New lease of life for old handsets

Secondhand mobile phones traded on consensus of buyers, sellers, carriers

By Yoon Ja-young

Old cell phones that were once cast off for newer models are being rediscovered and reborn to be sold for cash. It is a win-win deal for all parties concerned ― sellers, buyers and carriers ― as well as the environment.

Recycling second-hand cell phones is on the rise.

According to SK Telecom, the country’s top mobile carrier, transactions involving used cell phones through its “T ecophone” program have been steeply increasing. There were around 1,500 transactions in October but they soared to 10,000 in November and continued the momentum to reach 14,000 the following month.

“The secondhand phone transaction service went viral thanks to a positive reaction from users. They find the service trustworthy,” said an SK Telecom spokesman.

Those who wish to sell their old phones – but only those released after January 2008 - should take them to a shop or send their handsets to the center through a courier. They can receive up to 300,000 won from SK Telecom.

The secondhand phones are then sold to other consumers looking for cheaper phones, exported or donated to the underprivileged. According to SK Telecom, 95 out of 100 smartphones registered at the T ecophone site are re-sold within one month.

The mobile carrier expects the transactions to surge to around 200,000 to 300,000 next year.

Those who want a used phone can purchase such mobile devices in relatively good conditions at low prices at the T ecophone website. The smartphones registered there are sold at an average 140,000 won.

Protecting the environment

The use of secondhand cell phones contributes to environmental protection.

Koreans are notorious for changing to new phones. They switch handsets every 27 months on average, compared with 94 months in India and 46 months in Japan. As most consumers are sensitive to trends and prefer smartphones with the latest technology, even devices that are only a couple of years old are often upgraded. Only around 2 to 3 million phones were recycled in 2010.

“These phones are usually suitable for use though they may have some scratches. The only problem was that they were not the latest in terms of process capability or screen quality,” the SK spokesman explained.

This not only wastes resources but also contaminates the environment as toxic materials such as lead, cadmium, and arsenic can leak from the handsets. The government ran a campaign to collect old phones but most of them disappeared to unknown locations.

There were some Internet sites dedicated to the exchange of secondhand cell phones but there weren’t many transactions as they lacked a reliable system. Only 23 percent of phones registered at such third-party sites were sold as buyers weren’t confident about quality on top of the huge price gap between those sellers asked and what buyers would pay.

To solve such doubts SK Telecom has its technicians assess the value of the used phones. They test them on around 20 criteria for quality and condition, and grade them “New,” “A,” “B,” or “C” to decide on a price tag the buyers can trust.

Saving marketing costs

SK Telecom collects only minimal fees for each transaction, to sustain the program. However, it is helping the company as well, according to the mobile carrier.

“Around 20 million to 25 million cell phones are sold in the country a year, and this involves high marketing costs for mobile carriers. Consumers who subscribe to the mobile service with secondhand phones don’t require subsidies or involve marketing expenses. We can save here to make more investments,” the spokesman said.

The nation’s three mobile carriers, SK Telecom, KT and LG Uplus, spent 7.5 trillion won on marketing in 2010.

Beginning in April SK plans to expand the program so that buyers can subscribe to the used phones at offline shops as well. KT, which is planning to introduce a used phone program from March, is planning to offer discounts on mobile rates for used phones.

The government is also positive about the recycling of phones. The Korea Communications Commission, the country’s telecom regulator, announced earlier that it would urge mobile carriers to cut mobile rates for those who use secondhand phones.