Koryolink subscriptions increase

Martyn Williams writes in PC World:

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

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

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

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

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

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

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

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

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

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

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

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

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


4 Responses to “Koryolink subscriptions increase”

  1. Benoit says:

    What is the point of 3G if there is no internet in the country?

  2. I’m pretty sure Kaesong is covered. Last time I was at the border near Kaesong I whipped out my cell phone and sent it searching for networks.

    I could get a weak signal from Koryolink, although I sadly could not sign on the network. That was probably due to a lack of signal strength and no roaming agreement with my carrier.

  3. Gag Halfrunt says:

    North Korea has a domestic intranet called Kwangmyong. Perhaps Koryolink phones will have access to it in the future.

  4. Ron says:

    What is the point of 3G if there is no internet in the country?

    Military, Security service, the Central Party and its provincial branches, the very privileged few, and finally the various foreign interests in the country. As to the numbers, a healthy dose of skepticism may go far in this case and every other case involving North Korea and a publicly traded startup doing business in that country. Good numbers benefit both NK and Orascom.