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Photo courtesy of Yonhap News |
[Alpha Biz= Paul Lee] KT lost more than 310,000 subscribers during a two-week period in which it waived early termination fees as a follow-up measure to an unauthorized small-amount mobile payment incident, according to industry data released on January 14.
During the waiver period from December 31 to January 13, a total of 312,902 subscribers left KT, averaging approximately 22,000 departures per day. Notably, 30.9% of the total churn occurred in the final two days of the program, indicating a sharp concentration of cancellations toward the end of the waiver period.
Most departing customers switched to SK Telecom, which absorbed 201,562 subscribers, accounting for 64.42% of total outflows. LG Uplus gained 70,130 subscribers (22.41%), while budget mobile virtual network operators (MVNOs) attracted 41,210 users (13.17%).
KT’s subscriber losses exceeded those recorded in July last year, when SK Telecom implemented a 10-day termination fee waiver that resulted in 217,542 departures. Industry analysts attribute KT’s larger churn to several factors, including the longer waiver period, actual financial losses suffered by customers, and relatively low perceived value of KT’s compensation measures.
In contrast to SK Telecom’s decision to offer a 50% discount on monthly fees to all customers for one month in August last year, KT opted for non-monetary compensation programs such as additional data allowances.
The surge in subscriber movement was also fueled by intensified “negative subsidy” competition among mobile carriers following the repeal of Korea’s handset subsidy cap regulation. With aggressive incentive campaigns, the daily number of mobile number transfers during KT’s waiver period averaged approximately 47,000—more than three times the normal daily average of around 15,000, according to industry officials.
KT is expected to face financial costs totaling several trillion won. The company has decided to retroactively apply termination fee waivers to approximately 350,000 subscribers who left KT between September and December last year, bringing the total number of refund-eligible customers to around 660,000. Assuming an industry average termination fee of KRW 150,000 per user, the estimated loss from refunds alone amounts to approximately KRW 99 billion.
Additional expenditures include an estimated KRW 450 billion for customer compensation programs and KRW 80–100 billion for free SIM card replacements.
Further financial risk remains, as the Personal Information Protection Commission is still reviewing potential administrative penalties. Previously, SK Telecom was fined a record KRW 134.8 billion for a similar incident. However, securities analysts note that KT’s decision not to implement direct fee discounts may limit the overall impact on its financial performance.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
