Amazon is reportedly in talks with a large number of wireless carriers to offer free or low-cost cellular service to its Prime subscribers.
The e-commerce giant allegedly negotiated a deal with Verizon, T-Mobile and Dish Network to get the lowest possible rate for customers.
The revelation sent telecom stocks plummeting Friday morning, with T-Mobile and Verizon falling 8.4 percent and 4.8 percent, respectively. Both airlines denied today that the talks were taking place.
This is reported by sources familiar with the case Bloomberg that negotiations had been going on for six to eight weeks, but that it could take several months to get started if it goes ahead at all.
A deal could mean Prime members can access wireless plans starting at $10 a month or even get them for free.
Amazon is reportedly in talks with a host of wireless carriers to offer free or low-cost cellular service to its Prime subscribers
The revelation sent telecom stocks plummeting Friday morning, with T-Mobile and Verizon falling 8.4 percent and 4.8 percent respectively
An Amazon spokesperson told Dailymail.com: “We are always exploring even more benefits for Prime members, but have no plans to add wireless at this time.”
Amazon Prime costs subscribers $139 a year and offers free delivery, video streaming services and access to 100 million songs.
Data from Consumer Intelligence Research Partners shows that the service has failed to attract new members in recent years.
About 167 million Amazon shoppers have Prime memberships in March — a figure that remains relatively unchanged from a year ago.
This is partly due to the fierce competition in the market and the red-hot inflation that puts pressure on household budgets.
Walmart offers a $98 per year Walmart+ membership for free delivery of groceries over $35.
Meanwhile, Amazon Prime is experiencing competition in the streaming market from Netflix, Disney+ and Apple TV, among others.
A recent Self-Financial survey found that 33.3 percent of U.S. households planned to cancel part of their subscription as a direct result of inflation. The findings showed that Americans were wasting $25 a month on unused subscriptions.
The three major carriers – T-Mobile, AT&T and Verizon – risk seeing their own customers flee to Amazon’s cheaper option
Analysts said Amazon’s move was “troubling” for wireless carriers
Investors reacted quickly to the speculation on Friday. Struggling satellite TV company Dish Network saw its shares rise 24 percent.
The deal could be a coup for the company that has spent years investing in infrastructure upgrades to attract new customers – and racking up large debts in the process.
But the big three carriers — T-Mobile, AT&T and Verizon — risk seeing their own customers flee to Amazon’s cheaper option.
Peter Supino, analyst at Wolfe Research. told Bloomberg, “This is seen as a lifeline for Dish.
Amazon’s entry is “difficult” for the three major airlines. It is clear that the fewer competitors, the better.’
These companies have invested billions of dollars in high-speed, high-capacity 5G wireless networks, but have not seen a significant return on their investment.
It’s not the first time Amazon has strayed into wireless offerings. In 2014, the company introduced the Fire Phone to compete with Apple and Samsung, but it was killed off a year later.
It is also partnering with Project Kuiper to begin testing a satellite Internet service next year.
A Verizon spokesperson said, “Verizon is not negotiating with Amazon to resell 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 representative said it was “interested in working more closely” with Amazon, but added: “We are not in talks about including our wireless connection in Prime service and Amazon has told us they are not have plans to add wireless service.
Dailymail.com also reached out to Dish Network for comment.
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