Archive for the ‘Telephones’ Category

The prospects for commercial, mobile banking in North Korea

Friday, August 3rd, 2018

By Benjamin Katzeff Silberstein

A couple of days ago, Korea Times ran an interesting interview with Kim Young-hui of Korea Development Bank (KDB), on the prospects of commercial and mobile banking in North Korea. Kim was optimistic regarding the prospects for mobile banking to take off soon in North Korea:

“I think it could happen in the near future, within a year at most,” said Kim, Senior Research Fellow at KDB’s Korean Peninsula New Economy Center.

Kim’s forecast is based on the latest edition of the North Korean quarterly journal Economic Research, issued in June, which was about establishing a mobile banking system for smartphone users. The contents of the quarterly were reported by Yonhap.

“A commercial bank should be established first to enable customers to use mobile banking services,” she said. “Once it is established, individuals will be able to make transactions through their smart phones through their own bank accounts.”

In North Korea, the concept of individuals opening a bank account is alien.

Most of North Korean residents deposit their money with individual money traders, making it hard for the North Korean regime to account for the money it prints, Kim said.

Although North Korea established the Commercial Bank Law in 2006, it still does not have a separate commercial bank regulatory system. There are some “commercial” banks, but they only deal with foreign currency, not domestic currency, Kim said.

The Commercial Bank Law enables loan services for individuals, while working with domestic currency as well as foreign currency.

North Korea under Kim Jong-un is now trying to open up to the global economy as he declared in November that the completion of nuclear weapon development left him with one mission of economic development in his Byeongjin policy.

The new smartphone-based financial service would enable North Korean residents to check (their) bank accounts, withdraw cash, transfer money as well as pay at shops. The tool is a smartphone, an “indispensable information communication tools.”

The report also urged the mobile telecommunication organizations in the country to establish a communication infrastructure that can provide information on the purchase of goods while notifying financial transactions to mobile banking users. The infrastructure, once established, will also enable confirming of payments and settlements to both buyers and sellers.

“Unlike other countries where a series of steps have been taken before introducing mobile banking, North Korea is skipping them since smartphones are already prevalent in the country,” the researcher said.

The report also proposed the development and introduction of RFID (Radio Frequency Identification) and NFC (Near Field Communication) technologies as well as the installation of necessary devices to make payment using smart phones at stores and other facilities more quick and accurate.

Full article and source:
‘North Korea will soon open commercial bank, mobile banking’
Jung Da-min
Korea Times
2018-08-01

A few thoughts on this:

First, on methodology, I’m not entirely convinced that one can or should read the North Korean journal that this assessment is based on, Kyungje Yungoo (경제연구) as a blueprint for what policies are in place or will come in the future. For years, and particularly under Kim Jong-un, the journal has run a multitude of articles on private incentives and profits within enterprises and firms, and on topics such as the role of various technologies within the economy, with no large-scale, public policy announcement following. To be sure, much has already changed in the economic realm within most spheres of what the journal covers, but there doesn’t seem to be a clear line between articles there and consistent, thorough changes in economic management. Rather, Kyungje Yungoo is perhaps best read as a map of what topics of conversation and debate (yes, debate) are acceptable in the academic and policy realms in the country. In other words, the regime is clearly thinking about commercial banking and ways to make it work, but that doesn’t mean it’s necessarily on the horizon in the immediate future (which it could well be).

Second, on the issue itself: North Korea’s financial sector is seriously underdeveloped. The lack of a solid banking system is a huge stumbling block for economic development, as assets that could otherwise be used to fuel growth through investments often sit idle. (For those interested in the issue, I wrote about it in this report for the Center for a New American Security a couple of months ago). Part of the problem is that even if the state did take initiatives to create some form of commercial banking sector, public trust in the state is deeply eroded. The government isn’t really an entity that most people want to hand their hard-earned savings to, because economic policy has historically been so erratic and often changes on a whim. Look, for example, at the market crackdowns of the past few months. Much is done by decree and order rather than by law. And the laws that do exist don’t really mean much if there’s no credible mechanism to enforce them. Should the government institutions simply allow for the institutionalization of private, commercial banking, rather than participate in the game themselves, that would be a different story, but the history of economic development in North Korea shows that that’s usually not how things work.

Third: it does make sense that there could be a lot of leap-frogging in sectors like banking in North Korea, given the increasing prevalence of smartphones and other technology. So there’s certainly room for optimism here too.

