Impoverished N. Korea gets new mobile network

[December 15, 2008]  SEOUL, South Korea (AP) -- An Egyptian telecoms giant launched an advanced mobile phone network in North Korea on Monday, the latest attempt to introduce a global symbol of personal freedom into one of the world's most tightly controlled societies.

But analysts cautioned against reading too much into the widely publicized $400 million deal for a third generation mobile network built by Orascom Telecom.

Orascom Telecom Chief Executive Naguib Sawiris said the company's aim was for a "network that will accommodate the 22 million people" in North Korea, adding he was "surprised and astonished by the quality" and "advancement of the Korean people," according to footage from broadcaster APTN.

It was not clear what controls, if any, would be imposed on the network, which will provide phone service and data capability in a country that has tested a nuclear device but, relies on international assistance to feed its people.

A Pyongyang-based report by the Korean Central News Agency provided no details on the terms of service, the types of phones it might accommodate, or who would be able to utilize it.

Andrei Lankov, a Russian expert on North Korea at Kookmin University in Seoul, noted previous "optimistic predictions" that cell phone use heralded a loosening of controls had fallen short.

"North Korea doesn't want its people to talk too much between themselves," he said.

Authorities restrict the population's access to all but officially sanctioned sources of information and Internet access is limited to top government and military officials.

Paik Hak-soon, an expert on North Korea at South Korea's Sejong Institute, a policy think tank, said only elites will likely have access to the network, at least initially.

"Government, party, military people are the big beneficiaries," he said. Traders and people involved in the economy may also be allowed to use it, Paik said.

North Korea has experimented with cell phones before and has a working mobile phone network, though not as advanced as the one built by Cairo-based Orascom Telecom Holding SAE.

But visitors to the country say cell phone use by North Koreans has virtually disappeared since a mysterious train explosion in 2004 that killed an estimated 160 people. The blast was believed to have been sparked by a train laden with oil and chemicals that hit power lines.

Experts are divided about whether the crackdown on mobile phone use was related to the train explosion or was just an example of the regime getting nervous about losing control of its people.

In 2005, Thailand's then foreign minister Kantathi Suphamongkhon said North Korean officials said they believed mobile phones were used as a tool to gather intelligence by countries hostile to the hardline regime.

North Koreans still manage to make mobile calls illicitly, sometimes using networks in neighboring China. North Korean defectors in South Korea say they can regularly contact relatives.

Orascom has said it intends to cover Pyongyang and most of the country's major cities during the first year of service. Subscriber fees had yet to be announced.

The company runs networks in the Middle East, Africa and South Asia and has not shied from investing in places considered challenging and politically unpredictable, such as Zimbabwe.

APTN showed footage of Orascom's Sawiris cutting a ribbon to applause by North Koreans at a ceremony and later being shown what appeared to be a control center by a North Korean official.

North Korea, where Paik estimates per capita gross domestic product is less than $500 a year, has taken some steps to liberalize its dilapidated economy in recent years and has courted foreign investment.

Despite its general impoverishment and trouble feeding itself without international assistance, the country has consistently emphasized the importance of science and technology in its development.

Most famously, it carried out an underground nuclear blast two years ago amid an international standoff with the United States and other countries trying to convince it to abandon atomic development. It also has an active missile program.

Orascom said it was the first foreign telecommunications company to be awarded a North Korean commercial telecommunications license and would have exclusive rights for four years.

The 25-year-license to operate in the reclusive state was granted to Orascom subsidiary CHEO Technology JV Co., which is 75 percent owned by the Egyptian firm. The remaining stake is held by state-owned Korea Post and Telecommunications Corp.

[Associated Press; By KELLY OLSEN]

AP Business Writer Tarek El-Tablawy in Cairo contributed to this report.

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