Orascom User Numbers Keep Rising

North Korea’s rapidly burgeoning cell phone user numbers have surpassed 660,000, according to Egyptian operator Orascom Telecom’s half-year earnings report for January-June, 2011.

As of March, the last time Orascom released a similar report, the number of subscribers stood at 530,000, meaning that the company has officially added 130,000 additional users in just three months, an extraordinary performance given prevailing economic conditions, the price of phones and official controls.

The figures look even better over a 12 month period; at the same point last year, there were just 184,531 subscribers. Although things are likely to slow as time passes, this still puts the era of a million subscribers, which would represent around 4% of the population, within sight.

The causes of the rapid increase in user take-up include a rapidly expanding network, that the authorities encourage Party cadres to make use of the phones, and that they are of increasing importance to those doing business in the market. In addition, the company has been working to target young people with a number of additional services including MMS and Video Call.

According to the earnings figures, as a result of these efforts Orascom made $61 million from its North Korea venture in the first half of the year, an increase of 160% on last year.

Commenting on the success, company CEO Ahmed Abou Doma noted, “Our operation in North Korea continues to display tremendous growth with a subscriber base that has more than tripled compared to the first half of 2010, the growth of which impacted revenues which increased 164% year-on-year.”

However, there is another story behind the official earnings that could serve to give investors pause. First, the earnings are based on the official USD exchange rate, 135 North Korean won, instead of the market exchange rate, which stood at far removed at 2540 North Korean won in Pyongyang on August 2nd.

Second, the report notes the introduction of what it calls the ‘Euro Pack’, a bundle which offers new subscribers “voice minutes and VAS in return of fees that could only be paid in Euros”, a concept which Orascom says is proving popular, but which certainly reflects the uncertainty inherent in dealing with the North Korean currency.

Chris Green, Leiden University
Christopher Green is a researcher in Korean Studies based at Leiden University in the Netherlands. Chris has published widely on North Korean political messaging strategies, contemporary South Korean broadcast media, and the socio-politics of Korean peninsula migration. He is the former Manager of International Affairs for Daily NK. His X handle is: @Dest_Pyongyang.