SKT freezes new sign-ups, toughens consumer protection amid hacking fallout
In a press briefing at the company's headquarters in downtown Seoul on Friday, CEO Ryu Young-sang announced that all 2,600 T World stores nationwide will halt receiving new subscriptions so the company can focus on replacing compromised USIM cards.
It will also stop mobile number portability services, which allows users to switch mobile network providers while retaining their phone number, until the USIM shortage eases.
Additionally, SK Telecom said it will compensate for losses incurred by the T World stores during this replacement period.
As for the detailed compensation plan, Ryu said it will be implemented after consulting with dealers. 'When looking at the distribution network, 350 of the 2,600 T World stores are directly operated by SK Telecom, and the rest are authorized dealerships. They are also small and-medium-sized enterprises, so asking them to stop taking new subscriptions could be a huge loss,' said Ryu.
However, the latest service halt does not extend to third-party retailers and online distributors, which are not under direct contract with the company.
The latest action is in response to the government's guidance issued the previous day, instructing SK Telecom to suspend new subscriptions until it resolves the USIM shortages for existing users and implement stronger corrective actions in response to the data breach.
SK Telecom, the country's largest mobile carrier with 25 million subscribers, serving nearly half of Korea's population, disclosed that it had experienced a cyberattack and subsequent data breach of customers' USIM data on April 18.
In response, the telecom giant said it removed the malware, isolated affected servers and enhanced security measures.
The company began offering free USIM chip replacements to all users on April 28, but it has been challenged due to overwhelming demand and a supply crunch, causing long lines at retail stores and system outages on its online reservation site due to high traffic.
The company has about 1 million USIM cards in stock, with plans to secure around an additional 5 million this month and another 5 million in June.
Amid the slow USIM swap rollout, the company said it will automatically enroll all customers into its USIM Protection Service without requiring a separate application.
The company asserts that the USIM Protection Service effectively blocks the use of illegally cloned USIM cards on other devices, providing the same level of protection as physically replacing the USIM.
As of Friday, 14.42 million people had joined the protection service, leaving out some 8.5 million others. The system can handle up to 1.2 million enrollments per day. The company plans to complete the process by May 14, with priority given to subscribers aged 75 or older and those with disabilities.
Following the hacking incident, SK Telecom is experiencing a massive user exodus to its main rivals, KT and LG Uplus.
According to the Korea Telecommunications Operators Association on Friday, more than 237,000 customers had switched from SK Telecom to other carriers, including KT and LG Uplus, in April alone, an 87 percent increase from March.
Amid growing calls to waive early termination fees for users, Ryu said the issue is still under review. 'The penalty fee is such a critical matter that the CEO cannot unilaterally decide, but must be approved by the board,' he said. 'We plan to have a board of directors discussion as soon as the internal legal review is completed.'
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Korea Herald
7 days ago
- Korea Herald
KT hits record earnings in Q2 on mobile growth, property gains
KT on Monday reported its highest-ever quarterly operating profit in the second quarter, exceeding 1 trillion won ($720 million) for the first time, driven largely by subscriber growth following a cyberattack suffered by top rival SK Telecom and gains from a major property development project. The country's No. 2 mobile carrier said its operating profit jumped 105.4 percent from a year earlier to 1.01 trillion won in the April-June period. Revenue climbed 13.5 percent to 7.43 trillion won. Net profit surged 78.6 percent to 733.3 billion won in the same period. The company attributed the stellar performance to its core mobile business, which saw revenue increase 1.6 percent on-year to 1.78 trillion won, backed by a sharp increase in 5G subscribers. KT appears to have benefited from a surge in new users following SK Telecom's recent data security data breach that triggered widespread customer defections. As of June, KT's mobile subscribers stood at about 27.49 million, up 2.59 million from a year earlier and 1.05 million from the previous quarter, just before the April cyberattack. Fixed-line business revenue increased 1.4 percent, with high-speed internet subscribers reaching 10 million in May, driving a 2.1 percent boost in related sales. KT's subsidiaries also lifted the bottom line. Its property arm KT Estate saw revenue grow 2 percent on-year on stronger demand for offices and hotels. KT said profits were also buoyed by sales from the Eastpole mixed-used complex redevelopment in eastern Seoul. The company's cloud unit KT Cloud posted a 23 percent revenue increase, thanks to higher demand for data center co-location service from global clients and an increase in AI cloud sales to corporate customers. 'We were able to achieve a significant earnings improvement thanks to steady growth in our core telecommunication business, coupled with strong results from our key portfolio,' said Chief Financial Officer Jang Min. 'We will continue to accelerate our transformation into an AICT company to ensure sustainable growth while implementing our value-up plan without delay.'
