01 Sep 2014
Afghanistan’s Hope and Light
Can Karim Khoja's communications revolution help save a country from collapse?by Julia HannaTopics:
Hekmatullah Ebrahimkhil prays next to a network tower on a hill overlooking Qargha Lake, outside Kabul. Ebrahimkhil is helping his father guard and service one of the mobile communication towers on the hill—part of an innovative community security model piloted by Roshan. (Photography by Joël van Houdt)
Thirty or forty angry Afghan police officers crowded into Karim Khoja’s office. Someone had stolen their pay, and the prime suspect was the CEO of Roshan, the company offering the new mobile payment system that was used to process their salaries. Their weapons had been checked at security, but Khoja (AMP 156, 1999) could feel his heart beating as he verified that the money had been deposited correctly. It had. And each officer had received a text message to that effect. But none of the men had been able to read the message or access his account. (Afghanistan has a 70 percent illiteracy rate.) The following month, officers received a recorded notification of their salary deposit, with instructions on how to access it using an interactive voice-recognition system. The police, Khoja says, returned to his office—but this time, each gave him a kiss on both cheeks, believing him responsible for a jump in their pay. In fact, the new system had simply cut out the middlemen, who once took what they saw as their rightful piece of the pie.
That anecdote is one of many that Khoja—a genial, solidly built man who clearly enjoys a good story—can tell as an example of how Roshan has changed a country crippled for decades by corruption, poverty, and conflict. But before Roshan executives could even think about mobile banking—which they introduced in 2008 as M-Paisa—there was the question of establishing any cell phone service at all. A little over a decade ago, Afghans had two options for making a call: walk across the border to another country, including Pakistan or Tajikistan, or use an exorbitantly expensive satellite phone. Neither was feasible for most citizens; in Afghanistan, the average annual income at the time was about $100. (Current estimates are more like $700.) Roshan, which translates from the Dari and Pashto languages to “light,” was a name chosen by the Afghan people through focus groups. For them, the word really meant hope, a new beginning.
Before Roshan launched, demand for its service was so high that a prelaunch informational leaflet began selling in the Kabul bazaar for $1. Police were called in to control the crowds waiting outside Roshan’s flagship store in Kabul. That first day of business—July 26, 2003—the company sold 20,000 SIM cards at an average of $100 each. (Roshan was second to enter the market after Afghan Wireless; it now has four providers nipping at its heels in a highly competitive market.) Today, the company connects all of Afghanistan’s major cities as well as 240 villages and is the country’s largest employer (1,100 workers) and biggest taxpayer ($500 million and counting).
“If we treated the Afghans with respect, it would create a brand loyalty and empathy they’d never had a chance to experience before,” Khoja says of the company’s initial, basic strategy. “In terms of customer service, our objective was to provide an air-conditioned environment; offer support for customers who couldn’t read or write; and get them in and out of the store in 15 minutes with working service.”
It sounds like a reasonable goal. But building the infrastructure necessary to provide that service—in a dangerous country riven by tribal factions and lacking roads, electricity, and a well-functioning government—required the mindset of a manager who half-jokingly refers to himself as a “lovable dictator.”
Khoja, now 56, never planned to go to Afghanistan. A veteran telecom executive responsible for launching service in developing countries around the world, he was working for Deutsche Telekom in Croatia in January 2002 when a representative from the office of the Aga Khan, the spiritual leader of the Ismaili Muslim faith, called to request that he take a three-month leave to advise Afghanistan’s Ministry of Communications on the development of new telecoms in the country. Khoja was already doing some pro bono work for the Aga Khan Development Network (AKDN), a group of global, nondenominational agencies focused on development projects and private-sector growth in emerging economies often seen as too risky for most investors. But this new assignment was something else entirely. “I have a phenomenal job and I’m living in a safe and stable environment—why go to Afghanistan?” says Khoja, summarizing his thoughts at the time.
The next day, he was told to expect a call from the Aga Khan’s secretary: His Highness wanted to discuss the assignment in greater detail. Before that could happen, Khoja agreed to go. “It’s like the pope calling if you’re Catholic,” says Khoja, a devout Ismaili who speaks passionately about his faith, the rights of others to their own beliefs, and the damage done by extremists: “It’s a clash of ignorance, that people don’t understand what Christianity or Judaism or the Muslim faith stands for, because we’re all of the same book.”
Khoja’s grandparents emigrated from the Indian state of Gujarat; he was born in Pretoria, South Africa, where his family ran a small chain of grocery stores and butcher shops. What wealth the family had built up, however, was expropriated with the rise of apartheid rule. In that sense, he says, he has a deep empathy for destitute Afghan citizens who returned to their country after years spent in Pakistani refugee camps.