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Competition rises among factories and department stores in North Korea: Delivery services now available

Friday, September 5th, 2014

Institute for Far Easter Studies (IFES)
2014-9-4

It appears that some factories and department stores in North Korea have begun to implement a delivery service in response to customer demand. This new customer-oriented service seems to have arisen out of the Kim Jong Un regime’s goal of increasing autonomy and competition among businesses.

According to the newest issue of “Choguk” [Joguk] (“Motherland”, September 2014), a media outlet associated with the General Association of Korean Residents in Japan, North Korea’s representative state-run department store Pyongyang Department Store No. 1 has been making efforts to diversify the services offered to its customers. The article specifically revealed a personal delivery service, saying, “Salespersons have responded to the public’s requests and have begun to deliver ordered products to sell directly to customers at their doorsteps.”

Salespersons from Pyongyang Department Store No. 1 have also been travelling to power plants, mining sites, textile mills, farms and other worksites to sell products directly to workers and farmers. Other businesses, such as the Potong River Shoe Factory, have also been diversifying customer services. For example, employees now visit customers’ homes to measure shoe size and satisfy other requests they may have when placing an order for shoes.

The Daedong River Passenger Transport Company in Pyongyang is currently offering a taxi dispatching service to customers who call in and request a pickup. Similar to the workings of South Korea’s taxi service, North Koreans may simply dial “186” to be connected to the closest dispatch office, which then sends out a taxi to pick up the customer.

On the other hand, North Korea has recognized the problem of the low-quality products and poor construction work and has emphasized that efforts must be made to remedy these areas. In the most recent issue of the quarterly academic journal, Kyongje Yongu [Economic Research] (2014, Issue 3), one article points out problems in the poor quality of North Korean-made products and construction, saying, “Neglect in quality growth is an outdated attitude.”

Specifically, the article mentions the problem of promising completion of construction according to deadlines: “Technical regulations and construction methods are disregarded when projects are rushed to be finished by their completion date, which is often decided in advance to coincide with a holiday or anniversary.

Currently, North Korea has undertaken large-scale construction operations to finish the Kim Chaek University of Technology’s faculty apartments, the Pyongyang Orphanage and Nursery, the North Pyongan Chongchon River Power Plant and other projects spanning various fields. The goal is to complete these projects concurrently with the anniversary of the foundation of the Worker’s Party of Korea (October 10).

At construction sites around North Korea, it appears that all available resources are being mobilized to engage in a so-called “speed battle” with these construction deadlines. The side effect of this huge emphasis on speed has resulted in many instances of poor construction, like the collapse of the 23-floor apartment building in Pyongyang’s Ansan-1-dong back in May.

The article also points out, “Despite attempting to work toward self-sustainability, there are events where lower quality, alternative products are being used below the material requirements that are leading to lowered quality work.” Furthermore, the article emphasizes, “Production and circulation of faulty products or products which cause harm to the health or lifestyle of the people must be stopped.”

It has also been reported that corruption is taking place at factories and construction sites, with party officials or intermediary managers amassing riches by siphoning off materials and pocketing the money. This leads to further problems in product quality and defectiveness.

Due to the issues of poor construction and product quality, the article points out, “There are many areas in our material economic life that fall behind the global trend,” but “if the quality of products and buildings are improved, the need to consider products from other countries will wane.”

In order to solve these problems, the article suggests implementing product standardization and specialization and encourages research in industrial design.

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North Korea accelerating modernization of postal and communication sectors

Friday, September 27th, 2013

Institute for Far Eastern Studies (IFES)
2013-9-27

North Korea is promoting the development of its postal and communication sectors.

North Korea recently held the “National Communications Workers’ Rally” on September 16, 2013. The First Chairman of the National Defence Commission Kim Jong Un sent a letter addressed to the participants titled “Time for a New Shift in the Communications Industry.”

At the event, Deputy Premier Jon Sung Hun delivered a speech emphasizing that “(communications sector officials) must work with the mission and duty to raise the national communications business up to the state-of-the-art level.”

The dedication of technicians working at the mobile communication base station, research of scientists and technicians at the communications sector, and modernization of information and communications in Pyongyang were acclaimed for achievements.

In the North, letters and parcel delivery as well as land-based and mobile phones, and intranets are considered a part of the communications sector. The Ministry of Communications under the Cabinet oversees this entire industry.

