Forecast of Perceptual Changes in Telecommunications Market

The Ministry of Science and ICT decided that SK Telecom (CEO Yoo Young-sang) should be exempted from the number transfer penalty regarding the leak of USIM information. If the departure of 23 million subscribers becomes a reality, it is expected that there will be a change in the telecommunications market.

The Ministry of Science and ICT judged on the 4th that it is attributable to the company that has to waive the penalty under Article 43 of SK Telecom's terms and conditions regarding the USIM hacking case. It also explained that SK Telecom's poor account information management, lack of response to past infringement incidents, lack of important government encryption measures, violation of the Information and Communication Network Act, and failure to fulfill its obligation to provide safe communication services, which is its main duty in contract with customers.

Article 43 of the SK Telecom Terms and Conditions (Exemption of Penalty) stipulates that "if a customer cancels the contract due to reasons attributable to the company, the obligation to pay the penalty will be exempted."

For this judgment, the Ministry of Science and ICT received legal advice from four organizations on whether the penalty exemption rule of SK Telecom's terms and conditions in the early stages of the accident can be applied to the accident. At the time, legal advisory agencies presented a common opinion that if SK Telecom's negligence is recognized, users can apply the penalty exemption rule when the contract is terminated.

The Ministry of Science and ICT conducted additional legal advice to five organizations from June 26 to July 2 based on the results of the investigation for more accurate judgment at the time the investigation of the public-private joint investigation team was completed.

Most legal advisory agencies judged that SK Telecom was responsible for the hacking. They suggested that the leakage of USIM information is a major violation of the contract's obligation to provide safe communication services, and hence the exemption of penalty can be applied. One legal advisory agency reserved its judgment that it is difficult to judge based on the current data.

However, the judgment of the Ministry of Science and ICT is not compulsory by law, but SK Telecom is expected to have no choice but to accept it. On the 3rd, a day before, President Lee Jae-myung said, "In the process of terminating the contract, there should be no loss to the victim due to reasons attributable to the company," adding, "There was damage to the people, and the feeling of compensation for the damage to the people should be fully reflected."

In addition, SK Telecom CEO Yoo Young-sang said at a plenary session of the National Assembly's Science, Technology, Information, Broadcasting and Communication Committee on April 30, "If there is no legal problem, we will go in the direction of abolishing (the penalty)."

SK Telecom is cautious. "We have been considering whether to waive penalty fees," a company source said. "We will announce the result later when it is decided." SK Telecom is also discussing whether to waive penalty fees and the amount of compensation it will pay per customer.

If the exemption of penalty surcharge becomes a reality, the number of SK Telecom customers leaving SK Telecom is expected to be considerable. For example, 816,000 subscribers have moved from SK Telecom and other mobile carriers from affordable phones using SK Telecom and SK Telecom networks from April 26 when the hacking crisis began in earnest to June 23, right before the operation resumed.

Some of them moved their carriers even after asking SK Telecom for a penalty. Once the penalty exemption is official, the departure rush is expected to accelerate as barriers disappear when moving to other carriers.

If the trend of subscriber churn continues, it is expected to affect SK Telecom's Ahsung, the No. 1 telecommunications company.

According to the statistics of wireless communication service by the Ministry of Science and ICT, SK Telecom had 22.92 million mobile phone lines in April this year, accounting for 40.08 percent of all mobile phone lines, barely keeping the 40 percent level. During the same period, KT accounted for 23.45 percent (13.413,968), 19.22 percent (10.992,877) of LG Uplus, and 17.24 percent (9.861,974) of affordable phones.

"Usually, telecommunication consumers often use a single telecommunication company by combining wireless and wired products," an industry official said. "If SK Telecom customers leave due to the exemption of penalties this time, it can affect not only wireless but also wired markets."

Another official said, "The penalty exemption is not something to be seen lightly from the perspective of telecommunication companies," adding, "Although the Ministry of Science and ICT said, "not all cyber infringement accidents are subject to penalty exemption under the terms and conditions," SK Telecom's penalty exemption could remain a precedent in the future."

fun3503@chosunbiz.com