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| KT executives bow in a gesture of apology for damage caused by a network failure that caused disruptions in wired and wireless services for subscribers, Oct. 25, at a briefing outlining compensation and measures to prevent such an event from recurring, at the company's office in central Seoul, Monday. Yonhap |
By Kim Bo-eun
KT will pay out up to 40 billion won ($33.97 million) in compensation to customers of its wired and wireless services, which underwent nationwide disruptions Oct. 25, the company said.
The telecom company outlined its compensation policy for the network failure during a briefing, Monday. A routing error disabled wired and wireless services from around 11:20 a.m. to noon a week earlier ― most services were back by noon, but some disruptions lasted longer.
KT said it will pay compensation for 10 times the disruption time of 89 minutes, which works out at 15 hours, for individual service customers. Small business owners will be eligible to receive compensation for 10 days' worth of damage, given they use a number of devices that need to be connected to the internet, such as card payment systems.
Regarding the specifics of the compensation method, the company said customers will be compensated via a discount in subscription plan payments for this month to be paid for in December. A website and call center will be set up to address customers' inquiries and run for two weeks, the company added.
However, following its announcement, complaints began to grow given the average level of compensation for individuals comes to 1,000 won and for small business owners, 8,000 won.
The network failure disabled stock trading by individuals, card payments at restaurants and orders via ordering platforms from being registered. Taxi drivers experienced disruptions in navigation services and incoming calls.
KT noted the compensation plan is comprehensive given that the extent of damage could vary for each service subscriber, and it would be difficult to cater to each individual.
"We ask that the service subscribers consider that this was the best possible solution, given the plan needs to be fair and drawn up as fast as possible," KT's head of customer division Park Hyo-il told reporters in a briefing.
Under its contract, KT is not required to compensate for disruptions of less than three consecutive hours, but the company appears to have made the choice amid deteriorating public sentiment.
The company stressed the level of compensation is greater than that paid for disruptions stemming from a fire at a KT branch in western Seoul in November 2018. Disruptions at that time lasted longer, but only affected parts of Seoul and the metropolitan area.
NTT Docomo, AT&T, Verizon and T-Mobile caused disruptions in services for subscribers (customers) in recent years, but none offered compensation.
"We are offering the greatest level of compensation compared to both local and foreign companies in the same industry," a KT official said.
The Ministry of Science and ICT said the mistake of an employee of a KT subcontractor caused the nationwide disruption. The routing work was supposed to be carried out during night hours, but the employee had been doing the work in the daytime, with KT's consent. KT said it was responsible for failing to properly monitor the situation, as well as detect the error at a prior review stage and prevent the error from spreading to nationwide networks.
KT said it will incorporate a test-bed that will simulate the routing process before they are actually performed, to prevent any recurrence, and expand an existing system that blocks routing error dissemination.
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