North Korea Telecoms Market Report

North Koreans adopting digital technology via LTE

North Korea remains largely isolated from the rest of the world. The country’s economy is tightly controlled by the state, with the government controlling all significant activity. The state sets production levels for most products, and state-owned industries account for nearly all of the country’s GDP. Central planning determines every aspect of the economy, and entrepreneurial activity is virtually impossible. During the recent famine, the state allowed some private selling of goods outside sanctioned markets, but this temporary concession was soon removed.

After decades of financial mismanagement, autarky, and resource misallocation (the military accounts for a vast proportion of government spending), North Korea lacks the resources to invest in infrastructure. The obstacles to building a functioning telecom network are so numerous that a fixed-line segment barely exists. However, in recent years the mobile sector has shown considerable promise. An LTE network was launched in the capital in 2024, and this has been extended to certain areas of the main cities elsewhere in the country. Nevertheless, the telecom equipment deployed is generally second-hand, and services are strictly controlled. The proliferation of devices on the market has meant that a greater proportion of the population has access to digital services, particularly e-payment systems. Nevertheless, strict censorship also means that the state can expand its surveillance of the citizenry, since all transactions can be logged and used as electronic evidence.

North Korea has been slightly more effective in building an IT sector and a nascent digital economy on the back of a concerted effort to grow a sizeable, well-trained IT workforce. Yet even here, its capabilities have been directed more towards nefarious activities such as cybercrime, insurance fraud, and hacking into Western countries’ computer systems. North Korea’s determination to put itself out of step with the rest of the world in pursuit of its ideology can only lead to tighter controls on communications inside and outside of the country.

One potentially significant change in recent years has been the growing ties with Russia. This does not signify a pivot away from North Korea’s principal ally and benefactor China, but rather an opportunist grab for material assistance. North Korea has financially benefitted from sending military hardware and thousands of troops to support Russia’s continuing assault against Ukraine. In turn, it has secured Russia’s technical assistance relating to reconnaissance satellites, hypersonic missiles, and potentially nuclear submarines. While Russia’s commitment to North Korea may be questionable, it may nevertheless offer a useful deterrent in the event of tensions with South Korea.