SEOUL (AFP) — An Egyptian firm says it has won the right to provide a mobile phone service in communist North Korea, a country which currently strictly restricts such services to the general public.
Orascom Telecom, in a statement Wednesday on its website, said the licence was granted to its subsidiary CHEO Technology, which is 25 percent owned by a North Korean state body -- the Korea Post and Telecommunications Corporation.
It said the terms allow it to offer services throughout the country over a 25-year period with an exclusivity period of four years.
"Orascom Telecom intends to invest up to 400 million dollars in network infrastructure and licence fee over the first three years in order to rapidly deploy a high quality network and offer voice, data and value-added services at accessible prices to the Korean people," it said.
Orascom said it intends to cover Pyongyang and most other major cities during the first year of operations in the country of 23 million.
The North Korea deal "is in line with our strategy to penetrate countries with high population and low penetration by providing the first mobile telephony services," said Naguib Sawiris, chairman and CEO.
The firm "has consistently proved its ability to successfully roll out mobile services into countries where no other operator has."
It was unclear how widely the Orascom Telecom service would be available to the public. Spokespersons were not immediately available for comment.
North Korea began a mobile phone service in November 2002. But 18 months later, it banned ordinary citizens from using the service and began recalling unauthorised handsets.
There is still thought to be a mobile network in Pyongyang which is open for government officials. Most foreigners are not allowed to use mobile phones inside the country.
Authorities have staged periodic crackdowns on residents in northern border areas who illegally use mobile phones through relay stations in China.
The 2004 recall was ordered for security reasons, said Cho Han-Bum of South Korea's state-financed Korean Institute for National Unification.
"North Korean authorities regard mobile phones as sensitive items because they can be used by outsiders to acquire information on the country," he told AFP.
Cho said the deal with Orascom Telecom, if confirmed, would be meaningful. "It could be interpreted as a significant step towards the opening of its society.
"If North Korea approves a full commercial mobile phone service, it cannot maintain its tight lid on the flow of information."
The deal with North Korea is the second announced in six months by the Egyptian group. Orascom Construction Industries last summer sealed a 115 million dollar agreement to invest in a North Korean cement plant.
Egypt has historically had good relations with North Korea.
De facto head of state Kim Jong-Nam visited Cairo last July and President Hosni Mubarak has been to North Korea several times.
Orascom Telecom currently operates networks in Algeria, Pakistan, Egypt, Tunisia, Bangladesh and Zimbabwe.
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