North Korean Economy Watch

Martyn Williams writes in The Standard:

Koryolink, the North Korean 3G cellular network established in mid-December by Egypt’s Orascom Telecom, has attracted several thousand subscribers in the first two weeks since it began accepting applications in January.

“We didn’t start sales until about two weeks ago,” said Naguib Sawiris, chairman of Orascom Telecom in a telephone interview. “So far we have about 6,000 applications. The important point is that they are normal citizens, not the privileged or miliary generals or party higher-ups. For the first time they have been able to go to a shop and get a mobile phone.”

Orascom has a single shop in Pyongyang and is in the process of expanding its sales network, he said.

But while Koryolink’s first customers might not have high-profile official jobs, they are among the more wealthy in society and price, particularly of the handsets, stands as an obstacle to greater penetration.

“The price is quite high,” said Sawiris. “The government has put a big tax on handsets and it’s making it difficult for everyone to participate but we are having negotiations with the government to reduce that.”

The handsets Koryolink is offering, localized Korean versions of phones from China’s Huawei, cost between US$400 and $600 after the government levy has been added and there’s also calling charges.

The cheapest subscription costs 850 North Korean won per month. That’s about US$6 at the official exchange rate but only 24 cents at the current black market rate used by many citizens and traders. Calls on this tariff are charged at 10.2 won per minute. The highest package costs 2,550 won per month and call rates are 6.8 won per minute.

But all calls can be monitored:

With the launch of the Koryolink network the state continues to have the ability to monitor what its citizens are saying and can eavesdrop on calls if it wants, said Sawiris.

“That’s the right of the government,” he said.

How long to get the project moving?

It took about a year from that initial contact to reach an agreement and another nine months to get the network installed.

“We were quite worried about 2 things: the time it would take and the fact that they would really let normal citizens purchase lines.”

The full article is worth reading here:
North Korean 3G service attracts 6,000 in 2 weeks
The Standard
Martyn Williams
2/5/2009

This entry was posted on Thursday, February 5th, 2009 at 3:47 pm and is filed under Cell phones, Communications, Economic reform, Foreign direct investment, Joint Ventures, Orascom Telecom Holding. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.