Egyptian businessman Naguib Sawiris has taken over as CEO of the parent company of Cheo Technology, which runs North Korea’s Koryolink 3G cellular telephone network.
Sawiris assumed the top job at Orascom Telecom Media and Technology (OTMT) after the former CEO, Ahmed Abou Doma, stepped down for personal reasons. He had been CEO for less than a month, taking the job on October 1.
Earlier in October, Sawiris made his latest visit to Pyongyang.
He arrived in the North Korean capital on October 12 and left two days later. During his trip, he met with DPRK Premier Pak Pong Ju at Mansudae Assembly Hall and, as is customary, presented a gift for Kim Jong Un, the Korean Central News Agency (KCNA) reported. The news service did not release details of the talks, but it did release some images.
Naguib Sawiris meets DPRK Premier Pak Pong Ju at the Mansudae Assembly Hall in this October 13, 2014, image from Korean Central News Agency
Subscriptions to Koryolink, North Korea’s only 3G mobile phone network, have just passed the 2.4 million mark, according to the latest figures from the operator.
The figure represents a significant slowdown in growth in the last year over the previous year and points to the first big spurt in subscriptions being over. The carrier might have to start working harder to continue attracting new users.
Total subscriptions to the Koryolink network (Graphic: North Korea Tech)
North Koreans used cell phone messaging to independently organize a soccer group, surprising authorities, according to a new report on cell phone usage in the country.
The soccer club was apparently organized by a group at Kim Chaek University of Technology in Pyongyang, and could be one of the reasons that pushed authorities to launch a regional cell phone service that was more restrictive than previous offerings, said the report by Kim Yonho, a journalist with the Voice of America.
The report, “Cell Phones in North Korea,” was earlier this month by the U.S.-Korea Institute at SAIS, the Johns Hopkins School of International Studies. Kim is a long-time reporter on North Korea having worked for Radio Free Asia before joining VOA.
His report walks through numerous aspects of cellular telephony in the DPRK, including the technical side of the network, the phones and the operator Koryolink. But perhaps the best parts are anecdotes from North Koreans. More >
Orascom Telecom Media and Technology (OTMT), the Egyptian company that owns a 75 percent stake in North Korea’s on 3G cellular network operator, has apparently been doing very well in the North Korean market.
A recent audit report by Deloitte says the company’s assets in North Korea stand at US$512 million, of which $422 million is sitting in cash. The figures were obtained using the official exchange rate on September 30. Due to currency controls imposed by the government, that cash isn’t readily available to OTMT to withdraw from the country.
“North Korea has implemented currency control restrictions and, in particular, rules surrounding the repatriation of dividends to foreign investors. Additionally, the local currency of North Korea is not tradable outside the country. Such restrictions limit the level of dividends that can be paid to the company from its North Korean operations,” Deloitte auditors wrote in their report.
The $512 million amounts to almost half of the assets of OTMT, but Deloitte notes that management says it does not anticipate needing the money to bankroll operations elsewhere.
It said OTMT is “not currently dependent on, and does not expect to become dependent on its operations in North Korea to provide cash flow to service its obligations, meet committed CAPEX obligations or continue its operations.”
The North Korean 3G network is operated by CHEO Technology and branded under the Koryolink name. Orascom began service in December 2011 in collaboration with North Korea’s Ministry of Posts and Telecommunications, which holds the remaining 25 percent in the company.
The company’s own figures show the service has received an enthusiastic response from those wealthy enough to afford the phones and monthly payments needed to use it. Earlier this year, OTMT signed up its 2 millionth customer. (North Korea’s population is around 25 million.)
Earlier this month, press reports said OTMT had decided to freeze investment in North Korea because of problems getting its money out of the country. That is untrue, OTMT said in a statement to the Egyptian Stock Exchange last week, but it doesn’t have plans to make any more investments either.
“Orascom Telecom Media and Technology Holding S.A.E. announced today that recent reports in some media sources claiming that OTMT is freezing its investment in North Korea are entirely inaccurate,” the company said in the statement.
“Where OTMT currently has no plans for new investments in North Korea, the company is open for new opportunities in this market, in which it has been investing for six years. The company has not announced any intentions to freeze investments in the North Korean market.”
