New Street: Trump Mobile Unlikely to Threaten Other Carriers
The launch of Trump Mobile as a mobile virtual network operator (see 2506160040) will likely have minimal effect on the wireless industry, New Street’s Blair Levin told investors Monday night. “The Trump Organization’s track record in various consumer product business lines does not suggest that facilities-based carriers or other MVNO’s should feel threatened,” Levin wrote. “We won’t go through all the Trump business enterprises, but its track in consumer offerings is a long record of enterprises that did not, shall we say, have a material impact on the markets they entered.”
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However, Levin said, the Trump Organization's entrance into the MVNO space raises other issues. “There is a track record in the last few months of federal policy in antitrust, trade, and other areas being used to assist the Trump Organization and other Trump-friendly enterprises,” he wrote. In this case, “there is an implicit threat that any carrier who does not provide the Trump Organization the most favorable terms could face regulatory difficulties when attempting to obtain merger approval or some other action by the FCC.”
But John Strand, president of Strand Consult, noted that the large number of Americans who support Trump gives the offering a potential customer base that would rival those of the three major wireless carriers. Just by launching, the Trump MVNO will also likely raise the profile of MVNOs generally, Strand said in an email.
“To put it very simply, there are a lot of people who have tried the MVNO market, but very few who have been successful,” Strand said. “In general, you can say that the vast majority of MVNOs are at some point bought up by the mobile operators that host them.” The price point of service is very similar to what’s offered by the major carriers on their premium brand, he added. “I will not rule out that among Trump's 77 million voters, there is a segment that is willing to pay a premium price for the service they are provided. On the other hand, most Americans, including Donald Trump himself, like a good deal.”