In brief: Few companies have the power to disrupt an entire industry in one fell swoop. Amazon is one of the few and sources familiar with the company's plans claim the e-commerce giant is working towards that very goal.
Insiders told Bloomberg that Amazon is actively negotiating with major wireless carriers in the US including Verizon, Dish Network, and T-Mobile to lock in the lowest wholesale price on wireless service. Amazon has also reached out to AT&T over the past six to eight weeks, sources said.
Amazon aims to set up shop as a mobile virtual network operator (MVNO) and offer discounted or free phone service to Prime members. Plans could be sold to subscribers for as little as $10 per month, and Amazon might even offer its biggest spenders service for free.
It's a bit of a double-edged sword for carriers. They'd make money up front by inking a deal with Amazon but could see some of their customers jump ship once Amazon's service launches. It's unlikely that carriers could come close to matching Amazon's pricing, and they for sure aren't going to give away their service for free. They might still have an advantage when it comes to new phone promos... but maybe not?
Amazon spokesperson Maggie Sivon threw cold water on the rumor, telling Bloomberg that while they are always exploring ways to add even more benefits for Prime members, they don't have plans to add wireless service at this time. Carriers declined to comment or said they were not actively talking with Amazon.
A Prime membership sells for $139 a year (or $14.99 per month) and grants access to an ever increasing list of perks including free and fast shipping as well as access to Prime Video and Amazon Music. Some analysts believe Prime growth has stalled due to the most recent price hike and other factors including inflation. Bundling in a new perk like cheap or free wireless service could get the ball rolling in the right direction once again and would be far less risky than its Fire Phone gamble.