North Korean Economy Watch

You can see the whole report here (PDF).

According to Martyn Williams (PC World):

The number of 3G cellular subscriptions in North Korea passed half a million during the first quarter, the country’s only 3G cellular operator said this week.

The Koryolink network had 535,133 subscriptions at the end of March, an increase of just over 100,000 on the end of December 2010, said Orascom Telecom. Egypt’s Orascom owns a majority stake in Koryolink, which is operated as a joint venture with the state-run Korea Posts and Telecommunications Co.

Subscriber growth has been strong ever since the network was launched in late 2008, but the most recent quarter delivered the first signs that Koryolink is having to work harder for new subscribers.

The January to March period was the first time since the third quarter of 2009 that the number of new subscribers during the quarter failed to be more than the previous quarter. In the October to December quarter, the company added just over 130,000 new customers.

Revenue for the quarter was a record US$25.7 million, a jump of 185 percent on the same period of 2010. Orascom doesn’t disclose net profit figures for the company.

The company is keen to launch new value-added services to raise average revenue per user (ARPU) and during the quarter it began offering MMS (Multimedia Messaging Service). Customers gave the service a positive response, Orascom said.

But despite the efforts, ARPU fell to its lowest level since service began in 2009. At just US$12.7 per month, it was down 40 percent on the same period last year.

Orascom also launched pre-paid cards denominated in euros to boost foreign exchange earnings from North Korea. The scratch cards offer free voice and value-added service use during off-peak hours.

The company’s network now covers 92 percent of the population.

North Korea is one of the world’s most heavily controlled countries and communication is severely restricted. Most cell phones don’t have the ability to make or receive international calls.

The Daily NK offers some additional information:

Cell phone customer numbers are rising while the price of the handsets is falling, according to sources from inside North Korea.

One such source from Pyongyang reported on the 18th, “The phone bill is no different from in the past, only the price of the cell phone itself is falling.”

According to sources, in Pyongyang a single-piece handset has gone from $280 to $250, and a clamshell design from $400 to $380 (at the exchange rate in South Pyongan Province, one dollar is presently worth 2,500 North Korean won, while a kilo of rice continues to drift in the 2,000 won range).

The source explained, “Cell phone users keep increasing. In Pyongyang, approximately 60% of people between their 20s and 50s use cell phones. Especially for the younger generation in their 20s and 30s, a cell phone is seen as a necessary item,” he said.

A source from Shinuiju also commented, “Around three out of ten young people have got a cell phone, and prices have been cut a bit.”

A source from South Pyongan Province agreed, too, saying, “Cell phone bills and prices have dropped compared with in the beginning. A basic cell phone (single-piece) is $225 and an expensive one is $300. You pay 30,000 won in our money, and then you can use it for 200 minutes.”

The source went on, “But when you buy a $10 card, you can use it for 600 minutes. This is a state policy to earn dollars.”

He explained that according to the jangmadang exchange rate, $10 is currently 25,000 won, meaning that payment for credit in dollars is of huge benefit in terms of value for money.

However, there is still an application fee of $800 and registration fee of $100, as before.

The source reported, “Cell phone traders purchase cell phones using their families’ and relatives’ names,” because only one handset per person is allowed. “Since there are many people who have obtained a cell phone in another’s name, their cell phones occasionally get confiscated when they go to the telephone office to pay the bill and get their ID checked.”

In a connected story, Radio Free Asia reported on the 19th that Koryo Link has added another 100,000 subscribers to its books since the end of last year, bringing the total number to 535,133 as of the end of March.

However, in contrast with Pyonyang and the interior areas of North Korea where usage is growing, the battle in the border region is still to restrict and control cell phone usage. Distinguishing a Chinese cell phone is not easy, so cracking down on the practice of using them is not easy, either, and therefore the method of applying for a cell phone has been made more difficult, among other measures.

According to one Yangkang Province source, “One person who took cell phones brought in by smugglers in March, remodeled and sold them was arrested by the People’s Safety Ministry, and in the light of that the process for applying for a cell phone here got stricter. The person who wishes to buy the phone must have the signature of a National Security agent now. In the beginning, there was no such rule.”

In North Korea, applications for cell phones are handled by sales offices; however, the procedure is more difficult now, and so some get the handset from a smuggler and only the number from the local office, in order to avoid the process. Of course, bribes are necessary to facilitate that, currently approximately $400-$450 in Yangkang Province.

