According to a recent Bloomberg story, Amazon is apparently considering the introduction of a mobile phone service that would offer reasonably priced or maybe free plans to its Prime users in the US. By putting pressure on their pricing power, the measure may unsettle the major firms in the wireless market.
According to media reports citing insiders with knowledge of the situation, Amazon has been in talks with major mobile providers like AT&T, T-Mobile, Verizon, and Dish.
The goal of these negotiations is to reach low wholesale costs that will enable Amazon to provide Prime members with wireless subscriptions for as cheap as $10 per month. Amazon would have the freedom to choose its own prices as a reseller or mobile virtual network operator (MVNO).
The stock prices of Verizon, T-Mobile, and AT&T all fell between 5% and 7% in premarket trading as a result of the report
According to the Bloomberg article, these discussions between Amazon and the carriers have been going on for almost two months and may go on for some time.
The stock prices of Verizon, T-Mobile, and AT&T all fell between 5% and 7% in premarket trading as a result of the report that Amazon would enter the mobile phone service market. Dish, on the other hand, had a 9% increase despite having a smaller market value.
In response to the claim, Amazon said that while it is “always exploring” new advantages for Prime members, it does not currently have any imminent plans to provide wireless services.
Amazon has the potential to upend the market for mobile phone services
According to Consumer Intelligence Research Partners, Amazon Prime, the company’s premium subscription program, had 168 million subscribers by the end of 2022, according to Forbes.
Despite a minor drop from its 170 million subscribers in 2021, Prime is still a powerful player in the e-commerce sector. Amazon has the potential to upend the market for mobile phone services.
Amazon’s anticipated entry into the mobile phone service sector might be a game-changer by providing its sizable Prime subscriber base with affordable options and upending the pricing models of the traditional carriers. Whether these discussions result in an actual Amazon service in the near future, however, is still up in the air.