[Exclusive] "Illegal Subsidies Spread Amid SKT Hacking Crisis"... KCC Launches On-Site Inspections

Mobile Phone "Holy Sites" Offer Up to 400,000 Won in Cash on Top of Official Subsidies
KT and LG Uplus: "Let's Attract Customers Leaving SKT"
SKT: "We Must Prevent Customer Loss"
Illegal Subsidy Payments Detected Among the Three Major Carriers
KCC Launches On-Site Inspections

A mobile phone store at Sindorim Technomart in Guro-gu, Seoul.

As the "USIM crisis," triggered by the SK Telecom hacking incident, escalated into an illegal subsidy war in the telecommunications market, it has been confirmed that the Korea Communications Commission (KCC) has begun on-site inspections. KT and LG Uplus have been luring customers leaving SKT with subsidies, and SKT has also been found to be attempting to distribute subsidies in an effort to stem the decline in its customer base, prompting the KCC to conduct inspections.

A senior official from the KCC told Asia Economy on May 2, "KCC staff are currently visiting agency and retail store locations in person to inspect the status of subsidy payments," adding, "We are focusing inspections on collective shopping malls and distribution outlets that have received complaints, and these inspections will continue throughout the May holiday period." Major inspection targets include collective shopping malls known as "holy sites" for mobile phones, as well as major distribution outlets nationwide such as Gangbyeon Technomart in Seoul.

According to industry sources, taking advantage of the USIM shortage and consumer anxiety, some stores have been offering rebates in the hundreds of thousands of won?far exceeding the officially announced subsidies?to customers switching carriers, claiming "now is your chance." Such cases, suspected to violate the Mobile Device Distribution Improvement Act (Dantongbeop), are being detected daily.

For example, under conditions such as using a specific affiliated credit card, subscribing to the maximum number of additional services, and maintaining a high-priced monthly plan of 110,000 won or more for at least six months, an SKT user switching to KT and purchasing a Galaxy S25 could receive not only the standard official subsidy but also up to 400,000 won in additional cash. This amount far exceeds the normal official subsidy, making it highly likely to be a violation of the Dantongbeop.

Although the current activity is at the "inspection" stage rather than a "formal investigation," there is a possibility that it could lead to further investigation, including the collection of related materials, if necessary. Under the current Mobile Device Distribution Improvement Act, excessive subsidies beyond the official amount can result in sanctions such as business suspension, fines, or warnings.

Previously, on May 1, the Ministry of Science and ICT officially announced administrative guidance for SKT, including a halt to new subscriber recruitment, mandatory application of USIM protection services, and the preparation of a 100% compensation plan. In response, SKT has decided to temporarily suspend new mobile service subscriptions at T World stores starting May 5.

An industry official stated, "As more customers leave SKT due to the hacking incident, an ironic situation has emerged where the competition to attract customers from other carriers with subsidies is overheating," adding, "At times like this, market monitoring by regulatory authorities is especially crucial."