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(Reuters) -The Trump Organization launched a self-branded mobile service and a $499 smartphone on Monday, dubbed Trump Mobile, signaling a new effort to court conservative consumers with a wireless service positioned as an alternative to major telecom providers.
The new mobile venture will include call centers based in the United States and phones made in America, the organization said.
The Trump family, long known for its real estate empire, luxury hotels, and golf resorts, has in recent years ventured into newer arenas including digital media and cryptocurrency.
The Trump Organization, which is the main holding entity for most of the U.S. president’s business ventures, said ahead of Trump’s inauguration that control of the company would be handed to his children, replicating the arrangement from his first term, though concerns about potential conflicts of interest remain.
COMMENTS:
US MEDIA, CABLE AND TELECOM EQUITY RESEARCH, BARCLAYS
"Needless to say, it is quite unprecedented for a sitting president’s name to be attached to a commercial mainstream service that is regulated. None of the telecom companies have formally announced an agreement with the Trump Organization for an MVNO agreement and therefore it is not clear which entity is providing the network.
"However, telecom is a highly regulated industry and the present FCC chair has been politically close to the current administration1 and one of the co-authors of Project 2025, a wish list of administration goals and potential paths to achieving its objectives. This puts telecom companies in a tough position, as it is not clear how much negotiating leverage they really have in this situation, especially given that VZ and AT&T (NYSE:T) are both still in the process of getting deal approvals. This may also result in increased scrutiny at the state level and put operators in a politically sensitive situation. It is also possible that operators have most favored nation (MFN) clauses in their existing MVNO deals – for instance with the cable companies – which could increase risk if favorable terms are extended to the Trump Organization."
GIL LURIA, HEAD OF TECHNOLOGY RESEARCH, D.A. DAVIDSON & CO, PORTLAND:
"The new wireless plan and handset announcement is the latest attempt by the Trump organization to capitalize on the President’s popularity, much like Truth Social, the DJT stock listing and crypto endeavors."
LAWRENCE LESSIG, LAW PROFESSOR, HARVARD
"No one who has been paying attention could miss that President Trump considers the presidency a vehicle to grow his family’s wealth. Maybe this example will help more come to see this undeniable truth."
PAOLO PESCATORE, TMT ANALYST, PP FORESIGHT
"This latest move raises more questions than answers. As always the devil is in the detail given that it is unclear around the actual commercial relationship with the telecom players and so forth.
"Inevitably as seen to date, we should expect to see backlash from a slew of stakeholders.
"All parties will be keeping a close eye on how this evolves."
BRIAN MULBERRY, CLIENT PORTFOLIO MANAGER, ZACKS INVESTMENT MANAGEMENT
"Its pointed at Apple (NASDAQ:AAPL), that’s a really big downward price pressure on what Apple’s trying to do."
"There’s been kind of an opening for this type of device, if you will, simply because not just Apple, but Samsung (KS:005930) devices to a certain extent as well, have really gotten so expensive in the moment in time and we haven’t really seen that big of a measurable increase in utility."
"Most of the apps that you can download on a smartphone are just like super search kind of functions, if you will. So having that same functionality at half the price, there’s a market out there for that."
"I think it’s going to get probably some extra attention just because it has Trump’s name on it but I think the marketplace has been ripe for this type of competition."
"Competition is always good for consumers and that benefits markets in general. It’s going to drive people to be more productive and compete more for consumers’ dollars."
DAVID WAGNER, HEAD OF EQUITIES, APTUS CAPITAL ADVISORS, CINCINNATI, OHIO
"I don’t see much impact from Trump mobile across the industry, as half of it’s addressable market is negated by political parties, and then from there, this industry already has a lot of stickiness to current providers. These companies need scale to work, and we’ll see if the company can execute on the most important thing - consistency of network."