Archive for the ‘Egypt’ Category

North Korean oil tanker in Lybia (UPDATED)

Thursday, March 13th, 2014

UPDATE 4 (2014-3-17): US Navy Seals have boarded the Morning Glory.According to the BBC:

The raid by Navy Seals took place in international waters south of Cyprus, said spokesman Rear Adm John Kirby.

The Morning Glory’s evasion of a naval blockade at the eastern port of Sidra prompted Libya’s parliament to sack Prime Minister Ali Zeidan last week.

The oil terminal has been under the control of militia wanting autonomy for eastern Libya since July 2013.

Meanwhile, there has been a deadly attack on the barracks in the main eastern city of Benghazi.

This was their first attempt to export oil from rebel-held areas. It is not clear where the tanker was headed.

Adm Kirby said the operation had been authorised by President Barack Obama and that no-one had been hurt.

“The Morning Glory is carrying a cargo of oil owned by the Libyan government National Oil Company. The ship and its cargo were illicitly obtained,” he said, adding that it would now be returned to a Libyan port.

The vessel was flagged in North Korea but officials in Pyongyang said it had been deregistered because of the incident.

It was said to have been operated by an Egyptian company.

More in the Washington Post here.

See Marcus Noland’s comments here.

UPDATE 3 (2014-3-13): Morning Glory is on the run! According to The Diplomat:

…The Libyan government didn’t take kindly to this and threatened to attack the tanker, threatening airstrikes against it. Eventually, the tanker was intercepted and taken to Misrata where it was held by Libyan warships.

Remarkably, the North Korean tanker managed to escape its capture by the Libyan fleet in the middle of the night. It made its escape when the weather forced the smaller Libyan warships and patrol boats to sail close to the coast, leaving a gap in the convoy guarding the tanker. The Morning Glory made a run for the open seas and is now confirmed to be back in international waters according to Mohammad Hitab a spokesman for Libya’s al-Waha Oil Company, the state-run company running the Es Sider port.

It remains unknown the extent to which North Korea is communicating with Libya’s federalist rebels. In the case of the oil sale, the rebels were looking for buyers willing to purchase risky oil at rates far below the asking market price. Given North Korea’s energy situation, it appeared to be one of the few buyers interested in the deal. A report from the Libya Herald earlier this week noted that members of the federalist rebels were spotted on board the Morning Glory prior to its attempted departure from Es Sider port.

The tanker’s escape resulted in a no confidence vote on Prime Minister Ali Zeidan’s leadership in Libya. Zeidan lost the vote and had his travel barred. Libyan Defense Minister Abdallah al-Thinni was sworn in on Tuesday evening, according to Reuters.

The United States Department of State issued a statement where it said it was “deeply concerned by reports that a vessel sailing under the name Morning Glory is loading a cargo of illicitly obtained oil at the Libyan port of As-Sidra.” The statement does not mention North Korea but notes that the Morning Glory‘s ”action is counter to law and amounts to theft from the Libyan people.” The Italian Navy had reportedly assisted the Libyans in intercepting the Morning Glory but has since withdrawn from attempting to prevent the ship from leaving the Mediterranean.

UPDATE 2 (2014-3-12): Here is the full statement from KCNA on the tanker:

Spokesman for Maritime Administration of DPRK on “Oil Tanker Incident” in Libya

Pyongyang, March 12 (KCNA) — A spokesman for the Maritime Administration of the DPRK Wednesday gave the following answer to the question raised by KCNA in connection with the recent DPRK-flagged “oil tanker incident” which occurred in Libya:

On March 8 the government of Libya informed the DPRK of the fact that the DPRK-flagged oil tanker Morning Glory made an oil contract with an individual armed group in Libya and illegally entered a port under the control of the group in the eastern part of Libya, and urged the DPRK to take a necessary measure for settling it through a formal channel.

As far as the oil tanker is concerned, it is a ship run by the Golden East Logistics Company in Alexandria, Egypt and is allowed to temporarily use the DPRK flag for six months in accordance with the contract made by the company with the DPRK at the end of February.

Right after being informed of the fact by the Libyan side, the DPRK strongly blamed the company side for the violation of the contract and demanded it let the ship leave the port at once without loading oil.

In addition to it, the DPRK formally notified the Libyan government and the International Maritime Organization that it cancelled and deleted the ship’s DPRK registry and invalidated all the certificates as the ship violated the DPRK’s law on the registry of ships and the contract that prohibited it from transporting contraband cargo and entering the warring, dispute-torn or natural disaster-affected areas.

Therefore, the ship has nothing to do with the DPRK at present and it has no responsibility whatsoever as regards the ship.

