August.

According to them, the situation has deteriorated in recent weeks, with no apparent sign of a deal to get additional cash.

Satellite firms like SpeedCast International Ltd. and Eutelsat Communications, as well as fibre providers from bordering countries like Iran, are worried that services would be terminated, decreasing people's access to the outside world in Afghanistan, according to the people. They also noted that a variety of other services, such as remote software maintenance, spare parts, and electricity to keep cell towers functioning, need payment in US dollars.

According to Manuel Ntumba, regional partnership manager at the United Nations Space Generation Advisory Council, “a possible shutdown of SpeedCast services will affect more than 200 Afghan villages in end-to-end small cell communication.” Broadband, cellular, e-health, e-learning, and telemedicine in hard-to-reach locations, he claimed, would all be impacted.

According to DataReportal, over 74 percent of Afghanistan's population lives in rural areas.

An emailed request for comment from SpeedCast was not immediately returned. Eutelsat declined to comment on the commercial arrangements.

According to two top executives, estimates on how much international telecoms corporations have invested in Afghanistan under the US occupation are fuzzy, but it could be about $3 billion.

According to the persons, senior management from major telecom companies has fled Afghanistan for Dubai, Europe, and South Africa, with local engineers staying behind to try to keep the networks working. They claim that the largest threat to internet and mobile connectivity, aside from security, is the financial sector's imminent collapse.

The United States has frozen $9.5 billion in assets held by the central bank of the country, and the International Monetary Fund has barred the group from accessing reserve assets.

This has resulted in a liquidity crisis, with the central bank ordering lenders to limit withdrawals to $200 per week for all clients, even corporate accounts, making it nearly impossible to operate a telecom company.

According to the Afghan Ministry of Communications and Information Technology, Afghanistan had less than 15,000 local landlines and essentially no internet during the Taliban era, which ended after the US invasion in 2001.

During the occupation, this changed dramatically, with international operators like MTN Group Ltd. of Johannesburg, Etisalat of the United Arab Emirates, and Roshan joining the market. Monaco Telecom SAM and a Swiss development firm have teamed up to form the latter.

“If the economic situation deteriorates significantly over the short term and operators struggle to remain profitable, they would be inclined to leave,” said Dobek Pater, managing director of Africa Analysis. Local operators or the state-owned Afghan Telecom would absorb customers and infrastructure that was sold or left behind, he said.