While limited supply of devices continues to slow growth for resale markets, operators and regulators have also looked to improving the longevity of devices
The MSIT in South Korea introduces its plan to certify operators selling second-hand devices
On 23 July 2024, the South Korean Ministry of Science and ICT (MSIT) adopted procedures to govern its Second-hand Phone Secure Transaction Certification System. The programme, enacted through amendments to both the Device Distribution Act Enforcement Decree and the Telecommunications Business Act Enforcement Decree, is meant to encourage greater consumer trust in the second-hand device market. Operators seeking to resell second-hand devices would be required to meet a range of consumer protection standards in order to become a certified reseller under the new regulation. The MSIT notes that consumer anxieties related both to selling devices to resellers and buying second-hand devices from resellers were limiting the growth of the market in South Korea. While the MSIT is responsible for writing the certification standards for resellers, the Korea Association for ICT Promotion (KAIT) will be charged with administering the programme and issuing certifications to operators.
The certification programme seeks to protect consumers on both sides of the transaction
The MSIT has noted its desire to serve both sides of the second-hand device market by addressing the concerns of buying and selling consumers through its certification programme. To encourage more consumers to sell their devices, operators will be required to maintain data privacy practices which ensure the complete deletion of the selling consumer’s data. The MSIT will also require operators to report quality and pricing data on second-hand devices to improve transparency for consumers seeking to buy a resold device. Consumers will also be able to request a transaction confirmation certificate through the programme, which will be aimed at protecting consumers purchasing second-hand devices from future malicious reports of false phone theft or loss that could disable a device. Initial operator certifications under the scheme will last five years, and standards for certification will be reviewed every three years to ensure they continue to meet the needs of the evolving market.
Operators around the world note that supply is the primary limiting factor for growth in the second-hand device market
Given the importance of second-hand devices to improving both the sustainability and affordability of mobile phone markets, operators and regulators from around the world are engaged in efforts to grow the device refurbishment and resale market. With only an estimated global device trade-in rate of 5-10%, operators have looked at trade-in based pricing promotions as a tool to improve this ratio, noting that demand for refurbished devices is already strong. Improving incentives for consumers to trade-in or sell later generation 4G and 5G devices is also already understood as central to ensuring that the second-hand market is responsive to 2G and 3G network shutdowns occurring around the world. While the MSIT is one of the first regulators to intervene to support the second-hand market directly, a number of other efforts are underway elsewhere to improve the longevity of digital devices. Right to repair laws passed in the EU as well as a number of US states seek to drive consumer demand for device refurbishment over replacement by requiring greater access to needed parts and longer periods of software maintenance after purchase. The French Government has also refined its sustainability index to include additional information on the robustness, reliability and scalability of a new device at the time of purchase. With growing recognition of the need to reduce e-waste, including that produced by mobile phone turnover, further action from both governments and operators to grow device refurbishment and resale programmes is likely.
