Cheaper calls for North Korea

North Korea: international calls are ruinously expensive

A telecommunications firm in Thailand says it is on the verge of closing a deal to operate a mobile phone network in communist North Korea.

Final details have yet to be announced, but Loxley Pacific is reported to have secured exclusive rights to operate in the country for more than twenty years.

North Korea has some of the highest international phone charges in the world. Loxley Pacific's mobile plans could cut these costs dramatically.

The country has been struggling for the last decade, after most of its trading partners vanished with the fall of the Soviet Union.

North Korean consumers could enjoy lower phone costs

In recent times, the Government has been increasingly keen to attract foreign investment from the world's capitalist economies.

Lack of infrastructure

Its main problem is the lack of basic infrastructure, and its telecoms networks are archaic, expensive and unreliable.

The general population in North Korea has one of the lowest average incomes in the world.

Thitanan Pong Sidhirak, a lecturer in economics at Chulongkorn University in Bangkok said that even those with access to a telephone often cannot afford to use it.

"They have one of the highest international phone costs in the world," he said. "With this deal I think that phone costs will still be relatively expensive compared to the outside world but will be lower than they were before."

Even if charges do fall, he said, Loxley still stands to make a handsome profit.

The practical difficulties of the North Korea's rugged terrain have in the past made efforts to build a traditional landline telephone network time consuming and expensive.

Loxley Pacific's mobile plans should dramatically cut these costs, and give the Thai company new opportunities. Thailand's domestic phone market is thought by many to be close to saturation.