What matters is that some foreign media are making much fuss, deliberately linking the case with the DPRK, claiming that “the north Korean ship tried to purchase oil from Libya in an illegal manner” and “the government force of Libya opened fire on the north Korean flagged oil tanker.”

Some forces are misleading the public opinion, persistently linking the issue with the DPRK. This is obviously aimed at achieving a sinister political purpose to tarnish its image.

They should clearly know that with neither false propaganda nor mud-slinging can they damage the image of the dignified DPRK.

The AP reports on proof the DPRK provided to the western media to back up its claims:

North Korea offers its flag to foreign-owned ships in the same way as a number of other countries do.

Jon provided a document he said was the official deletion of the Morning Glory from the Maritime Administration’s registry. He also showed email correspondence he said was from IHS Maritime in London, a company that manages shipping information, that purportedly acknowledged the deletion of a vessel from the North Korean registry.

UPDATE 1 (2014-3-12): The DPRK has denied it owns the ship. According to the Wall Street Journal:

North Korea denied on Thursday it was illegally exporting oil from rebel-controlled eastern Libya, claiming that an Egyptian company was operating a North Korean flagged oil tanker in the center of an armed standoff since Saturday.

North Korea said it had revoked the registry of the tanker, named “Morning Glory,” and demanded that Alexandria-based Golden East Logistics Company leave al-Sidra port without loading oil.

The tanker, carrying at least 234,000 barrels of crude oil, sailed from a rebel-controlled port into international waters on Tuesday.

A contract signed by North Korea with the Egyptian company prohibits the tanker from transporting contraband cargo and entering war or disaster zones, North Korea said through a report in its state media.

“The ship has nothing to do with the DPRK at present and it (North Korea) has no responsibility whatsoever as regards the ship,” the report said, using the abbreviation of country’s official name Democratic People’s Republic of Korea.

The Golden East Logistics Company couldn’t be immediately reached for comment.

The presence of a North Korean-flagged vessel in the Mediterranean is very unusual, although the country has been involved in trading arms in the region. Cheong Seong-chang, a senior analyst at Seoul-based think tank Sejong Institute, said the rebels may have offered oil to North Korea at a fraction of market prices.

ORIGINAL POST (2014-3-6): According to IBT:

A North Korean oil tanker has tried to dock at Libya’s Es-Sider port which has been seized by armed protesters, Reuters reports.

It has not yet been confirmed whether the tanker wanted to take oil from the protesters, who have threatened to sell it independently unless they get political autonomy from Tripoli and a greater share of oil revenues, according to Libyan officials.

“The tanker came to Es-Sider but did not load oil,” said an official at the state-owned Waha Oil Co, which operates the port and connecting oilfields.

An official at National Oil Corp (NOC), which owns Waha, said he did not know whether the protesters, led by former militia leader Ibrahim Jathran, had tried to attract buyers with the tanker but said: “We know they have been trying to sell oil.”

It is extremely unusual for a North Korean-flagged oil tanker to operate in the Mediterranean region, shipping sources said.

Jathran’s group seized three oil ports which accounted for 600,000 barrels per day of export, before the protests started in 2013.

The Libyan government has tried to end the protests but little progress has been made so far.

Libya’s defence minister held talks with protesters blocking the 340,000-bpd El Sharara oilfield in the south, but NOC has not confirmed whether it will reopen in the near future.

The strikers are also demanding national identity cards and a local council; the ministers have promised to meet the requests.

Jathran’s group declined to comment.

The Libyan navy fired on a Maltese-flagged tanker which allegedly tried to load oil from the protesters in the port in January.

Libya’s oil output has fallen to little over 200,000 bpd from 1.4 million bpd in July when protests started across the country.

“The financial situation of the government is difficult,” Culture Minister Habib al-Amin, who acts as a government spokesman, said in February.

“Some ministries have been unable to pay for expenditures due to a lack of budget and liquidity.”

Read the full story here:
Libya: North Korea Oil Tanker Tries to Dock at Seized Es-Sider Oil Port
International Business Times
Ludovica Iaccino
2014-3-6

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KoryoLink update (sort of)

Friday, August 17th, 2012

It is getting harder to know specific information about the DPRK’s mobile phone network…such as how many subscribers have signed up or how revenues/profits are doing.

In December 2011 Orascom Telecom finalized a demerger and the KoryoLink portfolio (the DPRK’s 3G mobile phone network) was transferred to a new holding company, Orascom Telecom Media and Technology Holding S.A.E. (OTMT).

