Trump’s plans for mobile. Bat Sh*t crazy or great business sense?
The internet has been alive with the latest story about Trump launching a gold phone and his all american network. He’s using the MVNO model and it’s prompted questions from journalists about why anyone would launch their own network. Why put your name to it? Atlantic asked me this very question and you can read my thoughts here. I was conflicted about whether to comment at all.
It’s a polarising subject so the analysis that follows takes a view of how a celebrity or business person can use existing brand value and assets to access the world of mobile.For those reasons it’s the MVNO we didn’t expect, but makes perfect sense.
If you look around the world, celebrities, YouTube stars, football clubs are all moving into the MVNO space. It makes better commercial sense for those people who have become a brand in their own right because launching a beauty range or a vodka relies on repeat purchase. Mobile contracts provide a recurring revenue.
Most recently, Jason Bateman, Sean Hayes, and Will Arnett of the Smartless Podcast announced their MVNO, to significantly less fanfare. They’ve followed in the footsteps of Ryan Reynolds who was involved in Mint. Mint was acquired by T-Mobile for $1.35bn in May 2024. This alone shows you the draw to getting involved in the industry.
From a business perspective, when I was assessing potential MVNO partners in my wholesale days at Vodafone, we always looked for organisations that had customer access, a well-known brand, distribution and points of differentiation.
Taking that into account, celebrities score well and so would a businessman with a big following. In this case, Trump has lots of assets to work with. The Truth social platform provides a captive audience and his other businesses provide intel on customer behaviour.
It’s also worth looking at the bigger picture. The path of celebrities using their brand to create a product is well trodden. There have been many celebrity fragrances, alcoholic and energy drinks, clothing labels and so on. All of them can be classed as brand licencing deals.
As I understand it, licencing for Trump Corp has done well – $10m from bibles, watches, and sneakers (that’s trainers to us Europeans) and bigger money (some $30m) through hotel licencing in Dubai, India and Vietnam. Mobile isn’t such a big leap in this context.
The appeal of mobile for any brand or celebrity is that if it is done correctly it generates a monthly recurring revenue, and that will likely drive more long term value than trainers or perfume.
I suspect some of the appetite has come from watching Mint’s success. Although Mint wasn’t specifically focused on fans of Ryan Reynolds, his involvement certainly drove up awareness and added some star quality. When Mint sold to T-Mobile, Ryan Reynolds allegedly made $300m. That alone gives a celebrity 300m reasons to get involved in MVNOs.
More broadly, if we look at market conditions in the US, there is substantial growth expected in MVNO. It’s forecasted to take another 5% US market share by 2029. The total market is expected to reach 459m subscribers by 2029, so this helps you understand the scale and growth potential of even 1% let alone 5%.
But this isn’t just a US trend. There have been pushes into mobile by social media influencers, football clubs and many more brands across Europe and beyond. I bet that we will see more online personality brands join the telecoms market soon, for exactly the reasons outlined above.
However, nothing is guaranteed. Having a brand is a big help in terms of driving awareness and reaching a captive audience. But your offer still needs to be materially different to anything else. Otherwise it won’t get traction.
If you solve a need that other carriers can’t or deliver an enhanced brand experience (as Revolut and countless fintechs have recently) then you will be on the upward curve. Barça Mobile is a great example of a brand that’s intent on giving fans access to exclusives and experiences they can’t get on another network.
Not all the details about what you’ll get on 47 Mobile are public, or even clear – the claim of an all American smartphone has prompted queries in the press. But telemedicine and concierge type services have been mentioned. With so many businesses in its stable, Trump Corp will be able to enhance the offer in lots of surprising ways.
I think the real story is who will be next? Who will be motivated to seize on the opportunity of MVNO? It might be someone you and I have never heard of, but your kids have. Leads me to close by saying Watch Out World – more wealthy baseball-cap-wearing giants could be coming our way.
If you’d like to make a ‘mint’ from your MVNO idea then Graystone Strategy can help you assess the potential and develop the strategy to make it s success.
