Market consolidation ‘inevitable’, says Roshan CEO

2 Mar 2016

Karim Khoja, the CEO of Roshan has described consolidation in the Afghan mobile market as ‘inevitable’ in an interview with Mobile World Live, noting that the country’s economy is struggling to support six cellcos. The official pointed out that a lot of money is currently leaving the country with refugees heading for Europe, whilst at the same time less financial aid is flowing into the country. As such, the CEO said that consolidation makes ‘economic sense,’ adding that: ‘You can’t just keep putting money into the ground unless you’re getting an economic return.’ Mr Khoja went on to say that Roshan had been investing in the market for ten years, but ‘at a certain point in time, you can’t just be working to pay taxes, or [to] just keep investing.’ As previously reported by TeleGeography’s CommsUpdate, Mr Khoja stated in late 2015 that Roshan would not be leaving Afghanistan, and would likely be a consolidator.

Commenting on the challenges facing the market, Mr Khoja highlighted that issues surrounding security and energy continue to plague the sector, with more than 1,000 of the cellco’s sites currently generating their own electricity. Illustrating the difficulties, the CEO explained that the recent destruction of an electricity pylon by the Taliban had left less than 30% of Kabul with electricity: ‘Which means our ARPUs have gone down, because most people [who] have smartphones, cannot charge their smartphones.’

Meanwhile, whilst the official stressed that there was strong demand in Afghanistan for new applications and services, the lack of a ‘robust’ fibre-optic network is holding back such development. On the subject of LTE, Mr Khoja hinted that it might leapfrog 4G technology and go straight to ‘the next level … [which] is 5G, 6G’. The official added that Afghanistan ‘desperately needs’ foreign investment, especially with regard to improving the country’s fibre infrastructure, but the government needs to create an ‘enabling environment’ to promote foreign direct investment (FDI), with the use of tax breaks or other incentives.

Afghanistan, Roshan