Of course, they'll still confiscate your mobile phone for the duration of your visit.
I don't have too much trouble believing this recent news report. The 3G network rollout was well under way during my visit in late summer of 2009; my guides had mobile phones "for use in emergency situations." They said that they didn't have coverage out in the countryside yet, but I think that there is now.
When we first arrived at the airport, actually, we had the somewhat odd experience of watching our cell phones get confiscated (they were returned safely at the end of the trip) as a woman in the anachronistic Korean Army uniform chatted away on her own phone, waiting for baggage pick-up.
Where's the money coming from? Just see this quote from the article: "Orascom also launched pre-paid cards denominated in euros to boost foreign exchange earnings from North Korea." Sure, the North Korean currency is virtually worthless, but it's not widely known in the West just how much international trade North Korea does conduct. There are plenty of countries willing to do business with the regime and even in the developed world, it's lack of interest that stops trade, not law. Just a year ago, jeans manufactured in North Korea were marketed in Sweden. There's a class of people in North Korea with access to euros and other foreign currencies, whether through official or unofficial channels.
At an estimated population of 24 million, it's clear that there was money to be made for a company that could take on the task, and that's why Orascom, an Egyptian conglomerate, is involved. In fact, the North Korean government must have thought that they had a fairly strong bargaining position: it's clear that Orascom was required to complete construction on the infamous Ryugyong Hotel white elephant as a condition for getting the 3G contract. (Incidentally, it looks like construction is on schedule for completion in 2012, meaning that North Korea will have the world's largest soccer stadium and the world's largest hotel).
But this network, of course, is not the same as one in the rest of the world. Most phones can't dial internationally. (There are phone numbers you can direct-dial there, by the way, if you want to call North Korea and say hello). It's 3G, but there's no access to the wider Internet.
It's not fair, though, to say that there's nothing on the network. North Korea has its share of competent software developers and content producers. It's known that they have a Linux-based operating system that uses a customized version of KDE, and that even more incredibly, they have outsourcing teams that have developed mobile phone apps including, of all things, "Big Lebowski Bowling." (Still wondering where their hard currency comes from?) Most likely the 3G system is an extension of the existing Internet-like Kwangmyong network, containing information from the rest of the Web deemed useful for research, in addition to digital versions of North Korea's internal news, entertainment, and propaganda services.
It's hard to overstate how huge of an improvement this is over the 1990s, when, according to Barbara Demick's Nothing to Envy: Ordinary Lives in North Korea, mail was regularly burned for heat on its way north from the capital. Corresponding with relatives or friends just hundreds of miles away could be nearly impossible, even for those of relatively moderate means; internal travel is restricted, and many land-based phone lines were stolen for their scrap metal value years ago.
Will it make a difference, though? Optimistically, Orascom might get a million subscribers. That's five percent of the national population, and it's the five percent who are most invested in the current power structure -- it's given them moderate wealth, often at the cost of massive corruption that would cost them their jobs under a different regime. It's hard to say what kind of censorship is being done, but it is known that this system was built from the ground up with lessons learned from North Korea's old 2G system, which was shut down when the government got nervous about people speaking too freely on it. And, ultimately, the North Korean government wouldn't have let a foreign company build out the system unless they were sure that they had ultimate control over how it could be used. It could be shut down again, easily, just like communications in Libya or Egypt.
Kim Jong-Il is reportedly in China this week, allegedly to explore Chinese methods of economic development. Recent reports from North Korea indicate that telecom infrastructure -- like working Internet connections! -- is being ramped up for foreign journalists. It's well known that the government wants to hit certain economic goals before the hundredth anniversary of Kim Il-Sung's birth in 2012. Somehow, everything continues to hold together in the Hermit Kingdom, where change does come -- just not in the directions you'd expect.