An internal document has been found indicating that KT, while running its used-phone trade-in policy, paid higher incentives to Ribbon, known as the used-phone distribution brand of its subsidiary KT M&S, than to other certified operators. With dealership evaluation metrics also reflecting used-phone trade-in performance, critics say KT headquarters may have leveraged its sales network and incentive system to steer used-phone purchase volume toward its subsidiary.
If this structure operates in the field, concerns are being raised that KT dealerships could be incentivized to prioritize recommending Ribbon trade-ins, which offer separate incentives, over used-phone buyers that present higher prices to consumers. The industry sees this as potentially limiting consumers' opportunity to dispose of their existing devices at better prices.
◇ Extra points for used-phone trade-ins in dealership evaluations… Ribbon pays a flat 30,000 won per device
Internal KT documents obtained by ChosunBiz on the 4th include "Basic operating guide for wireless policies," "Retail dealership infrastructure and sales growth indicators," and "Used-phone safe-transaction operator trade-in policy." The materials explain the criteria by which the KT sales network evaluates device activations, plan retention, value-added service retention, used-phone trade-in performance, and how it pays support funds.
Among the documents, "Retail dealership infrastructure and sales growth indicators" explicitly lists "extra points for used-phone trade-ins" as one of the metrics. It states, "Pay 5P when the store processes an average of three or more trade-ins." This suggests a structure in which used-phone trade-in performance is reflected in dealership evaluations and incentive calculations. It also explains that if 5P is added for used-phone trade-ins, an additional benefit of 1 million won is possible based on 200 wireless-unit sales. The same document presents payout amounts by sales growth indicator grade: 100,000 won per wireless unit for 55P or more, 150,000 won for 65P or more, and 200,000 won for 75P or more.
Another document, "Used-phone safe-transaction operator trade-in policy," records differences in support payments by trade-in method. According to it, Mintit trade-in support is paid per device between 5,000 won and up to 25,000 won depending on the used-phone purchase price and the store's monthly purchase volume. If the purchase price is at least 10,000 won and less than 100,000 won, 5,000 won is paid regardless of the store's monthly purchase volume. If the purchase price is at least 100,000 won 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 at least 200,000 won, stores with three or more monthly purchases receive 25,000 won and those with fewer than three receive 15,000 won. By contrast, Ribbon, KT's subsidiary used-phone brand, is shown to pay a flat 30,000 won per device for trade-ins of used phones priced at 100,000 won or more, regardless of the store's monthly purchase volume.
◇ External average prices are higher for some devices… "Dealership incentives can restrict choice"
A "compensation unit price comparison" table attached to KT's internal briefing materials showed that for some recent devices, other operators' average purchase prices were higher than Ribbon's. For iPhone 16 Pro, Ribbon's purchase price was 820,000 won and the average price of other operators was 840,000 won; for Galaxy S24, Ribbon was 370,000 won and the average of other operators was 410,000 won. For Galaxy S25, Ribbon was 470,000 won and the average of other operators was 490,000 won. However, these were not the unit prices of a specific company but the average of non-certified used-phone safe-transaction operators; the method for calculating the average and the condition standards of the devices could not be confirmed from the document alone.
In the used-phone distribution industry, the transaction is carried out by telecom dealerships connecting customers' existing devices to purchasing companies. Buyers notify retail stores of used-phone market prices daily, and retail stores typically guide customers to the company offering a higher price. However, if a company pays a separate sales commission in this process, used-phone purchases may be concentrated with a specific company. This could limit consumers' chances to sell used phones at higher prices.
If, on top of that, purchases through a subsidiary's used-phone brand also earn dealerships extra points from headquarters, some say it inevitably raises suspicions of steering business to a specific company. A telecom industry official said, "KT dealerships have an incentive to prioritize certified-operator trade-ins to receive headquarters support funds and evaluation points, and in the process, external transaction channels where consumers might get higher purchase prices could be pushed down the list," adding, "It can restrict consumers' chances to get better prices."
◇ Debate over subsidiary support and discriminatory treatment… KT says "no intent to steer business"
Controversy is also expected from a fair-trade perspective. Industry sources say if a telecom company leveraged headquarters policies and its sales network to offer favorable terms to a subsidiary brand, it could escalate into issues of affiliate support, exclusion of competitors, and discriminatory treatment. There are currently more than 40 safe-transaction operators in the used-phone market certified by the Korea Information and Communication Promotion Association (KAIT). Including non-certified operators, the number is estimated in the hundreds.
Shin Hyeon-du, head of the Korea Consumer Association, said, "In a situation where consumers rely solely on dealership explanations for used-phone purchase prices, if KT grants sales incentives and extra evaluation points for purchases through its used-phone subsidiary, the likelihood is high that consumers' chances to sell used phones at the highest price will be limited," adding, "It appears to be an unfair practice that infringes consumer sovereignty."
A KT official said, "Those commission unit prices are set by used-phone operators, and KT dealerships are merely channels where those unit prices are paid, and we understand that there are many models for which Ribbon's used-phone purchase prices are relatively higher," adding, "In support of the government's used-phone safe-transaction operator certification system, we are implementing a policy of paying additional commissions (incentives) for used-phone trade-ins through certified operators (Ribbon, Mintit, etc.)."