Korea Post to start used phone business

By Bahk Eun-ji

Korea Post said Friday that it will start buying secondhand cell phones at 220 post offices across the country next month.

The telecom industry showed a mixed reaction to the state-run public company’s plan, as they feel it could trigger unfair competition between private companies and the state entity.

“Korea Post is a state-run public organization, having a nationwide network. Customers will naturally think the national agency is more reliable than private companies,” said Kim Byung-yul, president of TH Global, a company purchasing used cell phones.

Kim said the used phone market has been dominated by small and mid-sized private companies so far, so Korea Post’s plan could mess up this ecosystem.

Korea Post said it will offer a trial service first, similar to its budget phone sale business in response to the decline of its traditional mailing business.

Individual customers who want to sell phones can visit a nearby post office which will pass them on to private companies reselling the phones on consignment.

When individual user bring the used phone to the post office, it will confirm if the phone is lost or stolen first, and then send the user’s information to the consignment company. The company then wires the negotiated price to the seller. It will then resell it after deleting all data on the device.

The post company will receive around 12,000 won commission, and also make a profit while delivering parcels of used phones.

Customers showed a positive response to the postal agency’s new plan, as it could make the used-phone market more transparent.

“There are a lot of on- and off-line stores dealing with used-phones and as a customer, I was confused which I should choose in order not to lose money, because each shop suggested different price for same phone,” said Lee Jae-kun, a 31-year-old office worker in Seoul who sells his used smartphones.

Lee said the market will be more transparent if Korea Post joins the competition.

Korea Post has been endeavoring to streamline its organization in order to counter a prolonged deficit due to decreasing revenue from traditional mail deliveries.

It has diversified its revenue sources by launching postal banking services and sales of budget mobile phones.