During his life, former leader Kim Jong Il also showed great interest in the communications sector. At the national rally for communications workers on August 25, 1993, Kim sent a letter encouraging the participants: “Let’s push forward toward modernization of the communications sector.” In North Korea, this text is regarded as the bible of the communications industry.

North Korea has been holding the National Communications Workers’ Rally once every ten years, with the last event held in October 2003 at the People’s Palace of Culture in Pyongyang.

Meanwhile, Rodong Sinmun, the official newspaper of the Korean Workers’ Party, devoted the entirety of page four to introducing the achievements of the International Satellite Communication Bureau and the fiber-optic cable factories. It covered extensively the successes of the postal and communications industries.

The newspaper stated, “The workers and technicians of the communication sector successfully finished the fiber optic cable construction in the provincial, city, and district levels in a short period.” The news also boasted that “They realized the high-speed and large-capacity of communications based on state-of-the-art technology and high-tech facilities.”

In addition, Rodong Sinmun reported the advancement of the speed and accuracy of communications, high-speed data network and exchange capacity, making positive contribution in distance learning and remote medical system.

The news also acclaimed, “The fiber-optic cable communication and communication facilities and operation has reached the level of modernization,” and “Most of all, the high-tech mobile services is contributing greatly to ensuring the convenience of people’s daily lives.”

Recently, North Korean mobile communications has made great progress. Reportedly, North Korea has over 200 million subscribers (as of April 2013). About 1 in 12 North Koreans have mobile phones. The younger generation is also reported to be reading mobile news, multimedia message (MMS), and sending and receiving video calls via 3G.

Mobile phones in North Korea are spreading rapidly and mobile games are also growing in popularity.

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KoryoLink offers internet access to foreign users

Tuesday, February 26th, 2013

UPDATE 3 (2013-3-22): Koryo Tours employee, Hanna Barraclough, has been posing Instagram photos from her most recent trip to the the DPRK. You can see the photos here. She also wrote this blog post about her most recent trip. In the report, she dropped some notable information in the last paragraph:

In other news from the trip – the 3G access for foreigners has now been restricted to long term visitors/residents of Pyongyang only and tourists are not permitted to use this service. They can still buy simcards to make calls but no internet access available.

Hanna, Jean Lee, and David Guttenfelder are the only individuals of whom I am aware that have used Instagram/Twitter from inside the DPRK. Since they regularly enter and DPRK, they might get a pass as “long-term visitors”. It looks like the idea of thousands of tourists instantly uploading images to the web was a little more than Pyongyang could handle for the time being.  Still, we know the capacity is there, we just have to wait for them so flip the switch again.

UPDATE 2 (2013-3-7): Here is CCTV (China) coverage (in English) of the new cell phone policy:

UPDATE 1 (2013-3-4): Koryo Tours has posted all the details about mobile phone use in the DPRK.

ORIGINAL POST (2013-2-26): In January the DPRK began allowing foreigners to bring mobile phones into the country. These cell phones were not compatible with the DPRK mobile  network (Previously, foreign VIPs could only make mobile phone calls through the old Loxley network).  However, it later emerged that visitors could buy SIM cards which would allow compatible mobile phones to make international phone calls–but not domestic calls.

Last week, Jean Lee (Assiciated Press) reported that international visitors/expats will soon have access to the internet through their mobile phones with KoryoLink SIM cards:

North Korea will soon allow foreigners to tweet, Skype and surf the Internet from their cellphones, iPads and other mobile devices in its second relaxation of controls on communications in recent weeks. However, North Korean citizens will not have access to the mobile Internet service to be offered by provider Koryolink within the next week.

Koryolink, a joint venture between Korea Post & Telecommunications Corporation and Egypt’s Orascom Telecom Media and Technology Holding SAE, informed foreign residents in Pyongyang on Friday that it will launch a third generation, or 3G, mobile Internet service no later than March 1.

The announcement comes just weeks after North Korea began allowing foreigners to bring their own cellphones into the country to use with Koryolink SIM cards, reversing a longstanding rule requiring most visitors to relinquish their phones at customs and leaving many without easy means of communication with the outside world.

The two changes in policy mean foreigners in North Korea will have unprecedented connectivity while living, working or traveling in a country long regarded as one of the most isolated nations in the world.
However, wireless Internet will not yet be offered to North Koreans, who are governed by a separate set of telecommunication rules from foreigners. North Koreans will be allowed to access certain 3G services, including SMS and MMS messaging, video calls and subscriptions to the state-run Rodong Sinmun newspaper — but not the global Internet.

