Customer trust is being actively contested among the three leading telecom operators in South Korea after they each suffered data security breaches in 2025.
KT, SK Telecom and LG U+ are no longer competing only on subscription price and network coverage, but on who can offer the most appealing compensation packages while demonstrating accountability and customer care.
The telcos are jostling for the top position in market share, as KT holds around 19 percent, while SK Telecom and LG U+ each hold around 17 percent, according to statistics from the Korea Telecommunications Operators Association.
The cyber attacks have sharpened that competition, turning security lapses into a direct driver of customer churn.
Trust Becomes the Battleground as Security Breaches Drive Customer Reshuffle
KT found in September 2025 that unregistered devices had accessed its internal network and leaked 22,227 subscriber identification numbers, terminal identification numbers, and phone numbers. This resulted in 368 customers losing ₩243MN ($168,000) in small payment scams.
Inspections of the network confirmed that 94 servers were infected with 103 different types of malware, according to an investigation by South Korea’s Ministry of Science and ICT.
The ministry found that KT failed to have adequate security measures in place and ordered the company to exempt customers from early contract termination fees:
“The government determined that the penalty exemption provision could be applied, taking into account the fact that KT was found to have been negligent in the KT breach and that KT failed to fulfill its primary obligations under the contract.”
KT customers who exit their mobile service contracts before January 13 will be able to claim a refund of the termination fee between January 14 and January 31, the telecom operator said.
But to encourage customers to stay after January 13, KT is offering five loyalty deals.
All existing customers will automatically receive 100GB of data per month from February to July. They’ll be able to apply for a free six-month subscription to one of two online video streaming services, six months of discounts on popular KT membership brands, and two years of free safety insurance, “to compensate for damages from cyber financial crimes.” Customers aged 65 and over will receive the insurance automatically. KT will also automatically provide 50 percent additional roaming data from March to August to customers who sign up for joint roaming.
If a customer who canceled their subscription during the penalty exemption period between September 1, 2025 and January 13, 2026 re-enrolls, KT will reinstate their existing long-term benefit coupon and membership level.
KT has pledged to invest over ₩1TRN ($690.5MN) over the next 5 years in information security “to further strengthen its responsibility and obligation to protect customer information as an AICT company handling large amounts of customer information in the AI era.”
However, when customers are finally given frictionless permission to leave, through waived penalties, they do so quickly and decisively if confidence is already broken.
More than 107,499 customers left KT from December 31, when it announced the penalty exemption, up to January 6, according to telecom industry data cited by local media reports.
Most of those customers, around 64 percent, switched to SK Telecom, 23.54 percent moved to LG U+ and 12.6 percent headed to mobile virtual network operators (MVNOs).
The high demand for phone number transfers disrupted the portability processing on January 5-6, delaying some customers from making the switch. That could see the numbers rise further in the coming days.
Rival Telcos Tackle Security Lapses Even as They Court KT Customers
SK Telecom and LG U+ have been competing aggressively to woo KT customers with sales incentives. They have also been trying to retain customers after their own cyber attacks.
In July 2025, an anonymous informant tipped off the Korea Internet & Security Agency (KISA) about a data leak from LG U+’s Integrated Server Access Control Solution (APPM), which manages and issues system account passwords, according to the statement from the Ministry of Science and ICT. The telco didn’t report the breach until October 23, by which time it had already re-installed the server. The incident is under investigation by the National Police Agency.