North Korean Economy Watch

According to the Financial Times:

Orascom Telecom, the Egypt-based mobile network operator, says its subsidiary in North Korea, Koryolink, has acquired 100,000 subscribers in its first year and expects to add millions more in the next five years.

The expansion plans come as the isolated country of 24m, which says it wants to be considered a “mighty and prosperous nation” by 2012, steps up efforts to attract foreign investment.

Pyongyang’s economic ambitions come in the face of tough international sanctions on its nuclear arms programme.

“We see that there is a very big plan for an economic boom,” said Khaled Bichara, chief executive of Orascom. “They are really looking to have, by 2012, a much stronger economy. We believe that mobiles and eventually international communication will definitely be part of this.”

Koryolink, a pre-pay system, has been available in Pyongyang and Nampo, the capital’s port, since December 2008. To help expand the network from there, Mr Bichara said North Korea was laying fibre-optic cables in the provinces.

Orascom was installing its most technologically advanced 3G network in North Korea, he said. The 2010 target for user numbers was ambitious but Mr Bichara declined to put a figure on it.

“I think if we achieve the target of this year, that will be a big milestone,” he said. “The number will be big enough to make Koryolink look like a significant company for us because the revenues per customer are interesting and we believe that this business will have customers in the millions within the next four or five years.”

Mr Bichara said the subscription figures showed that mobile phones were not limited to elite members of the military and communist party, as many observers had speculated.

However, the handset price of €140 ($195) put a mobile phone out of most people’s grasp.

So far, Koryolink offers only a basic voice and text messaging service. International calls and roaming services are not provided but Mr Bichara said starting them would be simple given the sophistication of the network being installed.

Koryolink is a joint venture in which Orascom has a 75 per cent stake. The rest is owned by Korea Post & Telecommunications Corp, the state fixed-line provider.

Thanks to a reader for sending this to me. 

Read the full article here:
N Korea operator looks to millions of 3G users
Financial Times
Christian Oliver and Heba Saleh
2/3/2010

Choson Ilbo
12/10/2009

Even as North Korea struggles under UN sanctions and is in the midst of a controversial currency reform aimed at breaking the back of a nascent free market, the reclusive country is apparently in the process of changing laws in order to attract more foreign investment, an expert said Wednesday. It is even offering foreign companies wages cheaper than those paid to North Korean workers at the joint-Korean Kaesong Industrial Complex, according to Jack Pritchard, president of the Korea Economic Institute in Washington D.C.

Pritchard, who visited Pyongyang last month along with Scott Snyder, director of the Center for U.S.-Korea Policy at the Asia Foundation, told reporters in Washington. The North Korean trade department official they met there told them there are no strikes among North Korea’s skilled workers and were very aggressive in luring foreign investment. He added North Korean officials offered wages of 30 euros a month (around US$44), which was lower than the average $57 paid to workers at the Kaesong Industrial Complex. The officials said they were also willing to offer various incentives to foreign companies interested in taking part in the construction of 100,000 homes in Pyongyang. North Korea appeared to be changing its attitude toward foreign countries as part of its goal to become a strong and powerful nation by 2012, he said.

In an article for Global Security [Posted below], the Internet-based provider of military and intelligence information, Snyder wrote, “North Korean colleagues at the Ministry of Trade appeared genuinely surprised and dismayed when we mentioned that UN Security Council Resolution 1874… contains provisions prohibiting companies from making new investments in North Korea.”

Snyder said North Korea’s interest in foreign investment as part of its goal to become a “strong and powerful nation” by 2012 is a new development and one that could play a role in resolving the nuclear stalemate.

But efforts to attract foreign investment and capital over the past 25 years have been a disaster. North Korea announced new regulations in September of 1984 to allow businesses from capitalist countries to operate there. It set up special economic zones in Rajin-Songbong in 1991 and in Sinuiju in 2002. But the Sinuiju project never got beyond the ground-breaking stage due to conflict with China, while empty factories litter Rajin-Sonbong.

