On the afternoon of the 4th, when the Ministry of Science and ICT announced the results of the investigation into SK Telecom's hacking incident, which had been underway for over 70 days, there was a stir within SK Telecom. While the announcement of the results within the initially expected damage range was positive, the government's position that subscribers should be exempt from cancellation fees was an unexpected outcome. An employee of SK Telecom noted, "There is a sense of crisis inside and outside the company that SK Telecom could lose its position as the top operator due to the exemption from cancellation fees, which was not applied even when KT and LG Uplus faced hacking incidents in the past."
SK Telecom is facing its biggest crisis since its establishment in 1984. This is due to the deepening subscriber churn following the hacking incident that surfaced in April, compounded by the government's stance that cancellation fees should be waived. With the exemption from cancellation fees, SK Telecom is now expected to suffer a revenue loss of up to 7 trillion won over the next three years.
The Ministry of Science and ICT stated that SK Telecom must take responsibility for this hacking incident and waive subscriber cancellation fees. According to the telecommunications industry, approximately 600,000 subscribers had switched to competitors by June. Among them, existing subscribers who canceled despite having a remaining contract period are now eligible for full waiver of cancellation fees.
The problem is that the scale of subscriber churn could grow exponentially. If subscribers freed from contract periods through the waiver of cancellation fees flock to competitors, it has been suggested that SK Telecom could lose its position as the top operator. Ryu Young-sang, president of SK Telecom, attended a parliamentary hearing in May and stated, "Already, about 250,000 SK Telecom subscribers have switched. If cancellation fees are waived, up to 2.5 million could leave," adding, "Assuming a cancellation fee of 100,000 won per person, that would mean a loss of 250 billion won. In the worst case, if 5 million leave, the three-year revenue loss could reach a maximum of 7 trillion won," representing four times last year's operating profit of SK Telecom (1.8234 trillion won).
Such costs are expected to have a negative impact on SK Telecom's performance and stock price. Ryu Jong-ki, a professor at Sogang University, analyzed, "The amounts for cancellation fee waivers and compensation payments will negatively affect the company's performance and stock price." The telecommunications industry has reported that SK Telecom had been considering compensation payments of around 20,000 won per subscriber. If compensation is paid to 25 million subscribers (including those on budget phones), an additional revenue loss of about 500 billion won would be inevitable, according to industry perspectives.
Additionally, there is the issue of penalties that the Personal Information Protection Commission (PIPC) must address. The PIPC had previously warned that it would impose a significantly higher penalty than before for SK Telecom's hacking incident. Under the Personal Information Protection Act, a penalty surcharge of up to 3% of total revenue can be imposed on businesses that leak personal information. If the maximum amount is imposed as a penalty, this could amount to approximately 540 billion won.
In this situation, with the abolition of the subsidy law starting on the 22nd, the restriction on subsidy payments will be lifted, leading to intensified promotional activities by competing telecommunications companies targeting SK Telecom subscribers who are free from cancellation fees. An industry source noted, "It seems that SK Telecom is facing its biggest crisis since its inception. In the worst case, including cancellation fee waivers, compensation payments, and penalties, a loss of up to 9 trillion won is inevitable," adding, "With the expansion of competitors' promotions, marketing expenditure will also inevitably increase, leading to greater performance burdens."