SEOUL, May 8 (Yonhap) -- SK Telecom Co. may face losses of up to 7 trillion won (US$5 billion) over the next three years due to declining revenue and the possible waiving of early termination fees following a major data breach that has shaken consumer trust, the company's chief executive officer (CEO) said Thursday.
"Since the incident, 250,000 subscribers have left. The number could soon reach 2.5 million," CEO Ryu said during a parliamentary session. "If monthly cancellations reach as high as 5 million, we estimate losses of up to 7 trillion won for the next three years, including waived termination fees and lost revenue."
SK Telecom, South Korea's largest mobile carrier with around 25 million users, roughly half of the domestic market, has come under pressure after disclosing a large-scale leak of universal subscriber identity module (USIM) data affecting its entire user base in April. In response, a growing number of subscribers have switched to rival carriers KT Corp. and LG Uplus Corp., prompting calls for SK Telecom to waive early termination fees.
These fees typically apply when users end their contracts early, especially those who received device subsidies or promotional discounts. If the company exempts an average early termination fee of 100,000 won per person, the financial impact for 2.5 million users alone would amount to 250 billion won. Despite the pressure, SK Telecom has remained cautious.
"We will review the issue through our board of directors and a newly established Customer Trust Restoration Committee, based on government guidelines," Ryu said. "But making such a decision is difficult due to the massive potential fallout."
Since the outbreak of the data leak, the company has offered to replace the USIM of all 25 million subscribers. To focus resources on customer protection and USIM replacements, SK Telecom has temporarily suspended new subscriber sign-ups at its 2,600 retail stores nationwide starting Monday, May 5, 2025.
SK Group Chairman Chey Tae-won apologized for the incident on Wednesday. "I sincerely apologize on behalf of SK Group for causing concern and inconvenience to our users and the public due to a cyberattack at SK Telecom," Chey said at a press conference held at SK Telecom's headquarters in Seoul.
Chey acknowledged the difficulties customers have faced, including long waits at retail stores to receive new USIM cards, and expressed regret at the company's inadequate communication and response following the incident. "We will fully cooperate with the government investigation to identify the cause of the breach and to prevent further damage to customers," Chey said.
He also announced that the company will set up a new information protection innovation committee, comprising outside experts. SK Group plans to set up the new committee under the Supex Council, the conglomerate's top decision-making body.
"It is crucial that we properly establish a security system and address the issue not just as a security issue, but as one that concerns national security and lives," he added.
As of now, the exact cause and the identity of the attacker have not been officially confirmed. The data breach, caused by a malware attack inside a key internal system called the Home Subscriber Server, resulted in the leak of about 9.7 gigabytes of data.
Following the hacking incident, SK Telecom has experienced a user exodus to its main rivals, KT and LG Uplus. Amid growing calls to waive early termination fees for users, Chey said the issue is still under review. "I also hope this issue will be resolved in a way that causes no inconvenience to customers," said Chey. "Concerns over user fairness and legal matters must also be reviewed. SK Telecom's board of directors is currently discussing the matter."
As of Wednesday, all 24.11 million eligible customers have joined the USIM protection service, according to the company. About 1 million users remain unenrolled, as the service is currently incompatible with international roaming plans. The company said it is upgrading its system to allow users to use both services by May 14.
Meanwhile, some 1.07 million users have switched their USIM cards so far. The company began offering free USIM chip replacements to all users on April 28, but the swap process has been hampered by overwhelming demand and a supply crunch. The company said it plans to secure around 5 million additional USIM cards this month and another 5 million in June, vowing to speed up the replacement process.
As the fallout from the data breach continues, SK Telecom finds itself at a critical juncture, balancing customer trust and financial stability. The company's future actions and the effectiveness of their response will be crucial in determining whether they can recover from this significant setback.
