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Fearful of Becoming Next Egypt, North Korea Confiscates Mobile Phones

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In January 2008, Orascom Telecom Holding of Egypt and Korea Posts and Telecomm Corp. established a 75%/25% joint venture to build North Korea’s first 3G mobile network, called Koryolink.

The decidedly non-capitalist regime even produced a television commercial to promote the service:

Not long ago, Naguib Sawiris, the CEO of Orascom -- which trades on the Cairo & Alexandria Stock Exchange under the symbol ORTE, and on the London Stock Exchange under the symbol OTL -- explained, in so many words, that Orascom was intrigued by what could be considered the most emerging of emerging markets.

"We are always examining the countries that don't have service and always pushing to get in," Sawiris said. "This was one that didn't have coverage and we met the embassy here, got in touch with authorities and here we are."

That’s the “how.” The “why?”

"This is not just about providing 3G mobile services; we are making history in a country that is developing and opening up in a remarkable way," he said.

However, “opening up” can be interpreted in many different ways. Though the network was constructed by Orascom, Sawiris accepted that all communications would nevertheless be strictly controlled and monitored by authorities.

"That's the right of the government," Sawiris said.

This control means North Koreans are unable to connect with anyone outside the country -- except for those able to secure an unrestricted phone smuggled in from China and are close enough to the border to access Chinese networks. However, being caught communicating with the outside world can also lead to severe consequences. Like public execution by firing squad.

Just a few weeks ago, Vice Unification Minister Um Jong-Sik told a forum in Seoul that “After watching the spread of pro-democracy movements in the Middle East, North Korea is expected to strengthen its control further over any elements endangering its system."

Looks like he was correct. The DPRK government has "started a drive to confiscate mobile phones smuggled from China in an attempt to suppress news from the outside world," according to defector group North Korea Intellectuals Solidarity.

Agence France Presse reports:

The police warned that special devices to detect mobile phone use had been brought in to punish "those spreading capitalist ideas and eroding socialism", the group quoted one of the sources as saying. South Korean analysts say "the reclusive regime has lately tightened controls on outside information to suppress news of popular revolts against despots in the Arab world."

Naguib Sawiris' mobile networks back home in Egypt helped bring down the Mubarak regime. Shame his company can't do the same for North Koreans.
POSITION:  No positions in stocks mentioned.