In 1998, Afghan-American telecommunications entrepreneur Ehsan Bayat won an exclusive license from Afghanistan's Taliban government to create Afghan Wireless as a joint venture with the country's Ministry of Communications, which owns 20% of the company. Bayat received financial backing from British entrepreneurs Stuart Bentham and Lord Michael Cecil. Within a year, Afghan Wireless had re-enabled Afghanistan's international country calling code and set up computerized telephone exchanges in the cities of Kabul and Kandahar replacing the outdated manual telephone switchboards that the country's telecommunications had long relied upon.
In June 1999 the Taliban granted Afghan Wireless a 15-year monopoly on cell phone traffic in Afghanistan, but after the Taliban were overthrown by an American invasion in 2001, competing companies such as Roshan started to appear.
Afghan Wireless was the first company licensed to provide GSM wireless service in Afghanistan and launched its offering in April 2002. By June 2008, Afghan wireless reported to have 2 million subscribers across all 34 of Afghanistan's provinces.
According to a report written in 2011 by Vanity Fair contributing editor David Rose, Afghan Wireless's founder Ehsan Bayat had acted as a confidential informant for the American Federal Bureau of Investigation's Joint Terrorism Task Force since 1998. In a joint endeavor with the National Security Agency known as Operation Foxden, the FBI intended to install equipment into Afghan Wireless's infrastructure that would allow American intelligence agencies to eavesdrop on cell phone calls in Afghanistan. While the operation was in its planning stages, President Bill Clinton signed Executive Order 13129, which prohibited US citizens from doing business with the Taliban. In the interests of completing Operation Foxden, the FBI and NSA aided Bayat and his British partners in circumventing the executive order's ban by transferring ownership of Afghan Wireless to a shell company based in Liechtenstein. Before the plan could be put in place, the American Central Intelligence Agency raised objections to Operation Foxden, citing their traditional preeminence over the FBI in conducting foreign intelligence gathering. The operation was finally authorized to move forward on September 8, 2001—but the September 11 attacks just three days later and the subsequent invasion of Afghanistan rendered the project moot.
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Cecil and Bentham's lawsuit
In 2002, Bayat offered to buy out co-founders Stuart Bentham and Lord Michael Cecil's shares in Afghan Wireless for what Bentham termed "a derisory sum". Cecil and Bentham refused the offer and Bayat filed suit against them. Cecil and Bentham counter-sued for $400 million in a New York court, alleging "fraud, deceit, breach of contract and conspiracy" but the case was struck out after the CIA intervened, citing state secrets privilege. Cecil and Bentham reopened the case in London, but the plaintiffs claimed that they were barred from raising key aspects of their case due to the secrecy around Operation Foxden. Their lawsuit was finally dismissed in August 2011.
- Rose, David (September 2011). "9/11: The Tapping Point". Vanity Fair. Retrieved 2016-08-08.
- Shevory, Kristina (8 April 2016). "Once a Bright Spot, Afghan Telecoms Face Unsustainable Losses". New York Times. Retrieved 2016-08-08.
- Nystedt, Dan (23 June 2008). "Mobile Phone Use Grows in Afghanistan". PC World. Retrieved 2016-08-08.
- Cobain, Ian (27 March 2012). "US acted to conceal evidence of intelligence failure before 9/11". The Guardian. Retrieved 2016-08-08.
- Rose, David (7 April 2012). "Robbed and ruined by a British court on the orders of the CIA... and we couldn't tell a soul". Daily Mail. Retrieved 2016-08-08.
- Farmer, Ben (27 May 2009). "Lord Michael Cecil sues Afghan billionaire over £250m phone deal". The Daily Telegraph. Retrieved 2016-08-08.
- "Telephone Systems International and Ehsanollah Bayat Defeat US$400 Million Claim Brought by Lord Michael Cecil, Stuart Bentham and Alexander Grinling Bringing 9 Years of Litigation to a Close" (Press release). London: PR Newswire. Paul Hastings LLP. 11 August 2011. Retrieved 2016-08-08.