According to sources, an official North Korean cell phone works on a different frequency to those from China in order to stop their being used to connect outside the country. However, if the frequency of a smuggled phone is changed to match North Korea’s, then the cell phone can be used.

And according to Mobile Business Briefing:

Orascom Telecom’s North Korean mobile arm, koryolink, surpassed the half a million subscriber mark in the first quarter, representing growth of 420 percent year-on-year. Orascom noted during its Q1 earnings yesterday that its North Korean subscriber base has reached 535,133, up from 125,661 a year earlier. While the numbers are still relatively small, Orascom’s North Korean venture – which was first launched in December 2008 – is being closely watched; koryolink is the only commercial operator in the notoriously secretive and totalitarian country and therefore has huge growth potential – as well as being a risky investment. Orascom said that current mobile penetration in North Korea is just 2 percent. Its revenue from koryolink rose 185 percent year-on-year to US$25.8 million in Q1, while earnings (EBITDA) hit US$22.6 million, giving it an impressive EBITDA margin of 87.6 percent.

koryolink’s network currently consists of 341 base stations covering the capital Pyongyang, 14 main cities as well as 72 smaller cities, Orascom said. The network also extends over 22 highways. As of the end of Q1 2011, koryolink covers 13.6 percent of the country’s territory and 92 percent of its population. In January 2011, koryolink launched MMS services for the first time, the latest addition to its VAS portfolio. The firm has also focused on maximising foreign currency revenue, launching in February a recharge card that can be bought in Euros.

Pictured above: Locations of Koryolink (Orascom) moblie phone towers I have identified in the DPRK.  Supposedly 300 exist in total.

The German Financial Times published a story on Orascom.  Much of it was familiar material, but it did contain one interestign nugget I had not seen before:

Etwa 20 Ägypter und mehr als 200 Nordkoreaner arbeiten für Koryolink – die meisten der Expats im Management, ein Großteil der Nordkoreaner als Techniker und im Service. Für die Kundenbetreuung wurde ein modernes Callcenter eingerichtet. Das Netz deckt die Großstädte, die Autobahnen und die Schienenwege ab, insgesamt etwa 15 Prozent der Staatsfläche. In dem Gebiet leben 91 Prozent der Bevölkerung.

And putting this through Google Translate we get:

Throughout the country, told Heikal, meanwhile, more than 300 transmitters spread. Some 20 Egyptians and more than 200 North Koreans work for Koryolink – most of the expatriates in management, the majority of North Koreans as a technician and service. For customer support a call center was established. The network covers the major cities, highways and rail lines, totaling about 15 percent of state land. In the field 91 percent of the population live.

The service has grown to over 500,000 users but still remains out of the hands of the vast majority of the population:

Auch wenn jetzt theoretisch jeder ein Handy haben darf, sind die Tarife für die meisten Nordkoreaner unbezahlbar. 200 Freiminuten und 20 SMS kosten im Monat 800 nordkoreanische Won, nach offiziellem Wechselkurs sind das rund 5,50 Euro. Dazu kommen die Freischaltgebühr und die SIM-Karte für 50 Euro – zahlbar in Devisen. Wer sich nichts in der wuchernden Schattenökonomie dazuverdient, kann sich das nicht leisten.

And again, via Google Translate:

Even though now may theoretically have a cell phone each, the rates for most North Koreans are priceless. 200 free minutes and SMS cost 20,800 North Korean won per month, according to the official exchange rate is around 5.50 €. Then there are the activation fee and the SIM card for € 50 – payable in foreign currency. Anyone who does nothing, earned in the sprawling shadow economy can not afford that.

And on the human resources front…

Auch bei seinen nordkoreanischen Mitarbeitern bemerkt er Veränderungen. “Vom technischen Können her sind sie sehr gut, die Herausforderungen lagen eher im kaufmännischen Bereich und im Marketing”, sagt Heikal. “Aber wir bilden sie im Unternehmen aus, und wir organisieren für sie Trainings im Ausland, vor allem in China. Ich spüre, dass sich ihre Mentalität über die vergangenen drei Jahre gewandelt hat. Sie beginnen, das Geschäft zu kapieren.”

