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The pending $26 billion T-Mobile-Sprint merger has been through a regulatory roller-coaster, but Amazon may save the day, according to Reuters.
After the FCC chairman endorsed the merger, the Department of Justice recommended that the carriers make concessions for the merger to gain approval: They should sell off their prepaid businesses and lay the groundwork for a fourth wireless carrier to emerge.
Here’s where Amazon comes in:
It’s considering buying Boost Mobile from Sprint. While it’s not confirmed why Amazon is interested in operating its own MVNO, the purchase would give it access to New T-Mobile’s wireless network to bolster its service for at least six years. And it may want to follow Google’s lead: The firm is already in the space with its Fi MVNO service.
Reuters/Gus Ruelas
Boost Mobile is the more successful of Sprint’s prepaid mobile businesses, as it was the carrier’s only prepaid brand to add new customers in 2018. What’s more, Boost Mobile added nearly as many customers as Sprint did — Boost Mobile delivered nearly 600,000 net additions in its fiscal 2018 (ended March 31, 2019), while Sprint added 710,000 net postpaid additions in the same period.
Amazon’s also weighing buying divested spectrum from T-Mobile and Sprint. This would pave the way for Amazon to become the industry’s fourth major carrier. It wouldn’t be Amazon’s first foray into the space: It was in talks to buy wireless internet provider Dish in 2017, it announced the acquisition of home mesh Wi-Fi provider eero in March, and it revealed Project Kuiper, a broadband internet distribution strategy that requires the launch of more than 3,000 satellites into Low Earth orbit, in April.
What it means for Amazon:
We believe entering the mobile industry is a play to recruit more users into its ecosystem and better service its offerings. Amazon could offer discounts to its Prime subscribers who sign up for one of its potential mobile services.
It’s already used a similar tactic with its grocery chain, Whole Foods — where Prime subscribers qualify for discounts on Whole Foods’ purchases — and its partnership with Lenovo to offer an Amazon Prime exclusive version of the Moto Z3 Play. This could, in turn, increase Prime memberships, as it’s likely that not all Boost Mobile users are Prime members. Additionally, Amazon can leverage the mobile spectrum to eventually provide connectivity to its Alexa-enabled devices.
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See Also:
- MediaTek’s new 5G SoC opens the door for cheaper 5G devices
- iRobot has unveiled new in-home cleaning robots with improved features
- Apple’s iPod touch revival is the company’s most immediate solution to diversifying revenue
Source: Business Insider – feedback@businessinsider.com (George Paul)