North Korea aimed to attract $7 billion worth of foreign investment into Rajin-Sonbong, but actual investment amounted to only $140 million. According to the South Korean government and other sources, there are an estimated 400 foreign businesses operating in North Korea. Most of them are small businesses run by Chinese or North Korean residents in Japan. The shining exception is the Egyptian telecom company Orascom, which offers mobile phone services in the North. “It’s more accurate to say that there are no major foreign businesses operating in North Korea,” said Cho Dong-ho, a professor at Ewha Woman’s University.

North Korea forged its first pact guaranteeing foreign investment with Denmark in September 1996 and signed similar pacts with around 20 countries, including China, Russia, Singapore and Switzerland, as of 2008. There have been consistent reports that businesses in Europe and Southeast Asia were interested in doing business in the North, but hardly any made the move.

Cho Myung-chul, a professor at the Korea Institute for International Economic Policy, who taught economics at Kim Il Sung University in North Korea, said, “The reason why no listed foreign companies are operating in North Korea is because they may end up on the list of businesses subject to U.S. sanctions.” This is one of the reasons why North Korea has tried so desperately to be removed from the U.S. list of terrorism-sponsoring countries.

And even if foreign businesses are interested in investing in North Korea, its lack of infrastructure, including steady power supply and adequate roads and ports, make it impossible to operate factories there. Cho Young-ki, a professor at Korea University, said, “You have to build a power plant if you want to build a factory in North Korea. Cheap labor does not mean businesses will profit there.” The electricity used by the Kaesong Industrial Complex is provided by South Korea, while Hyundai Asan operates its own generator at the North Korean resort in Mt. Kumgang.

Dispatch from Pyongyang: An Offer You Can’t Refuse!
Global Security
Scott Snyder
12/07/2009

Every North Korean seems to have been mobilized for an all-out push to mark their country’s arrival as a “strong and powerful nation” in 2012, which marks the 100th anniversary of Kim Il Sung’s birth, Kim Jong Il’s seventieth birthday, and the thirtieth birthday of Kim Jong Il’s third son and reported successor, Kim Jong-Eun. Pyongyang citizens have cleaned up the city during a 150-day labor campaign, followed by a second 100-day campaign now underway. The Ryugyong Hotel in the middle of Pyongyang, unfinished for over two decades, has been given a facelift courtesy of the Egyptian telecommunications firm Orascom, which expects to have 100,000 mobile phone customers in Pyongyang by the end of the year. But it is still difficult to shake the feeling in Pyongyang that one has walked onto a movie set in between takes. Or that the used car looks good on the outside, but you really don’t know what you might find if you were able to look under the hood or give it a test-drive.

North Korean foreign ministry officials saw United Nations condemnation of their April missile launch as an affront to their sovereignty. This is the ostensible reason the North Koreans have walked away from six party talks. Having conducted a second nuclear test, North Korean officials want to be considered as a nuclear power, choosing instead to “magnanimously” set aside nuclear differences in order to focus on the need to eliminate U.S. “hostile policy” by replacing the armistice with a permanent peace settlement. Essentially, Pyongyang’s new offer–as a “nuclear weapons state”–has shifted from the denuclearization for normalization deal at the core of the 2005 Six Party Joint Statement to “peace first; denuclearization, maybe later.” There was no mention of “action for action” by our North Korean interlocutors.

But the North Koreans are likely to find when Ambassador Stephen Bosworth arrives in Pyongyang next week that the United States will not accept North Korea as a nuclear weapons state. There is virtually no area of agreement between the two governments on the nuclear issue based on public statements made by the two sides thus far, suggesting the likelihood that both sides will face a difficult conversation.

A new component of North Korea’s strategy for achieving its economic and infrastructure goals in the run-up to 2012 is its effort to attract investment from overseas. The Director of North Korea’s newly established Foreign Investment Board unveiled a new plan for attracting equity, contractual, and 100% foreign owned joint venture investments. On paper, the rules incorporate provisions for repatriation of profit, generous tax incentives, and a labor rate of thirty Euros per month. This rate undercuts the compensation of $57.50 per month currently offered at the South Korean-invested Kaesong Industrial Zone. Even more generous was the offer of special concessions in North Korea’s natural resources sector for companies willing to build 100,000 units of new housing in Pyongyang that have already been promised in the run-up to 2012.

