An internal document has been found indicating that, while KT was running a used phone trade-in policy, it paid higher incentives to Re:Born, known as the used phone distribution brand of its subsidiary KT M&S, than to other certified operators. With used phone trade-in results reflected in dealer evaluation metrics, some say KT's headquarters may have leveraged its sales network and incentive system to steer used phone purchase volumes toward its subsidiary.
If this structure operates in the field, concerns are being raised that KT dealers could be incentivized to first recommend Re:Born trade-ins, which provide separate incentives, over used phone buyers offering higher prices to consumers. The industry says this could limit consumers' chances to dispose of their existing devices at better prices.
◇ Extra points for used phone trade-ins in dealer evaluations… Re:Born pays a flat 30,000 won per device
KT's internal documents obtained by ChosunBiz on the 4th include Basic operations guide for wireless policy, Retail dealer infrastructure and sales growth indicators, and Certified used phone safe-transaction operator trade-in policy. The materials explain the criteria used within KT's sales network to evaluate device activation, plan retention, value-added service retention, and used phone trade-in performance, and how subsidies are paid.
Among the documents, Retail dealer infrastructure and sales growth indicators specifies Extra points for used phone trade-ins as one of the metrics. The materials state, Pay 5P when the store averages three or more trade-ins. This suggests a structure where used phone trade-in performance is reflected in dealer evaluations and incentive calculations. It also explains that earning the 5P for used phone trade-ins can lead to an additional 1 million won benefit based on 200 wireless sales. The same materials present payout amounts by sales growth indicator grade: 10,000 won per wireless sale for 55P or higher; 15,000 won for 65P or higher; and 20,000 won for 75P or higher.
Another document, Certified used phone safe-transaction operator trade-in policy, lists subsidy differences by trade-in method. According to the materials, Mintit trade-in subsidies are paid on a tiered basis from 5,000 won up to 25,000 won per device depending on the used phone purchase price and the store's monthly purchase volume. If the purchase price is 100,000 won or more and less than 200,000 won, stores with three or more monthly purchases receive 15,000 won and those with fewer than three receive 10,000 won. If the purchase price is 200,000 won or more, stores with three or more monthly purchases receive 25,000 won and those with fewer than three receive 15,000 won. By contrast, for Re:Born, KT's subsidiary used phone brand, all trade-ins of used phones priced at 100,000 won or more are paid a flat 30,000 won per device regardless of the store's monthly purchase volume.
◇ Some devices command higher average prices elsewhere… "Dealer incentive structure restricts choice"
A Compensation unit price comparison table attached to KT's internal explanatory materials showed that, for some latest devices, other operators' average purchase prices were higher than Re:Born's. For iPhone 16 Pro, Re:Born's purchase price was 820,000 won and other operators' average price was 840,000 won; for Galaxy S24, Re:Born was 370,000 won and the average was 410,000 won. For Galaxy S25, Re:Born was 470,000 won and the average was 490,000 won. However, these are not prices from a specific company but averages of uncertified used phone safe-transaction operators, and the averaging methodology and device condition criteria could not be confirmed from the document alone.
In the used phone distribution industry, transactions are conducted by telecom dealers connecting customers' existing devices to purchasing companies. Buyers notify retailers of used phone prices daily, and retailers typically guide customers to the company offering the higher price. However, if a company provides separate sales commissions in this process, used phone purchases may flow to a specific operator. This could limit consumers' chances to sell their used phones at higher prices.
There is also talk that if purchases through a subsidiary's used phone brand earn extra points in dealer evaluations from headquarters, it will be hard to avoid suspicions of steering business to a specific operator. A telecom industry official said, "KT dealers have an incentive to prioritize trade-ins with certified operators to receive headquarters subsidies and evaluation points, and in this process, external transaction channels that could offer consumers higher purchase prices may be pushed down the list," adding, "This could restrict consumers' chances to get better prices."
◇ Controversy over subsidiary support and discriminatory treatment… KT says there was no intent to steer business
Controversy is expected from a fair trade standpoint as well. Industry sources say that if a telecom company offered favorable conditions to a subsidiary brand through headquarters policies and its sales network, it could escalate into issues of affiliate support, exclusion of competitors, and discriminatory treatment. The used phone market currently has more than 40 safe-transaction operators certified by the Korea Information & Communication Industry Promotion Association (KAIT). Including uncertified operators, the total is estimated in the hundreds.
Shin Hyeon-du, head of the Korea Consumer Association, said, "When consumers rely solely on dealer explanations for used phone purchase price guidance, if KT grants sales incentives and extra evaluation points when purchasing through its used phone subsidiary, there is a high chance that consumers' opportunities to sell used phones at the highest price will be limited," adding, "It appears to be an unfair practice that infringes on consumer sovereignty."
A KT official said, "Those commission unit prices are set by used phone operators, and KT dealers are merely the channels through which those unit prices are paid, and we understand that many models fall into the category where Re:Born's used phone purchase prices are relatively higher," adding, "In support of activating the government's certification system for used phone safe-transaction operators, we are implementing a policy of paying additional fees (incentives) for used phone trade-ins through certified operators (Re:Born, Mintit, etc.)."