The biggest beneficiary of the subscriber battle sparked by the carriers' hacking crisis that began in Apr. last year has turned out to be LG Uplus. All three carriers were breached, but only LG Uplus saw a sharp increase in subscribers.
According to the industry on the 16th, LG Uplus increased its subscribers by about 340,000 from Apr. last year to the 13th of this month by taking advantage of rivals' hacking crisis and penalty waivers. Compared with KT's net increase of just over 60,000 subscribers, the figure is overwhelming. SK Telecom, which continued to see subscriber churn after last year's hacking crisis, posted a net decrease of just over 520,000. SK Telecom recently saw a net increase of just over 160,000 subscribers during KT's penalty waiver period, but it still has not recovered to pre-crisis levels. KT also recently saw a net decrease of just over 180,000 subscribers due to penalty waivers.
LG Uplus, benefiting from the hacking crisis that has continued since last year, is on the verge of entering a 20% share of the domestic mobile market. The company's recent subscriber count is about 11.2 million, pushing its market share up to 19.7%. At this pace, it is expected to break above 20% in the first half of this year.
Unlike SK Telecom and KT, which accepted responsibility based on the hacking probe results by waiving penalties and moving to prepare compensation for customers, LG Uplus has remained silent. Recently, the Ministry of Science and ICT announced that major LG Uplus servers suspected as leakage routes had their operating systems reinstalled or were discarded after being notified of signs of an intrusion incident, making further investigation impossible. The ministry has asked police to investigate LG Uplus on suspicion of obstructing official duties by deceit.
The industry believes the government could impose sanctions depending on the outcome of the police investigation, but it expects the probe—focused on alleged intentional cover-up—will not serve as grounds for penalty waivers. Because investigating whether an intrusion occurred has become impossible, the basis for deciding on penalty waivers has also vanished. Still, depending on the police findings, the possibility of tougher sanctions such as a business suspension is being floated.
Meanwhile, among the three carriers, only SK Telecom is likely to have posted negative growth last year. Financial information firm FnGuide projected SK Telecom's operating profit last year would fall 37.4% from a year earlier. In contrast, it expected LG Uplus' operating profit last year to increase 10% from the previous year. Kim Kyung-won, a distinguished professor of business administration at Sejong University, said, "It appears the wrong precedent that 'covering up is the answer' has been proven in numbers in the form of net subscriber gains and results," adding, "To prevent the spread of moral hazard, the competent ministry should take appropriate measures to prevent a recurrence."