[비즈한국] SK Telecom017670 is temporarily suspending the recruitment of new subscribers to resolve the issue of a shortage in USIM replacement supplies. The intention is to concentrate limited USIM inventory, mobilized personnel, and time on existing customers first. In accordance with government administrative guidance, SK Telecom has decided to continue daily briefings involving executives until the social anxiety caused by the data breach incident is resolved.
On the 2nd, when the first briefing was held, SK Telecom CEO Ryu Young-sang personally explained measures such as the automatic subscription to the USIM protection service and plans to secure inventory. The policy to suspend new subscriptions, which is expected to have a significant impact on revenue, was announced separately. However, regarding the exemption of penalty fees for customers wishing to switch to other mobile carriers, he did not clarify a position, stating only that they are "conducting a comprehensive legal review."
New subscriptions remain open at retail stores and online channels
SK Telecom decided to suspend new subscriptions just one day after the government issued administrative guidance urging the preparation of intensive solutions. From the 5th, new subscription and mobile number portability services will be temporarily suspended at approximately 2,600 T-World stores nationwide. The company plans to compensate for the retail stores' loss of business. Most stores, excluding about 350 direct-managed stores among the official T-World network, are agency-operated.
The decision follows a recommendation from the Ministry of Science and ICT the previous day to stop accepting new subscribers until the shortage of replacement USIMs is resolved. In the past, there have been government administrative sanctions that suspended new subscriptions, mobile number portability, and device changes for mobile carriers due to excessive competition in device subsidies, but this is the first time a suspension of new subscriptions has been implemented for the purpose of protecting users from corporate faults such as data breaches.
However, this decision does not appear to apply to retail outlets. CEO Ryu Young-sang held a press briefing at the SK T-Tower in Jung-gu, Seoul, on the 2nd, stating, "Retail outlets do not have direct contracts with SK Telecom. We concluded that it would be extremely difficult to demand a suspension of operations from retail outlets, which are smaller business entities than agencies, so we decided not to apply (the new subscription suspension measure) to retail outlets."
Compensation measures for agencies have not yet been specifically presented. CEO Ryu mentioned, "Rapidly suspending business can be a significant shock to agencies. The headquarters plans to develop measures, consult with the agencies, and implement a compensation plan."
New subscriptions through online channels will also be maintained. An SK Telecom official explained, "This measure is being implemented under the principle that business operations are put on the back burner so that smooth USIM replacement can be prioritized through offline agencies," and added, "We believe the impact on USIM inventory will not be significant as the proportion of new subscriptions via online channels is not high. As supplies are limited, we are considering utilizing eSIMs for new subscriptions."
Increasing pressure on penalty fees and fines
Discussions regarding the exemption of early termination fees for mobile carriers amidst subscriber churn remain at a standstill. According to the Korea Association of ICT Telecommunication Operators (KTA030200), approximately 237,000 users moved from SK Telecom to other carriers this April, an increase of about 87% compared to the previous month. Competitors appear to be focusing on attracting subscribers by increasing subsidy levels. The number of subscribers who moved to KT and LG Uplus032640 stood at approximately 96,000 and 86,000, respectively.
With new subscriptions effectively blocked and existing customers turning their backs, penalty fees are acting as a means to suppress customer churn. As noted by Choi Jang-hyuk, Vice Chairman of the Personal Information Protection Commission, who stated, "The amount of the fine could be significantly higher than the one applied to LG Uplus before the revision of the Personal Information Protection Act," a massive financial blow due to heavy fines is also expected.
While it is difficult for SKT to give up termination fees that hold customers back, there are ongoing arguments in the National Assembly that an exemption is justified. Recently, voices calling for the exemption of penalty fees for customers who wish to switch carriers have grown, led by consumer groups. With related discussions held at a National Assembly hearing on the 30th, the Ministry of Science and ICT is also reviewing the legal aspects.
Article 44 of SKT’s terms and conditions includes a clause that waives penalty fees if the termination is due to the company's fault. How to handle the penalty fee regulation appears to require discussion and resolution by the board of directors. On this day, CEO Ryu repeated his stance on repeated questions, stating, "We are reviewing it comprehensively." He explained, "This is not a matter that can be decided by the CEO alone, and there is room for complex consideration depending on the interpretation. We are conducting a legal review through law firms and internal organizations."
Damage compensation measures are also receiving attention. The Ministry of Science and ICT urged through administrative guidance, "Explain to the public specifically and actively how you will take responsibility for 100% compensation if user damage occurs due to hacking incidents." However, this briefing only reiterated the existing direction of 'taking responsibility if damage occurs after subscribing to the USIM protection service'.
The securities industry predicts changes in market share for mobile carriers. Jung Ji-soo, a researcher at Meritz Securities, analyzed, "Assuming an inevitable net loss of 10,000 subscribers per day in May and 5,000 per day in June, the impact on SK Telecom's second-quarter earnings is estimated at 16 billion won. Annual earnings for this year are expected to decrease by 111.6 billion won." Kim Joon-seop, a researcher at KB Securities, observed, "The possibility of the mobile number portability market becoming active will increase," and added, "Market share could also change depending on SKT's response direction."