[Reuters Breakingviews] Trump Mobile sends big business a chilling message

By Jennifer Saba

NEW YORK, June 16 (Reuters Breakingviews) - A scary call is coming for CEOs from inside the White House. President Donald Trump’s family holding company unveiled a new cellular service and touted a “Made in USA” smartphone. It will piggyback on AT&T T.N, Verizon Communications VZ.N and T-Mobile US TMUS.O networks for a piece of the $200 billion mobile market. Brazen conflicts of interest abound in a scary new normal for Corporate America.

The Trump Organization, which houses a business empire run by the president’s sons, Donald Jr. and Eric, rolled out its Trump Mobile offering on Monday. The service features unlimited talk, text and data, telehealth benefits and free international calling to more than 100 countries pitched specifically at military bases. The cost is $47.45 per month, evoking Trump’s role as both the 47th and 45th U.S. president. A gold mobile phone due for release in August costs $499, and consumers can plunk down a $100 deposit now.

White House officials say there are no personal and professional clashes to worry about because it is Trump’s offspring who are in charge. Yet the president reported more than $600 million of income last year from cryptocurrencies and other licensing deals using his name on watches, bibles, sneakers and fragrances, according to Reuters. Royalties from other sources such as rice cookers and dinner plates emblazoned with Trump’s face on them are also in the works through deals with Insta Pot and Lenox, Semafor reported.

Realistically speaking, Trump Mobile invites a slew of unseemly controversy. For one thing, telecommunications is a highly regulated industry. The Federal Communications Commission oversees wireless spectrum used to build out 5G networks, and Trump’s relationship with Chairman Brendan Carr is a cozy one. After Carr told satellite mogul Charlie Ergen that his indebted company EchoStar would have to start selling some of its unused spectrum licenses, the president brokered a follow-up meeting last week, according to Bloomberg. EchoStar shares jumped 45% on the news.

The Trump phone service also threatens to put AT&T, Verizon and T-Mobile, with a combined $650 billion of market value, in awkward positions. They will be in business with the president’s children while providing services to the U.S. government. Trump already has seen fit to exert influence over law firms, universities and companies because of diversity initiatives. A branded mobile service goes beyond even those pressure tactics and profiting on wine and snow globes. It sends a very chilling message to big business.

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CONTEXT NEWS

The Trump Organization on June 16 unveiled Trump Mobile, a new cellular plan offering 5G service over networks operated by the three major U.S. carriers, virtual medical care and free international calling to more than 100 countries. Trump Mobile said that in August it would release a “Made in the USA” gold smartphone and is accepting $100 deposits for the $499 device.

The three major U.S. carriers are T-Mobile US, Verizon Communications and AT&T.

The Trump Organization is the main holding company for most of U.S. President Donald Trump’s business ventures. His sons Donald Trump Jr. and Eric Trump oversee it.

U.S. telecom market is worth a mint