The likelihood of Amazon acquiring Boost is high given that it is already building experience in this industry by offering phone calls through its Echo Connect product which allows Alexa-enabled devices to make phone calls.
According to two sources familiar with the matter at hand, Amazon.com Inc is eyeing to acquire Boost Mobile, a prepaid cellphone wireless business, from U.S. carriers T-Mobile US Inc and Sprint Corp.
Amazon is interested mainly because the deal would allow it to use the New T-Mobile’s wireless network for at least six years, said a source. The source went on to add, Amazon would also be interested in any wireless spectrum that could be divested.
New T-Mobile is the name used by T-Mobile and Sprint to refer to the new entity that will result from their potential merger.
Amazon declined to comment.
T-Mobile and Sprint did not immediately respond to requests for comment.
Incidentally, Amazon has already been building experience by offering phone calls through its Echo Connect product, which uses a person’s home phone service and allows an Alexa-enabled voice-activated speaker to make phone calls.
T-Mobile and Sprint have pledged to sell Boost as part of measures to reduce their market share in the prepaid wireless business and gain regulatory approval for their planned $26 billion merger.
The U.S. Justice Department would need to scrutinize the buyer of a divested asset to ensure it would stay viable and preserve competition.
The sale of Boost could fetch up to $3 billion, potential bidders had said previously.
Earlier this month, analysts at Cowen estimated Boost has 7 million to 8 million customers and a transaction could be valued at $4.5 billion if the deal included wireless spectrum.
Sprint has not disclosed the number of Boost customers.