576,000 Net Loss in SK Telecom Subscribers After Hacking Incident
124,000 Leave Following Penalty Waiver Announcement
The mobile telecommunications market, which had been unsettled following the SK Telecom hacking incident, is once again showing signs of overheating ahead of the July 14 deadline for penalty-free contract cancellations.
With the upcoming pre-order for Samsung Electronics' new foldable phone this month and the impending repeal of the "Act on Improvement of Distribution Structure of Mobile Communication Devices" (commonly known as the DanTong Act), competition among the three major telecom operators for market share is expected to intensify further.
According to the telecommunications industry on July 13, from April 22, when SK Telecom reported the hacking incident, to July 12, a total of 793,187 subscribers switched from SK Telecom to other carriers. Of these, 418,817 moved to KT, while 374,370 switched to LG Uplus.
Even after accounting for customers who switched from KT and LG Uplus to SK Telecom during the same period, SK Telecom saw a net loss of 576,037 subscribers.
The daily outflow of subscribers, which had surged to the mid-to-high 30,000s at the end of April, gradually subsided, with the net daily decrease falling to around 10,000 last month. On some days, after SK Telecom completed its USIM replacement process, the number of new subscribers even exceeded the number of those leaving.
However, after the announcement of the penalty waiver, the outflow increased again. From July 5 to 12, 124,414 subscribers left SK Telecom, with a net decrease of 15,288 subscribers in a single day on Saturday, the previous day.
To maintain its subscriber base, SK Telecom has decided to offer a 50% discount on telecommunications fees to approximately 24 million users, including those using budget phones on its network, starting in August. From next month until the end of the year, all customers will also receive 50GB of data per month.
Nevertheless, the prevailing view in the industry is that SK Telecom, the market leader, has already seen its 40% market share threshold breached as of May.
KT and LG Uplus, the main beneficiaries of the hacking incident, are not offering large-scale discounts but are making every effort to attract former SK Telecom subscribers. On July 15, pre-orders for Samsung Electronics' new foldable phones, the Galaxy Z Fold7 and Flip7 series, will begin, and on July 22, the repeal of the DanTong Act is expected to further intensify the competition over subsidies.
The Korea Communications Commission is currently conducting an inspection into excessive marketing practices, such as false or exaggerated advertising by telecom operators. On July 11, it held a meeting with executives from the three major telecommunications companies, urging them to ensure that users do not suffer any harm.
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