[Reporter’s Notebook] KT Announces Compensation Plan After Hacking Scandal... Sincerity in Doubt

KT issued a public apology on December 30 for a hacking incident caused by a comprehensive security failure, which resulted in the leakage of personal information of 20,000 people and almost led to financial damages amounting to hundreds of millions of won. Kim Youngseop, CEO of KT, pledged to "be reborn," but several aspects of the customer compensation plan announced that day raise questions.

Kim Youngseop, CEO of KT, is moving after finishing the briefing on 'Customer Apology and Information Security Innovation Measures' held at the Gwanghwamun building in Jongno-gu, Seoul on the 30th. Photo by Yonhap News

The most notable part of KT's compensation plan was the decision to exempt customers from penalty fees. This means that customers wishing to terminate their contracts would not be charged a penalty, but this announcement came nearly five months after the first unauthorized micro-payment damages occurred in early August. During the months-long investigation, it was already revealed that illegal femtocells could be used to steal call and text information. If KT had truly recognized the importance of information security and customer trust, it should have proactively offered penalty fee exemptions and compensation. Even this measure was only announced defensively after the government released its investigation results and recommended the penalty exemption.

The process for applying for penalty exemptions is also far from customer-friendly. Customers who wish to terminate their contracts must first pay the penalty and then apply separately for a refund.

It was also difficult to sense sincerity in the compensation plan for customers who choose to stay with KT. The plan, which offers fragmented benefits instead of direct discounts, is reminiscent of Coupang's compensation approach. Providing 100GB of data per month is meaningless for customers with unlimited data plans, and the roaming service is of no use to subscribers who do not travel abroad. The online video service (OTT) voucher could also be seen as a tactic to promote bundled telecom packages.

This is a stark contrast to competitor SK Telecom, which in August offered a 50% discount on all customer telecom fees without requiring a separate application. SKT introduced this measure as an emergency response after the number of subscribers switching to KT and LG Uplus surged in May following a USIM information hacking incident.

In contrast, KT did not experience a large-scale number portability phenomenon even after the illegal femtocell incident. Compared to SKT, the scale of penalty exemptions at KT is inevitably smaller. It is difficult to understand why practical benefits such as telecom fee discounts were omitted.

There is a saying that crisis is an opportunity. KT's security incident could have been an opportunity to win back customers' trust through sincere compensation and apologies. CEO Kim stated, "Protecting and achieving customer safety, convenience, and satisfaction is the reason KT exists." However, looking at the measures announced, KT, as a "company without an owner," seems to have chosen a short-sighted approach focused on minimizing its own losses.

The year 2025 will be remembered as a disgraceful year in which all three major telecom companies, including KT, were exposed for critical security vulnerabilities. Sincerity toward customers will be the driving force that enables these companies to restore their honor.