Chinese-made Huawei cellphones sold by Koryolink are not cheap, with the most basic model costing about $150, and the governments restricts North Koreans from phoning abroad or foreigners from their cellphones. Still, mobile phones have become a must-have accessory among not only the elite in Pyongyang but also the middle class in cities such as Kaesong and Wonsan.

Foreigners, meanwhile, can now purchase SIM cards at the airport or at Koryolink shops for 50 euros ($70). Calls abroad range from 0.38 euros a minute to Switzerland and France and more than 5 euros a minute to the U.S. Calls to South Korea remain prohibited.

Starting next week, foreigners will be allowed to purchase monthly mobile Internet data plans for use with a USB modem or on mobile devices using their SIM cards. Prices for the service haven’t been announced yet.

It now appears that the service has been activated. Jean Lee, who wrote the article above has been tweeting and using Instagram (and here)and Loopcam. She may be the first customer to use the service.  Dennis Rodman may be the second.

Xinhua (Via North Korea Tech) has some financial details on the new project:

“We will provide both a USB modem and your current own SIM card to get access to Internet, respectively costs 75 euro and 150 euro upon registration, with different levels of charge standard, from 400euro/10G, 250euro/5G, to 150euro/2G for USB and 10 euro for SIM card per month,” he said.

The Xinhua article also claims the number of domestic mobile phone users has increased to 1.8 million. The Daily NK offers interesting information on how all these users are able to power their phones.

Choson Exchange first reported on the development of this technology back on 2011-10-16!

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KoryoLink update

Sunday, November 18th, 2012

Although KoryoLink’s corporate performance no longer appears in Orascom shareholder reports, Naguib Sawiris has given an interview in Forbes in which he offers some business details:

Sawiris has a 75% stake in Koryolink via his Orascom Telecom Media & Technology (OTMT) unit, with the remainder held by a company under the Ministry of Post & Telecommunications. He says revenues in 2012 should reach around €186 million ($145 million), with an average revenue per user of €8.6. The network only permits domestic calls and locally hosted data services. A separate cell network is available for foreigners in North Korea.

FORBES: How many subscribers does Koryolink have? How extensive is your coverage in DPRK?

NAGUIB SAWIRIS: Koryolink currently has more than 1.5 million subscribers. Coverage includes the capital Pyongyang in addition to 15 main cities, more than 100 small cities, and some highways and railways. Territory coverage is around 14%, and more than 90% population coverage. The subscriber base has been increasing at a very healthy rate from 950,000 at [year-end] 2011 to an estimated 1.7 million at [year-end] 2012.

FORBES: Under your joint venture with the Ministry of Telecommunications, when will Koryolink lose its exclusivity? What will happen after this period ends?

NS: Exclusivity was granted for a period of 4 years from launch. After the expiry of exclusivity in Dec. 2012, Koryolink received written confirmation that for an additional period of 3 years (until 2015) no foreign investors will be allowed in the mobile business. However, we are continuing to expand our network and services to further solidify our position [in order] to be ready for any possible competition.

FORBES: What is your role in the construction of the Ryugyong Hotel? What other real estate interests do you have in DPRK?

NS: This is a special investment that we are maintaining through our banking subsidiary in the DPRK, where Orascom has the right to operate this facility. The construction, repair and facade installations have all been completed last summer. We are planning to relocate Koryolink headquarters into the tower very soon to bring life to the building. There are no other real-estate investments in the DPRK, however, Orabank, our banking arm in DPRK, is actively working towards developing mobile-related businesses and projects.

Chris Green offers some great information (about which I have long wondered)  on the process required to acquire a cell phone:

First, the individual wishing to obtain a cell phone must go to his or her local Communications Technology Management Office (통신통화관리국 or CTMO; in provincial capitals only) or a subordinate arm of the same (in smaller cities) to obtain a three page application form. This form, once filled in, must be stamped by the Ministry of Public Security officer assigned to the individual’s workplace or, for those without official workplaces, attached to his or her local people’s unit.

Having paid off the public security official in cigarettes or cash (more often the former, according to this author’s sources, because it arouses less friction) he or she must submit the stamped form to the CTMO or equivalent, whereupon it is sent, with all the speed one would expect of the North Korean transportation network, to the Ministry of Communications in Pyongyang. At this point there is little else to be done but go away and pitch the proverbial tent, because at best it takes a month for the staff in the revolutionary capital to process the application.

