SK Telecom has announced a substantial compensation and cybersecurity initiative valued at 1 trillion won ($720 million) following a government investigation that revealed the company's negligence in a hacking incident that exposed sensitive subscriber data.

The compensation plan will provide 500 billion won in benefits to around 24 million subscribers, which includes a 50% discount on telecom bills and an additional 50GB of data per month from August through the end of the year.

Customers who decide to cancel their contracts due to the hacking incident will not incur termination fees until July 14, which is expected to result in significant financial losses for the company.

In light of the incident and the compensation program, SKT has revised its full-year revenue forecast from 17.8 trillion won to 17 trillion won, anticipating a potential decline in operating profit year-on-year.

During an emergency press briefing, SKT CEO Ryu Young-sang expressed deep remorse and committed to implementing corrective actions to prevent future security breaches.

To enhance governance, the company's chief information security officer will report directly to the CEO, and cybersecurity experts will be recruited to the board.

As part of its cybersecurity efforts, SKT will provide one year of free access to Zimperium's mobile security solution and has begun offering free USIM replacements and protection services.

SKT's five-year security plan includes doubling its security workforce, contributing 10 billion won to a security ecosystem fund, and strengthening partnerships with educational institutions and startups.

The Ministry of Science and ICT found that SK Telecom failed to adequately protect its systems during a hacking incident in April, leading to the requirement for penalty-free contract cancellations and enhanced security measures.