Orascom Telecom to start in N. Korea
Egyptian firm becomes first mobile operator in hermit state next week, services 'open to everyone'.
Orascom Telecom , the largest Arab mobile operator by subscribers, said on Wednesday it would start mobile services in North Korea next week, helping lift its stock on hopes of more revenue.
Shares of Orascom, which won the reclusive communist state's first mobile license in January, posted their highest single-day gain in at least a year, closing 11.11 percent higher.
"For the first time citizens will have access to mobile service on Dec. 15," an Orascom spokeswoman told newswire Reuters. "It will be open to everyone."
Orascom said earlier this year it had successfully tested its network and would start mobile services before the end of 2008, but many investors had expected the project to be delayed as the global financial crisis hit.
"Everyone had thought it would be put off," said Teymour Al-Derini, trader at Cairo-based investment bank Beltone Financial.
"It is a new market and penetration is very low," he added.
Orascom had said it planned to invest $400 million in infrastructure and licence fees over the next three years in the subsidiary, called CHEO Technology.
Orascom had said it expected a couple of million subscribers for the unit, in which the North Korean government holds a 25 percent stake, in the first three or four years.
OT has said it plans to cover the capital, Pyongyang, and other major cities during the first 12 months of operations. Its licence duration is 25 years, with an exclusivity period of four years.
Orascom Telecom also has operations in Egypt, Algeria, Tunisia, Pakistan, Bangladesh and Zimbabwe.
Shares of Orascom have tumbled about 70 percent this year. Its third-quarter profit fell short of analyst forecasts as revenue from its Pakistan unit disappointed. (Reuters)