Seoul: SK Telecom Co., South Korea's leading mobile carrier, announced on Thursday a significant 73 percent drop in its annual net profit for 2025. This decline is primarily attributed to the substantial compensation costs incurred in the aftermath of a data breach that compromised the data of its entire 25 million-user base.

According to Yonhap News Agency, the company's net profit for the year stood at 375.1 billion won (US$255.6 million), a stark contrast to the 1.39 trillion won profit reported in 2024. The regulatory filing also revealed a 41.1 percent decrease in operating income, amounting to 1.07 trillion won, and a 4.7 percent decline in annual sales, which totaled 17.09 trillion won.

The fourth quarter of 2025 saw SK Telecom's net profit drop by 75.4 percent year-on-year to 97 billion won. During the same period, the company's operating profit fell 53.1 percent to 119.1 billion won, while revenue saw a 4.1 percent decrease, reaching 4.32 trillion won.

SK Telecom attributed the downturn in both annual and quarterly earnings to a comprehensive compensation program and a reduction in subscribers following the large-scale data breach. In April, the company reported that a cyberattack on its main servers potentially exposed the universal subscriber identity module (USIM) data of its entire user base.

In response, SK Telecom undertook a massive initiative to replace the USIM chips for all 25 million users. The company also offered a comprehensive compensation package and outlined a cybersecurity investment plan exceeding 1 trillion won. Additionally, SK Telecom suspended new subscription services for two months to address the breach's repercussions.