North Korea is evading U.N. sanctions to cash in on soaring domestic demand for smartphones, using low-cost hardware imports to generate significant income for the regime, according to defectors, experts and an analysis of North Korean-made phones. Economists estimate as many as six million North Koreans – a quarter of the population – now have mobile phones, a critical tool for participating in an informal market economy that has become a key income source for many.
Reuters spoke to some 10 defectors and experts about the use of mobile devices in North Korea, as well as reviewing advertisements for mobile devices, and examining two North Korean-branded smartphones. The phones feature Taiwanese semiconductors, batteries made in China and a version of Google’s open-source Android operating system, analysis of the North Korean phones revealed. These basic North Korean phones typically cost between $100 and $400 at state stores or private markets.
One young North Korean woman surnamed Choi recalled selling two pigs and smuggling herbs from China to raise the 1,300 Chinese yuan ($183) her family needed to buy a mobile phone in 2013. She used the phone to help successfully run a retail business selling Chinese clothes and shampoos, arranging deliveries from wholesalers. “It turned out we could make a way more money than our official salaries,” said Choi, who has since defected to South Korea.
Phones are typically sold with service plans that include 200 minutes of calling time. Prepaid plans cost about $13 dollars for 100 minutes. While those prices are comparable to or higher than what mobile phone customers pay in other countries, North Koreans only earn an average of about $100 per month.
North Korean leader Kim Jong Un has endorsed wireless networks, some reportedly built with the help of China’s Huawei Technologies, and local mobile phone brands through public speeches and state media reports.