SK Telecom initiates damage control with free USIM replacement offer

SK Telecom CEO Ryu Young-sang apologizes to the public regarding its recent hacking incident during a press conference at the company's headquarters in central Seoul, Friday. Courtesy of SK Telecom

SK Telecom has pledged to strengthen measures to protect customer data and will offer free replacement of subscriber identity modules (USIMs) to its users starting Monday in an effort to contain consumer backlash over a recent data breach.

“As the nation's leading telecom service provider having its duty to protect customers' valuable information, everyone at SK Telecom, including myself, feels deeply regretful and responsible for this incident,” the company’s CEO Ryu Young-sang said Friday during a press conference at its headquarters in central Seoul.

He said the company is doing its best to cooperate with the relevant authorities and the police to determine the cause and extent of the damage.

The company will be providing a USIM card for free to all SK Telecom users who wish to replace it, along with a free protection service that prevents unauthorized duplication and usage of one’s USIM information.

Starting at 10 a.m. on Monday, customers can receive free replacement USIM cards at T World stores and airports nationwide. For those who replaced their cards at their own expense after the incident and before Monday, the company plans to reimburse the cost.

People walk past the headquarters of SK Telecom in central Seoul, Saturday. Yonhap

“We are also inspecting the security status of all company servers and systems and have elevated our fraud detection system to the highest level to block authentication attempts from illegally duplicated USIMs,” Ryu said, adding it will continue to provide protective measures to help ease customers’ concerns.

In response to SK's countermeasures, acting President Han Duck-soo instructed relevant ministries, Sunday, to thoroughly examine the appropriateness of the company’s actions.

"The appropriateness of the measures taken by the company involved must be thoroughly reviewed to ensure that public inconvenience and concerns resulting from this incident are promptly resolved," he said.

"I also call on the Ministry of Science and ICT, in coordination with the Korea Communications Commission, the Personal Information Protection Commission and other relevant agencies, to exert their utmost efforts to swiftly alleviate public inconvenience."

On Tuesday, SK Telecom announced that it had detected a security breach caused by malware and discovered that some customers’ USIM information was exposed on April 19 around 11 p.m. The company came under fire following accusations that it deliberately delayed reporting the incident to the Korea Internet & Security Agency, failing to comply with the regulation requiring notification within 24 hours.

The company denied the allegation, stating that the report was delayed because it was in the process of identifying and thoroughly collecting the information required for cybersecurity breach reporting.

Meanwhile, SK Telecom said it plans to sell all of its shares of platform giant Kakao — worth about 413.3 billion won ($287.35 million) — to fund its acquisition of a 100 percent stake in its internet service unit, SK Broadband.

SK Telecom plans to acquire Taekwang Group's 16.75 percent and Mirae Asset Group's 8.01 percent stakes in SK Broadband. To fund the purchase, the mobile carrier intends to spend a total of 1.15 trillion won by next month.

The sales of its Kakao shares will also help SK Telecom to secure funds for investment in key developing businesses, such as AI.

In October 2019, SK Telecom and Kakao exchanged 300 billion won worth of shares, forming a strategic partnership across telecommunications, commerce, digital content and information and communications technology.

SK Telecom reportedly plans to continue its cooperation with Kakao despite selling its stake in the messaging firm.