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KT Small Payment Incident Leads to Net Loss of 220 Subscribers... No Major Exodus Yet

After the incident was reported on September 4, SK Telecom saw a net increase of 182 subscribers
Limited scale of damage and security breach fatigue influence subscriber response

Despite KT's unauthorized small payment incident, there has not been a significant outflow of subscribers to other mobile carriers.

KT Small Payment Incident Leads to Net Loss of 220 Subscribers... No Major Exodus Yet Kim Youngseop, KT President, Bowing Deeply to Apologize for Small Payment Fraud Damage Photo by Yonhap News

According to mobile number portability statistics from the Korea Telecommunications Operators Association (KTOA) as of September 12, the number of customers who switched from KT to other carriers from September 4, when the incident was first reported in the media, through the previous day was 18,387. Considering that 18,167 customers moved from SK Telecom and LG Uplus to KT during the same period, the net decrease in KT subscribers was 220.


SK Telecom and LG Uplus saw net increases of 182 and 38 subscribers, respectively. However, given that the three major mobile carriers typically exchange subscribers in the range of several dozen to several hundred per day, these figures are not particularly notable.


The situation was different in April, when SK Telecom experienced a large-scale hacking incident. Just a few days after the incident became public, the daily net loss of subscribers reached 20,000 to 30,000, and in May alone, more than 330,000 customers left in a mass exodus.


One reason for the limited subscriber outflow in the current incident is that repeated hacking incidents in recent years have dulled public vigilance. Although anxiety surged following the SK Telecom incident, fatigue from frequent security breaches has accumulated, resulting in less sense of crisis this time.


The relatively limited scale of damage has also been cited as a factor. KT announced that 5,561 customers had their subscriber identification information (IMSI) leaked through illegal ultra-small base stations (femtocells). While a total of 19,000 customers received illegal femtocell signals, many were classified as simple connections. The damage was also concentrated in Geumcheon District in Seoul and in Gwangmyeong and Bucheon in Gyeonggi Province, so the sense of fear did not spread nationwide.


The perception that "other carriers are not necessarily safer" also appears to have played a role. Since SK Telecom, KT, and LG Uplus have all experienced both major and minor security incidents in recent years, a sense of resignation has spread that switching carriers does not fundamentally reduce risk. The inconvenience of the number portability process, long-term contracts, and bundled services are also cited as practical constraints that discourage switching.


However, since KT denied the data breach until September 10 but later acknowledged partial leakage, if the authorities' investigation reveals a larger scale of damage or additional leaks, public opinion could worsen and lead to a delayed outflow of subscribers.


© The Asia Business Daily(www.asiae.co.kr). All rights reserved.


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