According to the Orascom Q1 2012 shareholder report (p15):

Under the terms of the VimpelCom transaction, VimpelCom, Weather II and OTH agreed on a demerger plan (the Demerger”) pursuant to which the Company‟s investments in certain telecom, media and technology assets (the “SpinOff Assets”), which were not intended to form part of the VimpelCom business going forward, would be transferred to a new company, Orascom Telecom Media and Technology Holding S.A.E. (“OTMT”). The Demerger was performed in accordance with the guidelines of the Egyptian Financial Supervisory Authority and in particular decree no. 124 of 2010 and was completed in December 2011. The split of OTH shares by the way of the Demerger resulted in OTH shareholders holding the same percentage interest in OTMT as they held in the Company. The Demerger plan was initially approved in a shareholders meeting dated 14 April 2011 and subsequently on 23 October 2011. Approval from the Egyptian Financial Supervisory Authority was received in December 2011.

As a result of the Demerger, during November and December 2011, ownership of the following Spin-Off Assets was  transferred from the Company to OTMT:

[...]

75% ownership in CHEO Technology Joint Venture Company, together with all other assets and businesses located in
North Korea;

95% ownership in Orabank NK;

[...]

Other than the reference above, the Q1 report does not mention KoryoLink or even the DPRK. As you would expect, KoryoLink is not mentioned in Orascom’s Q2 2012 Shareholder Report either.

OTMT (the new holding company) has a web page, however it contains remarkably little information. Here is what it has to say about KoryoLink:

Koryolink

A joint venture between OTH [Orascom Telecom Holdings] and the state-owned KPTC [Korea Post and Telecommunications Company] and included as part of the assets held by OTMT following the demerger. OTMT holds, a 75% stake in [Cheo Technology Joint Venture Company] with KPTC. The company is North Korea’s only 3G Mobile operator. By June 2011, Koryolink’s network covered more than 75% of North Korea’s population (estimated at 24.5 million).

Being the first company of its kind and scale in North Korea, koryolink established many precedents; a first of its kind call center to provide customer service; a launch announcement in major newspapers and on radio despite almost non-existent marketing and advertising industries; and the implementation of a koryolink advertising billboard, the first of its kind in Pyongyang.

KPTC is the “Korea Post and Telecommunications Company” which is nominally controlled by the DPRK’s Ministry of Post and Telecommunications.

This OTMT page shows five financial reports for the year, however, only one of them is in English (an audit by Deloitte in June 2012). All the other reports are in Arabic. The audit report includes aggregate financial information from “CHEO Technology (KoryoLink)”; however, it does not contain any detailed company information. Hopefully this will change in the future.

The OTMT web page does not mention OraBank at all.  According to this organization chart, however, it appears to be held by a separate holding company under the OTMT umbrella, the Oracap Holding Co./Oracap Far East Ltd.  I have not been able to find out much more than that.

Additional information welcome.

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Sawaris second DPRK trip and KoryoLink subscription data

Friday, February 3rd, 2012

The CEO of Egypt’s Orascom Telecom, Naguib Sawiris, has made his second visit to the DPRK. You can read about his first visit in January 2011 here.

Pictured above (KCNA): Naguib Sawiris meets with Kim Yong-nam.

KCNA reported that Mr.Sawiris arrived on February 1 (video here):

Pyongyang, February 1 (KCNA) — Naguib Sawiris, executive chairman of the Orascom Telecom Media and Technology Holdings SAE, and his companion arrived here on Wednesday.

On February 2, KCNA reported that Mr. Sawiris met with Kim Yong-nam (video here):

Kim Yong Nam, president of the Presidium of the DPRK Supreme People’s Assembly, met and had a friendly talk with Naguib Sawiris, executive chairman of the Orascom Telecom Media and Technology Holdings SAE of Egypt, and his companion who paid a courtesy call on him at the Mansudae Assembly Hall Thursday.

KCNA reported that Sawiris left on February 3, however, before leaving he praised Kim Jong-il and offered a gift to Kim Jong-un. Accoridng to KCNA:

Naguib Sawiris, executive chairman of the Orascom Telecom Media and Technology Holdings SAE of Egypt, was interviewed by KCNA before his departure from here.

Expressing profound reverence for leader Kim Jong Il, he said:

The Korean people lost a great leader. I also lost the most friendly man. General Kim Jong Il was a great father of the people.

I can never forget the day when I had the honor of being received by him.

While meeting him, I was totally attracted by his humanity.

He was the greatest man possessed of the noblest virtue.

His untimely passing was a great loss not only to the Korean people but to progressive humankind.

He devoted his all to his people with ardent love for the people.

While staying in the DPRK I was deeply moved to visit the Pyongyang Children’s Foodstuff Factory honored with the leadership provided by Kim Jong Il.

