SKT Waives Penalty for Cancellations: Customers Terminating Between April 19 and July 14
Competition Among KT and LG U+ to Attract SKT Customers with Fear Marketing
[Seoul=Newsis] Reporter Oh Dong-hyun – “If I don’t change now, this decision will affect my children later,” “My number could be a risk to my children now.”
The controversy surrounding SK Telecom’s cyber breach has escalated as competing telecom companies engage in ‘fear marketing.’ They are reportedly enticing customers to switch by creating anxiety involving their children.
SK Telecom has decided to waive cancellation penalties related to a hacking incident that occurred this past April. This decision applies to customers who terminated service after April 19 or plan to do so by July 14. The waiver includes entire contract penalties, any announced subsidies, or early termination fees. Customers who have already paid penalties will begin receiving refunds.
After SK Telecom’s announcement, competitors have engaged in ‘fear marketing’ to aggressively attract defecting customers. Some retail channels, including those considered hotspots, are rumored to offer illegal subsidies while crossing lines with disparaging practices against competitors.
According to industry reports on the 6th, a competitor’s customer response scenario regarding SKT’s penalty waiver suggests it signals a quiet surrender to hackers. Statements like “Hacking starts with stealing my information and then ruins my life,” were noted, amongst other provocative responses.
Criticism arises that these tactics are based on unverified facts, with no confirmed secondary damage from the previous joint government-private sector investigation of the hacking incident.
Some telecom dealers have started using slogans like “SKT Waiver Confirmed! Bring your phone as is,” turning the situation into an aggressive marketing opportunity.
Critiques emerge noting that neither KT nor LG U+ provided significant compensation during past hacking incidents and data breaches.
In 2023, LG U+ experienced a data breach affecting 290,000 people. In response, they made their premium ‘U+ Spam Blocker’ service, previously priced at 550 KRW monthly, free for all wireless customers – a 6 billion KRW value considering 11 million handset subscribers.
KT has faced two significant data breaches in 2012 and 2014, impacting over 20 million customers, yet offered no customer compensation as no direct damages were reported.
Conversely, following the hacking incident, SK Telecom announced penalties waivers, an automatic 50% reduction in August’s telecom fees for all customers, and additional monthly data starting 50GB from August to the end of the year, totaling a 500 billion KRW ‘Customer Appreciation Package.’
The decision to waive penalties is foreshadowing subsidy competitions between the three telecom providers. Over the weekend, the Galaxy S25 (256GB) was being sold at 50,000 to 150,000 KRW with number porting conditions at Seoul’s Techno Mart, available on plans from all three providers.
This price reflected illegal subsidies of about 800,000 KRW after an official subsidy of 500,000 KRW (on a 109,000 KRW monthly plan) was subtracted from its original price of 1,353,000 KRW.
An industry official stated, “While SK Telecom’s penalty waiver could be seen as an attractive marketing opportunity for competitors, it’s inappropriate to excessively incite fear among customers. Although SK Telecom has implemented multiple customer protection measures, improperly utilizing the penalty waiver to amplify market competition and customer anxiety strays from its intended purpose.”