Amazon reportedly has its eyes on snapping up Sprint’s Boost Mobile — which would give it direct wireless connections with customers to let them instantly buy more products and stream Prime Video and Amazon Music anywhere in the U.S.
The e-commerce giant is mulling a bid for Boost Mobile, the Sprint-owned prepaid virtual mobile operator, Reuters reported, citing anonymous sources. It could make Amazon a player in the U.S. wireless arena, after AT&T, Verizon and T-Mobile/Sprint, the latter of which are trying to get regulatory clearance to merge.
Sprint declined to comment. Reps for Amazon and T-Mobile did not respond to requests for comment.
Earlier this month, T-Mobile and Sprint committed to selling Boost Mobile, which was among additional concessions to ameliorate regulators’ concerns about the $26 billion merger’s anticompetitive impact. The new plan won the approval of FCC Chairman Ajit Pai and other commissioners, but the Department of Justice has balked. The DOJ is insisting that T-Mobile and Sprint “lay the groundwork” to create a strong fourth carrier that would ride on top of the new entity’s network, Bloomberg reported this week — and it’s possible a deal with Amazon might fill the bill.
The prospect of Amazon becoming a new competitor in the wireless space prompted a drop in the stock prices of AT&T (-2.7%) and Verizon (-3.5%) in premarket trading Friday.
According to T-Mobile and Sprint, the companies “have committed that following the closing, New T-Mobile will divest Boost through a market-based process to a serious and credible buyer.” The buyer of Boost will be offered a six-year wholesale MVNO (mobile virtual network operator) agreement that will include wholesale rates “that will meaningfully improve upon the commercial terms reflected in the most favorable of T-Mobile’s and Sprint’s three largest MVNO agreements,” according to a T-Mobile filing with the SEC.
Amazon, in addition to offering smartphone service with Boost Mobile, could potentially integrate wireless connectivity directly into its array of consumer devices, like its Fire TV line and Echo smart speakers.
A deal for Boost could be worth $4.5 billion if it includes wireless spectrum, Wall Street research firm Cowen & Co. estimated.
According to Reuters’ report, Amazon also is interested in acquiring wireless spectrum as part of a deal for Boost Mobile that it could divest. Sprint doesn’t break out the size of the Boost Mobile business. Boost has 7 million-8 million customers, according to Cowen’s estimates.
Amazon has previously been interested in getting into the wireless game: In 2014, it launched its first smartphone — the Fire Phone — which had integrated shopping features and was available exclusively through AT&T. But the device flopped with consumers who weren’t persuaded to switch from their iPhones or other Android-based models.
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