Breaking News: Amazon Reportedly Considering Low-Cost or Free Mobile Service for Prime Customers
According to a recent report from Bloomberg, Amazon is delving into the possibility of offering low-cost or even free nationwide mobile phone service to its Prime subscribers in the United States.
This strategic move aims to enhance customer loyalty among Prime subscribers by integrating mobile service into the existing bundle of benefits.
To accomplish this, Amazon has allegedly engaged in discussions with major wireless carriers such as Verizon, T-Mobile, Dish Network, and AT&T.
Insiders familiar with the matter have revealed that Amazon is considering offering wireless plans priced at $10 per month or potentially making them completely free.
This innovative approach aims to discourage Prime subscribers from cancelling and re-joining the service whenever they desire, effectively incentivizing long-term subscription commitments.
While talks between Amazon and the wireless carriers have been ongoing for approximately two months, it remains uncertain whether Amazon will ultimately proceed with launching the mobile service or abandon the plan altogether.
In response to inquiries, Amazon spokesperson Bradley Mattinger refuted the claims, stating that there are currently no plans to incorporate wireless services into Prime. However, Mattinger did acknowledge the company’s continuous exploration of additional benefits for Prime members.
Following the publication of Bloomberg’s report, shares of Verizon, AT&T, and T-Mobile experienced declines during premarket trading on Friday. Verizon’s stock fell by 5%, AT&T’s shares dropped by 5.9%, and T-Mobile’s shares witnessed a decline of 6.8%.
Currently, a Prime subscription offers various benefits, including fast and free delivery, access to Prime Video, and a library of over 100 million songs. Bloomberg’s report coincides with analysts’ observations that Prime membership growth has plateaued since Amazon raised the annual subscription fee from $119 to $139.
Amazon is facing intensified competition from Walmart and its Walmart+ membership, which is priced at $98 per year and offers similar expedited delivery advantages at a lower cost.
Additionally, Walmart+ includes a subscription to Paramount+, a direct competitor to Amazon’s Prime Video. In February, Amazon initiated a change by imposing delivery fees on Fresh grocery orders under $150, departing from its previous policy of providing free grocery deliveries to Prime members for orders exceeding $35.
The report highlights that while Amazon would compensate wireless carriers for utilizing their networks, these carriers stand to potentially lose customers if Amazon proceeds with offering low-cost or free mobile service.
Nevertheless, Bloomberg emphasizes that the carriers may find it challenging to decline Amazon’s proposition due to their substantial investments in 5G networks. Exploring new avenues for generating returns on these significant investments has become a priority for wireless carriers.
If Amazon decides to move forward with this prospective venture, it wouldn’t be their first involvement in the wireless industry. The company plans to commence testing its satellite internet service, named Project Kuiper, next year.
Additionally, Amazon had previously released the Fire Phone in 2014, priced at $199, but ultimately discontinued the product approximately a year later.
It is noteworthy that Google already operates a wireless network called Google Fi Wireless, functioning as a mobile virtual network operator utilizing T-Mobile’s network infrastructure.