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Orascom Telecom Sees Surge in North Korea Subscribers

Mon, 11/08/2010 - 7:27am
Tarek El-Tablawy, AP Business Writer

CAIRO (AP) — Mobile phone service subscriptions in Orascom Telecom's North Korean joint venture climbed over 400 percent in the 12-month period ending September 2009, the Egyptian telecom giant said, as it pushes ahead with coverage plans in the reclusive communist nation.

Cairo-based Orascom Telecom, which operates an advanced 3G telephone service network in North Korea, also said its service now covered 75 percent of the country's population. Network coverage was extended over the third quarter of 2010 to reach a total of 12 main cities, including Pyongyang, 42 small cities and 22 highways and railways, OT said.

It planned to extend coverage to over 90 percent of the population by the year's end, the company said in a quarterly statement released late Sunday.

Total subscribers with koryolink, the network OT jointly operates in the country, climbed to 301,199 by the end of the third quarter of 2010, a major increase to the slightly over 69,000 subscribers at the end of September 2009.

The launch of the 3G network in the north in late 2008 was seen as a milestone moment in a country where private cell phone ownership was banned and information is tightly controlled. Analysts had expected that the service would largely be restricted to North Korea's political elite and limited to the capital.

But Orascom said koryolink had expanded across the country, and that there was a "steady increase in voice and SMS usage that took place over the last three quarters."

Overall, OT's net income across its global operations climbed to $934 million in the third quarter of 2010, boosted by a one-off gain from its Egyptian unit, Mobinil, which it jointly operates with France Telecom. Factoring out that gain, net profit stood at $112 million.

OT said koryolink had launched a video calling service that "resulted in a high level of demand, especially from the youth segment." In addition, the subsidiary had set up two new shops in Pyongyang and one more outside the capital, raising the total number of direct and indirect sales outlets to 26 in eight cities.

OT operates GSM networks in the Middle East, Africa and South Asia. The company — which is in the midst of a deal with Russia's Vimpelcom that would create the world's fifth largest mobile phone operator by subscribers — said its total subscribers had climbed to slightly over 100 million by the end of the third quarter of this year.

But Vimpelcom deal may be complicated by OT's troubles with Algeria over its subsidiary in that country.

Algerian authorities claim that Orascom's Djezzy subsidiary owes hundreds of millions in back taxes, a claim OT denies. Algeria has also indicated it will buy Djezzy, an announcement it made after it had blocked an earlier attempt by OT to sell assets to South Africa's MTN Group.

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