The Egyptian telecommunications firm Orascom Telecom and Media Technology (OTMT) is the main reason behind the rise of mobile phone usage in hermetically sealed North Korea in recent years.
OTMT secured a 75% stake in Koryolink, a joint venture with North Korea’s Korea Post and Telecommunications Corporation in 2008. It is estimated that as many as 3 million North Koreans have signed up for Koryolink cell phone services.
Prior to Koryolink, many North Koreans did not have access to landlines, let alone mobile services, or any modern way to contact each other.
The devices have enabled North Koreans to communicate more easily with people in other parts of the country—a big change in a place where travel is highly restricted. They have been particularly helpful in the nascent market economy, with traders reportedly using information about incoming shipments of rice to set prices at stalls around the country.
“I believe I have extended a good service to the innocent people of North Korea who are deprived of seeing their parents who live miles away or cannot call their children when they come back from school,” Naguib Sawiris, executive chairperson of OTMT, said during an interview with CNBC in December 2017. He added that it is only a simple service that everybody should have and that it has nothing to do with politics.
Orascom is considered the largest foreign investor in North Korea. Other than Koryolink, OTMT also offered to fix up the Ryugyong Hotel. One of Pyongyang ’s landmarks, the famous pyramid-shaped hotel had been looming incomplete for years.
The building’s exterior was completed in 2011 with a $30m injection of funds from Orascom, and in 2012, the company said that it expects the partial completion of the Ryugyong’s 360,000 sqm of floor space, which would include apartments and offices along with hotel facilities, by the end of the year.
Sawiris told CNBC that his investments in North Korea registered at $250m, but that they have nothing to do with politics and that Egyptian businesses have a long history of relations with North Korea.
However, North Korea has reportedly prevented Orascom from repatriating its profits, as authorities refused to convert its earnings at the official exchange rate and wanted the company to use the black market rate, which would have put Orascom’s profits at about $30m compared to $658m, according to a 2016 report by Foreign Policy.
Moreover, OTMT’s troubles did not end there; the company deconsolidated its stake in the joint venture, losing control of the service in the process, despite having a majority stake. In addition to that, North Korean authorities started a competing operator company named Byol.
International sanctions played a major role in the company’s problems, as they limit its ability to impose control over the joint venture, convert earnings, and repatriate dividends.
In December 2017, Sawiris reaffirmed that he obeys all UN resolutions concerning North Korea, making sure that his company does not violate any sanctions on the country.
OTMT’s exemption request that was filed with the UN Security Council Sanctions Committee on North Korea to avoid violating United Nations Security Council Resolution 2375, which since 10 January requires all companies to cease joint venture operations in North Korea, has not received any approvals to this day. Yet, the recent developments on the peninsula, and the hopes of denuclearisation could be the end of OTMT’s problems.
Sawiris was met with great respect by the authorities during his visit to the country in 2011, as the official Korean Central News Agency published a photo of Sawiris standing hand-in-hand with then-leader Kim Jong-il.