Archive for the ‘Orascom Telecom Holding’ Category

DPRK cell phone imports rise in 2010

Wednesday, January 11th, 2012

According to the Korea Herald:

North Korea imported six times more mobile phones in 2010 than in 2009, a media report said Wednesday, indicating growing mobile penetration in the reclusive country.

North Korea bought 430,000 mobile phones from China in 2010, up from 68,000 phones the previous year, according to Washington-based Radio Free Asia (RFA). In 2010, the country spent US$35 million on importing mobile phones, seven times more than the $5 million outlay in 2009, the report said, citing recent data from the United Nations.

The number of mobile phone users in the communist country has grown rapidly in recent years, from about 90,000 at the end of 2009 to 430,000 a year later and more than 800,000 in the third quarter of last year, the report added, referring to data from Egypt’s Orascom Telecom.

Read the full story here:
N. Korean imports of mobile phones jumped 6 times from 2009-2010: RFA
Korea Herald
2012-1-11

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Koryolink offers mobile access to “Rodong Sinmun”

Monday, November 28th, 2011

According to the Daily NK:

North Korean cell phone users are now reportedly able to read the news and views of the Chosun Workers’ Party on the move.

Chosun Shinbo, a publication run from Japan by the General Association of North Korean Residents in Japan (Chongryun), announced the news on Saturday, saying, “Koryolink, Chosun’s 3G cell phone service provider, has begun a service allowing the reading of Rodong Shinmun, one of the major newspapers, on cell phones.”

Chosun Shinbo also announced its own plans to set up a mobile service in the near future.

The Rodong Shinmun cell phone application is just the latest in a long line of interesting developments in the Koryolink story. Last January the company introduced a multimedia messaging service (MMS). Later in the year it also introduced a video call service, which received a positive reaction from younger users.

As expected, Chosun Shinbo claimed that many North Korean citizens are enjoying the new service on the way to work. One Pyongyang man was quoted by the paper as saying, “It’s very convenient being able to read the news every morning on my mobile phone. You can also go back and read all the news from a few months ago, too, which is great.”

Another resident of the North Korean capital reportedly commented that reading the news on their phone is the first and most important thing they do in the morning.

Interestingly, Chosun Central TV ran a program on November 7th including content teaching mobile phone users of the social etiquette they needed to follow, telling them to avoid bothering people nearby by lowering the ringtone or setting the device to vibrate mode, and to avoid speaking too loudly.

The Wall Street Journal also covered this development.

Read the full story here:
Rodong Shinmun on the Move
Daily NK
Cho Jong-ik
2011-11-28

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Orascom releases Q3 2011 sharholder report

Friday, November 18th, 2011

You can read the full report here (PDF).

Since I am behind on numerous commitments at the moment, I am not going to write much about this.  However, the report’s contents have been widely covered:

1. North Korea Tech (Martyn Williams) and here.

2. Reuters

 

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Orascom plans to offer mobile Internet service in DPRK

Wednesday, October 19th, 2011

Via Geoffrey See at Choson Exchange:

On my last trip to Pyongyang, I had the opportunity to catch up with some Egyptian expatriates from Orascom Telecom Holding over popcorn and whiskey. They were also kind enough to bring our team clubbing into the wee hours of morning.

Orascom Holdings is three companies each headed by a different brother of the Orascom family. Orascom Telecoms is headed by Naguib Sawiris, while the resorts arm Orascom Development is run by Samir Sawiris, and the construction arm Orascom Construction by another brother. All three brothers have stakes in different assets in North Korea, with the infamous Ryuggyong Hotel owned by Samih Sawiris. As of May 2010, when I had met Samih Sawiris in Switzerland, he had yet to visit Pyongyang. Recent pictures from Pyongyang indicate that this has changed.

The most exciting development to us was Orascom’s 3G Internet service which was still under the testing phase. The plan is to roll out this service in the near future, although the service will only be available to resident foreigners in the initial phase. Approval for this service to be provided on a larger-scale to North Korean citizens, in any censored form, has yet to be given although the infrastructure to do so is in place. For foreign residents in Pyongyang, the service could offer cost-savings of up to 60-80 percent over current satellite internet offerings. There is no information on what security trade-off such a service might entail.

We also discussed text advertising and the current mobile service business. While text advertising is possible, there has yet to be approval for the company to run such a service. Currently, handsets cost Euro 50 each and there is a monthly subscription fee of 900 Won (we are not sure how this cost scales with usage). For reference, the unofficial exchange rate has fluctuated around 2500 to 3500 Won to 1 Euro this year.

