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Orascom Using Pyongyang's Ryugyong Hotel for Nth Korean 3G Network

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Note -- this news article is more than a year old.

Orascom Telecom which is currently building a GSM 3G network in the secretive North Korea has apparently secured access to the mighty, if unfinished Ryugyong Hotel in Pyongyang. The company has been reported by the few foreign residents permitted into the country to be working on the very top of the 105 story building and installing equipment for its mobile network.

The Ryugyong Hotel dominates the Pyongyang landscape being by far the largest building in a city already full of monumental structures. Construction was started in 1987, and while the main structure is complete, the government cannot afford to finish off the structure. Construction work stopped in 1992 and the empty shell has been left since then.

It has been previously reported, mainly by South Korean sources that the concrete used is of such poor quality that the building cannot ever actually be finished and would have to either be demolished or reinforced at vast cost. If the structure is as weak as reported, then Orascom is taking a bit of a risk in using the top floors for its mobile network infrastructure.

CHEO, a subsidiary of Orascom Telecom, is looking to launch its full commercial mobile services within the second half of 2008.

Earlier this year, the company said that it expects to sign up an initial 100,000 subscribers when it launches its new GSM network in North Korea. Speaking on a conference call, CEO Naguib Sawiris said that the service would start in three main cities in the country and the company will then pause to assess the impact.

The company aims to spend an initial USD200 million on the network over the next twelve months, with US$100 per year for the two years after that.

Orascom's license was granted to the company's subsidiary CHEO Technology JV Company ("CHEO") which is controlled by Orascom Telecom with an ownership of 75% while the remaining 25% is owned by the state owned Korea Post and Telecommunications Corporation. The terms of the license allows CHEO to offer services to its customer throughout the country, the duration of the license is 25 years with an exclusivity period of four years.

On the web: Google Maps image of the hotel

Ryugyong Hotel

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Tags: google  orascom telecom  naguib sawiris  pyongyang  orascom  hotel  Korea