Amazon could be considering buying Boost Mobile – and a wireless network – from T-Mobile and Sprint.
The online marketplace is interested in buying Boost from the two carriers given that the deal will allow Amazon to use the new T-Mobile’s wireless network for at least six years, Reuters reported. New T-Mobile is the name used to refer to the outcome of a potential merger between T-Mobile and Sprint.
Boost is a prepaid brand owned and operated by Sprint with an estimated seven to eight million customers.
Purchasing Boost could cost Amazon up to three billion dollars in exchange for six years of access to the new T-Mobile’s wireless network and potentially any other wireless spectrum that the new T-Mobile may be willing to divest.
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T-Mobile and Sprint have pledged to sell Boost regardless in order to reduce their market share in the prepaid wireless business and to be granted regulatory approval for the merger. If approved, the merger will knock the country’s four wireless carrier count down to just three which may tempt networks to raise prices due to a lack of competition.
The US Justice Department actually wants T-Mobile to lay the groundwork for a fourth wireless carrier as a condition for the merger to pass in order to prevent these costs for consumers from rising.
If the deal goes through, Amazon will subsequently be under scrutiny from the Justice Department to ensure that the asset stays viable and to preserve competition between carriers.
It is not entirely clear why Amazon is looking to source access to a wireless network now. The largely disappointing Amazon Fire Phone launched as an AT&T exclusive in the US in 2014 and lasted only a year before being discontinued.
One theory is that the company is planning to give smartphones another shot on a network of its own in the US. An EU ruling late last year would also make it significantly easier for Amazon to sell Android devices in Europe without requiring Google’s buy-in.
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Amazon currently offers phone call capabilities through its Echo Connect. This allows your voice-activated smart speaker to make phone calls using your home phone service. Having access to its own wireless spectrum might encourage Amazon to go further down this route with its products in the future.
Whatever its reason, Amazon could soon have its sights set on replacing Sprint as one of the big four carriers in the US.