[Conference Call] KT to Reflect USIM Replacement Costs in Q4... Annual Performance Expected to Grow

"1 Trillion Won Security Investment Over 5 Years
Not a Major Financial Burden"

KT plans to reflect the costs related to replacing USIM cards for all customers-one of the compensation measures decided upon after a series of hacking incidents-in its fourth quarter financial results. However, despite the impact of the hacking incidents, the company expects its annual performance to show growth compared to last year.

Jang Min, Chief Financial Officer (CFO) and Executive Vice President of KT, stated during KT's third-quarter earnings conference call held on the afternoon of November 7, "The cost of replacing USIM cards for all customers will be reflected in the fourth quarter." He added, "Costs such as providing free data to affected customers or offering a 150,000 won discount on device fees will be recognized at the time they actually occur in the future."

Yonhap News Agency

Previously, KT decided to replace the USIM cards of all subscribers as a countermeasure against unauthorized small payments and customer information leaks caused by illegal small base stations (femtocells). As a result, since November 5, KT has been carrying out USIM replacements in eight districts of Seoul, nine cities in Gyeonggi Province, and Incheon.

In addition, for customers who suffered unauthorized small payments or information leaks, KT will waive penalty fees and, starting November 10, will automatically apply the following benefits: 100 gigabytes (GB) of free data per month for five months, and either a 150,000 won discount for device replacement or a telecommunications fee discount.

Regarding the impact of the hacking incidents on this year's performance, CFO Jang stated, "We are taking a conservative outlook due to uncertainties such as customer compensation costs and possible fines, but we are striving to minimize both customer damages and financial impact." He added, "For the full year 2025, considering ongoing revenue growth, efforts to improve profitability, and one-off gains, we expect growth compared to the previous year."

Regarding the plan to invest more than 1 trillion won in security enhancement over the next five years, he said, "In the past, we have invested around 120 to 130 billion won annually in security, so an investment of 1 trillion won over the next five years is not an excessive burden."

He also commented on the ongoing CEO appointment process, stating, "The value-up program to enhance corporate value will continue regardless of any changes in the CEO," and emphasized, "The commitments made to the market through the value-up program will be maintained."

On the same day, KT announced that its consolidated operating profit for the third quarter of this year reached 538.2 billion won, up 16% from the same period last year. During the same period, revenue was 7.1267 trillion won, a 7.1% increase year-on-year, and net profit was 445.3 billion won, up 16.2%. KT explained that growth centered on major group companies such as cloud, data centers (DC), and real estate, as well as one-off real estate sales profits from the development of the Gangbuk headquarters site, contributed to the increase in operating profit.

CFO Jang stated, "Restoring customer trust is our top priority, and we will promptly implement customer protection measures while doing our utmost to strengthen our information security system and network management." He added, "Based on a stable financial structure, we will faithfully carry out our shareholder return policy to enhance market trust, and strive for continuous corporate value enhancement through growth in our core telecommunications business and the transition to artificial intelligence (AX) operations."

This content was produced with the assistance of AI translation services.