North Korea’s Koryolink cellular network has hit the 2 million subscriber mark, majority owner Orascom Telecom said this week.
The landmark was reached in late May, 15 months after it surpassed the million subscriber mark.
Koryolink launched its 3G cellular service in the final days of December 2008 and in the last four years has expanded service to cover all major towns, highways and railways in North Korea.
“When we first acquired the license in North Korea, people thought the service will only be provided to a few privileged individuals,” said Naguib Sawiris, Executive Chairman of Orascom Telecom Media and Technology in a statement. “We are very proud today to witness our subscriber base in North Korea increasing at a growing rate, emphasizing the right of the North Korean citizens in DPRK to communicate.”
OTMT owns 75 percent of the company with the remainder in the hands of North Korea’s Ministry of Posts and Telecommunications. The company uses the Koryolink brand name but is legally called Cheo Technology.
While access to the service has gone far beyond the “few privileged individuals” mentioned by Sawiris, mobile phones remain out of reach for many North Koreans due to the price.
North Korean citizens are offered voice, text message and web browsing service on their phones, but North Korean regulations prevent them from direct international communications or Internet service. Foreigners in the country have a different class of service that allows international connectivity, but shuts off access to most domestic phone lines.
Koryolink recently began offering prepaid SIM cards for foreigners in the country on a short visit. Data cost between 150 euro for 2GBs to 400 euro for 10GBs, with an additional 10 euro monthly charge for the SIM card, according to reports.
But within weeks of the service being launched, it was reportedly scaled back.
In its statement, OTMT said the restrictions have been relaxed, but it’s unclear if the carrier means the original ban on short-term visitors using data or the most recent change in restrictions after the service launched.
“It is worth noting that through recent decisions of the North Korean government, restrictions on availing internet connections through mobile phones for foreign visitors have been reduced, allowing Koryolink to also offer some data services through its network,” it said.
Koryolink did not reply to a request for clarification.
Koryolink, North Korea’s sole 3G cellular service provider, is close to hitting the 2 million subscriber mark.
The news was disclosed this week by the Koryolink CEO Ezz Heikal in Pyongyang and later confirmed by the company’s head office in Cairo. It means that Koryolink will have roughly doubled its subscriber base in the last 15 months. Koryolink hit a million subscribers in early February 2012.
Only a few years ago it would have been unusual to see anyone in Pyongyang speaking on a cell phone, but that all began to change in December 2008 when Koryolink launched its service. It’s now available across Pyongyang, in all major cities and along main road and rail routes around the country.
Subscribers are offered voice, text message and web browsing service on their phones, but North Korean regulations prevent citizens from direct international communications or Internet service. Foreigners in the country have a different class of service that allows international connectivity, but shuts off access to most domestic phone lines.
Koryolink 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.
Visibility into the company’s North Korean operations has suffered in the last year since Koryolink ownership was transferred from Orascom Telecom to OTMT. The former owner published a detailed quarterly report with subscriber and financial data, but most of that disappeared when ownership was switched to OTMT.
Here’s a graph of subscriber growth. Because of the ownership change, quarters from Q1/12 are approximate and some data is missing, but this gives a good idea of the overall growth.
The news agency said a USB modem and SIM card to access the Internet will cost 75 euro and 150 euro (US$100 and $200) respectively, and that’s without data charges.
Data will cost between 150 euro for 2GBs to 400 euro for 10GBs, with an additional 10 euro monthly charge for the SIM card, Xinhua said quoting an unnamed technician at Koryolink.
The technician was quoted as saying Twitter, Skype and conventional Internet would be accessible from cell phones, iPads and other devices after registering at the Korea Communications Center. The KCC is in downtown Pyongyang and it’s unclear from the Xinhua report if the same cards and registration will be available at Sunan Airport.
“We have tried more than one year to negotiate with the Korean side, and got the approval recently,” said the technician, noting again “it has nothing to do with the Google trip.” — Xinhua News Agency, February 24, 2013.
The technician also told Xinhua that Koryolink will try to get approval from the North Korean government for services more suited to short-term visitors.