Bisher sind nordkoreanische Angestellte noch nicht ins oberste Management vorgestoßen, aber mittelfristig sollen sie die ägyptischen Expats ablösen. Natürlich wünscht sich das Regime, dass die eigenen Leute dort die Verantwortung übernehmen – und hegt trotzdem, wie so oft, schwere Bedenken dagegen. “Auf der Managementebene muss man mit der Außenwelt kommunizieren”, gibt Heikal zu bedenken. “Wir diskutieren das mit den Behörden. Sie verstehen das Problem, aber ich denke, das wird noch etwas dauern.” Er lächelt. “Im Rückblick erkennt man enorme Verbesserungen und Veränderungen, aber wir haben noch viel vor uns. Eine ganze Reihe von Dingen wird noch eine Menge Geduld brauchen.”

via Google Translate:

Even with his North Korean employees, he noticed changes. “From her technical ability, they are very good, the challenges were more in the commercial sector and in marketing,” says Heikal. “But we are training in the company, and we’ll arrange for her training abroad, especially in China. I feel that their mentality has changed over the past three years. You begin to understand the business.”

So far North Korea’s workers are not pushed into top management, but the medium they are to replace the Egyptian expatriates. Of course, the regime hopes that their own people over there take the responsibility – and still cherishes, as so often, serious concerns about it. “At the management level needs to communicate with the outside world is,” says Heikal pointed out. “We discuss with the authorities. You understand the problem, but I think it will take some time.” He smiles. “In retrospect, there are vast improvements and changes, but we still have a lot to us. A whole series of things still need a lot of patience.”

Read the full story here:
Die Pyramidenbauer von Pjöngjang
German Financial Times
2011-5-8

Martyn Williams writes in PC World:

North Korea’s only 3G cellular operator continues to report strong demand for its service and saw record revenue and growth in subscriber numbers in 2010, its majority shareholder said Monday.

The Koryolink service ended 2010 with 431,919 subscribers, more than quadrupling its customer base over the year, said Egypt’s Orascom Telecom. Orascom owns three-quarters of the cellular carrier through Cheo Technology, a joint venture with the state-run Korea Posts and Telecommunications (KPTC).

Revenue hit US$66.4 million, up 155 percent on the year.

Koryolink launched its service in the final weeks of 2008 amid some skepticism about whether North Korea’s government, which keeps tight control on its people, would really permit the general populace to own cellphones.

The continuing subscription growth appears to have proven the critics wrong. Anecdotal evidence from foreigners that have visited Pyongyang also points to an increasing number of people being seen on the street with cellphones.

There remains plenty of room to grow. The current subscriber base represents less than 2 percent of the population. Koryolink offered cheaper tariffs in 2010 to put its cellphone service within reach of more people, and might have to continue lowering prices if it wants to greatly expand penetration inside what is one of Asia’s poorest countries.

The service now covers 91 percent of the population including the capital, Pyongyang, 14 other cities, and 22 major highways. In addition to basic voice service, a video phone service was introduced in the third quarter. SMS and MMS messaging services and high-speed data service are available, although subscribers cannot access the Internet through their cellphones.

While subscriber numbers and revenues grow, it remains unclear if Orascom is making any money in North Korea. The company doesn’t disclose net profit figures for the unit, but provides profit before accounting for interest payments, taxes, depreciation and amortization (EBITDA). Measured this way, the company posted profits of $57.8 million, up from $17.2 million in 2009.

But perhaps an indication of Koryolink’s profitability, or at least its potential, can be found in Orascom’s recent deal to merge most of its telecom operations with Russia’s Vimpelcom. The deal includes carriers in a handful of countries in Africa, the Middle East and Asia, but excludes two: its home market of Egypt and Koryolink in North Korea.

Orascom’s 2010 annual report (Just released) can be found here (PDF).

More about the Vimpelcom deal here.

Martyn discusses the firm’s performance here.

Choson Ilbo has more here.

Read the full story here:
North Korea’s Sole 3G Operator Sees Users and Revenue Surge
PC World
Martyn Williams
2011-4-19

According to Yonhap:

North Korea has begun to demand that every personal and electronic storage device in the country be registered in an apparent effort to crack down on outside information that may contain sensitive news about Middle East uprisings, a government source said Friday.

The measure took effect early this year and has led to the confiscation of a considerable number of electronic devices, the South Korean source said, declining to be identified.