When Khoja was nine, the family moved to London; there, kids on the playground called him a “Paki,” the shorthand slur for all Southeast Asians; nontheless, the overall outlook for his future improved considerably. He went on to earn advanced degrees in biochemistry and management science and immigrated with his new wife, Shainoor, to Vancouver. After a brief stint at a pharmaceutical company (“I’m an entrepreneur; I just didn’t fit”), Khoja took a job in international marketing with Mobile Data International that required arriving at 3 a.m. to talk to clients in Europe. “I told them that I could close $20 million of business if they sent me to London,” he recalls. Fine, they said—but if you don’t, you’re fired. Khoja met his goal the first year; in the second, he closed $50 million in sales, matching the entire US division in revenues. “After that I was hit up by Motorola to run their GSM [Global System for Mobile communications] operation in Pakistan, which is where I discovered mobile—and the rest, as they say, is history.”
After landing in Kabul in February 2002, Khoja found himself sleeping under his desk at the AKDN’s offices. (Thanks to a lack of rentable space, post-Taliban landlords could demand a full year of highly inflated rent up front.) At the time, much of AKDN’s work was focused on nonprofit agencies and development, so the concept of a funded, for-profit telecom focused on revenues was foreign to many of the people he encountered. Halfway through his assignment, he discovered that a GSM license was being tendered for the Afghan market. “With the vision of the Aga Khan and his willingness to invest in Afghanistan, paired with the support of the various AKDN agencies already established within the country, I knew the difference telecoms could make to the country and to the Afghan people,” Khoja says. AKDN asked that he be released from his duties with the Ministry of Communications to avoid a conflict of interest and later won the tender with a $5 million bid. The company that would become Roshan was granted a license in January 2003. At that point, the clock began ticking on an immediate goal: launching cell phone service in five Afghan cities by July.
A Roshan billboard overlooks a street in the Mandawi Market area in central Kabul; the company is Afghanistan’s largest taxpayer and private employer.
Starting any sort of company in Afghanistan in that time frame would have been a tall order, but a telecom operation posed a number of special challenges. “There was nothing there, nothing,” Khoja says of the country’s infrastructure.
Actually, that wasn’t true—there were land mines, left over from years of conflict. Those had to be cleared before cell phone towers and the maintenance roads leading to them could be built. Available maps and government statistics were often inaccurate—one team of engineers even came upon a small town about 125 miles south of Kabul previously unknown to cartographers.
In the Taliban-influenced south, entering a village to build a cell phone tower was a task to be handled with great tact and cultural sensitivity. Khoja consulted with early Afghan hires to ensure they were taking the right approach. Sit with the elders over a cup of tea to explain what you’re doing, he was told. Notify a village two days before beginning tower construction—that way the men can ensure their women will be inside and not visible over compound walls. “Two years later, our competition didn’t follow the same cultural norms and were almost stormed by the villagers,” Khoja says.
Baksheesh—a word that encompasses charitable giving, tipping, and bribery—is another cultural norm in Afghanistan. A 2013 Transparency International report ranked Afghanistan in a three-way tie, with North Korea and Somalia, as the most corrupt country in the world. From the beginning, and in line with AKDN’s overarching principle of conducting ethical business practices, however, Khoja drew a hard line against making or receiving bribes of any kind, despite the fact that most Afghans accept the practice as a daily part of how business gets done. Any contractor offering a payoff to Roshan was immediately blacklisted. Any employee caught taking or offering a bribe was instantly fired. “In emerging markets, you have to be very persistent and clear in your messaging—dogmatic, even,” he says.
When navigating the expectations of baksheesh, a direct approach—promising indirect benefits—was the alternative tactic for making progress. We are here to invest in your country, Khoja or another Roshan representative would explain. You may not benefit from Roshan personally today, but if you want a new well for your village, Roshan will put it there. The company also used an innovative community security model, employing local villagers to ensure that fuel for its generators wasn’t stolen and its towers weren’t blown up by the Taliban. If these goals were met, bonus electricity from one of the company’s generators might be made available to power a new PA system for the village mosque.
“You have to lead from the front,” Khoja says of AKDN’s decision to go against the cultural norm. “These are the things John Kotter taught us in AMP. You’re trying to change the paradigm.”
