Roshan is Afghanistan’s largest telecommunications provider. Nearly a decade ago we entered war-ravaged Afghanistan with the ambitious goal of harnessing the power of mobile technology to catalyze reconstruction and economic development. Thirty years of conflict had decimated infrastructure, created chronic security risks, encouraged corruption, and left most Afghans in abject poverty. Once renowned for its thriving cultural and literary traditions, Afghanistan was now 70 percent illiterate. Among the working population, few potential employees had the education and skills necessary to support a viable business enterprise. Despite these obstacles, we viewed Afghanistan as an untapped reservoir of human potential.
Roshan is part of a new generation of companies that are redefining the concept of a social enterprise in emerging markets. This approach derives from our majority investor, the Aga Khan Fund for Economic Development (AKFED), which fosters entrepreneurship and builds economically sound enterprises in the developing world. We are pioneering a business model in Afghanistan that breaks down the traditional distinctions between profit and nonprofit and between social contribution and commercial success. Tapping the tremendous economic potential in emerging markets such as Afghanistan requires companies to jettison the old paradigms of corporate philanthropy and social responsibility, where social benefit is often disconnected from commercial operations and realities. If the goal is both social impact and profit, then they are inseparable.
Roshan began by making an investment that is the foundation of any successful enterprise: skilled employees. If we were to succeed in leveraging mobile technology to leapfrog decades of traditional infrastructure development in just a few years, Afghans would need the capacity to take on significant leadership roles. Each interviewee, many of whom barely knew how to turn on a computer, had a role to play in shaping this new landscape. Our role was to galvanize the entrepreneurial spirit of the Afghan people and supplement it with extensive training in technology and management. Today, 93 percent of Roshan employees and 52 percent of senior management are Afghan nationals.
Investing in the future of Afghanistan has been crucial to the success of our business. In 2003, most Afghans did not have access to a mobile phone. Today Roshan serves more than 6.5 million customers. Through our nationwide network we provide mobile telecom access to 21.5 million Afghans (71 percent of the population).
Connecting Afghans to one another and to the world through mobile technology has become the foundation for a new economy. Both directly and through the multiplier effect, Roshan has created more than 30,000 jobs in Afghanistan. New complementary businesses, from kiosks selling mobile-phone SIM cards to public call centers serving remote villages, are providing legitimate opportunities for economic development and the growth of a new middle class.
Mobile products and services are creating an ecosystem that supports public institutions and helps entrepreneurs build new businesses. Through M-Paisa, Roshan’s mobile-banking service, the Afghan National Police are now receiving their monthly salaries via mobile phone. Before mobile money, the intermediaries responsible for transferring the cash pocketed up to 30 percent of a police officer’s salary. Police officers now receive their rightful salaries. We believe that this motivates them to achieve the mandate of public safety and allows them to take pride in being part of a transparent government institution.
Mobile financial services also allow a talented village seamstress to obtain a microfinance loan, enabling her to purchase another sewing machine, employ other women in her village, and provide for her family instead of relying on aid or depriving her children of basic education. She has now broken the cycle of generational poverty in her family.
With the rise of “impact investing” in emerging markets, a model that was once considered audacious is beginning to catch on. To Roshan and other AKFED companies it is simply common sense and business as usual. Rather than hindering financial returns, social enterprise offers a huge competitive advantage in the unpredictable global economy. Instead of relying only on profits generated by wealthy consumers in developed nations, truly innovative companies are inventing new wealth and fostering human potential in rapidly growing emerging markets.
The metrics prove that impact investing works. As the largest communications provider in Afghanistan, Roshan generates 6 percent of the country’s GDP. Our social impact and profitability are mutually reinforcing. To date we have paid $350 million in taxes and invested $550 million in infrastructure. In addition to cell towers and transmission lines, Roshan has constructed and financed playgrounds, sports facilities, e-learning centers, and schools all over Afghanistan. In 2012, we built 57 wells that deliver clean drinking water to our customers in the most remote regions of the country. We also served half a million meals to children who work in the streets and are attending school part time. These activities deliver tangible change and improve the well-being of entire communities.
The telecom sector is developing products and services that link education, healthcare, business, aºnd technology to support Afghan youth as they develop into the leaders of the future. For example, partnerships with Vodafone, Cisco, and Netlink are bringing more and better technology to Afghanistan, amplifying the younger generation’s interest in technology and IT entrepreneurship by providing students with laptop computers and connecting medical professionals to teleconsultation networks that link rural hospitals to medical centers of excellence. As one of the few business success stories in Afghanistan, the telecom sector has attracted $2 billion in foreign direct investment for reconstruction.
As we approach our tenth anniversary in Afghanistan, our model will be put to an important test. With the partial withdrawal of foreign troops expected in 2014, the Afghan people are already capitalizing on this unique opportunity to define their country’s identity and future. We believe that Roshan’s model of meaningful social contribution combined with commercial success will continue to play a vital role in shaping the future of Afghanistan.