North Korean colleagues at the Ministry of Trade appeared genuinely surprised and dismayed when we mentioned that UN Security Council Resolution 1874, which condemned North Korea’s May 25, 2009, nuclear test, contains provisions prohibiting companies from making new investments in the DPRK. This is all the more unfortunate because on paper, North Korean efforts to open its economy through foreign investment are exactly the course that should be encouraged, and North Korea’s goals for 2012 could be advanced significantly with inward investment from companies that might be willing to take the risk, but the nuclear issue stands in the way. This is not to mention that North Korea’s own economic retrenchment and anti-market policies, including the “currency reforms” announced earlier this week, stretch the credibility of the North Korean government to back up these laws. Recent surveys of Chinese investors suggest few demonstration projects for successful investment in North Korea and a high probability of getting scammed or fleeced on the ground.

But the North Korean plea for foreign investment does suggest a potential point of leverage that deserves careful consideration, and that is the possibility of an investment in a strategic commodity that is of special interest to the United States: North Korea’s plutonium stock. During the Clinton administration, former Defense Secretary William Perry led efforts to make similar purchases of nuclear materials from the Ukraine and Kazakhstan, which had inherited stocks of nuclear materials from the breakup of the Soviet Union. These transactions advanced the cause of nuclear non-proliferation by ensuring that these countries would not become nuclear states. A 2004 report of a Task Force on U.S.-Korea Policy co-sponsored by the Center for International Policy and the University of Chicago, also suggested a plutonium “buy-out” proposal for North Korea, despite the obvious moral hazard of appearing to reward North Korea’s bad behavior. Any transaction with North Korea involves moral hazard, and North Korea has already proven that it will sell or sub-contract nuclear materials to the highest bidder. One positive of this approach is that any transaction involving removal of nuclear materials or capabilities from the North would be irreversible, in contrast to past practice of offering irreversible food-aid benefits to North Korea in exchange for participation in multilateral dialogue, but not for irreversible steps toward denuclearization.

In a post-9/11, post-North Korean nuclear test world, the Obama administration must find a formula that facilitates North Korea’s irreversible actions on the path toward denuclearization rather than agreeing to half-measures: North Korea’s immediate focus is on gaining the resources necessary to mark 2012 as a year of accomplishment, yet the North has been highly critical of Lee Myung-bak’s “grand bargain” Proposal. Denuclearization needs to be placed on the North Korean agenda as an accomplishment that North Korea will be able to justify as part of its broader 2012 objective of becoming a “strong and prosperous state.” Unless a new formula can be found by which to bring these two objectives into line with each other, it is likely that the United States and North Korea will continue to talk past each other.

At the end of Q2-2009 Koryolink had signed up nearly 48,000 subscribers.  At the end of Q3-2009, this number has grown to more than 69,000.  According to Telegeography:

North Korea’s only mobile operator, CHEO Technology, which offers services under the Koryolink brand, has signed up 69,261 customers as at 30 September 2009. The company was awarded a 25-year licence to operate 3G services in January 2008, with the first four years on an exclusive basis. It is owned by Orascom Telecom Holding of Egypt (75%) and state-owned Korea Post and Telecoms Corporation (25%). Koryolink launched services in December 2008 in the capital Pyongyang, but the network has since been expanded to include the main road running up to the northern city of Hyangsan, with the company currently working on expanding services nationwide. In the first nine months of 2009, the cellco reported revenue of USD18.5 million, while earnings before interest, tax, depreciation and amortisation (EBITDA) reached USD9.99 million with a margin of 54%. Average revenue per user (ARPU) for the third quarter of 2009 totalled USD21.6, down from USD22.8 in the previous quarter. With a focus on network rollout and network quality improvement, Koryolink invested USD25 million in the first nine months of 2009.