Of course, paying a bribe would have saved time—something that was in scarce supply, as Khoja and his team worked under the six-month deadline. “We’d have a huddle session every day at 7 a.m. and say, okay, what do we need to do to get to launch?” he recalls. “It didn’t matter who did what—we’d assign that day’s tasks and report our progress at the end of the day.”
That management team, and many of Roshan’s early hires, consisted in part of foreign nationals like Khoja and Altaf Ladak, Roshan’s COO and a citizen of the UK. From the beginning, however, the goal has been to hire and train as many Afghans as possible, or in Ladak’s words, to “Afghanize” the business. An employment ad for engineers drew thousands of responses, but after years of Taliban rule, few had the necessary training or language skills. Overwhelmed, Roshan’s CTO at the time, Eric Chapman, came up with a new set of criteria: If a candidate could turn on a computer, use a basic word processing program, and speak English, he would make him an engineer. (In addition to providing technical training, Roshan has subsidized college degrees for a number of employees.) Today, Ladak notes that those engineers and other early Afghan hires make up 75 percent of Roshan’s senior management; 97 percent of its workforce is Afghan. “It wouldn’t surprise me if in the next 5 or 10 years you saw an Afghan CEO or COO of Roshan,” he adds. Roshan’s franchise model extends the number of jobs it generates; in addition, women have found employment in their villages by selling minutes at public call offices and repairing broken headsets.
Ladak also notes that 20 percent of the company’s employees are women—a percentage that sounds small until you consider that a woman working outside the home in Afghanistan is still widely viewed as a subversive act against society. Shireen Rahmani, Roshan human resources director, receives frequent death threats via letters delivered to her home, email, and text messages. (Ten percent of Roshan’s operating budget is devoted to security, which includes 500 full-time guards.) In the beginning, she remembers the difficulty of recruiting female employees; each hire would require at least one visit with the woman’s family to reassure them and answer questions. About five years ago, however, women began approaching the company on their own to apply for jobs. “We struggle for our rights in this country, which is very unique in terms of its traditions, beliefs, and values,” says Rahmani, who started with the company as an administrative assistant. “Roshan has opened the door of opportunity and hope for women here.
“I might have left a long time ago if I was in a different environment,” she adds. “But Karim and Altaf have been really supportive, and I feel a responsibility to offer support and an example to other women working at the company as well.”
“In a country like Afghanistan, to have a female HR director hiring and firing anyone—especially a man—is revolutionary,” says Ladak.
Roshan launched as scheduled in July 2003; by December, it had 70,000 subscribers, 20,000 more than forecast. Just over 11 years later, with market penetration essentially complete, that number hovers around 6 million, with over $300 million in annual revenues. Afghanistan’s stability, however, is entering a particularly challenging time. GDP growth is falling, and its currency has lost a tenth of its value since January 2013. The result of the June 14 presidential runoff election, plagued by accusations of voter fraud, was determined only after US Secretary of State John Kerry brokered an agreement for a painstaking recount of every ballot cast. Those facts, combined with a significant reduction in US troops by the end of 2014 (and a complete pullout by 2016) paint a less-than-rosy picture at best and something quite a bit darker at worst. But Khoja remains optimistic despite, or maybe because of, all he’s seen while helping build Roshan.
“People ask if I’m afraid of what will happen when the Americans pull out of Afghanistan,” he says. “But you can’t erase the fact that in the past decade, one-third of the country has learned to read and write and has experienced the freedom of using a phone, along with Twitter, Facebook, music, and everything that comes with it. It’s a communications revolution that can’t be reversed.”
“Technology has brought people closer together,” says Shireen Rahmani. “People will not go backward.”
Changes over the past six years seem to support that opinion; before 2008, the Taliban were responsible for destroying some 300 cell phone towers among the country’s five telecoms, but public outcry from the service disruptions was so intense that the attacks eventually stopped. The power of that human connection will no doubt continue to be one of the strongest forces in the country’s future development.
As Roshan expands into Burundi, Uganda, and Tanzania (under the brand name “Smart”), Khoja is as busy as ever, continuing to commute from his home in Dubai to Kabul 10 or so days each month (“I can take a 4:20 a.m. flight and be at my desk by 7:00”) and devoting the rest of his time to overseeing the launch of service in East Africa. As in Afghanistan, multiple operators exist in the countries where Roshan is staking its claim. But it will focus in part on the rural areas that have the lowest service penetration and the fewest social services, a strategy that fits well with the company’s dual mission of profit and development. “I’m passionate about the difference technology can make in people’s lives,” Khoja says. “What I’ve learned by working with people all over the world is that human beings, in their own cultural ways, have exactly the same hopes and dreams.”
Class of AMP 156