This undated file photo shows SK Telecom Co.’s corporate image. (Image courtesy of Yonhap)
SK Telecom Faces Mounting Pressure as Regulators Order Full Penalty Waivers for Customers After Hacking Breach
SEOUL, Aug. 21 (Korea Bizwire) — South Korea’s telecom regulator has ordered SK Telecom to waive all early termination penalties for subscribers who wish to cancel their contracts by year’s end following the company’s massive hacking incident, intensifying the financial and reputational crisis facing the country’s largest mobile carrier.
The Communications Dispute Mediation Committee, a statutory body under the Korea Communications Commission, announced Thursday that SK Telecom must exempt customers from cancellation fees through December. The committee also ruled that SKT should reimburse half of the penalties incurred by subscribers who canceled bundled services, such as internet or IPTV.
The move goes further than SK Telecom’s own relief plan. In July, the company said it would waive penalties only for customers who canceled immediately after the breach and those scheduled to cancel by mid-July. Regulators stepped in to expand that scope, citing fairness for affected users.
People wait in a line to receive new universal subscriber identity module (USIM) chips at Incheon International Airport, west of Seoul. (Image courtesy of Yonhap)
Mounting Financial Strain
SK Telecom has already lost about 600,000 subscribers since the breach and has been absorbing significant penalty losses. The requirement to extend full waivers through year’s end could deepen its financial strain and accelerate customer outflows.
The company’s market share of mobile subscribers fell below 40 percent in May for the first time and has continued to slip. Its operating profit in the second quarter plunged 37.1 percent from a year earlier, even before the costs of customer compensation programs were fully reflected.
SK Telecom did not immediately say whether it would comply, stating only that it was “carefully reviewing” the decision. Industry observers noted the company may contest the ruling, given that mediation committee decisions are not legally binding. SKT has 14 days to formally reject or accept the order.
SK Telecom Co. Chief Executive Officer (CEO) Ryu Young-sang (C) bows to apologize for a large-scale data breach during a parliamentary session at the National Assembly in Seoul on April 30, 2025. ( Image courtesy of Yonhap)
Broader Regulatory Risks
The company is also bracing for a separate fine from the Personal Information Protection Commission, which will decide on August 27 whether to impose penalties of up to 3 percent of relevant revenue.
Based on SK Telecom’s 2024 wireless sales of 12.77 trillion won ($9.5 billion), the fine could reach the mid-300 billion won range ($230 million). Some analysts, however, expect the final amount to be closer to 100 billion won ($70 million), depending on how regulators weigh SKT’s remedial efforts, including penalty waivers and compensation.
“Regulators will likely consider whether SK Telecom has demonstrated genuine efforts to restore customer trust,” said one industry official. “The scope of penalty relief could influence the size of the upcoming fine.”
With financial losses mounting, customers defecting, and regulatory scrutiny tightening, SK Telecom is facing one of the most serious crises in its history — and may soon be forced to fight on both legal and financial fronts.
Kevin Lee (kevinlee@koreabizwire.com)
