SKT unveils W1tr post-hack plan after government probe

Plan includes waived fees, extra data and Korea’s largest telco cyber spend

SK Telecom CEO Ryu Young-sang bows in apology during a press conference in Seoul on Friday. (Yonhap)

SK Telecom on Friday pledged a sweeping 1 trillion won ($720 million) compensation and cybersecurity initiative, including penalty-free contract cancellations, after a government probe concluded the carrier was negligent in a hacking attack that exposed nearly 10 gigabytes of sensitive subscriber data.

“I offer my deepest and sincerest apologies. I stand here today with profound remorse and reflection,” SKT CEO Ryu Young-sang said, bowing during an emergency press briefing after the government’s disclosure of its findings.

“We take the results of the government's joint public-private investigation very seriously and will swiftly implement all corrective actions and additional measures to prevent any recurrence.”

Earlier, the Ministry of Science and ICT said SK Telecom failed to adequately protect its systems against an intrusion in April and ordered the company to permit contract cancellations without penalties and reinforce security measures.

In response, SKT announced a compensation initiative, which includes 500 billion won worth of benefits for its about 24 million SKT subscribers, and a 700 billion won investment in cyber security over the next five years — the largest such commitment in Korea’s telecom sector.

The company also accepted the government’s order to remove early termination penalties, a move expected to result in significant financial losses. Customers who canceled their contracts after the hacking, or who do so by July 14, will not be required to pay termination fees.

In addition, the telecom giant will also automatically apply a 50 percent discount on telecom bills and provide 50GB of additional data per month to all subscribers, including those using budget services on SKT’s network, from August to through the end of the year.

Noting how it has been offering free USIM replacements and protection services, the company said it will also provide one year of free access to Zimperium’s advanced mobile security solution, used by over 2,500 organizations globally.

In its five-year security innovation plan, the company said it aims to double its security workforce, contribute 10 billion won to a security ecosystem fund and strengthen partnerships with universities and startups. The company will also elevate the chief information security officer to report directly to the CEO and recruit cybersecurity experts to its board.

Before announcing the compensation plan, SKT lowered its full-year revenue forecast to 17 trillion won from 17.8 trillion won and revised its operating profit outlook from an expected gain to a potential loss on a year-on-year basis.

“This forecast reflects the impact of implementing the customer appreciation program worth 500 billion won and broader market conditions,” SKT said.