He paid deep attention to the operation of the factory.

The tireless efforts made by him for the happiness of the people will be conveyed to posterity for all ages.

The Korean people are energetically pushing forward socialist construction under the sagacious leadership of supreme leader Kim Jong Un.

I sincerely rejoice over the achievements made by the Korean people.

I wish the Korean people greater progress.

I would like to make a positive contribution to boosting the exchange with the DPRK.

His gift to Kim Jong-un remains unknown for now:

The dear respected Kim Jong Un, supreme leader of the Workers’ Party of Korea and the Korean people, received a gift from the executive chairman of the Orascom Telecom Media and Technology Holdings SAE of Egypt.

Chairman Naguib Sawiris handed it to an official concerned on Thursday.

While in the DPRK, Orascom holding announced that it had reached 1 million mobile phone subscribers in the DPRK. According to Bloomberg:

Orascom Telecom Media & Technology Holding SAE, an Egyptian mobile-phone operator headed by billionaire Naguib Sawiris, said its subscribers in North Korea exceeded 1 million.

The Cairo-based company made the annoucement in a regulatory filing today.

The Economist offers some business statistics:

Koryolink earns a gross margin of 80%, making North Korea by far the most profitable market in which Orascom operates. The company has worked hard to court the regime, its chairman travelling to Pyongyang last year to meet the late supreme leader, Kim Jong Il.

North Korean mobile-phone users spend an average of $13.90 a month on calls and text messages, and they tend to pay in hard currency. According to a foreign diplomat, many customers turn up at Koryolink shops with bundles of euro notes. There are even incentives for paying in euros, such as free off-peak calls. This provides foreign currency for a government that craves it.

Mobile-phone customers obtain the hard currency from the informal private trading on which many North Koreans depend. Such business is forbidden, but the government has failed to feed its people, forcing it to turn a blind eye to some capitalist practices. Many insiders benefit: Pyongyang’s “golden couples” consist of a government-official husband and an entrepreneur wife.

Mobile usage now appears to be spreading beyond Pyongyang. The gadgets are a common sight in other cities such as Nampo, not far from the capital, and increasingly are owned by non-officials. As yet, though, only a sixth of the country has a mobile signal.

Martyn Williams has specifics on the corporate structure of the service and service statistics:

The company is operated by Cheo Technology, which is a joint venture between Egypt’s Orascom Telecom Media And Technology Holding (OTMT) and North Korea’s Ministry of Posts and Telecommunications. OTMT holds a 75 percent stake and the North Korean government owns the remaining 25 percent.

Koryolink’s service has popularized cell phones and visitors to Pyongyang say they are now a common site on the city streets. The Koryolink network covers the capital city in addition to 14 major cities, 86 smaller cities, and 22 highways. That equals 14 percent of the landmass but about 94 percent of the population, according to Orascom.

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Orascom 3G wrap up

Friday, December 19th, 2008

UPDATE: Here is an older paper by Stacey Banks which I have not read: North Korean Telecommunication: On Hold.

ORIGINAL POST: On Monday the Orascom 3G mobile network launched in North Korea.  Just about everyone covered this story…so here are the highlights:

Telecommunications in North Korea: Has Orascom Made the Connection?
Working Paper: Marcus Noland

The topicality of the second paper, on the Egyptian firm Orascom’s role in North Korea’s telecommunications modernization, received a boost this week with the announcement in Pyongyang that Orascom was finally rolling out its cell phone service and creating a joint venture bank with a North Korean partner.  The planned Orascom investments are large: if actualized, they would be the largest non-Chinese or non-South Korean investments in North Korea, and would exceed total private investment in the Kaesong Industrial Complex to date

Financial Times

Orascom is confident North Korea is opening up its economy and says it has been assured by the ­government that everyone will be allowed to buy a mobile. However, experts think that such a volte-face is highly unlikely and reckon only senior military and government officials will be allowed access, and then only to a closed network.

When asked how many people would ultimately use the service, Orascom’s chairman Naguib Sawiris said: “We have a modest target of 5 to 10 per cent of the population.” The population is about 23m. Mr Sawiris expects 50,000 subscriptions in the first three-to-six months.

Jim Hoare, Britain’s former chargé d’affaires to Pyongyang, says the new network is bound to have severe restrictions.

“It’s unlikely that a country that doesn’t allow you to have a radio unless it’s set to the state frequency will suddenly allow everyone to have mobile phones. It’s more credible that there will be a limited network for officials in Pyongyang and Nampo.”

Dong Yong-sung, chief of the economic security team at the Samsung Economic Research Institute in Seoul, believes another obstacle to ordinary North Koreans owning phones will be the cost. “As far as I know, mobile phone registration costs about $1,000,” he said, a sum equivalent to the average annual income.

