North Korea Monitor

North Korea To Expand Mobile Phone Service

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Mobile phone service in North Korea is extremely limited. Besides Pyongyang, the Chinese border and the Rason (formerly Rajin-Sonbong) free trade zone , it is impossible to receive mobile phone service (that is, assuming one could afford to buy and get permission to operate a mobile phone). According to anecdotal evidence featured in a recent Associated Press report, mobile phone use has been on the decline since 2004. This would be inline with new hard line measures taken by the regime in the wake of an ever-so-slight opening since the famine years.

However, now, Egyptian telecom company Orascom announced they have formed a joint venture company with the North’s state-run Korea Post and Telecommunications Corp. to provide 3G mobile phone service in North Korea for the next 25 years. For the first four years, the joint venture company, known as CHEO Technology, will have exclusive rights to the North’s mobile markets. Orascom holds a 75 percent stake in CHEO Technology.

Said the Comapny in its official announcement:

 “Orascom Telecom intends to invest up to 400 million US dollars in network infrastructure and licence fee over the first three years in order to rapidly deploy a high quality network and offer voice, data and value-added services at accessible prices to the Korean people,”

One analyst has high expectations for the project and for the North Korean mobile industry:

Alex Kuznetsov, an analyst at Bear Stearns in London, estimates that North Korea will achieve 20 percent wireless penetration in 2012 and Orascom will begin turning a profit on the venture two years before that.
Though Kuznetsov acknowledged that political risk is “quite a serious factor” in North Korea, Orascom’s background in other emerging markets suggests it can succeed.

According to Cellular-News.com, the South Koreans originally had a plan to construct a CDMA network in Pyongyang in 2002, but these plans were scrapped due to US pressure.

CHEO Technology held its first board meeting in November 2007 in Switzerland, said the KCNA (see: KCNA 11/27/2007). The delegation of the Ministry of Post and Telecommunications was headed by its Vice-Minister Pak Myong Chol.

 In case you were wondering, the North currently uses GSM technology for its existing network.

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Written by nkmonitor

February 1, 2008 at 2:06 am

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