Thoughts and additional information:

1. For the record, Koryolink is not the only mobile phone operator in the DPRK.  It is the only 3G operator. A little research on this site will turn up plenty of information on the DPRK’s first cell phone provider.

2. See past Koryolink and Orascom posts here.

3. It is interesting that the DPRK and Orascom have expanded 3G service from Pyongyang to Myohyangsan.  Though a popular spot for North Korean elites and tourists, it is not a commercial hub by any means…

UPDATE 8:   According to the BBC, Orascom claims the final plans for the hotel have yet to be approved:

Dozens of Egyptian engineers and some 2,000 local workers are working on the Ryugyong project, which Orascom’s chief operating officer Khaled Bichara tells the BBC is “progressing well”, despite reported problems with suspect concrete and misaligned lift shafts.

“There have been no issues that have caused us too much trouble,” Mr Bichara says. “Most of the work at the moment is coverage of different areas of the building. The first job is to finish the outside - you can’t work on the insides until the outside is covered.

“You can see that we have already completed the top of the building where the revolving restaurant will be. After 2010, that’s when it will be fully safe to start building from the inside.”

How the building will be divided up is not yet finalised the company says, but it will be a mixture of hotel accommodation, apartments and business facilities. Antennae and equipment for Orascom’s mobile network will nestle at the very top.

Mr Bichara denies reports that the company’s exclusive access to North Korea’s fledgling telecoms market is directly linked to the completion of the hotel.

But he says the job is a way of planting a rather tall flag in the ground. “We haven’t been given a deadline, we are not tied into doing it by a certain time,” he said.

“But when you work in a market like this, where we cannot sponsor things, a project of this kind is good to do - it’s word of mouth advertising for us, it builds good rapport with the people - on its own it’s a great symbol, one which cements our investment.”

Read the full article here:
Will ‘Hotel of Doom’ ever be finished?
BBC
10/15/2009

Read previous posts about the Ryugyong’s construction below: (more…)

UPDATE:  According to Business Monitor International:

koryolink, North Korea’s sole mobile service provider has reported strong subscriber demand. The joint venture (JV), which is 75% controlled by  Orascom Telecom of Egypt and the remainder held by state-owned  Korea Post and Telecommunications Corporation (KPTC), saw its subscriber base rise by 149.2% quarter-on-quarter (q-o-q) in Q209 to end with 47,863. The operator stated it had encouraged interest in its services through further cuts in connection fees, the introduction of free SMS for the first time and the revision of free minutes to satisfy customer requirements.

Almost all of the operator’s subscribers are based in the capital Pyongyang. This is due to the prevalence of two retail outlets based in the downtown area, in addition to three KPTC shops, which sell koryolink services, while the level of network coverage is significantly higher in the capital than anywhere else in the country. Although calls can be made outside of Pyongyang, the reception is often poor, suffering from weak service quality and dropped calls.

Mobile penetration rates, based on Pyongyang’s population are estimated at 1.4%, which is significantly lower than the 30% cited by cellular-news sources. Demand for mobile in the capital has been led not by government officials and foreign ownership but by ordinary citizens. State employees and foreigners are prohibited from owning mobile handsets, which has been deemed a security risk, with authorities wishing to control information from being circulated outside. This was a primary reason for the decision to ban mobile services in the country following the explosion in the northern Ryongchon train station in April 2004, which was said to have been a failed assassination attempt on North Korean leader Kim Jong-il, who had passed through the station several hours before the explosion. A state of emergency was subsequently declared, and the country cut all telephone and mobile lines in order to stop news from getting out

While the two most likely market segment groups able to afford and own mobile handsets have been barred from usage, this has not impacted mobile revenues. Indeed, koryolink announced that its Q209 revenues had risen by 179.7% q-o-q to US$12.472mn, based on strong subscriber growth and ARPUs of US$22.8.