(NKeconWatch: Others put the price at $700…and there are many problems with asserting that the DPRK’s per capita income is $1,000 per year.)

Bloomberg

The inauguration of Koryolink took place today in North Korea, Orascom Telecom said in an e-mailed statement. Orascom Telecom Chief Executive Officer and Chairman Sawiris attended the event, a company official said, requesting anonymity. The Cairo- based company got a 25-year license and exclusive access for four years in January. It plans to spend as much as $400 million on a high-speed network and the license for the first three years.

The North Korean venture is “in line with our strategy to penetrate countries with high population and low penetration by providing the first mobile telephony services,” Sawiris said in a statement earlier this year.

CHEO Technology JV Company, the North Korean unit that will operate under the Koryolink name, is 75 percent owned by Orascom Telecom and 25 percent by the state-owned Korea Post and Telecommunications Corporation.

The unit will see average revenue per user of $12 to $15 this year as Orascom Telecom targets three of the country’s biggest cities, according to company forecasts.

Koryolink has rolled out its so-called third-generation grid to initially cover Pyongyang, with a population of 2 million.

Orascom is counting on four potential markets in the Stalinist nation, according to a study by Marcus Noland of the Peterson Institute for International Economics.

The military and government officials are the top targets, followed by foreigners working for UN organizations and diplomats. The others are customers from South Korea, which has several economic projects with its neighbor, and local demand from rich North Koreans.

To protect its investment, Orascom “hedged its bet, committing only half of its investment at the outset and making additional investment conditional on its assessment of conditions going forward,” Noland said.

If the deal is threatened, Orascom may withdraw specialized equipment or technicians, reducing the value of the network to Pyongyang, Noland said in his study.

“Orascom may have spread the wealth informally, creating beneficiaries within the decision-making apparatus who would stand to lose if the agreement failed,” according to the study.

Bloomberg

Orascom Telecom, the Middle East’s biggest wireless company, opened Ora Bank in Pyongyang in the presence of Chairman and Chief Executive Officer Naguib Sawiris, a company official said on condition of anonymity. Ezzeldine Heikal, who is also head of Koryolink, Orascom’s North Korean mobile-phone network, was appointed president of the bank, the official said without providing further details.

“This is a big deal, especially as far as North Korea is concerned, because the current banking system is virtually non- existent,” Marcus Noland of the Peterson Institute for International Economics said in a telephone interview from Washington, D.C. “It’s a ground that others have feared to tread and is perhaps an endorsement for North Korea that says ‘we’re open for business.’”

Ora Bank is a joint venture between Orascom Telecom and North Korea’s state-owned Foreign Trade Bank, North Korea’s official news agency reported today. The director of North Korea’s central bank Kim Chon Gyun and Egypt’s ambassador to Pyongyang Ismail Abdelrahman Ghoneim Hussein, were also present at the opening ceremony, the news agency said.

Radio Free Asia

Chinese traders who regularly travel back and forth to North Korea said local residents showed little enthusiasm for the new service, which cost more than U.S. $900 to set up before the Ryongchun explosion.

North Korean defector Kim Kwang-jin, a senior researcher at the Institute for National Security Strategy in Seoul, said the fact that the government had once pulled the plug on North Korean cell phones meant that it could easily do so again.

“In the beginning, people will be hesitant, because a few years ago many of them made a big investment in cell phones. But service was suspended abruptly, so they are still very concerned that might happen again,” Kim said.

“People are also worried that the ability to pay such a high amount of money for a cell phone may raise a red flag and bring them under scrutiny by the North Korean authorities.”

Most foreigners are banned from using cell phones while in North Korea, although a network for government officials is believed to exist in the capital, Pyongyang.

(NKeconWatch: I personally saw elite North Koreans use mobile phones and even some western journalists in 2005.)

The Guardan

North Korea first experimented with mobile phones in 2002, but recalled the handsets 18 months later after a mysterious train explosion that killed an estimated 160 people. Some experts argue that officials feared the incident was an attempt to assassinate the regime’s “dear leader”, Kim Jong-il, and that mobile phones were involved.

BBC

Some reports suggest that handsets for the new network will cost around $700 each, putting them far beyond the reach of the vast majority of people in the impoverished country.

Choson Ilbo

Although the technology would enable users to send and receive text messages and video content, North Korean customers will only be allowed to speak over their phones.

BMI Political Risk Analysis, Dec 16, 2008 (h/t Oliver)

BMI View: North Korea has officially begun third-generation (3G) mobile phone services, thanks to Egypt’s Orascom Telecom (OT). However, the growth of the network could be limited by the regime’s fear that mobile phones will increase the scope for anti-regime activities.