Assuming, and it should not be assumed, that those checks done in Pyongyang don’t yield any incriminating evidence of wrongdoing (don’t forget, the North Korean legal system makes every adult a criminal in one way or another, something which can come back and haunt any individual whenever “rents” are desired), the individual will eventually be ordered back to his local communications office, whereupon he will be handed a payment form. He or she must then take this form to a bank, and engage with the separate, and no less inefficient, bureaucracy therein in order to pay the majority (though not all) of the cost of a phone and Koryolink network activation fee.[1]

The payment form, duly stamped by a functionary at the bank, must then be taken back to the CTMO or equivalent, whereupon it can be exchanged for half the stamped application form originally sought from the ministry in Pyongyang. Here, finally, the individual reaches a watershed moment: this form can actually be exchanged for a cellular telephone!

However, the pain is actually quite a long way short of being over. In a moment of uncharacteristic efficiency, the actual cell phone shop is often directly outside the communications office, but in a moment of karma-balancing inefficiency, it doesn’t open much, carries a limited amount of product and is pitifully understaffed. As a result, queues are long, as are waits. Assuming an individual lives long enough to reach the front of such a queue, he or she is finally offered the opportunity to hand over another $70-$100 and depart the scene with a brand new phone.

Writing in the Daily NK, Kim Kwang-jin explains how people are getting around this burdensome regulatory process:

Therefore, the source said, “Middlemen in larger cities are getting multiple phones activated in random people’s names and then taking them to smaller cities to sell. Alternatively, households that don’t have any problem getting that kind of approval are mobilizing the names of their entire families to get phones, which they are then selling on to the middlemen.”

“The end users are buying these cell phones for $300 to $500 from the middlemen or from private sellers. This saves them having to go to the trouble of applying to Koryolink,” he added.

A basic Koryolink phone can be purchased officially for roughly $270- $300, excluding bribes and extraneous costs. The price of one of these semi-legal phones depends on duration of use and model. The best product, the T1, a clamshell design, is the latest and costs more than $500. The next mid-range model is the T3, another clamshell; there is also a similarly priced phone with a slide design. The budget offerings are the T95 and T107. Differences in price are mostly attributable to differences in sound quality rather than the designs, sources assert.

In addition, there are also phones available for use within individual provinces. These products, which are similar to the so-called “city phones” that were briefly permitted in the late 90s but soon got withdrawn, cost just $70 at the time of writing.

Geoffrey See of Choson Exchange also offers some insight on Ora Bank’s mobile-related business projects:

However, it appears that Naguib, Chairman of Orascom, might have other ideas. In his words, “Orabank, our banking arm in DPRK, is actively working towards developing mobile-related businesses and projects.” The 3G network provides a platform for a range of other services that emerging market economies would need including remittances and payments through mobile banking and mobile payments. Given the primitive development of the services sector, mobile provides an opportunity for Orascom to upend the services industry in North Korea.

This was something I was originally looking at in North Korea. Payments are currently messy in the country. On a previous trip, I remembered an account of a North Korean trying to pay the handphone bill. Apparently the payment went to the wrong account, and the North Koreans spent the morning calling and shouting at some people to make the mistaken beneficiary return the money so that the payment could go to the right account. For what mobile banking and payments could potentially look like in North Korea, check out M-pesa.

Read the full story here:
Pyongyang Calling For Egyptian Telecoms Tycoon Naguib Sawiris
Forbes
Simon Montlake
2012-11-18

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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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North Korea on the Cusp of Digital Transformation

Tuesday, November 1st, 2011

The Nautilus Institute has published a new paper by Alexandre Mansurov on the DPRK’s communication and technology sectors.  The press release and a link to the paper are below:

PRESS RELEASE

The DPRK mobile communications industry has crossed the Rubicon, and the North Korean government can no longer roll it back without paying a severe political price. The most the authorities can do now is probably to manage its rapid expansion in such a way that will ensure that the interests of the political regime and state security are taken care of first.

While traditionally, the State Security Department monitored most communications on a daily basis, the implication of this explosion of mobile phone use is that communication in North Korea has transitioned from a panopticon of total control to a voluntary compliance system where the government makes an example of a select group to try and force the rest of the country to stay in line.

Alexandre Y. Mansourov, a Nautilus Institute Senior Associate, comprehensively examines information technology in North Korea. As of 2008 the regime launched a world-class 3G mobile communications service, which gained almost 700,000 users in less than three years of operation, revealing an insatiable demand for more robust and extensive telecommunications services among the North Korean general population.

