KT boss vows to beef up database security

KT Chairman Lee Suk-chae

Executives at KT have been taking turns expressing regret after hackers broke into the company’s computer network and stole the personal details of nearly 9 million of its subscribers.

It is now the turn of company Chairman Lee Suk-chae, who in an emailed statement vowed to beef up security management systems and install more sophisticated data protection software to prevent any further breaches.

One couldn’t help being reminded of shutting the stable door after the horse has bolted. Lee’s comments came just days after KT CEO Pyo Hyun-myung bowed in apology during a news conference while insisting that the company will improve its security standards.

Investigators at the National Police Agency’s cyber terror response team arrested two people and are questioning seven others for breaking into KT’s network and stealing the information of 8.7 million of the company’s 16 million wireless customers.

The compromised data included names, mobile phone numbers, contract terms and resident registration codes, the Korean equivalent of social security numbers.

The incident could have huge ramifications for KT, which was unaware for five months that their network had been penetrated by cyber criminals before belatedly calling the police. Already more than 30,000 people have signed up to pursue class action against KT, according to their lawyers.

Police suspect that the data was leaked to telemarketers with the suspects pocketing at least 1 billion won (about $884,000) in exchange.

“This is really humiliating for us. As chairman, I will put huge resources on strengthening our internal security systems, which will be required to regain investor confidence,’’ Lee said in the email sent to employees and reporters.

“The key point is whether we show real commitment to solve the matter. We are a big company that should be able to embrace difficulties and allow the experience to make us better.’’

It was very rare for Lee to comment about a specific issue through email, KT spokeswoman Kim Yoon-jeong said.

KT said it will integrate its wireless and technology convergence divisions under a single unit to cut costs and strengthen management control.

Pyo, who is currently leading the company’s customer division, will now lead the new unit the company dubbed the telecommunications and convergence division, while KT’s other president Seo Yu-yeol will replace Pyo at the customer division.

“The reshuffle represents the company’s vigorous attempt to create more revenue by trimming down the number of divisions and to gain more bargaining power from what it identified as next cash-generators such as Internet-based TVs, amid slow growth in its main telecom businesses,’’ said Lee Ji-yeon, an analyst at KB Investment.

Lee said KT is simplifying its business structure for effective corporate growth, while investing more in customer policy.

KT has decided to walk away from its handset-making business after sluggish sales over the last few years. KT, which is the biggest shareholder of KT Tech, bought its affiliate’s assets and debt for 39.9 billion won.

Since 2001, KT Tech has so far been manufacturing budget feature phones branded EVER, while the affiliate produced a smartphone, TAKE.

“Samsung Electronics and Apple are dominating the smartphone market, meaning there’s no reason for KT to continue,’’ said a high-ranking KT executive asking not to be identified.

Previously, the affiliate of SK Telecom ― SK Telesys ― pulled out of the handset-making business unable to compete with Samsung and Apple phones. <The Korea Times/Kim Yoo-chul>

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