Could Amazon Become a National Brand in the Wireless Industry? New Rumors Spark Discussion

Amazon (NASDAQ: AMZN) is supposedly in discussions with wireless carriers to offer low-cost or even free nationwide wireless phone service to its Prime members. However, according to the e-commerce giant, such plans are merely that: a rumour, and nothing more.

According to Bloomberg which cited people familiar with the situation, Amazon has reportedly been in discussions with Verizon Communications Inc., T-Mobile US Inc., and Dish Network Corp. to secure low wholesale prices— even as low as $10 per month— in an effort to entice increased loyalty among its big spending customers. The talks have reportedly been underway for six to eight weeks, involving AT&T Inc. at times, but the initiative may take several more months to be operational, if it gets off the ground at all.

However, an Amazon spokesperson was quick to quell the rumours, explaining that a nation-wide phone service isn’t currently on the horizon. “We are always exploring adding even more benefits for Prime members, but don’t have plans to add wireless at this time,” Maggie Sivson said in a statement, as cited by Bloomberg. Whether the rumours are true or not, though, this isn’t the first time that Amazon has ventured into the wireless sector. In 2014, Amazon launched the Fire Phone, but it was discontinued a year later.

Amazon Prime users in the US currently pay $139 per year for services such as fast free delivery, video streaming, and access to a vast music library. Despite these perks, Prime membership has stalled after Amazon increased the annual price from $119. Still, the Seattle-based retail giant has demonstrated its willingness to absorb billions of dollars in costs to boost Prime membership growth. The mobile operators, having invested billions into 5G networks, are ambitiously looking for new applications and sales outlets that could yield a return on investment.

Amazon last traded at $125.09 on the NASDAQ.

Information for this briefing was found via Bloomberg and Reuters. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.