Meanwhile, there are plans to create a national mobile network across the country, according to the North Korean Central Broadcasting Station, as cited by state news agency Yonhap News. Fibre-optic cables are also being laid to link the capital with all provinces with the intention of supplying digital services. The automation and digital capacity of the country’s data networks are said to have already risen by some sevenfold over the last 16 years.

ORIGINAL POST: Download Orascom’s financial report for the first half of 2009 (here in PDF).  The information on Koryolink is on page 24.  Here is the text:

Being the first full fledged operator to serve DPRK offering attractively priced services and utilizing state of the art technologies, Koryolink was met with very positive market reception. The first of its kind mobile fair in the history of DPRK was launched during the last two weeks of March.

In order to capitalize on the subscriber growth momentum, in the second quarter of 2009 Koryolink introduced further reduction in connection fees as well as free SMS for the first time. Additionally, the mix of free minutes was revised to satisfy customer requirements. Such changes resulted in even more positive demand.

Throughout the second quarter, demand on Koryolink services remained strong and the subscriber base at the end of Q2 ended just short of 50K representing an increase of 149% in subscriber base compared to Q1. Koryolink subscriber base stood at 47.85 thousand by the end of Q2.

Koryolink retail network currently consists of 2 large sales shops strategically located in downtown Pyongyang with 3 additional scratch card sales outlets located within KPTC post office shops. Koryolink plans to expand the indirect sales network through the inauguration of 6 more outlets within KPTC shops. A separate after sales service shop is planned for Q3.

According to the report, at the end of the second quarter of 2009 Orascom reported that Koryolink’s mobile subscriber base reached 47,863 (this was apparently leaked earlier in the year so no surprises there), up from 19,208 three months earlier. During Q2 MOU rose to 199 per month, but ARPU fell to USD22.8, compared to USD24.7 in the first quarter of 2009.

And according to Yonhap:

Orascom reported that its operating profit from North Korea reached US$2.49 million in the April-June period, soaring about eight fold from $312,000 for the previous quarter.

Second quarter sales for Koryolink, a 75-25 percent joint venture between Orascom and North Korea, amounted to $8.01 million, with its profit margin reaching 31 percent, up substantially from the 7 percent for the previous three months, according to Orascom.

Read more Koryolink stories here.

According to an article in the Choson Ilbo, Koryolink has attracted nearly 50,000 subscribers since launching.  Most surprisingly, they claim that members of the Worker’s Party are not allowed to use the phones.  (I am not sure if I believe that).

According to the article:

Orascom, the Egyptian telecom firm that runs it, plans to expand the service area from Pyongyang to the whole of North Korea by the end of this year, VOA said. The operator is poised to start HSPA service at the request of foreigners in North Korea who need to use wireless high-speed internet there, the report said.
 
Currently, officials of the North Korean Workers’ Party or the government are reportedly banned from using mobile phones for security reasons. Ordinary North Korean residents, whose monthly pay is about 4,000 North Korean won (around US$30), cannot afford the service due to the high price of handsets, which cost at US$300-500, and the subscription fee.

“We understand that mobile phones are used chiefly by foreigners, wealthy people, and trade functionaries,” a South Korean government official said.

North Korean phone users buy prepaid phone cards and can send text messages. The North started the European-style GSM service in Pyongyang and the Rajin-Sonbong special economic zone in November 2002 but suspended it after an explosion at Ryongchon Railway Station in April 2004.

Further information: 

1. The Economist Intelligence Unit on Orascom (joint venture partner in Koryolink).

2. Here is a very informative older post on Koryolink. Make sure to read the information in the comment section.

3. Regarding the claim that party members are not allowed to purchase Koryolink service: In February, Martyn Williams gave us an interesting update on Koryolink–after only two weeks of sales.  This story notes, “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.”

4. The previous mobile network, set up by a Thai subsidiary in 2002, is still in operation.  I know that North Korean VIPs and visiting journalists have been using this network since 2002 (despite the wide media coverage of this system being closed down).

