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According to a recent report, there are discussions suggesting that Amazon might be considering the possibility of offering low-cost or potentially free nationwide mobile phone service to its Prime subscribers in the United States. The tech giant is said to be in talks with major wireless carriers such as Verizon, T-Mobile, Dish Network, and AT&T.
Insiders familiar with the matter informed that Amazon is contemplating providing wireless plans for as low as $10 per month or even free, as a strategic move to enhance customer loyalty among its Prime subscribers. Currently, some individuals cancel their Prime membership and then rejoin when they need to. However, if Amazon were to include mobile service as part of the Prime bundle, it would likely encourage subscribers to remain with the service for a longer duration.
According to the report, these discussions have been ongoing for approximately two months. It is possible that it may take several more months for Amazon to launch the service, or the plan could be abandoned altogether.
In response to the report, Amazon spokesperson Bradley Mattinger denied any plans of adding mobile service to Prime, stating in a statement to TechCrunch, “We are always exploring adding even more benefits for Prime members, but don’t have plans to add wireless at this time.”
Following the publication of the report, shares of Verizon, AT&T, and T-Mobile experienced a decline in premarket trading on Friday. Verizon’s stock fell by 5%, while shares of AT&T and T-Mobile dropped by 5.9% and 6.8%, respectively.
Both Verizon and T-Mobile have stated that they are not engaged in discussions with Amazon regarding the reported plans. AT&T declined to comment on the matter.
Verizon’s spokesperson conveyed to TechCrunch, “Verizon is not in negotiations with Amazon regarding the resale of the nation’s best and most reliable wireless network. Our company is always open to new and potential opportunities, but we have nothing to report at this time.”
A T-Mobile spokesperson mentioned, “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. 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.”
A Prime subscription presently offers fast and free delivery, access to Prime Video, and a library of 100 million songs. The report arrives at a time when analysts have observed a stagnation in Prime membership since Amazon raised the annual fee from $119 to $139.
Amazon is facing growing competition from Walmart and its Walmart+ membership, which offers similar fast delivery benefits as Prime at a lower cost of $98 annually. Additionally, Walmart+ includes a subscription to Paramount+, a competitor to Prime Video. In February, Amazon introduced delivery fees for Fresh grocery orders below $150. Previously, Prime members enjoyed free grocery deliveries on orders over $35.
The report highlights that while Amazon would pay wireless carriers to utilize their networks, the carriers themselves potentially stand to lose customers if Amazon does enter the market with low-cost or free mobile service. Nevertheless, they suggests that the carriers might not be in a position to decline Amazon’s proposal, considering their significant investments in 5G networks and their search for new sales outlets to recoup their substantial investments.
This potential move into the mobile service industry would not be Amazon’s first endeavor. The company plans to commence testing its satellite-internet service, Project Kuiper, next year. Moreover, in 2014, Amazon released the Fire Phone, priced at $199, but discontinued it approximately a year later.
It is worth noting that Google already operates a wireless network called Google Fi Wireless, which functions as a mobile virtual network operator utilizing T-Mobile’s network infrastructure.