North Korean Network Expected to Launch Next Week

A new mobile phone network is due to be launched in North Korea next week - reports Radio Free Asia, citing a Chinese businessman operating in the country. However the report noted that the handsets are likely to be sold for US$700 - which is equivalent to roughly five months wages for most people.

North Korean commentators will doubtless watch the launch intently - to see if North Korean leader Kim Jong Il attends the ceremonies. A launch of this magnitude would normally be attended by high ranking members of the government, but  Kim Jong Il has been reported to be very ill following a serious stroke in August and has not been seen in public for months. His death could through the country into a political crisis as the succession is not at all clear.

The mobile license was granted to Orascom's local 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.

The company aims to spend an initial US$200 million on the network over the next twelve months, with US$100 per year for the two years after that.

Earlier this year, the company said that it expects to sign up an initial 100,000 subscribers when it launches its network. 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.

Plans by South Korean companies to build a CDMA network in the capital city in 2002 were cancelled following diplomatic pressure by the USA.

Mobile phones, thought to be based on a GSM system supplied by China were made available in the country in 2003, but only for government officials. Use of mobile phones by the general public in the Rason Economic Zone was allowed, but a ban was imposed in 2007 and people using them have been reportedly sentenced to execution.

Posted to the site on 5th December 2008