SKT Expects Over 7 Trillion Won Loss in Three Years if Penalties Are Waived

Board of Directors Convened Twice, but "Decision Remains Difficult"
Ministry of Science and ICT: "Law Firm Review Also Inconclusive"

SK Telecom, which is currently dealing with a USIM hacking incident, has estimated that it could suffer losses exceeding 7 trillion won if it waives contract termination penalties. As a result, even though there is strong demand for the waiver of penalties, both the government and SKT have stated that it is difficult to reach a quick decision.

On May 8, Yoo Sangyoung, CEO of SKT, appeared at a hearing of the National Assembly's Science, Technology, Information and Broadcasting and Communications Committee. He stated, "We believe that up to 4.5 to 5 million people could potentially switch carriers in a single month," and added, "Considering not only the penalties but also three years' worth of revenue, we expect losses to exceed 7 trillion won."

In response, SKT convened its board of directors twice to discuss whether to waive the penalties, but announced that it is difficult to make an immediate decision. CEO Yoo explained, "We need to comprehensively review not only legal issues, but also the scale of losses and the issue of customer discrimination within the mobile telecommunications ecosystem," and added, "At this stage, it is being discussed that a decision is difficult to make."

The government's legal review regarding the waiver of penalties is also expected to take time before a conclusion is reached. The Ministry of Science and ICT has requested legal reviews from four law firms. Lee Jongho, Minister of Science and ICT, stated, "We received a legal review from the law firms yesterday morning, but the results are not very clear," and added, "We will have to wait for the results of the joint public-private investigation team before making a decision." He continued, "Since this could cause serious damage to the business operator, I do not think it is an issue that can be decided lightly," and emphasized, "I believe there must be sufficient data to make a decision."

Yoo Sangyoung, CEO of SK Telecom, is responding to questions from lawmakers at the hearing held by the National Assembly's Science, Technology, Information and Broadcasting and Communications Committee on the 30th of last month. Photo by Kim Hyunmin