Revenue of SK Telecom decreases by 37% in Q2, due to significant data leak incident.
South Korea's largest mobile carrier, SK Telecom, has reported a 37.1% drop in second-quarter operating profit due to a data breach that occurred in April. The breach led to a massive leak of customers' USIM data, causing approximately 835,000 customers to leave the company between April and July.
The financial fallout from the breach is still ongoing, with the decline in profits attributed to the data security incident. The total costs associated with Q2 2025 earnings drop, which include expenses related to the data breach and customer defections, are primarily reflected in significant one-time costs. These costs include customer SIM card replacements and retail stores’ loss compensation, totaling approximately 250 billion won.
The exact monetary value specifically attributed to the data breach and customer defections is not detailed, but these one-time costs led to a 37.1% decrease in operating income and a 76.2% decline in net income year-over-year, with net income falling to KRW 83.2 billion (approximately $59.5 million).
Despite these challenges, SK Telecom's AI transformation business has shown resilience. Sales in this sector climbed 15.3% to 46.8 billion won, with increased sales of business-to-business solutions contributing to the growth. SK Telecom projects its AI data center business will generate over 1 trillion won in annual revenue by 2030.
As part of its efforts to regain customer trust, SK Telecom has launched an ‘Accountability and Commitment Program’. This program aims to enhance customer protection and information security, signaling the company's commitment to mitigate further damage from the breach.
In an attempt to retain customers, SK Telecom has also introduced a customer compensation program. This includes a 50% mobile bill discount for the third quarter and the exemption of early termination fees.
Looking ahead, SK Telecom anticipates additional costs to negatively impact earnings in the second half of the year. However, the company is moving forward with its plans to build the country's largest AI data center in Ulsan, in partnership with Amazon Web Services and other SK Group affiliates. The Ulsan AI data center is set to commence operations in 2027.
In terms of financials, SK Telecom's consolidated revenue for Q2 2025 was KRW 4.3388 trillion with an operating income of KRW 338.3 billion. Compared to the previous quarter, operating profit and net income dropped by 40.4% and 77%, respectively. The company's subscriber count fell to 22.5 million in May, marking the first time its market share dipped below 40% since 2015.
Despite the challenges faced, SK Telecom remains committed to its growth strategies and is taking steps to recover from the data breach and regain customer trust.
- The data breach and subsequent customer defections have caused significant one-time costs for SK Telecom, which are primarily attributed to the decline in profits within the finance sector.
- Amidst the financial fallout, SK Telecom's AI transformation business continues to show resilience, with increased sales of business-to-business solutions and a projected annual revenue of over 1 trillion won by 2030 within the technology industry.
