An employee surnamed Song, 40, who has been using SK Telecom for over 10 years, decided to visit a mobile phone shopping plaza known as a mecca for mobile devices with his family this weekend. He heard the news about SK Telecom's exemption from cancellation fees and plans for the whole family to switch to another carrier. Song said, "I received a call from an employee at a mobile distribution point, who noted that unprecedented subsidies from KT and LG Uplus are expected, so I decided to consult with my family," adding, "Such an opportunity to almost get a new phone for free seems rare."
More than 70 days have passed since the hacking incident was revealed, but SK Telecom has been holding back subscribers who want to switch to other carriers by citing cancellation fees. Despite facing criticism from the public and the National Assembly for not waiving the fees, Chey Tae-won, chairman of SK Group, and Ryu Young-sang, president of SK Telecom, maintained silence on the issue. However, with the government stating its position on waiving cancellation fees, subscribers frustrated by SK Telecom's 'delay tactics' are now able to switch carriers. Industry experts are keenly observing whether the migration triggered by the cancellation fee exemption will catalyze a major upheaval in the telecom market.
On the 4th, SK Telecom expressed that cancellation without fees would be available from April 19, when the hacking incident was first recognized, until the 14th of this month. There was no differentiation based on the remaining contract period. Anyone who cancels within this period will not pay a cancellation fee. Subscribers who have already canceled by paying the fee can get their money back, and those who cancel by the 14th will be exempt from the fee.
The sudden announcement by SK Telecom regarding the cancellation fee exemption after a 70-day delay was due to the government's announcement. That day, the Ministry of Science and ICT stated, "Since SK Telecom is at fault, the cancellation fee should be waived," siding with the subscribers.
According to the telecom industry, about 600,000 subscribers have left SK Telecom since the hacking incident became known on April 22. It is unprecedented for such a significant number of people to leave in a short period. Due to unprecedented concerns over personal information leaks, there has been a surge in customers willing to switch to other carriers even if it means paying the cancellation fee, despite having remaining contract periods. However, until the 14th of this month, customers can switch to other carriers without the burden of cancellation fees, even if they still have some contract time left. Multiple industry insiders noted, "A massive migration of subscribers in the telecom industry is expected in the next ten days."
The telecom industry expects fierce promotional competition in the mobile market over the next ten days to attract SK Telecom subscribers. It has been reported that competitors KT and LG Uplus are already reviewing increases in specified subsidies centered around the latest devices like the Galaxy S25 and iPhone 16.
Some industry insiders suggest that SK Telecom limited the cancellation fee exemption period to the 14th due to the impending repeal of the Device Subsidy Act (Mobile Device Distribution Improvement Act) on the 22nd. With the restriction on subsidy payments being lifted from the 22nd, it was considered that losses from a competitive marketing bloodbath with rivals would increase.
Under the original Device Subsidy Act system, only specified subsidies and an additional 15% subsidy could be provided. In the early implementation of the Device Subsidy Act in 2014, the specified subsidies were capped at a maximum of 600,000 won; however, this restriction was lifted through revisions of the enforcement decree, allowing for adjustment within a range that does not exceed the device's retail price. With the repeal of the Device Subsidy Act on the 22nd, this upper limit will also be eliminated. This means that 'minus phones,' where customers receive money to open contracts, could be legally recognized.
Kim Kyung-won, a distinguished professor at Sejong University’s Business Administration Department, said, "If the cancellation fee exemption is recognized during the repeal period of the Device Subsidy Act, SK Telecom's expenditure on marketing will significantly increase to protect its subscribers," adding, "It seems that due to large marketing expenditures by KT and LG Uplus over the next ten days, many subscribers will likely leave SK Telecom." Ryu Young-sang, president of SK Telecom, previously stated at a National Assembly hearing in May that "if the cancellation fees are waived, up to 5 million people might leave."