“No matter which carrier you switch to, the 'Galaxy S25 256 gigabytes (GB)' and 'Galaxy S25 Plus 256GB' come with added fees. SK Telecom's waiver of early termination fees doesn't mean prices have dropped significantly, but the conditions are still quite good.”
On the afternoon of the 7th, at Techno Mart on the 9th floor in Sindorim, Seoul. Despite being a weekday, the mobile phone distribution market was bustling with customers looking to purchase smartphones. This phenomenon is interpreted as a marketing expectation to capture customers leaving SK Telecom after the company announced it would not charge early termination fees until the 14th due to a hacking incident. Online inquiries about the so-called 'holy sites' where illegal subsidies (rebates) can be received have also increased.
Initially, the telecommunications industry predicted that the number portability market would be revitalized if SK Telecom, the top mobile operator in Korea with around 25 million subscribers (including budget carriers), enacted a waiver for early termination fees. However, in reality, more customers opted to remain with SK Telecom and purchase new devices than switch to other carriers.
An employee at a retail store that handles SK Telecom, KT, and LG Uplus said, “I received about 10 customers in the morning, but none of the SK Telecom subscribers switched.” He added, “It seems the compensation for the hacking incident was better than expected.”
◇ “It's a shame to give up 'long-term customer benefits' for an additional 200,000 to 300,000 won”
SK Telecom announced a customer compensation plan immediately after the government's announcement of the hacking investigation results on the 4th. It included: ▲50% discount on communication fees in August ▲additional 50GB of data each month until the end of the year ▲expansion of membership discounts. A SK Telecom subscriber, surnamed Kim, who purchased the Galaxy S25 Ultra 256GB for 600,000 won (full payment with public support and cash) stated, “I was reluctant to give up long-term customer benefits for an additional 200,000 to 300,000 won, and since I could get a discount on my fees right away, there was no need to switch carriers.” Kim also noted, “I changed the USIM (Subscriber Identity Module) and there were no actual secondary damages to consider.”
According to the telecommunications industry, from the 5th to the 7th, 13,419 SK Telecom subscribers switched to KT. Meanwhile, 14,729 moved to LG Uplus. However, during this period, the net decrease of SK Telecom subscribers was limited to 10,540.
In comparison, the average daily loss of SK Telecom subscribers was around 18,000 from late April to mid-May, right after information theft was made public. A telecommunications industry official noted, “It seems that those who wanted to leave SK Telecom have mostly already switched.”
◇ Even with 'SKT's waiver of early termination fees,' there has been no additional increase in sales incentives
The fact that SK Telecom, KT, and LG Uplus did not increase their sales incentives is also seen as a reason the number portability market remained relatively calm after the waiver of early termination fees. At Techno Mart, customers could purchase the Galaxy S25 256GB model, which has a retail price of 1,155,000 won, under number portability conditions, receiving the device for free regardless of the carrier and receiving 200,000 to 300,000 won as 'added fees.' Though there were conditions to maintain high-cost plans in the 80,000 to 100,000 won range for six months, it means about 900,000 won would be provided in 'illegal subsidies.' The Galaxy S25 Edge, Plus, Ultra, as well as the iPhone 16 series also had about 800,000 to 900,000 won in illegal subsidies if users switched carriers.
Merchants suggested customers take advantage of the “unusual offers,” but this price has been frequently seen over the last two months following the revelation of the SK Telecom hacking incident. Retailers utilize the 'sales incentives' provided by the three telecom providers as a source of rebates. The sales incentives set at around 800,000 to 1,000,000 won for major models have not changed significantly even after the waiver of early termination fees was announced.
The industry is also analyzing that, with the launches of the Galaxy Z Fold and Flip 7 (pre-orders starting July 15) and the abolition of the telecommunications regulation act (July 22) approaching, the three telecom companies are managing their 'marketing expenses.' A telecommunications industry official stated, “Sales incentives operate in a structure similar to a 'game of perception,' where if one company raises prices, the others follow. However, there haven’t been major changes to any companies since the announcement of SK Telecom's waiver of early termination fees.”
Another industry official commented, “After the hacking incident, SK Telecom has primarily raised sales incentives first.” They continued, “It seems SK Telecom has determined that the customer influx effect from the hacking compensation plan was sufficient and has not added further expenses for sales incentives.”
While there has been little change in sales incentives, a 'customer recruitment method' using SK Telecom’s waiver of early termination fees has been spreading. An employee at a KT shop in Guro District, Seoul, said, “The waiver is essentially an acknowledgment that SK Telecom cannot prevent 'information leaks.' Are you still not switching carriers?” An employee at an LG Uplus store in Yeongdeungpo District, Seoul, also stated, “How can you still use SK Telecom with the uncertainty? It’s better to switch to LG Uplus, where there are no worries about information leaks.”
Recently, a 'customer response scenario' emphasizing SK Telecom's waiver of early termination fees has circulated, causing controversy within KT's device distribution network. The customer response script includes statements like, “You should move to a place you can trust,” and “Hacking starts with stealing my information and eventually leads to stealing my life.”
The Device Distribution Law (the law on improving the distribution structure of mobile communication devices) is still in effect, making additional support exceeding 15% of the public support fund illegal. An official from the Korea Communications Commission noted, “To stabilize the market, we held a meeting with SK Telecom, KT, and LG Uplus on the 7th, where we advised caution regarding illegal marketing and false or exaggerated advertisements.”