Download the report here

About the Nautilus Institute: Since its founding in 1992, the Nautilus Institute (www.nautilus.org) has evolved into a thriving public policy think-tank and community resource. The Institute addresses a myriad of critical security and sustainability issues including the United States nuclear policy in Korea and energy, resource and environmental insecurity in Northeast Asia. Over the years, Nautilus has built a reputation for innovative research and analysis of critical global problems and translating ideas into practical solutions, often with high impact.

For more information, contact the Nautilus Institute at [email protected] or at 415 422 5523.

Here is Yonahp coverage of the report.

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DPRK IT product management borrows from the past

Monday, April 4th, 2011

According to Yonhap:

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

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

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

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

And according to the Straits Times (Singapore):

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

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

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

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

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

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

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

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

The control was never perfect…

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

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

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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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Russian blog debuts DPRK PDA device

Wednesday, November 3rd, 2010

UPDATE: Martyn Williams writes in PC World (11/5/2010):

A new PDA (personal digital assistant) has hit stores in North Korea, according to a student who writes a blog from the secretive state.

The device, which doesn’t appear to carry any branding, has a color touchscreen display that occupies its entire front, according to photos published on the “Pyongyang Show and Tell” blog. The Russian-language blog is maintained by a Russian student who is studying in the country.

Installed software includes a Korean dictionary and translation dictionaries pairing Korean to and from Russian, English, Chinese and German, the blog report said. There are several basic utility programs and an electronic map of the country although the PDA does not feature GPS (global positioning system).

There is also no wireless networking so data transfer has to take place via a USB connection to a Windows or Linux computer. Data can also be transferred via MicroSD card, which is the same as used in domestic cell phones.

“Comparing it to modern things like, let’s say, the iPad, it’s nothing,” the blog’s author, who didn’t wish his name to be used, told IDG News Service via email. “It’s still good as a dictionary, except I don’t see any other advantages.”

It’s not the first PDA in North Korea.

In 2003 the country’s media said “Hana 21,” a PDA developed by the Samilpo Information Center, had been put on sale. The device included English-Korean and Korean-English dictionaries as its main function and also had several games and a basic word processor. Input was by pen and touchscreen.

According to published images of the Hana 21, the two devices are different.

At the time the Hana 21 was said to cost around 200 euros (US$182 at the exchange rate of the time).

The new PDA that hit stores recently costs around US$140.

“It’s still hard to buy for a Korean, but there are many people who keep their money for years and can afford it,” the student said via email.

PDAs have long been out of fashion in many countries after their features and functions were duplicated by smartphones. North Korea has a 3G cellular network, but most cell phones have only basic features.

ORIGINAL POST: Show and Tell Pyongyang introduced the world to the DPRK’s version of Linux: Red Star.  Now he has introduced us to the DPRK’s new Personal Digital Assistant (PDA).

Here are pictures from the Russian web page:

According to the Russian-language web page (via Google Translate):

A few weeks ago in North Korea has started selling the first PDA. In all the computer shops you can see the advertising of the new items. [I] offer a small review of this device.

On sale are a few options. The difference between them – is the amount of internal memory and a built-in slot for the stylus. The most feature-rich [costs] $ 140 and has 8 gigs of internal memory and a slot for the stylus, so you do not accidentally lose it.

In addition, there is a slot for MicroSD memory cards – the same as in the local mobile phones.

The main function of which is worth noting (and more generally for which there is a fly sabzh), an electronic dictionary Samhyn (삼흥) with the Russian language. It is no secret that South Korea produced electronic translators, but, according to eyewitnesses, the Russian language is absent in them as fact. And in this case, Russian-Korean and Korean-Russian dictionaries most voluminous in the number of vocabulary words. Besides, there are English, Chinese and German. Also has a large Korean Wiki Grand Korean Dictionary.

So for me personally, the main value of the PDA – is an electronic dictionary, which can carry with them always and everywhere. And the rest is not so important.

So what else is there? There is a map of Korea’s system of teaching foreign languages (English, Chinese). By the way, about a month ago there was an opportunity to put maps on your mobile phone. Application free of charge and requires activation. Put it on a large computer center of the city. []

Device has access to TV, headphones and a USB-slot. Possible to connect devices to both Windows, and Linux (in this case, Red Star)

On the whole – everything is simple and works quite well. At the moment, the firmware needs some work, not all features fully implemented, but the Korean comrades promise to update and refine.

If anyone else has more information, please let me know.

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