North Korea’s only 3G operator has reported the number of 3G mobile subscriptions in the country has surpassed half a million.
The number represents a landmark for the company since it hit something of a peak in 2009, and was forced to rethink its strategy by adding new value-added services to raise the average revenue per users.
Reporting steady growth, Koryolink network had 535,133 subscriptions at the end of March, up from 100,000 in December 2010, reported Egypt’s Orascom Telecom. Egypt’s Orascom Telecom owns a majority stake in Koryolink as a joint venture with Korea Posts and Telecommunications Co.
Since the network launched in late 2008, growth has been steady, but in the most recent quarter, Koryolink has hit something of a plateau, making it hard to gain new subscribers. From October to December of 2009, the company added only 130,000 new customers, the first time the number of new subscribers has not exceeded the previous quarter.
In response to the low sales numbers, the company introduced value-added services like MMS (Multimedia Messaging Service) and prepaid scratch cards that offer free voice and value-added service use during off-peak hours. The prepaid cards are valued in Euros as a way to build foreign exchange earnings from North Korea. Orascom reported this move received a positive response from consumers, but failed to pull the company out of its losing streak.
Just last quarter, Koryolink reported its lowest ARPU since service began in 2009 at just $12.7 USD per month, down 40% since the same time during the previous year.
For many telecoms, value-added services are part of expansion strategies in emerging markets and worldwide. Just this week, China Mobile Chairman Mr. Wang Jianzhou talked about the company’s plan to introduce value-added services in China and emerging markets such as Taiwan and Pakistan as a way to boost service and subscription base.
Koryolink is in an interesting position as it tries to boost service within North Korea while facing severe government intervention in the business sector. One of the major barriers to success is North Korea’s strict mobile codes that disallow users to make or receive international calls.
Regardless, Orascom’s network now covers around 92 percent of the North Korean population, which may mean the company is at a point of saturation and may face an uphill battle to continue quarterly growth.