5. If this story is true, it would imply that 1 out of every 60 Pyongyang residents has a phone (assuming pop of 3 million).  Additionally, if Koryolink sold 6,000 units in their first two weeks last February, they would have to sell nearly 9000 new units/month on average to reach a total of 50,000 today.  Does that seem reasonable?  Can anyone track down the original VOA sotry on which the Choson Ilbo story is based?

Read the full Choson Ilbo story here:
Some 50,000 N.Koreans Use Mobile Phones
Choson Ilbo
7/31/2009

According to Yonhap:

Egypt-based mobile operator Orascom Telecom earned US$312,000 in first-quarter sales this year from its mobile service in North Korea on surging demand among the communist nation’s upper class, a company press release said Thursday.

More than 19,200 people have signed up for Orascom’s mobile phone service as of March since it began with 5,300 subscribers last December, according to the firm’s report on its first quarter earnings in 2009.

Martyn Williams offers some additional details which could call the venture’s profitability into question:

The network generated modest earnings of US$312,000 for its operators in the first quarter, before accounting for interest payments, taxes, depreciation and amortization. Orascom did not disclose whether the network made a profit or a loss for the period.

Koryolink achieved the EBIDTA (earnings before interest, taxes, depreciation and amortization) results on consolidated sales of US$4.4 million, said Egypt’s Orascom. The company holds a 75 percent stake in the network operator, which is called Cheo Technology but uses the Koryolink brand name. State-owned Korea Post and Telecommunications holds the remaining 25 percent.

Martyn also gives us some Koryolink prices:

The handsets, which are localized versions of Chinese models, cost between US$400 and $600 and the cheapest subscription costs 850 North Korean won per month.

That works out to about US$6 at the official exchange rate, but about 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 most expensive calling package costs 2,550 won per month and call rates are 6.8 won per minute.

Cheo offers service through a single retail shop in Pyongyang but opened a second temporary outlet during a March sales promotion. The promotion, available during the final two weeks of the quarter, offered lower price handsets, cheaper calling packages and free minutes. As a result, sales in March increased by 138 percent over February, said Orascom.

Read previous Orascom posts here. 

On a similar note, Kim Jong il’s English language translator was named ambassador to Egypt.

Read more here:
Egypt’s Orascom reports profit from N. Korean mobile service
Yonhap
Kim Eun-jung
6/25/2009

North Korean 3G network hits 19,000 subscribers
NetworkWorld
Martyn Williams
6/29/2009

UPDATE: Excellent information in the comments. 

ORIGNAL POST: Last week many press reports claimed that the DPRK’s newly launched 3-G mobile phone service includes limited Internet access.  To take one example from the Associated Press:

North Korea has begun limited Internet service for mobile phone users, a government Web site reported, months after launching an advanced network in cooperation with an Egyptian telecoms company.

The service allows North Koreans to access a Web site through their phones to see news reports carried by the country’s official Korean Central News Agency as well as news about the capital Pyongyang, according to the government-run Uriminzokkiri Web site.

Uriminzokkiri did not give any further details in its report Thursday on whether the service is restricted to the capital Pyongyang or is available elsewhere.

The number of mobile phone users had reached 20,000 by the end of March, including some foreigners, Tokyo-based Choson Sinbo newspaper, considered a mouthpiece for the North Korean regime, said earlier this month.

I have not yet been able to locate the story on Uriminzokkiri, but according to a follow up story in the AP:

The Korean-language Web site as seen on an ordinary computer screen also allows viewers to listen to North Korean music, get information about books, art and investment opportunities in North Korea and even engage in Internet chatting. It was unclear, however, if those services were available in the mobile version.

So the “Web site” is actually a portal, and I am 99.99% sure that  it is not connected to the Internet at all but to either the DPRK’s intranet network, called “Kwangmyong,” or to a newly built self-contained computer network.  As an aside, however, many North Koreans (in Pyongyang anyhow) are aware of the internet. 

