Bloomberg reported that Amazon is considering offering low-cost mobile service to its Prime subscribers. The news sent telecom stocks tumbling in early trading on June 2. Verizon shares fell more than 4%, T-Mobile fell 7%, AT&T fell more than 5%, but Dish rose more than 14%.
According to Bloomberg , the retail giant wants to sell Verizon, T-Mobile, and Dish services to Prime members at a lower price, or even for free. Talks have been ongoing for about six to eight weeks, including AT&T, but it could take months before the plan is finalized.
Still, an Amazon spokesperson said the company is always looking for ways to bring more benefits to Prime members but has no plans to add mobile service at this time.
Amazon previously tried its hand at mobile with the ill-fated Fire Phone, which was launched in July 2014 and discontinued a year later. More recently, the company has focused on high-speed Internet through its Kuiper program, which aims to build a network of 3,236 satellites in low Earth orbit.
A mobile plan would help Amazon attract more Prime subscribers. Launched in 2005, Amazon Prime charges $139 a year in exchange for benefits like free two-day shipping, access to exclusive shows and movies, Grubhub delivery privileges, and more.
The company is facing fierce competition from Walmart’s Walmart+ loyalty program, while user growth has also slowed. As of April 2021, there were more than 200 million Prime users.
By partnering with a carrier like Verizon or Dish, Amazon essentially acts as a virtual private network (MVN) operator. Instead of owning its own mobile network, it buys data from a larger carrier and resells it to customers.
(According to CNBC)
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