By Hope King
Shares of major telecoms reacted after a Bloomberg report suggested Amazon is talking to the wireless carriers about entering the mobile market as a reseller to boost Prime membership perks.
What they’re saying: “We are always exploring adding even more benefits for Prime members, but don’t have plans to add wireless at this time,” an Amazon spokesperson, Bradley Mattinger tells Axios in a statement.
Catch up quick: The report said Amazon is negotiating with Verizon, T-Mobile and Dish about possibly reselling their mobile services at a low cost, or even potentially offering free plans, to Prime subscribers.
The talks reportedly involve Amazon becoming a mobile virtual network operator, which means it could pay for use of an existing telecom’s mobile infrastructure network to launch its own plans.
The intrigue: Such a deal could be enticing for a telecom to consider, as Amazon would pay wholesale rates in exchange for bulk access to a provider’s network services. That’s dependable revenue.
But it could also ignite a price war, or lead to customers leaving their current carriers to sign up for Amazon plans.
Of note: Verizon Communications shares closed down 3.2 per cent, while T-Mobile fell 5.6 per cent.
Dish shares closed up 16.2 per cent, as investors viewed a potential deal as a boon for the company as it tries to scale up in the space.
What others are saying: “We are not in discussions about inclusion of our wireless in Prime service, and Amazon has told us they have no plans to add wireless service,” T-Mobile said in a statement. Verizon and AT&T issued similar statements.
The big picture: Amazon’s Prime membership is facing growing competition from Walmart’s subscription loyalty service, Walmart+.
