Apparently Amazon Might Be Launching Its Own Mobile Network and the Telecoms Market Freaked Out
Key takeaways
- Amazon allegedly in talks with Verizon, T-Mobile and Dish to deliver low-cost or free mobile network to Prime members
- Verizon and T-Mobile stocks dipped at the news, while Dish soared 18%
- Amazon issued a statement saying it’s not planning on moving into the wireless network business
Everyone knows Amazon has its fingers in many pies, but its latest move could be into having its own mobile network for Prime members. The telecoms industry saw its share prices dive as a result, even though the plans are supposedly months from being final. Here’s the full lowdown.
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What’s Amazon planning in the telecoms space?
Amazon, which is primarily known for its online shopping business, is said to be in talks with several telecom companies, including Dish, Verizon and T-Mobile, to resell their mobile services via its Prime membership. The talks are said to have been ongoing for a couple of months.
Amazon previously tried to launch its own mobile phone, the Fire Phone, in 2013 before scrapping it just a year later. It also has a high-speed internet division in a bid to rival Elon Musk’s Starlink satellite venture, but this would mark the Big Tech titan’s first foray into mobile networks.
The market reaction
Everyone involved denied any involvement and Amazon put out a statement saying it wasn’t moving into the wireless business, but it wasn’t a good day for Amazon’s new potential rivals. Verizon and AT&T both dropped by 3%, while T-Mobile suffered a 7% slide in its share price. Troubled telecoms company Dish, however, saw a big 15% lift in its stock.
But if the talks are true, it’s an exciting offering for Amazon to provide to its Prime customers, which could boost investor interest. A low-cost or even free mobile service would inevitably result in more subscribers, so traders will watch closely to see if any other rumors appear on the grapevine.
The bottom line
It wouldn’t be so crazy for Amazon, which is facing stiff competition from retailers like Walmart and dwindling membership rates, to introduce a swish new perk for its customers. We’d imagine investors would appreciate the uptick in Prime customers on Amazon’s balance sheet, so it’s unlikely we’ve heard the last of this potential new venture.
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