Afghanistan is taking up the challenge to rebuild itself after 20 years of war and civil unrest. Tthere is no doubt that telecommunications will play a crucial role in the effort to set up a new economy and social structure. The telecommunications infrastructure that survived the turmoil did not even support a properly functioning network. It will be a huge task to establish national telecommunications coverage. There are still very few computers in Afghanistan and many parts of the country do not have electricity. Up until recently, Internet access had been gained by using telephone lines provided by neighbouring Pakistan. There is no official information on just how many Internet users there are in the country. One source suggested 55,000, or 0.2% of the population, by end-2004. In early 2005, there were 8 ISPs in the country.
As for mobile subscriptions, the country’s mobile network was increasing at a remarkable annual rate of more than 200% growing off a low base. By end-2004, there were a reported 710,000 subscribers for a penetration of more than 2%. Bangladesh, one of the poorest, most densely populated, least developed countries in the world, has been struggling with the inefficiency of its state-owned enterprises and the slow implementation of much-needed economic reforms. These factors have had a serious impact on the building of the country’s telecom infrastructure and the regulatory reforms in that sector.
The fixed line penetration in Bangladesh still languishes below 1%. This low teledensity is partly due to the fact that at least 68,000 villages remain isolated outside the major cities. More than 90% of Bangladesh’s telephone services are located in urban areas. By contrast, the mobile market in Bangladesh has been almost doubling on an annual basis over the last three to four years. There were almost 5 million mobile subscribers in the country (3.5% penetration) by March 2005. The market is likely to be further boosted by foreign operators moving into the market in alliances with existing operators.
The Internet came late to Bangladesh with first connectivity in 1996. Over the last few years, growth has been dramatic, although obviously from a very low base. With an estimated user base of more than 420,000 by the end of 2004, representing only a 0.3% penetration, the local Internet industry is preparing to move into the next stage of its development. The country’s first broadband service was launched in 2001 using DSL technology. A cable modem service was also offered at about the same time. But, for the time being, broadband services remain a minor component of the country’s Internet market. Bhutan - Until relatively recently, Bhutan was isolated in terms of its telecommunications capability, the country’s mountainous landscape having been a barrier to the development of any substantial infrastructure. Whilst the country had a basic connection to the outside world as early as 1974 with the introduction of a link between Bhutan and India, it was not until 1999 that telecom services started developing. Over a 4-year period to 2000, Bhutan invested US$15 million in telecommunications infrastructure to deliver a modern fixed-line network.
Interestingly, Bhutan has been without a mobile network. However, in November 2003, the government initiated Phase One of what was called the ‘b-mobile’ network. It planned to connect the vast majority of Bhutan’s remote mountainous territory to a mobile network by the end of 2006. The service was officially launched in November 2003, with a network that initially provided coverage for five major towns including the capital Thimphu. By January 2004, the service had about 3,000 subscribers in the five towns it was serving. After a late start, Bhutan has been cautiously embracing the Internet. The Bhutanese Government and the United Nations Development Program (UNDP) signed a project agreement in March 1999 to support the development of DrukNet, the country’s first Internet Service Provider (ISP).
India - With almost 46 million fixed line subscribers representing a teledensity of just over 4% in early 2005, India has achieved a remarkable coverage with an estimated 98% of the population having access to a telephone. Despite the enormous investment in telecommunications infrastructure over the last decade, servicing the huge population has presented difficulties. Even the booming mobile phone market was still less than 5% penetration in early 2005. In 2001, the Indian government threw open the whole fixed-line telephone business to an unlimited number of operators in each of the 21 telecom circles. Prior to this, fixed-line telephony had been the preserve of the state-owned MTNL and BSNL, with only one private company being allowed to compete with an existing state-run player in each circle. VSNL, the former monopoly provider of international telephony, also lost its exclusive status when the market was opened to competition in April 2002.
Growth in India’s mobile telephone sector has been nothing short of spectacular in the past few years, aided by higher subscriber volumes, lower tariffs and falling handset prices. Now home to a number of global mobile operators working with local companies, India’s mobile market has consistently experienced annual growth rates of 50% to 100% and higher. Analysts predict that the market will continue to grow strongly, moving at a compounded annual rate of more than 50%. The milestone of 50 million mobile subscribers was passed in February 2005. Despite the considerable popular interest in Internet in India, the Internet Service Provider (ISP) market has been in disarray. According to the telecom regulator, there were 189 operational ISPs in the country, but 10% of the ISPs have 90% of the subscribers. The popularity of cybercafes has been playing a big role in fuelling Internet development in India. Whilst there is tremendous enthusiasm amongst the dial-up users, an estimated 60% of users regularly access the Internet via the country’s 9,000 cybercafes. The take-up rate of high-speed broadband Internet access has been slow, although 2004 saw a surge in growth. By early 2005, it was estimated that broadband subscribers still accounted for less than 12% of the total Internet subscriber base.
