Fee exemption accelerates churn following network security breach
More than 30,000 users have left KT Corp. within days of the company waiving early termination fees, showing how quickly subscriber movement can accelerate when contractual barriers are removed during a security crisis. The waiver followed a government investigation into a data breach that exposed weaknesses in KT’s network management.
Industry sources said 31,634 subscribers canceled their KT contracts between Wednesday and Friday after the penalty exemption took effect, allowing customers to switch carriers without financial cost. The scale and speed of the outflow highlight the sensitivity of telecom customers to trust and security issues, particularly when exit conditions are eased.
Where the users went
Most departing subscribers moved to rival operators, with the country’s largest carrier emerging as the main beneficiary:
- About 18,720 users switched to SK Telecom Co.
- Roughly 7,200 users moved to LG Uplus Corp.
- The remainder opted for mobile virtual network operators (MVNOs)
Analysts said the distribution reflects both competitive positioning and lingering concerns over data security across the telecom sector.
SK Telecom benefits from return traffic
Industry watchers attributed the strong flow toward SK Telecom to its subscriber recovery strategy. The company has reinstated membership benefits for customers who previously left following its own hacking incident last year, making it easier for former users—some of whom had migrated to KT—to return once penalty-free switching became available.
“This was not only about price or promotions,” said one industry analyst. “For many users, it was also about going back to a familiar operator that had already gone through a breach and taken visible recovery steps.”
LG Uplus sees limited gains amid separate scrutiny
LG Uplus attracted a smaller share of KT’s departing users, which analysts linked to ongoing trust issues. The carrier is under investigation in a separate data breach case and has faced allegations that it failed to preserve key records, raising doubts among consumers already on edge about cybersecurity.
As a result, some users appear to have bypassed LG Uplus entirely, instead choosing either SK Telecom or lower-cost MVNOs.
Security breach remains central to customer concerns
The subscriber exits follow confirmation that personal information belonging to 22,227 KT users was compromised after an illegal femtocell accessed KT’s internal network. Investigators said exposed data included phone numbers and mobile identity information, which was later used in 368 cases of unauthorized micropayments totaling 243 million won.
While authorities said the damage was limited to confirmed cases, they also noted gaps in system logs, making it difficult to rule out additional, earlier losses.
Penalty waiver may extend churn window
KT said it will continue waiving early termination fees until January 13, giving customers additional time to leave without penalties. Market analysts said this extended window could lead to further subscriber losses, depending on how quickly KT restores confidence in its security controls.
Similar fee waivers earlier this year led to prolonged churn at other carriers, suggesting the full impact on KT’s subscriber base may not yet be visible.
KT signals focus on trust recovery and security reform
Amid the fallout, Kim Young-shub, chief executive of KT, urged employees to treat cybersecurity as a company-wide responsibility.
“Every task we perform—from network operations to customer service—can now be a potential target and must be protected,” Kim said in a New Year message.
He added that KT will pursue stronger security measures alongside its longer-term push into artificial intelligence, but analysts noted that rebuilding customer trust is likely to remain the company’s most immediate challenge.
