LG Uplus gains edge with AI-powered security strategy

A model demonstrates LG Uplus' anti-deepfake technology. Courtesy of LG Uplus

Amid growing concerns over cyber threats and the telecom industry's transformation toward artificial intelligence (AI), LG Uplus is emerging as one of the most notable beneficiaries.

As its AI-driven security strategy gained users' attention in the aftermath of a major data breach incident at its biggest rival, LG Uplus is expected to see strong second-quarter earnings and a substantial user influx, with analysts casting positive outlooks on the company's sustainable profitability.

NH Investment & Securities on Tuesday estimated LG Uplus’ annual operating profit is expected to reach 1.1 trillion won ($793.36 million), up 28.1 percent year-on-year.

It further projected that the telecom company will post a second-quarter operating profit of 298.1 billion won, outpacing brokerages' consensus of 269 billion won.

"As the investment cycle on 5G is in the twilight, the telecom sector continues to enjoy favorable market conditions," NH Investment & Securities analyst Ahn Jae-min said. "In addition, the recent cybersecurity breach at a competitor has resulted in a steady influx of new subscribers (for LG Uplus), fueling expectations for both revenue and profit growth."

The turning point in subscriber growth came after the data breach at Korea's largest mobile carrier, SK Telecom, in April. The breach prompted a rapid exodus of SK Telecom’s users to switch to rivals such as KT and LG Uplus.

This coincided with LG Uplus' existing security-focused initiatives and AI-powered protection services, helping the telecom to quickly capture the segment of users with cybersecurity concerns.

An illustration of LG Uplus' upcoming data center in Anyang, Gyeonggi Province / Courtesy of LG Uplus

According to data released by the Ministry of Science and ICT last month, the company’s mobile phone subscription count climbed from 10.957 million at the end of March to 10.993 million at the end of April.

As SK Telecom announced earlier this month that it would waive subscription cancellation fees until July 14, LG Uplus and KT are expected to have seen more new user sign-ups from those switching off from SK Telecom during the period.

Central to the company’s recent success is its substantial investment in security. In 2024 alone, LG Uplus poured 82.8 billion won into strengthening its information and data security, a sizable 31.1 percent jump over the previous year and triple the past three years.

Unlike many of its rivals, LG Uplus has focused on recruiting experts dedicated to cybersecurity, expanding related personnel to about 293 employees last year from 157 the previous year. This means roughly 6 percent of its total staff are dedicated solely to information protection.

The company recently introduced a new AI-powered security feature for its ixi-O AI agent, in response to the growing number of cases of voice phishing and fraud crimes.

The on-device Anti-DeepVoice technology detects voices made or manipulated by AI’s deepfake technology during a call and alerts users within seconds. It aims to help identify and prevent voice phishing crimes using AI-generated voices to impersonate acquaintances or stage fake hostage situations to extort money.

“By offering our differentiated security technology, we aim to establish ourselves as the telecom company that is most committed to security and holds the safest AI-powered technology,” Jeon Byoung-ki, senior vice president and the head of the AI and data tech group, said during the company’s press event last month.

LG Uplus employees demonstrate its malicious app alert service. Courtesy of LG Uplus

Complementing the new feature, the company is also underway to roll out an anti-deepfake feature that can identify AI-generated videos of a person to prevent phishing crimes using impersonated images or videos.

“By offering our differentiated security technology, we aim to establish ourselves as the telecom company that is most committed to security and holds the safest AI-powered technology,” Jeon said.

At the consumer level, the company has been setting new industry standards, running stores specializing in security matters for its users. Since last month, it has launched over 1,800 security-specialized retail stores nationwide with certified consultants to offer tailored consultations and support for customers concerned about smishing (text message scams) and phishing threats.

These locations provide one-on-one consultations regarding suspected phishing and smishing cases and help detect malware. The company shared that more than 200,000 customers signed up for its free blocking service on mobile payments within only two weeks of its launch, proving its ability to help raise security awareness among users.

“We are supporting customers in various ways to help them prevent crimes such as smishing and phishing in advance, including distributing informational pamphlets,” the company said.