The communist country is also allowing its notoriously harsh policing organ to have the right to approve the use of a mobile phone by an individual, the source said.

More than 300,000 mobile phones are believed to be in use in North Korea, which strictly controls the flow of information in and out of its territory in an effort to keep its 24 million people brainwashed and make them conform to the regime.

And according to the Straits Times (Singapore):

Pyongyang has ordered institutions and households to report on how many computers and even portable data storage devices such as USBs and MP3 players they own, early in 2011, according to a Seoul government source.

The North Korean police agency is in charge of keeping track of the IT gadgets possessed by everyone, presses criminal charges against those who failed to report and even confiscates many of the gadgets, the source said.

…

The reclusive communist state has been running a unit of authorities for years to crack down on North Koreans watching South Korean soap operas or foreign movies, which they call ‘non-socialist video’.

Pyongyang is also reinforcing a crackdown on use of cellphones and the Internet. It is estimated that more than 400,000 mobile phones are being used in North Korea. North Koreans are required to get government permission to use cell phones. They are also banned from bringing them into the country or using cell phones bought overseas.

Foreign members of international non-governmental organisations working in North Korea were also told to follow domestic regulations on cell phones.

It appears that the DPRK is attempting to treat these products the same way it has treated radios for decades.  Lankov writes in his book, North of the DMZ:

Certainly, a person with some technical knowledge can easily make the necessary adjustments and transform such a receiver into a real radio. To prevent this from happening, the police undertake periodic random inspections of all registered receivers. Controlling the correct use of radio receivers is also an important duty of the heads of the so-called people’s groups or inminban. The head of an inminban can break into any house at any time (even in the dead of night) to check for the possible use of a non-registered receiver.

If a North Korean has access to foreign currency, he or she can buy a foreign-made radio set in one of the numerous hard-currency shops. However, after purchase the radio set was subjected to minor surgery in a police workshop — its tuning had to be fixed, so it could only receive official Pyongyang broadcasts (it appears this practice is declining in recent years).

The control was never perfect…

Of course it is questionable as to whether the inminban play a reliable role in “law enforcement” these days.  Instead, individuals in these positions seem to play an increasing role in shielding their residents from Pyongyang’s dictates rather than assuming a pure-exploitation position.  In the past we have seen how inminban effectiveness can affect local real estate prices.  Also, when the government needed to apologize for the disastrous “recent” currency reform, they did so in person to the inminban representatives.

Given the proliferation of electronic devices, particularly in Pyongyang, in combination with the capacity of local police to carry out this mission, I believe the actual result of this policy will be the registration of “some” electronic devices along with the hiding and bribing required to keep others off the books.  So inspection police just got a raise!

Pictured above (L – R): Jang Song-thaek, Naguib Sawiris, and Kim Jong-il

According to Martyn Williams:

The CEO of Egypt’s Orascom Telecom has been given a rare honor during his current trip to Pyongyang: an audience with Kim Jong-il and dinner hosted by the reclusive leader for the businessman whose firm owns a majority of North Korea’s only 3G cellular network.

Naguib Sawiris arrived in the North Korean capital on Friday and was received on Sunday by Kim Jong-il, the Korea Central News Agency reported on Monday.

Kim Jong-il, “warmly welcomed his DPRK visit taking place at a time when Orascom′s investment is making successful progress in different fields of the DPRK, including telecommunications,” the report said.

Orascom holds a 75 percent stake in Cheo Technology, which operates North Korea’s only 3G cellular network.

The network, the remaining stake in which is held by the government, uses the Koryolink service name. It has seen fast growth in subscribers and currently claims more than 300,000 accounts in just the two years since its launch.

After starting first in Pyongyang, the network has been expanded to cover provincial capitals and smaller cities and a 3G signal is now within reach of 75 percent of the population, the company said in November last year.

The Orascom group has made several other investments in the country. In 2007 it invested in a cement factory and in late 2008, at around the same time it launched the 3G network, it opened a local bank. The company has also been tied to renewed construction work at Pyongyang’s pyramid-shaped Ryugyong Hotel. The iconic building was halted in 1992 and has remained vacant ever since.

According to the AFP:

North Korean leader Kim Jong-Il has met the head of an Egyptian company that provides a mobile phone service in the impoverished communist nation, state media reported Monday.

