The Korea Media and Communications Commission urged the three mobile carriers to prevent market disruption and overheating ahead of the launch of Samsung Electronics' flagship Galaxy S26 series, and was said to have called for clear notice to consumers of key points in the "pre-compensation program for used phones." Although each company operated it under a slightly different name, the pre-compensation program for used phones is a system that, separate from subsidies at the time of device purchase, sets the device's used-phone price in advance on the condition of returning it after a specific period (18 months) and compensates accordingly.
However, there were criticisms that explanations about discounts and compensation were unclear, and that notices about potential changes in compensation prices at the time of device return were insufficient. SK Telecom, KT, and LG Uplus, in line with the Korea Media and Communications Commission (KMCC)'s concerns, decided not to release pre-compensation products in connection with the Galaxy 26 series.
According to the industry on the 20th, the Korea Media and Communications Commission (KMCC) recently conveyed concerns to the three carriers about the pre-compensation program for used phones ahead of the Galaxy S26 launch.
The pre-compensation program for used phones is a system that the Korea Communications Commission 10 years ago imposed a 3.402 billion won penalty surcharge on and halted, saying it caused consumer harm. At the time, because the Mobile Device Distribution Improvement Act was in effect, it was problematic to pay excessive subsidies separate from legally provided subsidies, and it drew controversy by linking the program to specific high-priced plans and requiring users to immediately return the entire pre-compensation amount as a penalty if they failed to meet the mandatory usage period, thereby restricting service use or termination. Moreover, the three carriers were found to have violated the Telecommunications Business Act by neglecting to notify subscribers of the conditions for returning used phones.
With the Mobile Device Distribution Improvement Act repealed and marketing capacity limited, price competition among carriers intensified, and a service similar to the "pre-compensation program for used phones" appeared with the Galaxy S25 series last year and again when the iPhone 17 was released. KT introduced the pre-compensation program for used phones when the Galaxy S25 series launched, and after the iPhone 17 series came out, KT and SK Telecom rolled out pre-compensation programs.
Kim Jang-kyom of the People Power Party said, "The pre-compensation program for used phones likely lured many users into signing up under marketing claims that they could use an expensive phone at half price without fully recognizing the loss that would occur at the time of return," adding, "It could lead to classic consumer deception that hides onerous conditions."
An official at the Korea Media and Communications Commission (KMCC) said, "We conveyed our requests to the three carriers regarding the pre-compensation program for used phones ahead of the Galaxy S26 series launch," adding, "They must distinguish device discounts from compensation when explaining, and clearly communicate key points about the compensation process and compensation price volatility so there is no room for disputes."