Telecommunications in North Korea: Has Orascom Made the Connection?

Abstract

IntroductionTelecommunications are one of the basic building blocks of a modern economy. In a world of globalized competition, economic development can be hamstrung by inferior telecommunications. But the formation of telecommunications policy poses a challenge for authoritarian regimes: while improvements in telecommunications can contribute to material prosperity, and by extension, political legitimacy, they may also contribute to a loss of control over information flows and enhance the ability of challengers to organize against the incumbent regime.These opposing tendencies are manifest in contemporary North Korea. The country's dilapidated telecommunications capability lags well behind world standards. The country's physical infrastructure is lacking and decrepit, with a considerable share of the general infrastructure dating back to the Japanese colonial period. Most of the modern infrastructure installed by Soviets or based on Soviet or Chinese designs is from the 1950s and 1960s. For security purposes, much of the power and telecom transmission network is buried, hampering successful maintenance. If ever there was a country that could benefit from a telecommunications upgrade, it is the DPRK.The country faces both external and self-imposed internal constraints on telecommunications modernization, however. Externally, North Korea is one of the few remaining socialist states and the most militarized country in the world. It is embroiled in a diplomatic conflict over its nuclear ambitions. The upshot is that it is subject to COCOM (Coordinating Committee for Multilateral Export Controls) restrictions under the Wassenaar Agreement, impeding its ability to import stateof-the-art technology.More fundamentally, government policies reveal an ambivalent attitude, driven by conflicting goals of modernization and control. In an attempt to make a great leap forward, the government has seized upon the promotion of information technology as a strategic priority, with P'yongyang at the top of a vertical technology hierarchy. Yet the regime repeatedly reverses field when its insecurity and instinct for control trumps development, as illustrated by the country's multiple false starts in establishing its cellular phone network, the single most frequently identified problem in doing business in North Korea in a recent survey of Chinese businesses operating there. What emerges is the primacy of political over economic concerns. Policy implicitly regards telecommunications development as a means of earning hard currency rents rather than as a tool to enhance economic efficiency and competitiveness.This paper reviews the state of North Korea's telecommunications infrastructure, though the data invoked should be considered highly provisional. Most of the information is regarded as state secrets, and some data maintained from putatively authoritative sources (e.g., statistics reported through the United Nations system) are probably estimates or have been fabricated by reporting sources. The paper also provides a brief history of North Korean telecommunications policies in a variety of settings, paying particular attention to the recent decision to authorize yet another foreign cellular provider, in this instance the Egyptian firm Orascom Telecom, to provide nationwide cellular service, potentially leapfrogging from North Korea's dilapidated existing systems to a modern system. The theme that emerges from this review is of a government that tends to place a higher value on political control than economic development. Attempts at modernization are subject to reversal at times of heightened insecurity over loss of control, yet the Orascom deal holds forth the prospect of things working out differently this time.InfrastructureLandlinesNorth Korea reports having approximately 1.1 million phone lines, amounting to less than five mainlines per 100 inhabitants. Most of these are installed in government offices, collective farms, and state-owned enterprises (SOEs), with only perhaps 10 percent controlled by individuals or households. …