Amazon is interested in getting into the wireless business. The online retail giant is considering a bid for Sprint’s prepaid business Boost Mobile, according to a report from Reuters that cited unnamed sources.
Sprint is preparing to sell off the prepaid Boost Mobile brand as a condition of its proposed merger with T-Mobile. A handful of companies have already indicated their interest in acquiring the business, including a prepaid wireless firm Q Link, an unnamed private equity firm associated with FreedomPop and Boost Mobile’s founder, Peter Adderton.
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Reuters noted that Amazon is interested in the deal because it would give the retailer access to new T-Mobile’s wireless network for six years. If the merger is approved, Sprint and T-Mobile may also be forced to divest some spectrum assets. According to Reuters’ report, Amazon would also be interested in obtaining licenses for that spectrum should they become available.
News of Amazon’s potential bid caused carrier stocks to drop Friday morning, signalling investor fears that Amazon may be able to use its scale to pose a significant competitive threat.
Amazon’s interest in wireless spectrum and the prepaid business is surprising, though the company has already dabbled in the handset business. In 2014, Amazon unveiled the Fire phone, which was sold exclusively through AT&T for a period of time. The phone performed so badly that Amazon ended up reducing the price from $200 to just 99 cents a few weeks after releasing it. Amazon later took a $170 million write-down on the experiment.
Amazon isn’t the only e-commerce giant interested in wireless. Japan-based Rakuten is building a new mobile network to challenge operators NTT DoCoMo, KDDI, and SoftBank in Japan.