North Korea has officially commenced third-generation (3G) mobile phone services, thanks to an investment by Egypt’s Orascom Telecom (OT). The firm’s initial target is 100,000 subscribers in three major cities, including Pyongyang, and it eventually hopes to develop a nation-wide network connecting North Korea’s 23mn citizens. OT has promised to invest US$400mn in network infrastructure over the next four years. It has signed a 25-year contract with the North Korean government, and owns 75% of their joint-venture (known as Korealink). OT’s exclusivity rights will last for four years. Orascom’s foray is something of a coup, given that North Korea’s communications network is so rudimentary (for further background see December 8 2008, Industry Trend Analysis – North Korea Prepares For Mobile Network Launch).

Why Pyongyang Fears Mobile Phones
North Korea launched a mobile phone service operated by a Thai subsidiary firm in 2002, but reversed course in 2004, apparently because of a devastating bomb blast on a train in Ryongchon in April of that year. Given that North Korean leader Kim Jong Il’s personal train had passed through the area only a few hours earlier, there was speculation that the explosion had been an assassination attempt, possibly triggered by mobile phone. Since then, only those living in areas close to the border with China have had access to mobile phones, thanks to the proximity of the Chinese network.

Aside from the notion of mobile phones as bomb triggers, they can also make it easier for citizens to communicate with one another. This would increase citizens’ ability to organise anti-government activities – such as protests or sabotage. For example, the popular uprising that led to the overthrow of Philippine president Joseph Estrada in 2001 was dubbed the ‘text message revolution’, because that is how the marches were announced and coordinated. Admittedly, the Philippines is a far more open society than North Korea, but the subversive aspect has not been lost on the regime.

Mobile phones would also make it easier for North Koreans to communicate with the outside world, and thus allow the real-time transmission of information or intelligence to foreign media or spy agencies, and vice versa. They would also allow the North Korean elite to communicate more efficiently, allowing dissident elements to plot against the regime.

Thus, even something as basic as mobile phones are seen as potentially regime threatening.

Mobile Service Difficult To Spread
Consequently, Orascom will surely find it difficult to spread its mobile service across the country. For a start, registration will be tightly watched. Secondly, the cost of the handsets, at several hundred dollars, will mean that only the political and moneyed elites will be able to afford mobiles. Of course, elements of the elite can ‘misuse’ their phones to arrange subversive actions if they deem it worthy, but it seems that the regime are counting on loyalty. Indeed, depending on the sophistication of their equipment, the regime will probably be able to snoop in on the elite’s conversations and movements, giving them an additional layer of security.

Read the full articles below:
Orascom eyes North Korean network
Financial Times
Christian Oliver
12/14/2008

Orascom Telecom’s Sawiris Signs North Korean Deal
Bloomberg
Tarek Al-Issawi
12/15/2008

Orascom Telecom of Egypt Opens Bank in North Korea
Bloomberg
Tarek Al-Issawi
12/16/2008

North Korea Brings Back Cell Phones
Radio Free Asia
Jung Young
12/16/2008

Secretive North Korea launches restricted mobile phone service
The Guardian
Tania Branigan
12/16/2008

N Korea launches 3G phone network
BBC
Steve Jackson
12/15/2008

N.Korea Restarts Cell Phone Service
Choson Ilbo
12/17/2008

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North Korea: The Columbus complex

Monday, February 4th, 2008

Several days ago, Orascom Telecom issued a press release claiming “that it has been granted the first commercial license to provide mobile telephony services in the Democratic People’s Republic of Korea (DPRK) using WCDMA (3G) technology,” and also claiming, “The DPRK has a population of approximately 23 million of which 67% is between the age of 15 and 64 years, moreover, there is currently no mobile services in the country.”

(Although we won’t know if these demographics are correct until the next census).

However, Dr. Aidan foster Carter took issue with these statements this weekend in the Asia Times…

In 2008, not even North Korea is a cellphone virgin. The DPRK and mobile telephony have a tangled history, starting over a decade ago. (There’s a very useful account as of 2005 at this site.) The tale includes a joint bid in 2002 by several South Korean firms to build a CDMA network in Pyongyang, which sank when Washington made it clear it would not let Qualcomm sell the technology.

That false start apart, our Egyptian Columbus is ignoring, and perhaps usurping, a Thai Leif Ericsson in the shape of Loxley. Back in 1995, the Thai conglomerate set up a 70:30 joint venture, North East Asia Telephone & Telecommunication, with the very same partner Orascom has now bagged, KP&TC. NEAT&T had a 30-year “exclusive” concession – or so it thought.

