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Tue 16 Dec 2008 04:36 AM

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Orascom Telecom starts mobile services in N. Korea

Largest Arab mobile operator begins first 3G service to cover capital city Pyongyang.

Orascom Telecom (OT), the largest Arab mobile operator by subscribers, has started mobile service in North Korea, the company said in a statement."Orascom Telecom Holding celebrates today the inauguration of Koryolink ... the first 3G mobile network to operate in the Democratic People's Republic of Korea," the company said on Monday.

The statement said Koryolink's network would initially cover the capital, Pyongyang, with its population of more than 2 million, and planned to expand coverage to the entire country.

"We are making history in a country that is developing and opening up in a remarkable way," CEO Naguib Sawiris said.

OT won the reclusive communist state's first mobile licence in January, and 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.

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.

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.

OT's third-quarter profit fell short of analysts' forecasts as revenue from its Pakistan unit disappointed.