[Reporter's Note] SKT's Penalty Waiver Sparks a "Chicken Game"... Concerns Grow Over Post-DanTongBeop Era

Overheated Marketing in the Battle for Market Share
A Call for Fair Market Order

SK Telecom (SKT)'s "full penalty waiver" policy, introduced as a crisis management measure following a hacking incident, is shaking up the telecommunications market. What began as a compensation measure for customers has now ignited a fierce battle for market share among telecom companies. Immediately after SKT announced the penalty waiver, mobile phone dealerships were covered with banners. Slogans such as "Now is your last chance to switch numbers," as well as fear-inducing phrases like "Hacking means my life gets stolen" and "If you don't switch now, your child will have to deal with it later," began to appear. The situation escalated to the point where SKT reported KT's excessive marketing activities to the Korea Communications Commission. The three major telecom companies have abandoned all pretense and are now engaged in an all-out brawl.

The aftermath of the penalty waiver was intense. In the week following the announcement, more than 200,000 people switched their mobile numbers, and on July 12 alone, 42,307 people changed their telecom providers. This was the third highest daily number of switches since April 22, when the hacking incident was first reported.

The government also recognized the gravity of the situation and, on July 7, urgently summoned marketing executives from the three telecom companies to request restraint. However, the number of mobile number switches did not decrease even after this meeting. The real issue is that this overheated competition is happening just one week before the abolition of the Mobile Device Distribution Improvement Act (DanTongBeop). Once this regulatory framework disappears, the market will become even more vulnerable and unprotected.

At the beginning of this year, the telecommunications industry was confident that aggressive price wars were a thing of the past, focusing instead on investments in artificial intelligence (AI). Now, with the abolition of the DanTongBeop imminent, the situation has completely reversed. The SKT hacking incident has reignited the "customer poaching" war, and dealerships are already gearing up for battle, declaring "DanTongBeop Abolition D-DAY."

A poster advertising benefits such as subsidies and rate discounts for new subscriptions after the abolition of the Mobile Device Distribution Improvement Act is displayed on the glass window of a KT agency in downtown Seoul. Photo by Park Yujin

The original intent behind abolishing the DanTongBeop was to "expand market autonomy" and "strengthen consumer choice." However, given the turmoil sparked by the SKT hacking incident, there are growing concerns about whether the Korean telecommunications market is truly prepared for free competition.

While competition to attract customers is fierce and flashy, its underside is much darker. Subsidies are concentrated on "new subscribers" and "bargain hunters," while long-term customers and those with limited access to information are consistently left behind. Even if two people use the same rate plan, one may receive hundreds of thousands of won in benefits while the other receives nothing. The subsidy conditions tied to expensive rate plans also limit the actual reduction in telecom expenses. This is why there is growing demand for fairness in the way benefits are distributed, rather than simply focusing on the size of the benefits themselves.

Even if the market moves toward greater autonomy after the abolition of the DanTongBeop, structural problems left unaddressed will inevitably lead to repeated issues of subsidy concentration and fairness controversies. Ultimately, fundamental solutions such as revitalizing the unlocked phone market and separating telecom companies' authority to sell devices must be considered. The market needs an order that guarantees fair choices for everyone, rather than a "benefit competition."