North Korea sucks up foreign cash through growing mobile sales

Lee Sang Yong  |  2015-11-23 14:07
Read in Korean  

The number of North Korean mobile phone users has reached 3 million people. According to sources inside the country, phone subscription costs provide a valuable source of foreign currency for the authorities, explaining the drastic surge in official state permissions given out for phone contracts. 

“North Korean mobile phone carrier Koryolink gives permission for foreign currency earning companies to import cell phones from China; these permissions have been steadily rising,” a source in South Pyongan Province reported to Daily NK on November 18. 

“The foreign-currency earning companies usually can acquire the phones for approximately US $50. They then turn around and sell them to customers for about 200-300 USD. A portion of the profit goes to the Egyptian company Orascom, but the lion’s share goes to the regime.”   

This news was confirmed by an additional source in North Pyongan Province. 

When asked to describe how the profits are divided within North Korea, the source explained that 30% of the profit remains at the foreign currency earning companies; however, under the the pretext of revolutionary funds, the companies are required to send the remaining 70% to the central authorities Office 39, a special department charged with raising funds for Kim Jong Uns use.

“The Supreme Leader [Kim Jong Un] is tolerating and even approving residents to purchase the phones in foreign currency rather than North Korea Won. The phone sales thus work as foreign currency streams for the regime. This explains why sales have been steadily rising; even phones cards used to top up mobile phone accounts can be purchased with foreign currency," he asserted.

As North Korea began importing cell phones in bulk, the variety of the models available to customers has increased as well. This makes it easy to line up a phone with a customer’s tastes.  In fact, "certain cadres and merchants involved in mobile sales are even known to own multiple phones," the source said.

As would be expected, in terms of coverage and signal strength, remote regions still lag behind, just as in most of the world. “In places where there aren’t enough cell towers, customers have reported some difficulty in finding a signal. In the more remote regions of the country, a message comes up on the screen that says ‘Out of Service Area.’ In these places, phone calls are difficult to make or receive," he explained.

"There are other instances of cell towers being overworked by the sheer volume of calls. In these cases, it’s possible to make calls in the morning, but in the afternoon, service can get a bit spotty. That is why some merchants have two phones handy at all times. If one doesn’t get a signal, they are ready with a backup.”

*Translated by Jonathan Corrado

 
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