Egyptian Telecom Halts Investment in N.Korea

Egypt’s Orascom Telecom, the mobile service provider in North Korea, has invested US$200 million into the project so far but has yet to make a dime, according to website Middle East Online.

Orascom chief Naguib Onsi Sawiris was quoted by the U.K.-based website as saying he would make no more investment in North Korea until the company sees some returns.

Orascom started offering 3G mobile services in North Korea in a joint venture with North Korea’s postal service in 2008. The joint venture, Koryo Link, is 75-percent owned by Orascom and 25 percent by the North. It has managed to attract 2 million subscribers.

The Egyptian company invested another $200 million to build the giant Ryugyong Hotel in Pyongyang and set up a joint venture bank.

But North Korea apparently barred Orascom from sending profits from the mobile phone service back to Egypt. “Koryo Link is making profits, but North Korean authorities seem to have blocked remittance of the money,” a source in Beijing said.

Regime obstruction has also led to losses for Chinese companies that invested in North Korean mines. China’s Wanxiang Group pumped more than 560 million yuan into a copper mine in North Korea since 2007, but the source said the group decided to stop investing because it has made no profits at all.

Xiyang Group invested 240 million yuan in the North but was forced out of the country without a penny in profit last year.

Source: The Chosun Ilbo ‎