They’re not the only ones. Hyundai used to vie with Samsung to be South Korea’s biggest chaebol or conglomerate. The group’s northern-born founder, the late Chung Ju-yung, was a pioneer of inter-Korean business. His reward was to be fleeced rotten by Pyongyang, which charged almost a billion dollars for a six-year tourist concession – and then coolly offered bits of it to rival operators like Lotte. As a result, Hyundai splintered into separate firms – and no other chaebol will touch the North with a bargepole. Cheating really doesn’t pay.

But back to the luck of the Loxleys. Having begun with a mainly fixed network in the Rason special economic zone in the northeast, several years later in 2003 Loxley rolled out mobile service in Pyongyang – only to see them banned after a mere six months. That was in May 2004, soon after a huge rail explosion destroyed a swath of the northwestern town of Ryongchon – hours after Kim Jong-il’s train had passed through from China. Officially an accident, one rumor is that this was an assassination attempt triggered by a mobile phone.

Whatever the reason, with service still suspended over a year later, Thailand’s then foreign minister, Kantathi Suphamongkhon, went to Pyongyang in August 2005 to fight Loxley’s corner. He got no joy. North Korea still bars hand-phones, confiscating them from the rare foreign visitor at the country’s Sunan airport and coming down hard on bold souls along the northern border who have illicit mobile phones using Chinese networks. Last October, a factory boss who made international calls from 13 lines – unlucky for some – installed in his basement was reportedly executed in a stadium in front of 150,000 people.

Dr. Foster-Carter gives a great summary of the DPRK’s mobile phone adventures, but I have a couple of data points that flush out the story a bit further.

While visiting Pyongyang in 2005, I personally witnessed an elite North Korean woman (who also claimed to have a reserved room at the Koryo) discretely use a mobile phone, then wrap it in a pink handkerchief a store it in her purse.  Even my guides were shocked, having previously told me that cell phones were recalled for security reasons.  One told me, “She must be special, I am just a normal person.”

Additionally, many journalists to the country are provided with state-sanctioned cell phones to use.  I met a reporter from Reuters who had one.

The full article can be found here:
North Korea: The Columbus complex
Asia Times

Aidan Foster-Carter
2/2/2008

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Orascom Telecom Receives First Mobile License in DPRK

Thursday, January 31st, 2008

Orascom Telecom
(Hat tip to Werner)
1/30/2008

Orascom Telecom Holding S.A.E. (“OTH” or “Orascom Telecom”) announced today that it has been granted the first commercial license to provide mobile telephony services in the Democratic People’s Republic of Korea (“DPRK”) using WCDMA (3G) technology.

The license was granted to OTH’s subsidiary CHEO Technology JV Company (“CHEO”) which is controlled by Orascom Telecom with an ownership of 75% while the remaining 25% is owned by the state owned Korea Post and Telecommunications Corporation. The terms of the license allows CHEO to offer services to its customer throughout the country, the duration of the license is 25 years with an exclusivity period of four years. Orascom Telecom intends to invest up to US$400 million in network infrastructure and license fee over the first three years in order to rapidly deploy a high quality network and offer voice, data and value added services at accessible prices to the Korean people. OTH intends to cover Pyongyang and most of the major cities during the first 12 months of operations.

The DPRK has a population of approximately 23 million of which 67% is between the age of 15 and 64 years, moreover, there is currently no mobile services in the country. The operation in the DPRK will complement OTH’s existing operations in Asia and will further enhance OTH’s position as the leading GSM operator in the emerging markets.

Naguib Sawiris, Chairman & CEO, Orascom Telecom, stated “We are continuing to head in the right strategic direction; our Greenfield license in the DPRK is in line with our strategy to penetrate countries with high population and low penetration by providing the first mobile telephony services. OTH has consistently proved its ability to successfully roll out mobile services into countries where no other operator has. OTH will continue to increase shareholder value and maintain its leadership in the markets it operates in.”

About Orascom Telecom
Orascom Telecom is a leading international telecommunications company operating GSM networks in six high growth markets in the Middle East, Africa and South Asia, having a total population under license of approximately 430 million with an average mobile telephony penetration of approximately 37% as at September 30th 2007. Orascom Telecom operates GSM networks in Algeria (“OTA”), Pakistan (“Mobilink”), Egypt (“Mobinil”), Tunisia (“Tunisiana”), Bangladesh (“Banglalink”), and Zimbabwe (“Telecel Zimbabwe”). Orascom Telecom had reached approximately 65 million subscribers as at September 2007.

