SK Telecom said Friday it will suspend new subscriber sign-ups at its retail stores starting from Monday, to expedite USIM card replacements and to enhance customer protection in the fallout of a massive data leak from a recent hacking incident.
In a press briefing at the company's headquarters in downtown Seoul on Friday, CEO Ryu Young-sang announced that all 2,600 T World stores nationwide will halt receiving new subscriptions so the company can focus on replacing compromised USIM cards.
It will also stop mobile number portability services, which allows users to switch mobile network providers while retaining their phone number, until the USIM shortage eases.
Additionally, SK Telecom said it will compensate for losses incurred by the T World stores during this replacement period.
As for the detailed compensation plan, Ryu said it will be implemented after consulting with dealers. “When looking at the distribution network, 350 of the 2,600 T World stores are directly operated by SK Telecom, and the rest are authorized dealerships. They are also small and-medium-sized enterprises, so asking them to stop taking new subscriptions could be a huge loss,” said Ryu.
However, the latest service halt does not extend to third-party retailers and online distributors, which are not under direct contract with the company.
The latest action is in response to the government’s guidance issued the previous day, instructing SK Telecom to suspend new subscriptions until it resolves the USIM shortages for existing users and implement stronger corrective actions in response to the data breach.
SK Telecom, the country’s largest mobile carrier with 25 million subscribers, serving nearly half of Korea’s population, disclosed that it had experienced a cyberattack and subsequent data breach of customers’ USIM data on April 18.
In response, the telecom giant said it removed the malware, isolated affected servers and enhanced security measures.
The company began offering free USIM chip replacements to all users on April 28, but it has been challenged due to overwhelming demand and a supply crunch, causing long lines at retail stores and system outages on its online reservation site due to high traffic.
The company has about 1 million USIM cards in stock, with plans to secure around an additional 5 million this month and another 5 million in June.
Amid the slow USIM swap rollout, the company said it will automatically enroll all customers into its USIM Protection Service without requiring a separate application.
The company asserts that the USIM Protection Service effectively blocks the use of illegally cloned USIM cards on other devices, providing the same level of protection as physically replacing the USIM.
As of Friday, 14.42 million people had joined the protection service, leaving out some 8.5 million others. The system can handle up to 1.2 million enrollments per day. The company plans to complete the process by May 14, with priority given to subscribers aged 75 or older and those with disabilities.
Following the hacking incident, SK Telecom is experiencing a massive user exodus to its main rivals, KT and LG Uplus.
According to the Korea Telecommunications Operators Association on Friday, more than 237,000 customers had switched from SK Telecom to other carriers, including KT and LG Uplus, in April alone, an 87 percent increase from March.
Amid growing calls to waive early termination fees for users, Ryu said the issue is still under review. “The penalty fee is such a critical matter that the CEO cannot unilaterally decide, but must be approved by the board,” he said. “We plan to have a board of directors discussion as soon as the internal legal review is completed.”
sahn@heraldcorp.com
