What would Amazon do with Boost Mobile?
Amazon.com is exploring an acquisition of Boost Mobile, Sprint’s low-cost, prepaid carrier, as well as any wireless spectrum (or airwaves that carry data) that may become available as a result of the Sprint and T-Mobile merger, according to Reuters.
Sprint is selling Boost as a regulatory condition included in the mega-merger of the third and fourth largest telecoms, behind AT&T and Verizon.
Amazon is interested in the acquisition because Boost would provide access to the wireless network of the new T-Mobile for at least six years, sources told Reuters. That fact has still left observers wondering exactly why.
With Boost Mobile, Amazon would become an MVNO (Mobile Virtual Network Operator), just like Google. Amazon-tailored cellphone plans could be bundled with the mobile phones it already sells to include deals extending to Prime subscribers. Amazon’s internet-connected hardware devices may benefit from better coverage.
Amazon could also spend six years renting bandwidth as it builds out its own network. The Department of Justice is hoping for a new wireless carrier to emerge to avoid the number of carriers dwindling to three.
Much like its logistics investments are seen reducing its reliance on FedEx and UPS, more control of internet connectivity could support everything from Echo devices to FireTV, Prime Video, a new Amazon smartphone and potentially delivery drones.
“Owning its own wireless network, especially if Amazon had its own chunk of spectrum and network infrastructure instead of relying entirely on T-Mobile, would give Amazon another way to reach customers directly,” wrote Klint Finley for Wired. With the FCC ending net neutrality, Amazon’s own network “could prioritize its own services over those of its rivals.”
“The U.S. wireless industry is a very large and inefficient market,” wrote Timothy Horan, an analyst at Oppenheimer, in a note. “We think this is a perfect market for Amazon to enter and to be disruptive.”
Naysayers to Amazon’s telecom entry cite the exorbitant costs in equipment, wireless spectrum and cell towers that would be required. Veteran telecom analyst Craig Moffett of MoffettNathanson, added in a note, “Would Amazon really want to open itself to the regulatory scrutiny and limitations that come with being a telecom provider?”
- Exclusive: Amazon interested in buying Boost from T-Mobile, Sprint – sources – Reuters
- What Amazon Might Want With Boost Mobile – Wired
- Report: Amazon is interested in buying Boost Mobile from Sprint and T-Mobile – Fast Company
- Amazon cell service? Company reportedly interested in buying Boost Mobile – Ars Technica
- Amazon as a wireless carrier? Company reportedly wants to buy Boost Mobile from T-Mobile and Sprint – Geekwire
- Are You Ready for Amazon or Comcast to Be the Next Big Wireless Carrier? – Gizmodo
- Amazon Possibly Buying Boost From Sprint and T-Mobile Is Confounding the Mobile Industry – Fortune
- What if Amazon took Sprint’s place as the US’s fourth wireless carrier? – The Verge
DISCUSSION QUESTIONS: Does it make sense for Amazon to acquire Boost Mobile and/or launch its own wireless network? Would you encourage a move by Amazon into telecom?