A Prime wireless service could undercut the national MNOs, but might boost Boost
Rumors surfaced late last week that the U.S. national wireless network operators were in talks with Amazon on a deal that would establish a wireless service for Prime subscribers at an ultra-low price point.
A Bloomberg story reported that Amazon was exploring the possibility of offering wireless service as a loyalty perk for Prime subscribers and that it might be free or as low as $10 per month, citing anonymous sources familiar with the matter. The story said that Amazon has been in talks with Verizon, T-Mobile US and Dish Wireless for weeks, and that AT&T has been involved at times as well as Amazon seeks the lowest possible wholesale pricing. However, one source indicated that the plan could several more months to launch and/or might never come to fruition.
The established wireless carriers’ stocks dropped a few percent on Friday on that news, given that a cheap Prime wireless service could mean a mass exodus of wireless subscribers. Dish’s stock rose on the news, however, because a deal with Amazon would boost the company as it transitions from an MVNO to a facilities-based operator with plenty of spectrum, but not so much in the way of a robust retail customer base.
T-Mobile US, Verizon and AT&T subsequently denied to Reuters that they are in such talks with Amazon; Dish did not respond to requests for comment. Amazon itself also denied that it was involved in such negotiations.
“We are always exploring adding even more benefits for Prime members, but don’t have plans to add wireless at this time,” said Bradley Mattinger, an Amazon spokesperson.
“Amazon is a great partner to T-Mobile in many areas, and we are always interested in working more closely with our cross-town neighbors in new ways,” said a T-Mo spokesperson when contacted by RCR Wireless News. “However, 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.”
“AT&T is not in discussions with Amazon to resell wireless services,” said an AT&T spokesperson in a statement provided to RCR Wireless News. (RCR has also reached out to Verizon and Dish Wireless and will update this story accordingly.)
Dish is on the cusp of reaching a mandatory coverage milestone and has said that it is on track to meet the build-out requirements from the Federal Communications Commission, in which it must make 5G service accessible to 70% of the U.S. population by June 30. Chairman Charlie Ergen also mentioned Amazon Web Services on Dish’s most recent quarterly call—but it was in the context of Dish potentially making available its spectrum on a wholesale basis to some of its network partners (of which AWS is one) as a means to serve the enterprise market with private networks.
Specifically, Ergen said that as capital-constrained Dish looks at opportunities beyond the consumer market that would be light on additional capex, one of the options is an approach in which “some of our partners in our build … Cisco or Dell or AWS come to mind, where they already have a big enterprise business that they just add our spectrum into their thinking about how they would design private networks.
“At that point, we would be more of a wholesale provider of spectrum,” he added.
Ergen and other execs also said on the quarterly call that Dish has been largely focused on its build-out in order to meet the FCC coverage deadline and that it will be ramping up marketing and distribution of its Boost Infinite product later this year as it focuses on expanding to the postpaid market.
This story has been updated with a statement from Amazon.