Naguib Sawiris, chairman and CEO of Orascom Telecom Holding, has been visiting the North since Friday. His company has provided a mobile phone service in the North jointly with a local firm since late 2008.

Kim “warmly welcomed his DPRK (North Korea) visit taking place at a time when Orascom’s investment is making successful progress in different fields of the DPRK, including telecommunications,” the North’s state news agency KCNA said.

Kim had “a cordial talk” with Sawiris and hosted a dinner for him, it added.

Orascom said last year that mobile phone subscriptions in North Korea had more than quadrupled in the space of a year — to 301,199 by the end of September 2010 from 69,261 a year earlier.

However, it said overall “mobile penetration” remains at one percent in the country, which has an estimated per-capita GDP of 1,700 dollars and a population of 24 million.

North Korea strictly controls access to outside information and fixes the tuning controls of radios and televisions to official stations.

It began a mobile phone service in November 2002 but shut it down without explanation 18 months later and began recalling handsets.

But in December 2008 the country introduced a 3G mobile phone network in a joint venture with the Egyptian firm.

The Egyptian group in 2007 sealed a 115 million dollar deal to invest in a North Korean cement plant. It is also reportedly involved in completing construction of the 105-storey Ryugyong Hotel in the capital.

Martyn has more at North Korea Tech.

According to Martyn Williams at North Korea Tech:

The late start of cellular telephony in North Korea has brought the country at least one advantage: it leads the world in 3G adoption.

An impressive 99.9 percent of all subscribers in the country use 3G, placing North Korea number one in the world, telecommunication analyst TeleGeography said on Wednesday.

The solid showing doesn’t really mean North Korea’s cellular network is ahead of the world. In fact, it does more to illustrate how statistics can sometimes provide only half the picture.

While 3G adoption is indeed strong, it’s because most people didn’t have a chance to subscribe to the country’s 2G network.

A small handful of subscriptions on the Sunnet network were allowed before restrictions were put in place in the wake of the Ryongchon train explosion in 2004. Phones were also expensive and the network was not available nationwide.

In contrast the 3G network has been made more widely available. It’s operated by Koryolink, a joint venture between the state-run Korea Posts and Telecommunications Co. and Egypt’s Orascom.

Koryolink had 301,199 subscriptions at the end of its third quarter, which represents a penetration of just over 1 percent of the country – that’s poor by international standards.

In contrast, Japan ranked second in the survey with 94.6 percent of cell phone users on 3G. That works out to about 115 million lines.

Read more here (image source).

Institute for Far Eastern Studies (IFES)
NK Brief No. 10-11-22-1
11/22/2010

The Chosun Sinbo reported on November 15 that North Korea has erected hundreds of cellular signal towers throughout the country, providing phone service to every province, city, and town in North Korea. According to the report, the expansion of the North’s 3G network has really taken off in 2010, and the number of subscribers within the country has grown 2.5 times in the latter half of the year, as has the available coverage area.

This initiative has focused on setting up hundreds of cell towers near major highways, cities, and industries important to economic advancement. It was also reported that industry insiders had revealed that not only towns, cities, and provinces were targeted for the expansion of cellular service, but that there was a plan to erect towers in the back country, as well, and that authorities aimed to extend service to every village in the country by next year.

To this end, the Chosun Sinbo reported, the Pyongyang-based DPRK-PRC JV Checom Joint Venture Company has set up a “flow manufacturing process and is producing hundreds of high-performance cellular phones each day” and, “Related sectors are testing new devices and actively working on a project aimed at modifying the operating software to suit the needs of North Koreans.”

The paper also reported that North Korea’s academics and scientists collaborated to develop such a system in a short time, and that the system was also integrated into the nation’s Intranet. This system is different from the previous configuration in that videos, recordings, and text messages can be sent both ways, so that the system better supports an exchange of information rather than merely a transfer.

The paper emphasized that by providing distance education service to every local academic office, city and town library, and science and educational facility, the North has enacted a state-of-the-art, nationwide education system. In addition, by providing the infrastructure for real-time interactive lectures, workers and children in every region of the country can easily pursue their education by actively participating in a wide range of lectures.

According to Bernama:

North Korea has started to mass-produce cellular phones while trying to customize their operating systems to satisfy local needs, Yonhap news agency reported, citing a pro-Pyongyang newspaper as saying.

