Amazon is reportedly in discussions with several wireless carriers, including Verizon, T-Mobile, and Dish Network, to provide low-cost or potentially free unlimited mobile phone service to its Prime members in the United States. This information comes from unnamed sources cited by Bloomberg.
The negotiations, which seem to have been ongoing for the past couple of months, aim to secure the lowest possible wholesale prices for Prime members. While AT&T was initially involved in the discussions, it appears that the carrier is currently not included in the ongoing talks.
Amazon as a Potential Mobile Virtual Network Operator
If the deal materializes, Amazon would essentially become a Mobile Virtual Network Operator (MVNO), leveraging the network of one or more wireless carriers. This would put Amazon in direct competition with several low-cost MVNOs and one of its biggest competitors, Google, which operates its own Google Fi wireless service.
Despite these reports, Amazon has officially denied the claims. A spokesperson is quoted as saying, “We are always exploring adding even more benefits for Prime members, but don't have plans to add wireless at this time.”
Prime Membership Benefits
Amazon Prime, which currently costs $14.99 a month or $139 for an annual subscription, offers a plethora of perks to its members. These include special pricing on products, free two-day shipping on millions of items, access to Amazon Prime Video with a plethora of original streaming TV shows and movies, access to thousands of free ebooks and magazines via Prime Reading, and the ability to listen ad-free to millions of songs on Amazon Music.
Potential Impact for Amazon and Mobile Carriers
The introduction of a “Prime wireless” perk could potentially make the subscription more attractive to consumers. Despite a recent price increase from $119 to $139 annually, Amazon Prime continues to offer good value with its wide range of benefits. The company has dismissed claims that the growth of Prime subscriptions has been stagnating, stating that “Prime membership continues to grow year-over-year—in the U.S. and worldwide—as the value members receive continues to increase.”
While US mobile carriers may be interested in increasing their revenue by partnering with Amazon, they might also be wary of the new competition. The outcome of these negotiations and the potential impact on the wireless carrier market remains to be seen.