Global investment banks (IBs) are lowering their outlook on South Korean telecom operator SK Telecom, citing a recent USIM (Universal Subscriber Identity Module) hacking incident.
According to investment media outlet Investing.com on the 8th, U.S.-based Citigroup downgraded its investment rating for SK Telecom from “Buy” to “Neutral.” It also lowered its 12-month target price from approximately 48.91 USD to 42.34 USD.
Citigroup stated, “Measures such as halting new subscriptions and replacing USIM cards could reduce operating profit by 1.3 and 3 percentage points, respectively,” and predicted that the company’s operating profit would fall below the forecast of approximately 1.46 billion USD for this year.
The report continued, “Although SK Telecom maintains a solid free cash flow yield and sound financial health, further declines in subscribers, increased compensation to dealers, government fines, and rising cybersecurity expenditures could deteriorate its financial outlook.”
It also emphasized that, “SK Telecom may struggle to grow its subscriber base without increasing marketing expenses,” and warned that “intensifying regulatory movements ahead of the presidential election could present additional risks.”
Previously, Bank of America (BofA) also downgraded its investment rating for SK Telecom from “Buy” to “Neutral,” lowering its 12-month target price from approximately 51.82 USD to 44.53 USD.
Bank of America explained, “The recent hacking incident has led to anticipated financial impacts, resulting in increased costs.” It added, “SK Telecom’s performance between 2025 and 2027 is expected to fall short of expectations, and the potential for enhanced shareholder returns appears limited.”
On April 19, SK Telecom confirmed that some USIM-related user information had been compromised due to malware introduced by a hacker.
As a result of the incident, from April 22 to May 6, approximately 248,000 users switched from SK Telecom to other carriers. Even after accounting for users who moved to SK Telecom from other carriers, the net loss in subscribers reached 207,897 during the same period.
