Amazon (NASDAQ:AMZN)
Bloomberg News cites individuals familiar with the subject who say Amazon.com (NASDAQ:AMZN) is in talks with telecom operators about giving cheap or perhaps free countrywide mobile phone service to Prime members. As a result, Amazon’s stock surged.
The article claims that the online retailer has been in negotiations with Verizon Communications, T-Mobile US, and Dish Network (DISH) to get the best possible wholesale rates. That would allow Amazon to provide cellular service to Prime subscribers for as little as $10 per month.
Six to eight weeks of talks have taken place, with AT&T sometimes participating; nevertheless, the source notes that the proposed proposal may take several months to launch or be canceled altogether.
Dish Network was up 22.8% at the market’s midday Friday break, while T-Mobile was down 8.3%, AT&T was down 4.6%, and Verizon was down 4.6%. Amazon’s stock price rose by 1.6%.
Amazon issued a warning on the news, saying that no such arrangements are in place, while T-Mobile issued a similar statement, saying that they were not in discussions to add their service to Prime.
Although Amazon is considering expanding Prime’s perks, a representative stated they “don’t have plans to add wireless at this time.”
Amazon is a terrific partner for T-Mobile in many respects, and the company has shown an interest in collaborating with its neighbor across town in novel ways. But Amazon has assured us that they have no intentions to include wireless service, and we are not in talks with them to include our wireless in Prime.
Some observers claim that Amazon’s Prime membership in the United States has plateaued after the company increased the yearly fee from $119 to $139.
A partnership between the telecom industry and Amazon might increase wholesale income and drive more traffic to the next generation of 5G networks. But if Amazon’s Prime Wireless becomes successful and steals customers from the other carriers, Amazon’s arrival might have a detrimental effect.
Featured Image: Unsplash