Orascom Telecom is traded on the Cairo & Alexandria Stock Exchange under the symbol (ORTE.CA, ORAT EY), and on the London Stock Exchange its GDR is traded under the symbol (ORTEq.L, OTLD LI).

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IFES Monthly report

Wednesday, August 1st, 2007

Institute for Far Eastern Studies (IFES)
8/1/2007

INTER-KOREAN RELATIONS

Following two days of talks between economic representatives of the two Koreas at the Kaesong Industrial Complex, South Korea announced on July 7 that it would begin shipping raw materials to the North in exchange for DPRK natural resources. South Korea shipped 800,000 USD of polyester fabric on July 25, and is set to send the rest of the materials by the end of November. North Korea accepted South Korean prices for the goods, and will pay transportation, cargo working, and demurrage costs, as well. South Korea will pay for shipping, insurance, and the use of port facilities. On 28 July, a South Korean delegation left for the North in order to conduct on-site surveys of three zinc and magnesite mines. The team will spend two weeks in North Korea.

It was reported on 17 July that North Korea proposed a joint fishing zone north of the ‘Northern Limit Line’ dividing North and South territorial waters to the west of the peninsula. Seoul turned down the offer.

Inter-Korean military talks broke down early on 26 July after only three days of negotiations as North Korea insisted on the redrawing of the Northern Limit Line.

North Korea demanded on 27 July that workers in the Kaesong Industrial Complex be given a 15 percent pay raise. The North Korean workers will not work overtime, weekends or holidays beginning in August unless the raise is granted.

It was reported by the Korea International Trade Association on 26 July that inter-Korean trade was up 28.6 percent in the first six months of 2007, totaling 720 million USD.

RUSSIA-DPRK INVESTMENT

It was reported on 19 July that Russia and North Korea have agreed to connect Khasan and Najin by rail, enlisting investment from Russian oil companies interested in an inactive refinery at Najin Port capable of processing up to 120,000 barrels per day. The project is estimated to cost over two billion USD.

MONGOLIA-DPRK RELATIONS

During a four-day visit to Mongolia by Kim Yong-nam beginning on 20 July, the two countries signed protocols on cooperation on health and science, trade and sea transport, and labor exchange issues. This follows on the heals of an agreement to allow South Korean trains to travel through North Korean territory on to Mongolia in route to Russia and Europe.

JAPAN-DPRK PROPAGANDA

Japan took one step further to recover abductees in North Korea this month when the government began broadcasting propaganda into the DPRK intended for Japanese citizens. The broadcasts are made in Korean and Japanese (30 minutes each) daily, and updated once per week.

U.S.-DPRK PEACE PROSPECTS

U.S. Ambassador to the ROK Alexander Vershbow stated that Washington was prepared to negotiate a permanent peace regime on the Korean Peninsula by the end of the year if North Korea were to completely abandon its nuclear ambitions.

 

EGYPT-DPRK INVESTMENT

The Egyptian company Orascom Construction Industries announced a 115 million USD deal with North Korea’s state-owned Pyongyang Myongdang Trading Corporation to purchase a 50 percent state in Sangwon Cement. To put this in perspective, the deal in worth more than four times the amount of frozen DPRK funds that had caused six-party talks to break down and delayed the implementation of the February 13 agreement.

NORTH KOREAN SOCIETY

The Economist reported on 7 July that, according to foreigners living in the North’s capital, concern for petty law appears to be weakening. Citizens are reportedly smoking in smoke-free zones, sitting on escalator rails, and even blocking traffic by selling wares on the streets.

It was reported on July 11 that a letter sent earlier in the year by the North Korean Red Cross indicated severe shortages of medical supplies. The letter stated that North Korea would accept any medicine, even if it was past expiration, and accept all consequences for any problems that arose from using outdated supplies. The (South) Korea Pharmaceutical Manufacturers Association had no choice but to reject the request.

Events were held on July 11 in North Korea in order to promote women’s health and well-being issues. Marking World Population Day, a North Korean official stated that the DPRK has cooperated with the UN Population Fund since 1986, and is now in the fourth phase of cooperation.

Seeing entertainment venues as a “threat to society”, North Korean security forces have been implementing a shutdown of karaoke bars and Internet cafes. These venues mainly cater to traders in the northern regions of the country.

It was reported on July 13 that construction of North Korea’s first all-English language university was nearing completion. The Pyongyang University of Science and Technology, funded largely by ROK and U.S. Christian evangelical groups, will hold 2600 students and offer undergraduate and post-graduate degrees in business administration, information technology, and agriculture.

Local elections were held on 29 July for DPRK provincial, city, and country People’s Assemblies. 100 percent of 27,390 candidates were approved with a 99.82 percent turnout reported.

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