After KT decided to waive contract cancellation fees following an unauthorised small-payment incident, South Korea's telecom market is being jolted in the new year. With the number of customers leaving KT nearing 80,000, marketing competition is intensifying.

As of Jan. 7, the telecom industry says 79,055 people left KT over six days from Dec. 31, when KT began waiving the fees, through Jan. 5. With activations on Sunday (Jan. 4), when back-end processing is not done, also reflected, 26,394 people switched to other carriers on Jan. 5 alone.

With the number of subscribers leaving KT nearing 80,000, the pace of departures is expected to accelerate further. The industry says the compensation plan fell short of expectations, including the exclusion of bill discounts, which accelerated the exodus from KT.

Earlier, KT presented a compensation package for the unauthorised small-payment incident that included free 100GB of data each month for six months, an additional 50 percent roaming data, a six-month pass for an OTT service, and discounts on major membership benefits. But it did not include monetary benefits such as bill discounts.

An industry official said the free data, cited as the biggest benefit, is virtually useless for subscribers on unlimited plans. The official expected demand to switch carriers among disappointed customers to continue for the time being.

KT's fee waiver has benefited SK Telecom the most. Through Jan. 5, 51,728 KT customers switched to SKT. Some 65.4 percent of all customers leaving KT chose SKT. The reason cited for SKT's strong performance is a membership restoration benefit. SKT restores tenure and membership to customers who rejoin after leaving the company from April 19 to July 14 last year due to the fallout from a USIM hacking incident.

Switching promotions are already active in the market. Through the end of this month, SKT refunds the entire first month's fee to customers who switch or newly sign up for certain plans, including "Direct 5G 48". LG Uplus also refunds the entire first month and discounts fees through the 12th month for customers who sign up for "Nugget47" and the unlimited-data "Nugget59". Those benefits run through the 13th, the deadline for KT's fee waiver.

KT is also bracing for rivals' offensive. Starting Jan. 5, it decided to provide VIP membership benefits throughout the subscription period to customers on the Yogo 69, 61 and 55 plans. It is also focusing on retaining customers by offering various benefits, including support for a payback worth 610,000 won in monthly points for 24 months to customers who subscribe to the unlimited-data Yogo 69 plan.

Some retailers are even offering phones that come with cash, known as "chabi". Chabi refers to giving customers cash from part of incentives provided by carriers to distribution networks. A telecom agency official said the period from now through the 13th will likely be the peak season. The official said they will try to attract as many subscribers as possible even if it causes some losses.

With increased demand for number porting, system outages also occurred. From 10 a.m. on Jan. 6, after activations began, multiple system failures occurred in the process of handling number porting from KT to SKT and LG Uplus. The same error occurred for a second consecutive day following the previous day.

Authorities have sent a signal to stop "overheated competition" in the market. The Broadcasting Media and Communications Commission has already indicated it will inspect false and exaggerated phrases that encourage number porting to prevent overheated competition.

SKT sent a "Not-To-Do" list to its distribution network and announced it was banning improper sales practices, including disparaging other carriers or amplifying customer anxiety.