Seoul: SK Telecom Co. may face losses of up to 7 trillion won (US$5 billion) over the next three years due to declining revenue and the possible waiving of early termination fees following a major data breach that has shaken consumer trust, the company's chief executive officer (CEO) said Thursday.
According to Yonhap News Agency, CEO Ryu revealed during a parliamentary session that since the incident, 250,000 subscribers have already left, with the potential for this number to reach 2.5 million. He indicated that if monthly cancellations reach as high as 5 million, the estimated losses could amount to 7 trillion won over the next three years, including waived termination fees and lost revenue. SK Telecom, South Korea's largest mobile carrier with around 25 million users, has been under pressure after disclosing a large-scale leak of universal subscriber identity module (USIM) data affecting its entire user base in April.
In response to the breach, many subscribers have switched to rival carriers KT Corp. and LG Uplus Corp., leading to calls for SK Telecom to waive early termination fees, which are typically applied when users end their contracts early. If the company exempts an average early termination fee of 100,000 won per person, the financial impact for 2.5 million users would amount to 250 billion won.
Despite these pressures, SK Telecom has remained cautious. Ryu mentioned that the issue will be reviewed by the company's board of directors and a newly established Customer Trust Restoration Committee, in accordance with government guidelines. However, he acknowledged the difficulty of making such a decision due to the potential fallout.
Since the data breach, SK Telecom has offered to replace the USIM of all 25 million subscribers. To focus on customer protection and USIM replacements, the company has temporarily suspended new subscriber sign-ups at its 2,600 retail stores nationwide starting Monday. On Wednesday, SK Group Chairman Chey Tae-won issued an apology for the incident.