The report by Chosun Sinbo, run by a group of pro-North Korea residents in Tokyo and monitored in Seoul, came after Cairo-based Orascom Telecom Holding announced earlier this month that its mobile business in the communist state is rapidly expanding.

The number of mobile phone subscribers has at least quadrupled over the period of one year in North Korea, according to Orascom. The expansion doesn’t mean that the regime has eased its rules aimed at restricting the flow of information in and out of the country.

Chosun Sinbo said Monday in its report from Pyongyang that a firm known as Checom Technology Joint Venture Company has set up a “flow manufacturing process and is producing hundreds of high-performance cellular phones each day.”

Checom is a Pyongyang-based electronics and communications company, according to the Web site of Songsang Company, a Dandong, China-based firm that trades with North Korea.

Flow manufacturing is a build-to-order process aimed at minimizing inventory.

“Related sectors are testing new devices and actively working on a project aimed at modifying the operating software to suit the needs of local users,” Chosun Sinbo said.

“Central engineering rooms for mobile communications are also pushing a program to develop software for their main machines to meet the domestic environment.”

The report added that a video calling service has also been made available while “hundreds of base stations” that transmit signals have been set up across the country.

Orascom, which operates jointly with the local Koryolink, had said in its earnings report that video calling “resulted in a high level of demand, especially from the youth segment.”

North Korea first launched a mobile phone service in Pyongyang in November 2002, but banned it after a deadly explosion in the northern Ryongchon train station in April 2004, possibly out of concern that it could be used in a plot against the regime.

In 2008, the country reversed its policy and introduced a 3G mobile phone network in the joint venture with Orascom.

However, the overall “mobile penetration” remains at 1 percent in the country that has a per-capita GDP of US$1,900 and a population of 22.8 million, according to Orascom.

Read the full story here:
North Korea begins mass-producing cell phones to meet local demands
Bernama (Malaysia)
11/15/2010

Martyn Williams writes in PC World:

Koryolink, the operator of North Korea’s only 3G cellular network, saw a big jump in subscribers during the third quarter as its network was expanded to cover more of the country.

The company ended September with 301,199 subscribers, a jump of 63 percent in just three months, according to Orascom Telecom. The Egyptian company owns a three-quarter stake in Koryolink.

Quarterly revenue of US$18.4 million was a record while profit was $7.5 million, before accounting for interest payments, taxes, depreciation and amortization. Orascom did not disclose whether Koryolink made a net profit or a loss for the period.

A lot of the growth came from outside the capital city of Pyongyang.

Koryolink expanded its network to cover a twelfth provincial city during the quarter and added tariffs aimed at lower-income users outside of the capital. As a result approximately half of all new subscribers during the quarter came from outside of Pyongyang.

The push to broaden its subscriber base had an effect on the average revenue gained from each subscriber during the period. It was US$15.20 during the quarter, down from $21.50 in the second quarter.

In addition to the capital and provincial cities, the network now covers 42 small cities and 22 highways and railways putting a 3G signal within reach of 75 percent of the population, the company said.

Koryolink plans to expand the network further to 59 small cities by the end of the year. That would push coverage to 91 percent of North Korea’s roughly 24 million people.

Koryolink launched in the final days of 2008, so is approaching the second anniversary of providing 3G services in North Korea. It has one competitor, Sunnet, which runs a second-generation GSM network. Call quality is superior on Koryolink’s network and so it is attracting more users, according to sources in Pyongyang.

I have to admit I am surprised that Koryolink could generate $18.4 million in revenues in just one quarter–much less a $7.5m EBITDA profit!  There is no telling what the actual profit is, but no doubt it will be reinvested into the firm to expand service rather than being repatriated to Egypt.  Once the network is completed, we can expect costs to fall further and profits to make up a larger share of revenues, especially if the North Korean government keeps out pesky competitors as their agreement requires.

So now we know that Pyongyang, Sinuiju, Kanggye, Chongjin, Hamhung, Wonsan, Sariwon, Rajin, Phyongsong, Hyesan, and Haeju are covered by Koryolink.  I am also willing to bet that Nampho and Kaesong are covered. I will try to figure out which other smaller cities are connected.  It sounds like they are now moving out to the county capitals, but it would be interesting to know in which provinces they are focused.