The Maldives claims an efficient, up to date telecommunications system. In fact, the country’s telecom infrastructure is excellent, the Maldives boasting one of the most advanced communications systems in the region. Through the recent efforts of Dhiraagu, its monopoly telco, there is now full telephone service coverage of the archipelago. As well as the fixed-line network, the company also operates a GSM cellular mobile service and was, until recently, the country’s sole licensed provider of Internet service. A second ISP licence was issued in 2002. The move took advantage of the fact that Dhiraagu’s exclusive licence did not include Internet, thus providing an ideal starting point for the government’s plans to liberalise the wider telecommunications market. The country’s mobile market has been grown quickly, boosted by Dhiraagu’s prepaid service offering. By December 2004, out of a total subscriber base of about 113,000, there were 97,000 prepaid mobile subscribers. In November 2004, the government licensed a second mobile operator, in a move that was set to further reduce Dhiraagu’s monopoly control of the telecoms business.
Nepal - Telecommunication services have been growing steadily in Nepal over the last decade, but supply has not been able to meet demand, some 50% of which remains unmet. Rural services have been neglected, as they require higher investments in infrastructure. More than 60% of the telephone services remain concentrated in the capital Kathmandu and 55% of villages still have no access at all. A number of factors have been slowing development. Nepal’s topography has made it extremely difficult to develop the telecommunications infrastructure. The country has been struggling under the adverse economic situation caused largely by political instability. The activities of the rebels operating throughout the country had also been a serious and direct threat to telecom infrastructure. Despite the difficulties, the country has made progress in its effort to meet the growing demand for telephone services. A second national mobile licence has been awarded and, under the terms of the licence, the operator has an obligation to invest at least 15% of its revenue in rural areas. The licensing of a relatively large number of ISPs, combined with the liberalisation of the VSAT data market, has created the possibility for Internet to thrive in Nepal. On a positive note, the population have been able to access Internet for some of the lowest prices in the region.
Pakistan - The number of fixed-line services in Pakistan has increased five fold since 1990. However, whilst the majority of working lines are in urban areas, 70% of Pakistan’s population lives in rural areas. Efforts by the government of Pakistan to promote the development, modernisation and diversification of its telephone infrastructure over the last decade have met with mixed success. Nevertheless, recent strong growth in the mobile market has created a much more positive general outlook in the industry. Mobile subscriber numbers have surged from less than 2 million at end-2002, to around 11 million by mid-2005 and the growth has the feel of sustained development. Significantly, two new mobile operators were licensed in 2004, joining the existing four operators, to create a very busy market. There is still plenty of room for further expansion.
Although Internet access has been available in Pakistan since 1995, Internet penetration remained low at around 2% by early 2005. Following the military regime of General Pervez Musharraf taking control of the country in October 1999, an aggressive IT policy has been pursued, aimed at boosting Pakistan’s drive for economic modernisation and creating an exportable software industry. Whilst this has been helping boost the popularity of the Internet, there is a long way to go. The broadband Internet market in Pakistan is almost non-existent. Sri Lanka's telecommunications sector has been struggling to develop in the difficult context of a nearly two-decade-long conflict between the government and separatist Tamil Tiger rebels. With the hope of an enduring peace and a general improvement in the country’s social and economic wellbeing, the telecom sector is well positioned for vigorous growth. Some major initiatives have been put in place to boost the building of national infrastructure and open the market to more competition. While still far from adequate, Sri Lanka’s telecommunications infrastructure has already been improved thanks to liberalised policies that have rapidly allowed significant private sector participation.
Mobile telephone services have been offering a positive note to the local market. The overall annual growth in mobile subscribers was in excess of 60% in 2004 and this strong growth pattern was continuing in 2005. Although mobile penetration was a relatively low 12% in early 2005, the market was expected to develop on the back of the competition that comes with having four operators competing with each other. This will be in spite of the fact that one of these – MTN – has around 60% market share.
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