Amazon in talks to introduce ‘Prime wireless’, slashing cell phone bills to $10 or even free

Amazon is reportedly exploring the possibility of launching a mobile phone service that would offer affordable or potentially free plans to its Prime subscribers in US, according to a recent report by Bloomberg. The move could potentially disrupt the dominant players in the wireless industry by exerting pressure on their pricing power.

Media reports citing sources close to the matter revealed that Amazon has been engaged in discussions with major mobile carriers including AT&T, T-Mobile, Verizon, and Dish. 

Also Read | India's electric two-wheeler retail sales hit record high in May 2023

The purpose of these talks is to negotiate low wholesale prices that would allow Amazon to offer wireless plans to Prime members for as little as $10 per month. As a reseller or mobile virtual network operator (MVNO), Amazon would have the flexibility to set its own pricing.

Negotiations ongoing 

These negotiations between Amazon and the carriers have been ongoing for nearly two months and could continue for a while longer, as per the Bloomberg report. 

Also Read | Elon Musk's tweet on #WhatIsAWoman fans Twitter buzz. Here's all you need to know

The news of Amazon potentially entering the mobile phone service market had an immediate impact on the share prices of Verizon, T-Mobile, and AT&T, which experienced declines between 5% and 7% in premarket trading. In contrast, Dish, with its smaller market capitalization, saw a 9% spike.

Amazon reacts 

Amazon responded to the report by stating that it is "always exploring" additional benefits for Prime subscribers but currently does not have immediate plans to add wireless services.

Amazon subscriber base 

Amazon Prime, the company's premium subscription service, had an estimated 168 million subscribers by the end of 2022, according to Consumer Intelligence Research Partners, reported Forbes. 

Watch | Pakistan to begin barter trade with Afghanistan, Iran and Russia

Although Prime experienced a slight decline from its 2021 subscriber count of 170 million, it remains a significant force in the e-commerce industry. 

Amazon can bring disruption into mobile phone service market 

Amazon's potential entry into the mobile phone service market could introduce a disruptive force, offering affordable options to its vast Prime subscriber base and challenging the pricing strategies of the established carriers. However, it remains to be seen whether these talks will materialise into a concrete offering from Amazon in the near future.