Egypt-based telecoms group Orascom Telecom Media and Technology Holding (OTMT) has reportedly halted investment in its 75%-owned North Korean subsidiary CHEO Technology (Koryolink), amid claims that the local authorities have blocked remittance of the profit to Egypt, Chosun Media reports citing sources close to the matter. According to the article, Orascom has invested USD200 million in the mobile operator to date, but has reportedly seen no returns.
According to TeleGeography’s GlobalComms Database, CHEO Technology was established by Orascom Telecom Holding (now Global Telecom Holding) and state-owned Korea Post & Telecoms Corporation (KPTC, 25%), but as a result of the 2011 merger between Orascom and Russian telecoms group Vimpelcom, certain Orascom assets were excluded from the merger and spun off into a new company, OTMT, including the majority stake in Koryolink. The North Korean cellco generated revenues of USD66.4 million in the twelve months ended 31 December 2010, representing an increase of 156% compared to the USD25.95 million posted in 2009. In 9M11 (latest available figure) Koryolink generated sales of USD102.7 million. OTMT reported net revenues of USD871 million for the twelve months ended 31 December 2012, but did not indicate how much of this figure was generated by Koryolink.