In 2025 SK Telecom Co., Ltd. (KRX:017670, NYSE:SKM) disclosed that attackers had taken data belonging to 23,244,649 of its subscribers — phone numbers, IMSI identifiers, USIM authentication keys, 25 categories in total. In a country of about 52 million people, that is close to every customer the company had. Korea's Personal Information Protection Commission responded with a fine of ₩134,791,000,000, the largest it has ever imposed on anyone.
A year on, the numbers say the damage has substantially stopped. What they don't yet say is whether it has reversed, and the distinction matters more than the recovery headline suggests.
In the second quarter of 2025, the quarter the breach became public, SK Telecom lost 879,000 mobile subscribers on a net basis. Korean number portability is fast and cheap, the market has three carriers, and a security failure of that scale is exactly the kind of event that moves people.
In the second quarter of 2026, the net loss was 41,000.
That's a 95% reduction in the rate of bleed. It is not the same thing as growth — the number is still negative, and a company can lose subscribers slowly for years. But two things underneath it point the right way. Handset subscribers, the highest-value segment, have now been net positive for two consecutive quarters. And 5G subscribers reached 17.97 million, up 5.6% year on year.
So the mix is improving even while the headline count drifts down, which usually means the losses sit in low-value lines — secondary devices, connected hardware, prepaid — while the customers who actually generate average revenue per user are staying or returning.
For a US reader the useful context is how unusual this is. A US carrier that leaked authentication keys for its entire subscriber base would face class actions measured in years and a churn problem measured in millions. Korea's market structure — three carriers, heavy handset subsidy lock-ins, and a regulator that fines rather than litigates — compresses the damage into a much shorter window. That's not a defence of anyone's security. It's an observation about where the risk actually lands.
First-half operating profit was ₩1,103.6bn against ₩905.6bn, up 21.9%. Second-quarter operating profit was ₩566.0bn, up 67.3% year on year. Net income for the half was ₩782.4bn against ₩444.8bn, up 75.9%.
Two of those figures deserve a moment. First-half operating profit of ₩1,103.6bn already exceeds the ₩1,073.2bn SK Telecom earned across the entire twelve months of 2025 — the year the breach costs landed. First-half net income of ₩782.4bn is more than double the full-year 2025 figure of ₩375.1bn.
That's what a company looks like when a large one-off year rolls out of the comparison. The 67.3% second-quarter growth is measured against the worst quarter in the company's recent history, when it was replacing USIM cards, compensating customers and losing 879,000 of them. Some of the recovery is the business improving. A lot of it is the absence of last year's costs.
The revenue line is the check on that, and it's flat: ₩8,751.4bn for the half against ₩8,792.5bn, down 0.5%. A business whose profit is up 22% while its revenue is unchanged is a business where the profit came from costs, not from selling more. In this case the costs that disappeared were the breach costs, which is the good version of that sentence. It does mean the growth doesn't repeat once the comparison base normalises in the second half.
Full-year 2025 revenue was ₩17,099.2bn against ₩17,940.6bn in 2024, down 4.7%. The top line has not recovered to where it was before the incident.
SK Telecom filed an administrative lawsuit in January 2026 seeking cancellation of the ₩134.8bn penalty, saying it wanted a careful judicial assessment.
For scale: the fine is 0.63% of the ₩21.39tn market capitalisation, and roughly 12% of first-half operating profit. It matters more than the ₩54.0bn penalty KT received matters to KT, but it is still not the sort of number that changes an investment case on its own.
What the litigation does mean is that the incident stays open. A company contesting the largest privacy fine in its country's history is a company whose regulator relationship remains an active file, in a sector where the same government influences retail tariffs. There is also a layer the accounts don't quantify. Current provisions stood at ₩154.6bn at the end of June, up from ₩146.0bn — a small movement — but private claims from 23 million notified subscribers are not the kind of thing that resolves in a year.
I don't have a figure for civil claims outstanding and won't estimate one.
This is where the recovery story gets complicated as an investment proposition.
At ₩99,600 the market capitalisation is ₩21.39tn. Annualise first-half net income of ₩782.4bn and the multiple is about 13.7x. Against equity attributable to the parent of ₩15,436.6bn, the price-to-book is 1.39x. Non-controlling interests are immaterial here — ₩58.4bn out of ₩15.50tn of equity — so both figures are close to what a shareholder actually owns.
Neither is cheap for a mature telecom. KT trades at 0.72x book and about 8.1x earnings. The dividend, at ₩830 a quarter for two quarters running, annualises to ₩3,320 and a 3.33% yield — respectable, and well below KT's 4.5%.
And the shares have already moved. The 52-week range is ₩52,100 to ₩125,200; the current price is 91% above the low. Whoever bought the breach has been paid.
So the bull case can't be "cheap recovering telecom" any more. It has to be that SK Telecom's AI and data centre businesses deserve a growth multiple, which is a different argument requiring different evidence.
The bear case doesn't depend on the breach at all. Revenue is flat, the profit growth is measured against a hole in the prior period, the stock has nearly doubled, and the multiple is now higher than the peer's on both earnings and book while the yield is lower. If the AI story doesn't produce revenue at scale, what's left is a no-growth carrier at 13.7x.
The third-quarter subscriber number, against negative 41,000. Positive net additions would be the first unambiguous evidence that the breach is behind the company commercially rather than just in the accounts. Another quarter in the tens of thousands negative means SK Telecom has stopped bleeding but hasn't started winning, which is a materially weaker position at 1.39x book.
Second, third-quarter operating profit against ₩566.0bn. That comparison runs against Q3 2025, by which point the worst breach costs had already been absorbed. It's the first quarter this year where the year-on-year growth figure will mean something operationally.
Third, any movement in the fine litigation, and any increase in provisions above ₩154.6bn. The first tells you how the regulator relationship is going. The second tells you the company sees costs the market hasn't been shown yet.
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