In the past four years, mobile phones have been off limits to the general public in North Korea. With the resumption of 3G mobile services, mobile phones are now back on the market. In 2002, North Korea created the Northeast Asia Telephone and Telecommunications Co. (NEAT&T) in cooperation with the Thai company, Loxley. They launched mobile communications services which were available only in the North and utilized Europe's GSM (Global System for Mobile Communications) and integrated-circuit (IC) chips. However, since the 2004 the explosion at Yongcheon station, the North Korean regime eliminated all of the mobile communications devices that were in service at the time.
Four years later, the North's Korea Post and Telecommunications Company and Egypt's Orascom Telecom jointly held the Inauguration Ceremony for a 3G Communication Service on December 15th of 2008 in Pyongyang to kick-start the mobile communications services program. The Orascom Group which is partnering with the North in providing the service is a household name in Egypt and considered among the largest network operators in the Arab world. The Orascom Group was established in 1950 and now has four affiliates engaged in mobile communications, construction, hotels, real estate and IT. The payments by Orascom Telecom, which has invested heavily in the North Korean mobile telephony and construction industries on projects which include the construction of the Ryugyong Hotel (a 105-floor skyscraper under construction in Pyongyang), have been guaranteed by Switzerland's UBS Bank. Judging from Orascom Telecom's business track record in the North Korean mobile communications industry, Orascom Telecom has consistently and painstakingly worked to gain control over the mobile communications networks.
In January of 2008, just six months after Korea Post and Telecommunications Company and Orascom Telecom signed their cooperation agreement, the construction arm of Orascom Group announced that it would buy a stake in North Korea's Sanwoon Cement, located near Pyongyang. Allegedly, Orascom's investment amounted to approximately US$115 million, the biggest private investments made in North Korea to date. Orascom Telecom and the Korea Post and Telecommunications Company set up a joint venture called "CHEO Technology", which was invested jointly by Orascom Telecom and Korea Post and Telecommunications Company at a 75:25 ratio. Orascom Telecom, a network operator that has usually done business in the Middle East and Africa, said it would sink nearly US$ 4 million into building a 3G (WCDMA) network in North Korea.
Back in 2008, North Korean mobile operator Koryolink entered the mobile communications business to serve 126,000 subscribers, but demand far exceeded the company's expectations. Therefore, Koryolink plans to secure enough mobile phone circuits so as to serve all the people who wish to use mobile communications services.
In addition, the Choson Sinbo, a newspaper based in Japan, reported that the number of North Korean mobile subscribers would break the 600,000 mark by the end of this year. That means just one year and four months after 3G mobile carrier Koryolink started its business in December of 2008, the number of mobile subscribers topped 120,000 as of April of this year. The mobile communications bureau of the Chosen Post said, "In 2009, base stations were put up throughout Pyongyang and communications networks have been complemented. And major highways leading to Pyongyang (e.g. Pyongyang-Hyangsan, Pyongyang-Nampo highways), major railways sections, and each province have been equipped with communications networks.
"In the future, more than half of the counties and towns will have networks with the rest scheduled to be equipped within this year" said the Chosen Post. North Korea is planning to expand mobile connectivity to the entire nation by 2012. Those who wish to use 3G services can go to mobile service centers called "Bongsaso", pick up an application form and submit it with a payment (the price of the mobile phone plus a 50 euro subscription fee). The prices of terminals range from 110 euro to 240 euro and some mobile devices have built-in cameras. The basic mobile device is supplied by China's Huawei Technologies.
In the future, the 3G mobile communications service will go beyond simple voice calls: Multimedia services such as TV phones and high-volume, high-speed communications will be made possible. The subscription fees, call charges and the prices of mobile phones will go down. On the hardware front, North Korea aims to develop and manufacture its own hand-held mobile phones, but at the moment, mobile phones will be imported from foreign nations, primarily from China. For now, a new production line is planned to be built by a joint venture company, which was formed by foreign capital and the Chosen Post, to assemble imported parts into finished goods.
North Korea said it would set up a nation-wide mobile communications system in order to modernize its communication system. Building an upgraded mobile communication system has been of great interest to North Korean leader Kim Jong-il, so this project is expected to gain momentum quickly. According to South Korean mobile carriers and South Korea's Korea Communications Commission (KCC), only senior government figures are using mobile phones right now in the North. Yet the general public will soon get their hands on mobile devices.
As for the North Korean mobile communications industry, getting foreign investors can be a problem. But the real issue lies with North Korea's poor electricity grids, which are so insufficient that anticipated high electricity demand from maintaining network facilities and charging mobile phones may not be met. Regardless, it is indeed very encouraging that the North offers 3G mobile communication services to the public. I believe that the commercialization of 3G mobile communication services would serve as a stepping stone to North Korea's gradual reform and market opening, which are deemed to be inevitable in the end.
Namseoul University Dept. of Computer Science
Professor PhD, Sung Choi