OT tests network in North Korea, expects H2 launch

CAIRO, May 19 (Reuters) - Arab regional mobile operator Orascom Telecom ORTE.CA(ORTEq.L: Quote, Profile, Research, Stock Buzz) has successfully tested its network in North Korea and will launch mobile services there in the second half of 2008, the firm said on Monday.

Orascom Telecom, the fourth-biggest Arab mobile operator by market value, said its North Korean subsidiary CHEO Technology had successfully made a "first call" on the network in the reclusive communist state.

"The success of this trial network ... represents the first step in providing coverage throughout the DPRK (North Korea)," the company said in a statement. Orascom Telecom won North Korea's first mobile phone licence in January, and has said it plans to invest $400 million on infrastructure and licence fees over the next three years.

The Cairo-based group said CHEO, in which the North Korean government holds a 25 percent stake, was "looking to launch its full commercial mobile services within the second half of 2008".

An OT spokeswoman said there was no specific launch date for commercial services. Egypt-based telecoms analyst Walaa Hazem of HC Securities said he anticipated a launch early in the second half of the year.

Orascom Telecom had said in March that it hoped to launch mobile service in North Korea in May, aiming to sign up 100,000 subscribers initially. The firm had said service would start in three major cities and then it would assess the impact.

Chief Executive Officer Naguib Sawiris has said he expected a couple of million subscribers in the next three or four years.

OT has said it plans to cover the capital, Pyongyang, and other major cities during the first 12 months of operations. Its licence duration is for 25 years, with an exclusivity period of four years.

Orascom Telecom has operations in Egypt, Algeria, Tunisia, Pakistan, Bangladesh and Zimbabwe. (Writing by Cynthia Johnston, editing by Will Waterman)