Telecom stocks sink as Amazon believes in establishing mobile service for Prime fellows

June 5, 2023: Amazon is in talks with several wireless pages about establishing a mobile service for Prime fellows, according to a report from Bloomberg.

The news sent shares of telecom stocks lower on Friday. Verizon decrease more than 4% in early trading, while T-Mobile slid over 8%. AT&T’s inventory was down more than 4%. Dish shares surged more than 23%.

Bloomberg reported that the e-retailer is negotiating with Verizon, T-Mobile, and Dish about reselling their mobile services to its Prime fellows at low cost or potentially free. According to the document, the discussions have been going on for six to eight weeks, including AT&T, but it could be several more months before a plan materializes.

“We are always exploring adding even more benefits for Prime members, but don’t include plans to add wireless at this time,” Amazon spokesperson Bradley Mattinger said in a statement.

A T-Mobile spokesperson said, “Amazon is a great partner to T-Mobile in many areas, and we are still interested in working more closely with our cross-town neighbors in new ways. However, we are not discussing the inclusion of our wireless in Prime service, and Amazon has told us they have no plans to add wireless service.”

Amazon has yet to experiment in the mobile category, launching its ill-fated Fire Phone in July 2014 before scrapping it a year later. More recently, it has focused on high-speed internet through its Kuiper program, which aims to develop a network of 3,236 satellites in lesser Earth orbit.

A mobile plan could be an attractive hook for Amazon to attract more Prime subscribers. Launched in 2005, Amazon Prime members pay $139 a year for access to free two-day shipping, exclusive movies and TV shows, and newer benefits like generic prescription discounts and Grubhub delivery perks.

Amazon has been examining ways to attract more Prime members as it faces growing competition with Walmart’s Walmart+ loyalty program and concerns about slowing membership growth. The company had over 200 million subscribers worldwide as of April 2021.

Amazon would function as a mobile virtual network operator by partnering with a company like Verizon or Dish. Instead of owning its wireless network, the company would purchase data from a large carrier and resell it to consumers.

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Telecom stocks sink as Amazon believes in establishing mobile service for Prime fellows