UPDATE: Martyn Williams gave me a link to the Orascom financial reports from where all this data originates.  You can read them here.  He adds revenue, subscription, and pretax profit charts on his blog.

Read the full story here:
Koryolink Logs Big Jump in North Korean Cell Phone Users
PC World
Martyn Williams
11/8/2010

Martyn Williams writes in IT World:

The girl in the video looks like she’s about 12 years old. Thin, dirty and with a vacant look on her face, she tells the cameraman that she’s actually 23 and she survives by foraging for grass to sell to wealthier families for their rabbits.

The sobering footage was shot in June this year in the province of South Pyongan, North Korea, and provides a glimpse into the life of one person who lives far from the military parades and fireworks last month marking the 65th anniversary of the Workers’ Party of Korea.

It was shot on a cheap camera by a man who goes by the pseudonym Kim Dong-cheol, a North Korean with a double life. In addition to his job as a driver for a company, Kim also works as a clandestine reporter for AsiaPress, a Japanese news agency that’s taken advantage of the digital electronics revolution to get reports from inside North Korea.

AsiaPress works with six North Koreans they’ve trained as journalists. They’re given instruction in operating cameras, using PCs and how to use cell phones so they don’t attract the attention of authorities. Then, every few months, they meet with AsiaPress representatives just over the border in China to hand over their images.

“When we started training journalists in 2003 or 2004, getting cameras into North Korea was a real problem,” said Jiro Ishimaru, chief editor of the news agency, at a Tokyo news conference on Monday. “Nowadays, within North Korea you are able to have your pick of Sony, Panasonic or Samsung cameras.”

The material they produce is often startling and documents a side of the country the government doesn’t want the world to see.

In another clip also captured by Kim, a North Korean woman argues with a police man. Asked for a bribe, she screams at him and pushes him. “This cop is an idiot,” she shouts.

For most journalists, getting into North Korea is a tough task. Getting outside of the capital Pyongyang to see the lives of average people in the countryside is very difficult. Seeing the sort of poverty or disagreement with authority that Kim caught on camera is impossible.

Most of the shots are recorded surreptitiously and the small digital cameras make smuggling images easier than from older tape-based models.

“You used to have to tape video cassettes to your stomach,” he said. “But it’s very easy to hide an SD Card somewhere on your body.”

AsiaPress isn’t the only media working with reporters or informants in North Korea. Outlets including Open Radio for North Korea and Daily NK also receive reports from correspondents inside the country that add additional information, understanding and sometimes rumor to what’s happening inside the country.

The reports are typically sent via cell phones connected to a Chinese mobile network. Signals from Chinese cellular towers reach a few kilometers into North Korea and are difficult to monitor by the state’s telecom surveillance operation.

Recently, North Korean authorities have woken up to the flow of information across the border and are trying to stop it.

“The greatest headache I face is telecommunications,” Ishimaru said.

Mobile detection units patrol the border looking for signals from within North Korea and, if found, attempt to triangulate their source.

“The number of these units has been increasing, so if you spend a long time on the phone the police will come and search your house,” said Ishimaru. “People have become frightened of using the phone.”

If caught the punishment can be severe. Earlier this year a man faced a public firing squad after he was caught with a cell phone and admitted to supplying information to someone in South Korea, according to a report by Open Radio for North Korea.

The risk such reporters face leaves their agencies open to criticism that they are putting people in unnecessary danger, but Ishimaru said his reporters all want to provide a true picture of life inside North Korea to the rest of the world. He pays them between $200 and $300 per month.

The digital media revolution isn’t one way. It’s estimated that half of all young people in major cities have watched pirated South Korean TV dramas.

“Media around the world has gone digital and that’s also happened with North Korean propaganda,” said Ishimaru. “But even the wealthy and those in authority don’t want to watch propaganda films and movies about Kim Il-Sung and Kim Jong-Il. They want to watch something that’s more entertaining.”

The shows are recorded from South Korean satellite TV broadcasts in China and burned onto DVDs or Video CDs that soon make it over the border and into North Korean markets.

There are occasional crackdowns, but even the police want to watch the dramas.

“Although there are crackdowns and things are confiscated,” he said, “I don’t think there is anyway the leaders can put a stop to this.”

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Read the full story here:
How digital technology gets the news out of North Korea
IT World
Martyn Williams
11/2/2010