Calling Pyongyang … Orascom Eyes Cell Phone Venture in North Korea

Via The Financial Times, news that Orascom is looking at setting up a mobile phone venture in North Korea.  As the article notes

“…Setting up a mobile phone service in North Korea – an authoritarian state that has banned mobiles – may sound like a misguided venture but Egypt’s Orascom reckons it can defy conventional wisdom when it starts operations there on monday.

Orascom is confident North Korea is opening up its economy and says it has been assured by the ­government that everyone will be allowed to buy a mobile. However, experts think that such a volte-face is highly unlikely and reckon only senior military and government officials will be allowed access, and then only to a closed network.

When asked how many people would ultimately use the service, Orascom’s chairman Naguib Sawiris said: “We have a modest target of 5 to 10 per cent of the population.” The population is about 23m. Mr Sawiris expects 50,000 subscriptions in the first three-to-six months.

But the hurdles are considerable.

North Korea banned mobile phones in 2004. Although the reasons are unclear, several observers say the ban was linked to a massive train explosion which may have been an attempt to assassinate dictator Kim Jong-il. A mobile phone was supposedly found near the blast site. The 2004 ban has not been wholly effective as many mobiles have crossed the porous border with China, where smugglers can wade across the river Tumen. Some Chinese SIM cards work in North Korea.

Still, the authorities have clamped down hard on these phones, as Vitit Muntarbhorn, UN special rapporteur on human rights in North Korea, complained in a report in October. He thought the authorities were preventing people spreading news about food shortages, an inflammatory political issue in a country where as many as a million starved to death in the mid-1990s.

Jim Hoare, Britain’s former chargé d’affaires to Pyongyang, says the new network is bound to have severe restrictions.

“It’s unlikely that a country that doesn’t allow you to have a radio unless it’s set to the state frequency will suddenly allow everyone to have mobile phones. It’s more credible that there will be a limited network for officials in Pyongyang and Nampo.”

Dong Yong-sung, chief of the economic security team at the Samsung Economic Research Institute in Seoul, believes another obstacle to ordinary North Koreans owning phones will be the cost. “As far as I know, mobile phone registration costs about $1,000,” he said, a sum equivalent to the average annual income.”



This entry was posted on Wednesday, December 17th, 2008 at 9:46 am and is filed under Egypt, North Korea, Orascom.  You can follow any responses to this entry through the RSS 2.0 feed.  You can leave a response, or trackback from your own site. 

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