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Date: September 27, 1998

Locator: Hackettstown

Title: Telephone Systems” Afghan Connection

Author: By Trevor Thomas

Subject: The firm says it has a $240-million cell-phone deal with the Taliban.

Although the U.S. State Department can”t confirm it and telephone equipment manufacturers say they know nothing about it, a small company in Hackettstown says it has landed a $240-million deal with the Taliban to install a cellular phone system in war-torn Afghanistan. A U.S.-based spokesman for the Taliban, a fundamentalist Islamic group, confirmed the contract was signed in early September.

Gary Breshinsky, president of Telephone Systems International, says his company will establish a cell-phone network in Afghanistan within two years, covering 15 cities, using equipment from Motorola, AT&T, Nokia and Ericsson. There are no Federal restrictions on doing business with Afghanistan, despite the recent U.S. missile attack against a reported terrorist site there.

Breshinsky says his company will own 80% of the Afghan system, while Taliban authorities will own the remaining 20%. The Afghan government will then take over the entire system in 20 years.

Spokesmen for AT&T and Motorola insist they never heard of Breshinsky”s company. Breshinsky counters that he dealt with officials of the companies based overseas, and that “their people back here would not be aware of it yet.”

Breshinsky also discounts official State Department denials that the government knew anything about the deal. “We told them 20 months ago what we”ve been doing,” he insists.

He says that the wireless system would be based on a network of rooftop-based receivers and transmitters. “The toughest part will be to get the equipment into the country,” he observes, because Afghanistan”s infrastructure has been demolished by 20 years of warfare. He adds that his firm is negotiating with several international satellite services to provide uplinks for the system.

His company has 10 employees in New Jersey and a like number in a California office, Breshinsky says. The Afghan installation could increase its state-based workforce to 500 or more people, he estimates. Telephone Systems has an option to lease space in a 30,000-square-foot plant near its headquarters.

Breshinsky remains mum about a number of specifics regarding the Afghan deal, explaining that he needs to keep information from competitors.

He says his company has set up phone systems in Asia, including a network of six million phones in a country that, typical of his close-to-the-vest style, he would not identify–except to say that it was “close” to China. He also says that officials of two former Soviet republics have invited his company to discuss installing a cell-phone system, but again, he would not be more specific. Breshinsky also declines to name who will finance the Afghan system. This reticence raises doubts in at least one telecommunications consultant

“Can he find banks to back it?” asks Henricus Cox, principal of Cox Partners, a telephone consultancy in Boca Raton, Florida. From his own experience in helping to set up a phone system in Vietnam, Cox observes that simply obtaining a letter of credit from a bank to back a deal is often difficult.

Other problems Breshinsky is likely to face include the tricky task of integrating equipment from different manufacturers, negotiating the difficult Afghan terrain and finding suitable sources of electric power, adds Cox.

“There are considerable financial, operational and infrastructure issues that are unanswered,” Cox observes.

Over the next two years, Breshinsky and his engineers are going to have to come up with specific replies to such questions.