Mobile rental business in North Korea thriving amidst crackdown on international calls

North Korean resident on his mobile phone in a provincial region of the country
North Korean resident on his mobile phone in a provincial region of the country. Image: Daily NK

Residents of the Sino-North Korean border region in North Pyongan Province continue to face difficulties in sending payments and conducting smuggling activities due to the regime’s crackdown on international calls, which have continued since last year. The country’s domestic market has not been significantly affected by international sanctions but is nonetheless facing a downward spiral.

Some brokers in the border region are renting out mobile phones in the wake of these crackdowns after seeing signs that the domestic market is facing difficulties, North Korean sources recently told Daily NK. In essence, they are trying to find ways to conduct their [illegal] business activities despite international sanctions and draconian state control.

“The economic blockade [on North Korea] has gotten worse recently and some trading companies are earning less and less foreign currency as a result,” said a North Pyongan Province-based source on May 27. “The sanctions have reduced the number of products that can be dealt with legally and this has even affected the earnings of ordinary people.”

“Locals who don’t make much money are forced to find ways to survive in their given circumstances,” he said. “International calls with China are blocked, so people can’t carry around Chinese-made cell phones anymore. But entrepreneurs have stepped in to rent out cell phones that can be used to make calls to China.”

These small-scale cell phone rental businesses were previously the sphere of a small minority of business people and had almost disappeared completely due to heavy crackdowns by the state. Recently, however, the rise in widespread economic difficulties has led to greater demand for cell phone rentals. These businesses charge 200 yuan (around 35,000 South Korean won) per day, which is twice the amount charged just a year ago.

“Every village [in the border region] has a couple of people who conduct business with China or make money in other ways. These business people need phones. They pay 200 yuan to use the phones to avoid state crackdowns. These cell phone rental businesses are on the rise,” he said.

Renters agree, however, that they are to be held responsible if they are caught by authorities, rather than the rental businesses.

“You can rent a phone on a per call basis for 50 yuan, or pay 130-150 yuan just for the mornings. However, people usually need phones for the entire day to do business effectively,” a separate source in North Pyongan Province reported.

“The owner of a Chinese-made cell phone needs to be well-connected. If they’re caught in a cell phone bust, they need to know law enforcement officials and how to use bribes,” she said.

“A really bold person without any money can’t really do it.”

Some cell phone renters fail to return the phones back to the rental businesses, so rental business people need to ensure that renters know their place.

“Someone in possession of just one or two phones can make a lot of money,” the additional source said. “The rental business is very dangerous due to the risk of getting caught by the authorities, but it can bring in a lot of money.”

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