The success rate of SK Telecom's "one-stop conversion service" (OSS) for canceling internet subscriptions fell to about 20-30% in early last month. Following the disclosure of the theft of subscriber identification module (USIM) information due to hacking attacks, the conversion success rate, which usually recorded around 80%, significantly dropped, leading to allegations of "intentional cancellation delays." SK Telecom explained that it was a "temporary phenomenon due to a surge in inquiries."
According to the telecommunications industry on the 13th, the Korea Communications Commission is confirming that the success rate of cancellations through SK Telecom's OSS for internet subscribers has decreased by 50 percentage points compared to usual as of early last month. It is reported that numerous complaints alleging "SK Telecom is intentionally delaying OSS internet cancellations" have been filed with the commission. In response, the commission is conducting a verification check targeting SK Telecom.
OSS is an integrated system that allows easy changes to internet and bundled paid broadcasting services. When a user requests a new subscription, the system is designed to automatically cancel the existing service. The system was introduced by the commission in 2020 to benefit users, and is provided by KT, SK Broadband, SK Telecom, LG Uplus, LG HelloVision, DLive, CMB, KT HCN, and KT Skylife. SK Telecom provides services by reselling the wired internet network built by its subsidiary SK Broadband.
"We believe the incident related to SK Telecom's breach is being investigated not only for the period in question but also for the surrounding time," said a commission official. "It is currently confirmed that there has been a delay in cancellations," they added. "We are also currently investigating the scale of subscribers who were unable to cancel their services and the reasons behind it."
◇ Allegations of 'intentional delays' persist despite SK Telecom's clarification
SK Telecom acknowledged that there were delays in cancellations, but clarified that there was no intent. The company stated, "Due to the cyber breach incident, there was an influx of inquiries related to wired, wireless, and general civil complaints, and overlaps from accumulated cancellation requests during the holiday period led to some delays in early May. We are promptly strengthening our related personnel to resolve the delays and are currently operating normally."
When changing internet service providers through OSS, the existing company's employee must manually record the subscriber's information and transfer it to the new company. From May 1 to 6, during the holiday period, there was a surge in internet cancellation requests, but a lack of personnel to handle this led to temporary delays, according to SK Telecom.
Despite SK Telecom's explanation, the industry has raised suspicions about intentional cancellation delays. Following the public disclosure of the hacking incident on April 22, SK Telecom's mobile network operator (MNO) subscribers began to leave in earnest, allegedly leading to a covert strategy of "delaying internet service cancellations" to prevent this. Subscribers who combine MNO plans with internet services contribute significantly to the carriers' revenues.
An industry official noted, "There are claims that SK Telecom delayed cancellations to buy time, citing 'staff shortages' and reached out to subscribers to persuade them to stay by offering 'benefits'." They added, "The manual process for OSS is typically carried out and is not a complex procedure, so it can only be viewed as having intent."
The number of individuals who switched from SK Telecom to KT and LG Uplus averaged 33,660 per day from April 28 to May 3. During the period of internet cancellation delays at SK Telecom, this average dropped to 13,500. The implementation of measures to defend against customer churn, such as increasing sales incentives for mobile phone agencies, coincided with the delays in OSS cancellations.
An industry insider stated, "It doesn’t seem reasonable to cancel a service because it’s been delayed a few days," adding that "numerous reports have been made of cases where applications for new subscriptions were suddenly canceled."
◇ A penalty surcharge of up to 3% of annual sales if intent is confirmed
Internet service providers (ISPs) demanded action from the Korea Telecommunications Operators Association (KTOA) immediately after the delays in SK Telecom's cancellations. In response, KTOA held a 'team leaders' meeting on the 22nd of last month, urging attention to prevent disruptions in operating OSS due to the surge in internet subscribers.
If SK Telecom intentionally delayed internet cancellations, this would constitute a prohibited act under the Telecommunications Business Act. The commission will transition its verification check to a factual investigation if SK Telecom is found to have delayed or restricted cancellations without justifiable reasons. Should issues arise from this fact-finding investigation, actions will be taken according to the law. If violations are confirmed, a penalty surcharge of up to 3% of the related annual average revenue may be imposed, along with possible criminal charges.
Meanwhile, the Ministry of Science and ICT urged SK Telecom on the 1st of last month through administrative guidance, stating, "Frequent disruptions in sales systems have been occurring recently," and requested that in the event of such disruptions, immediate sharing of situations and swift recovery be ensured to prevent delays in number portability processing.