LG Uplus, which enjoyed a windfall from rivals’ security incidents, is facing demands to waive contract termination fees amid controversy over the design of subscriber identity numbers (IMSI). Analysts say it is being put to the test over whether it can sustain its growth momentum.
According to the industry on April 21, LG Uplus raised its market share after benefiting from number portability to its network following last year’s SK Telecom SIM hacking incident and KT’s small-payment incident. LG Uplus’ share rose to about 19.6 percent as of end-February from 19.2 percent on March 2025, before the SKT incident. Its share price also improved, rising from the low 10,000 won range to around 17,000 won currently.
Server disposal allegations, IMSI controversy rebound as security risk
But some analysis says its growth could be capped as the fallout from the security incident widens. LG Uplus faces allegations that it deliberately discarded a server suspected of being hacked last year and reinstalled it, obstructing a forensic investigation by security authorities. Police are escalating the investigation, including searching the company and seizing materials.
A recent controversy over IMSI design has also hurt trust in the company. LG Uplus is widely reported to have assigned IMSIs reflecting customers’ phone numbers since 2011. IMSI, a value used to identify subscribers when connecting to a mobile network, became controversial because it could lead to security threats if combined with other information.
LG Uplus is moving to contain the situation by expanding measures to strengthen security. It is upgrading and replacing SIM cards for all customers. It is also pursuing a plan to encrypt IMSI during a future transition to 5G standalone mode (SA).
Calls to waive termination fees spread, raising fears of subscriber losses
Despite the company’s follow-up steps, the controversy is showing no sign of easing. Calls are growing among politicians and civil society for LG Uplus to waive termination fees. They argue LG Uplus should take responsibility as it is attributable to the company.
The National Assembly Research Service in February presented a review opinion that if LG Uplus’ concealment of the security incident is recognized as malicious destruction of evidence or obstruction of an investigation, it could constitute grounds attributable to the company, making a termination-fee waiver possible. More recently, it issued an opinion that the IMSI system may also potentially violate the Personal Information Protection Act. It judged that if the structure reflects phone numbers in IMSI, it is highly likely to qualify as personal information.
LG Uplus, however, says IMSI itself does not constitute personal information, and with no actual cases of leakage, it is difficult to view it as a violation of the Personal Information Protection Act.
Even so, pressure from civil society is intensifying. Seoul YMCA called for a termination-fee waiver for all customers, citing LG Uplus’ poor IMSI management and its response to the security incident. It argued that user protection measures are needed because there is a possibility of secondary harm such as location tracking or smishing.
Consumer Citizen Coalition for Economic Justice also said there were problems across LG Uplus’ overall security management system. The group said, “Regardless of whether it meets legal standards, proactive measures to protect consumers and sufficient explanations are basic responsibilities,” and stressed that practical consumer protection steps must follow.
If demands to waive termination fees spread, it cannot be ruled out that subscriber switching could be triggered again. As already seen in SKT and KT cases, termination-fee waivers act as a factor that sharply increases number portability in a short period of time.
The industry says LG Uplus’ current market share largely reflected spillover effects from external factors, so if security issues drag on, some subscriber losses could materialise. It also expects the market impact could be larger if police investigation results clarify whether the company is at fault.
Still, LG Uplus’ first-quarter performance is expected to be solid. That view reflects expectations including revenue from data centres, after it absorbed customers who left SKT and KT. The fact that it designed IMSIs reflecting customer phone numbers was first reported on March 17, near the end of the first quarter.
According to FnGuide, the company’s first-quarter revenue is expected to be 3.86 trillion won, with operating profit seen at 280.7 billion won. That is up 3.1 percent and 9.7 percent, respectively, from a year earlier. An industry official said, “This year’s performance and market share trend for LG Uplus will depend on sincere follow-up measures on the controversy and whether it restores trust.”
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