Korea Herald
06-08-2025
- Korea Herald
Hanmi Global to manage upgrade of Romania's Cernavoda Nuclear Plant
Korean construction project management firm Hanmi Global announced Wednesday that it has secured a contract to oversee infrastructure work at the Cernavoda Nuclear Power Plant in Romania. The 10 billion won ($7.2 million) contract was awarded by Korea Hydro & Nuclear Power, which is leading the refurbishment of Unit 1 at the 706-megawatt heavy water reactor. The project aims to extend the 30-year-old plant's operating life by another three decades. Under the contract, Hanmi Global will provide comprehensive project management services, including construction supervision, cost and risk control, regulatory compliance and technical advisory services for building facilities such as radioactive waste storage. 'This Cernavoda project marks Korea's first overseas contract for the life extension of aging nuclear power plants. It is expected to pave the way for diversifying Korea's nuclear power export strategies in the future,' said Noh Hee-sang, head of Hanmi Global's nuclear business division. The project is Hanmi Global's first in the nuclear sector since launching its dedicated nuclear division last year. In 2022, the company acquired UK-based project management firm Walker Sime to leverage its proven track record in nuclear power plant construction. 'Using this project as a stepping stone, Hanmi Global plans to expand its business model across the entire lifecycle of nuclear power plants, targeting not only Europe, but also the Middle East and Asia,' Noh added.
Korea Herald
06-08-2025
- Korea Herald
SK Telecom profit tumbles 37% in Q2, hit by major data breach
SK Telecom, South Korea's largest mobile carrier, reported Wednesday that its second-quarter profits plummeted after a major data security breach triggered widespread customer defections and costly compensation expenses, weighing heavily on its primary wireless business. For the April-June period, operating profit fell 37.1 percent from a year earlier to 338.3 billion won ($244 million), missing analysts' expectations. Net income plunged 76 percent to 83.2 billion won, while revenue dropped 1.9 percent to 4.34 trillion won, the company said in a regulatory filing. Compared to the previous quarter, operating profit and net income were down 40.4 percent and 77 percent, respectively. The decline follows a hacking incident at the telecommunications giant that led to a massive leak of customers' USIM data in April. Between April 22, when the breach was revealed, and the July 14 deadline for customers to terminate their contract without a fee, around 835,000 customers left the company for its rivals. According to the latest government data, SKT's subscriber count fell to 22.5 million in May, marking the first time the company's market share has dipped below 40 percent since 2015. The company also cited one-off costs, including free USIM replacements and compensation to retail stores for their losses. SKT vowed to win back customer confidence through improved data security infrastructure and protective measures. 'We are taking a hard look at the cybersecurity incident and are committed to rebuilding our business thoroughly and transparently,' said Kim Yang-seob, SKT's CFO, in a statement. "We ask for our customers' continued support and trust as we move forward with changes in rebuilding SK Telecom.' Despite the turbulence, the company said its AI business fared well, with AI-related sales rising 13.9 percent on-year. The AI data center business posted revenue of 108.7 billion won, up 13.3 percent on-year, thanks to higher utilization. Sales in the AI transformation business climbed 15.3 percent to 46.8 billion won in the same period, bolstered by increased sales of business-to-business solutions. In June, the company announced plans to build the country's largest AI data center in Ulsan, in partnership with Amazon Web Services and other SK Group affiliates. The facility is set to commence operations in 2027. SKT projects its AI data center business will generate over 1 trillion won in annual revenue by 2030, once both its existing Seoul facility and the new Ulsan center become fully operational.
