According to sources familiar with the situation, Bloomberg News reported on Friday that Amazon.com Inc. is in talks with several telecom companies to give low-cost or perhaps free mobile phone service to U.S. Prime users.
According to the article, the big e-commerce company is negotiating with Verizon Communications (NYSE:VZ), T-Mobile US (NASDAQ:TMUS), and Dish Network (NASDAQ:DISH) Corp. to give Prime customers wireless plans for $10 a month or less. Earlier, Amazon (NASDAQ:AMZN) and AT&T Inc (NYSE:T) also held discussions.
Amazon gained 2%, while shares of Verizon, AT&T, and T-Mobile fell by 4% to 7%. Dish Network had a 17% increase. It was rumoured last week that Amazon and Dish were in talks.
Reuters’ inquiries for responses from the aforementioned telecom companies received no response.
In response to a Reuters inquiry, an Amazon representative stated: “We are always exploring adding even more benefits for Prime members, but don’t have plans to add wireless at this time.”
Amazon’s core loyalty programme, Prime, which gives users expedited shipping and video streaming, is seeing a slowdown in new sign-ups while the rumoured talks are taking place.
A resale agreement with Amazon might be a way for telecom operators to increase revenue and draw in new customers. The specifics of any possible agreements between Amazon and the telecom companies were not immediately available.