Strangely, here is an advertisement of sorts about the DPRK’s mobile network which several readers have sent to me.  I believe this was produced by the Chongryun, but this is merely a guess:

Click on image for You Tube video

Here is a little history on the DPRK’s experiences with mobile networks (via teleography):

Mobile phones are tightly controlled in North Korea and were banned until November 2002. Two months later incumbent fixed line telco Northeast Asia Telephone and Telecommunications (NEAT&T) launched GSM-900 services under the banner SUN NET. However, cellular devices were once again banned following an explosion on a train in June 2004, which was thought to have been triggered remotely by a wireless handset. In January 2008 Egypt-based telecoms operator Orascom Telecom announced to the surprise of most that CHEO Technology, a joint venture between itself (75%) and Korea Post and Telecoms Corp (25%), had been awarded a licence to operate 3G wireless services by the government. Under the terms of its licence, CHEO is permitted to provide mobile telephony services for 25 years, the first four of which on an exclusive basis. The company launched the country’s first 3G network in the capital in December 2008 under the name Koryolink. By April 2009 CHEO had reportedly signed up 20,000 subscribers and its 3G network had been expanded to include the main road running up to the northern city of Hyangsan, with national coverage expected by 2012.

Read more here:
NKorea opens limited Internet cell phone service
Associated Press (via Forbes)
5/21/2009

NKorea allows limited Internet cell phone service
Associated Press (via Yahoo)
Kwang tae Kim
5/22/2009

Institute for Far Eastern Studies (IFES)
NK Brief No. 09-4-22-1
2009-04-22

Since 3G cellular phones were first offered in North Korea last December, more than 20,000 customers have signed up for service. According to a recent report by the Choson Sinbo’s Pyongyang correspondent, the North’s cellular network is capable of providing voice and SMS services to as many as 126,000 customers in the Pyongyang area and along the highway between Pyongyang and Hyangsan, and is available to North Korean residents as well as foreigners in the North.

Anyone can procure a cell phone in the North by submitting required information on an application to a service center, along with an application fee of 50 Yuan, or approximately one Euro, or 130 Yen. Currently, telephones are selling for between 110 Euros for basic handsets, to as much as 240 Euros for phones with cameras and other functions. When a phone is turned on, a white ‘Chollima’ horse graphic appears over ‘Koryolink’ in blue, all with a red background. The trademark is said to mean, “The Choson spirit, moving forward at the speed of the Chollima to more quickly and more highly modernize the information and communication sector.”

To use one’s phone, a pre-paid phone card must be purchased. Three types of phone cards are sold for 850 won (A), 1700 won (B), and 2500 won (C), with ‘B’ and ‘C’ cards offering 125 and 400 minutes ‘free air time’, respectively. In order to see to it that its customer base continues to grow, the communications company plans to adjust prices, and offer services such as television and data transmission. Video and picture transmission and other technological preparations have already been made.

As has been previously reported, the service is provided by CHEO Technology Joint Venture Company, owned by the Choson Posts and Telecomm Corporation (KPTC) and Egypt’s Orscom Telecom Holding. There are now two service centers within Pyongyang. In December of last year, only one International Communications Center was established, but as service grew, a temporary sales office was set up in mid-March. The North Korean government purports to provide cellular service as part of its plan to improve the lives of the masses, and the number of subscribers is climbing daily. CHEO Technology plans to extend the coverage area to every major city, along all highways and along major rail routes throughout the country by the end of the year, with the ultimate goal of providing cellular service to every residential area in the nation by 2012. 

According to Telegeography:

Vietnamese military-owned telco Viettel has announced plans to expand its network to North Korea, Cuba and Venezuela, according to reports in local paper Thanh Nien Daily. Tran Phuoc Minh, deputy director of Viettel, said the company is hoping to hold negotiations with the three countries in order to gain a foothold in their still relatively underdeveloped wireless markets. The cellco expanded its network to Cambodia last year, where it signed up 100,000 wireless subscribers after two months of pilot operations, as well as Laos, where it hopes to attract 50,000 subscribers this year. According to TeleGeography’s GlobalComms database, Viettel had a subscriber base of 28 million at end-2008.

Read the full story here:
Viettel plans network expansion to North Korea, Cuba, Venezuela
TeleGeography
2/6/2009