The largest e-commerce firm in the world Amazon.com Inc is considering purchasing the prepaid cell phone wireless service Boost Mobile which is jointly owned by the United States carriers T-Mobile US Inc and Sprint Corp, according to reports quoting a couple of sources who were privileged with the information.
According to the reports quoting the sources, the fact that the acquisition would give Amazon the chance to make use of the new T-Mobile’s wireless network for at least six years is among the primary reasons that the e-commerce giant is interested in making buying Boost which is currently one of prepaid brands of Sprint. The name to the new entity that will result from their potential merger given by T-Mobile and Sprint is New T-Mobile.
Reports also claimed that any wireless spectrum that could be divested is of interest as a potential purchase for Amazon.
There were no comments available to the reports in the media from Amazon, T-Mobile and Sprint.
There was however no official statement about why Amazon would want the wireless network and spectrum.
The Echo Connect is the name of the product that Amazon had earlier offered to customers thereby gaining experience in offering phone calls. Echo Connect is a product that utilizes the home phone service of an individual and makes use of an Alexa-enabled voice-activated speaker to make phone calls.
Exploring and creating new ventures is nothing new to Amazon because it had started off as a book seller and had in between also ventured into various projects such as creating original TV shows for Amazon Prime members. Another example is the cloud service business in which Amazon is a major players and one of the members of the Big Four technology companies which also includes Alphabet Inc, Apple Inc and Facebook Inc.
As a part of their commitment to reduce their market share and dominance in the prepaid wireless industry in the US and thereby be able to gain approval from anti-trust regulators for their planned $26 billion merger, T-Mobile and Sprint had announced earlier that they would be divesting Boost.
The buyers whoever would have to be scrutinized by the U.S. Justice Department in order to ensure that the divested asset would remain viable and retain competitiveness in the market.
In oer4der to further ensure regulatory approval of the merger, divesting wireless spectrum, or airwaves that carry data, is also being considered by the carriers.
If the merger of T-Mobile and Sprint gets regulatory approval, there would be just three major wireless carriers in the United States instead of four currently. Concerns have been raised by some consumer advocates about the possibility of price hike because of the merger and have asked for one more competitor in the market.
According to reports, up to $3 billion could be generated from the sale of Boost.
According to an estimate by analysts at Cowen earlier this month, there are between 7 million to 8 million customers of Boost and if a deal includes wireless spectrum, or the airwaves that carry data, and facilities, a sale of the business could be valued at $4.5 billion.
(Adapted from Reuters.com)