While news of falling sales of mobile phones in the U.S has been reported due to the deteriorating credit crisis, the Afghanistan telephone market is growing at around 70%.

A new report shows that as the political and social rebuilding of the country proceeds following years of war and civil unrest, Afghanistan has been busy putting new national telecommunications infrastructure in place.

With ongoing unrest in the country and the recovery from war not yet complete, one of the big challenges for the country has been to attract and manage foreign investment. There have been some positive signs in the telecom sector in this regard and, interestingly, for a period the telecom sector was the only one in the country that was attracting any foreign capital.

A properly functioning basic telephone network has been and continues to be a high priority for the Afghani Government. As part of this commitment, an important step was the creation of the Ministry of Communications (MoC) in 2002, followed by the establishment of a regulator, the Afghanistan Telecom Regulatory Authority in 2005.

With two mobile operators already in place, the MoC announced in late 2005 that two more mobile licences had been awarded. In July 2006, the Investcom/Alokozai consortium launched its Areeba Afghanistan service in four provinces and by mid-2007 the new operator already had 500,000 subscribers, as the overall market pushed along at an annual growth rate of around 70%.

In a similar story, UAE’s Etisalat was awarded a GSM licence in May 2006 and beginning its operations in August 2007, it launched a network with coverage of the country’s main cities, picking up 200,000 subscribers in the first month.