North Korean 3G network hits 19,000 subscribers

The company claims success in signing-up over 19,000 subscribers in one of the world's most closed countries

North Korea's first and only public cellular telephone network attracted 19,200 subscribers after just over three months in business.

Koryolink started operating on December 15 last year and signed up 1,694 customers by the end of last year, with a further 17,500 sign-ups during the first quarter, Orascom Telecom said in its first quarter results announcement.

The network generated modest earnings of US$312,000 for its operators in the first quarter, before accounting for interest payments, taxes, depreciation and amortization. Orascom did not disclose whether the network made a profit or a loss for the period.

Koryolink achieved the EBIDTA (earnings before interest, taxes, depreciation and amortization) results on consolidated sales of US$4.4 million, said Egypt's Orascom. The company holds a 75 percent stake in the network operator, which is called Cheo Technology but uses the Koryolink brand name. State-owned Korea Post and Telecommunications holds the remaining 25 percent

The service is open to anyone in North Korea, although in reality the service is only affordable for a subset of the population.

The handsets, which are localized versions of Chinese models, cost between US$400 and $600 and the cheapest subscription costs 850 North Korean won per month.

That works out to about US$6 at the official exchange rate, but about 24 cents at the current black market rate used by many citizens and traders. Calls on this tariff are charged at 10.2 won per minute. The most expensive calling package costs 2,550 won per month and call rates are 6.8 won per minute.

Cheo offers service through a single retail shop in Pyongyang but opened a second temporary outlet during a March sales promotion. The promotion, available during the final two weeks of the quarter, offered lower price handsets, cheaper calling packages and free minutes. As a result, sales in March increased by 138 percent over February, said Orascom.

Orascom focuses on under-developed cellular markets and runs networks in several countries. Its operations include Algeria, Pakistan, Egypt, Tunisia, Bangladesh, Namibia and Zimbabwe. It also works through subsidiaries in Burundi, the Central African Republic and Lebanon.

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Copyright © 2009 IDG Communications, Inc.

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