Click here to see previous posts about Orascom and cell phones in the DPRK.

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Orascom publishes 2nd quarter 2011 report

Sunday, August 14th, 2011

Read the full report here (PDF).

According to the Daily NK:

North Korea’s rapidly burgeoning cell phone user numbers have surpassed 660,000, according to Egyptian operator Orascom Telecom’s half-year earnings report for January-June, 2011.

As of March, the last time Orascom released a similar report, the number of subscribers stood at 530,000, meaning that the company has officially added 130,000 additional users in just three months, an extraordinary performance given prevailing economic conditions, the price of phones and official controls.

The figures look even better over a 12 month period; at the same point last year, there were just 184,531 subscribers. Although things are likely to slow as time passes, this still puts the era of a million subscribers, which would represent around 4% of the population, within sight.

The causes of the rapid increase in user take-up include a rapidly expanding network, that the authorities encourage Party cadres to make use of the phones, and that they are of increasing importance to those doing business in the market. In addition, the company has been working to target young people with a number of additional services including MMS and Video Call.

According to the earnings figures, as a result of these efforts Orascom made $61 million from its North Korea venture in the first half of the year, an increase of 160% on last year.

Commenting on the success, company CEO Ahmed Abou Doma noted, “Our operation in North Korea continues to display tremendous growth with a subscriber base that has more than tripled compared to the first half of 2010, the growth of which impacted revenues which increased 164% year-on-year.”

However, there is another story behind the official earnings that could serve to give investors pause. First, the earnings are based on the official USD exchange rate, 135 North Korean won, instead of the market exchange rate, which stood at far removed at 2540 North Korean won in Pyongyang on August 2nd.

Second, the report notes the introduction of what it calls the ‘Euro Pack’, a bundle which offers new subscribers “voice minutes and VAS in return of fees that could only be paid in Euros”, a concept which Orascom says is proving popular, but which certainly reflects the uncertainty inherent in dealing with the North Korean currency.

Martyn Williams has more here.

At least one report claims that the older mobile phone network (pre-Orascom) has finally been closed down.  Now Orascom is the sole mobile phone provider.

Read the full story here:
Orascom User Numbers Keep Rising
Daily NK
Chris Green
2011-8-11

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Orascom releases 2011 Q1 shareholder report

Friday, May 20th, 2011

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.

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Koryolink employee numbers and other info…

Sunday, May 8th, 2011

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

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Koryolink sees increase in users and revenue

Tuesday, April 19th, 2011

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

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KJI and JST meet with Orascom president

Sunday, January 23rd, 2011

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.

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Friday Fun: New year’s close out

Thursday, December 30th, 2010

Item number one: the DPRK’s domestically produced film camera, Hakmujong-1 (학무정-1):

This picture comes via the Russian blog “Show and Tell Pyongyang”. You can read about this camera in the original Russian here.  You can read about it in English (via Google Translate) here. This is the same blog that informed us about the DPRK’s PDA device and the DPRK’s Linux OS, Red Star.  He also has some fabulous pictures of the Kim Jong-suk Pyongyang Silk Mill here.

Item number two: DPRK’s domestic “Coke”:

This photo comes from the collection of Eric Lafforgue.  If you have not already seen his photos, please do yourself a favor and click over.

The soda is “Crabonated” which is a pretty funny typo.  Also worth noting are the lengths they have gone through to copy the Coca-Cola brand–as if they are trying to win back market-share from the foreign firm.  The colors, red, black, silver and white are the same.  The familiar cursive English “C” at the beginning of the word is a close copy.  They even tried to replicate the Coke “wave” by adding a literal wave in a similar curve along the bottom of the advert.

Item number three: DPRK caviar (Okryu Restaurant)

“Thanks to our leader Kim Jong-il we have managed to breed sturgeons.  People from Pyongyang and other provinces can come here to taste caviar and turtle meat.”

See the full video here. Here is a satellite image of the restaurant.

Item number four: Women’s fashion

Uriminzokkiri has posted a clip on DPRK women’s fashion to their Youtube account.  You can see it here.  I have blogged about women’s fashion before here and here.

Item number five: New Koryolink advert (Koryolink is the DPRK’s new 3-G mobile phone service founded by Orascom)

The video comes from this NK web page.  For South Koreans I posted it to my Youtube account.  You can see it here.

Item number six: DPRK verison of The Diary of Anne Frank

Michael Rank has scanned the introduction and uploaded it here.

Item number seven: Happy new year!

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