North Korea is expected to register the one millionth cellphone user on its new 3G network by the end of the year, barely four years after people were thrown into prison camps for owning one.

Most of the users are in the capital of Pyongyang, home to the impoverished country's elite and powerful who have the cash to splash out for a device and the calling fees.

"There has been an astronomical increase since even two years ago," said Michael Hay, a lawyer and business consultant based in the capital for the past seven years.

Two years ago, there were less than 70,000 users.

"All the waitresses in coffee shops have them, as one example, and use them. Let's not even talk about businessmen. The are never off them, and conversations are frequently interrupted by mobile calls."

The authoritarian government ended a ban on cellphones in 2008, inking a four-year deal with Egyptian company Orascom to build the 3G network in partnership with the government.

A report this month by the Nautilus Institute for Security and Sustainability said 60 percent of people aged 20-50 use cellphones in Pyongyang, a city of around 3 million people who are strictly vetted by the state for residency permits.

"Especially for the younger generation in their 20s and 30s, as well as the merchant community, a cellphone is seen as a must, and many youngsters can no longer see their lives without it," wrote Alexandre Mansourov in the report.

Calling fees have fallen this year, driving the surge in demand, reports say. And the introduction of the "Euro pack" bundle provides the isolated government with some much-needed hard foreign currency.