Amazon looking to enter the MVNO space

Amazon is rumored to looking at the possibility of adding phone service for Prime customers. I don’t know if anything will come of it but besides the big three the rumor has Amazon looking at a possible tie up with DISH.

I don’t see how becoming an MVNO makes sense for Amazon. I’m sure Amazon could get excellent wholesale terms from one or more of the national carriers but there would be operating costs beyond those.

Would bundling “free” or cheap wireless service be sufficiently enticing to get more folks to pay $139/month for Prime. Prime already provides attractive secondary benefits for those inclined to use them but most sign up for Prime to get “free” shipping. Amazon is actively experimenting with reducing its cost for “free” shipping: Amazon Is Giving Some Prime Members $10 to Pick up Their Own Orders. Would it be to Amazon’s advantage to encourage more folks to use free shipping by adding a wireless benefit?

@old_engineer, my crystal ball is no better than yours as to whether this latest rumor involving Amazon and wireless service might come to pass. I do think this article offers some worthwhile insight why it might not: Amazon reportedly in talks to sell phone service as part of Prime.

What might be more realistic is Amazon bringing one or more of the national carriers into an already existing Prime benefit program: I don’t see why Amazon would want to deal with directly supporting wireless customers as a loss leader?

Prime’s only function is to get customers to buy more. I don’t see offering a free phone service to subscribers as doing anything to support the goal. Free shipping has a direct correlation to that goal but phones? Your guess is as good as mine.

Where I thought it interesting was the DISH rumor. DISH’s network doesn’t really have national coverage and their roaming agreement relies upon AT&T so what does DISH have that might have some value to Amazon? I couldn’t see any advantage other than an excess of brands but those aren’t worth much without customers to go with them. I agree it makes more sense for Amazon to co-brand a discount service with one of the major suppliers. Discount programs are something many companies have done for their customers over the years allowing the sponsoring company reap the goodwill without the headache of running service.