NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Friday, May 6, 2005

As the Afghan government looks to sell more cellular licenses, some are questioning whether or not there’s going to be too much competition. Of course, that’s a problem for the operators, not the regulators.
In some ways, it’s almost amazing that this discussion is even taking place. It wasn’t long ago that using a mobile phone in Afghanistan was basically impossible. However, with the rebuilding of Afghanistan, plenty of people have realized that communications infrastructure is key — and so, mobile services are in demand. Given the rapid success of mobile phone service in neighboring countries, it shouldn’t come as a surprise that there’s plenty of demand for such services.
However, with the government now looking to sell new license for two new operators, some are worrying that there’s going to be too much competition, which could strangle the burgeoning market for mobile phone service in the country. Obviously, the comments need to be taken with a grain of salt, as they mostly come from a competitor already in the space, who is worried about the impact of increased competition on his own business. The warnings he gives of the difficulties a new operator faces are probably accurate, but it should be up to the operators to decide whether or not that risk is worth taking — not the government.
Article found here.