Amazon has reportedly been in contact with multiple wireless carriers for the past six to eight weeks as they consider offering low-cost or free phone service to U.S. Prime members.
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Amazon’s Potential Mobile Service for Prime Members: Amazon may soon introduce a new benefit that could help you save a substantial amount of money each month. Amazon has reportedly been in contact with multiple wireless carriers for the past six to eight weeks as they consider offering low-cost or free phone service to U.S. Prime members.
A source with knowledge of the matter told Bloomberg that Amazon has been in discussions with Verizon, T-Mobile, Dish Network, and occasionally AT&T to use their networks to provide wireless services for Prime members for $10 per month (or potentially for free).
However, the launch of Amazon Prime’s rumoured wireless plan could take several months or even be cancelled. Maggie Sivon, a spokesperson for Amazon, told Bloomberg, “We are always exploring adding more benefits for Prime members, but we do not have plans to add wireless at this time.”
Offering Prime members a wireless plan is one way Amazon can retain current subscribers and attract new ones. Last year, the annual cost of a Prime membership increased from $119 to $139, which slowed subscriber growth.
Amazon could combat stagnating subscription rates by making Prime memberships more appealing to consumers through the introduction of a low-cost wireless phone service. In addition, this additional advantage could assist Amazon in competing with similar services on the market. Walmart+, for instance, provides many of the same benefits as a Prime membership, such as free grocery delivery, but at a reduced price ($98).
For wireless carriers, partnering with Amazon could be a double-edged sword. The deal would increase wholesale revenue and attract more traffic to 5G networks, but the profoundly discounted price of Prime wireless could erode the subscriber bases of large carriers.
JDPower told CNBC that the average cell phone bill is $144, and Bloomberg reports that Verizon, T-Mobile, and AT&T’s unlimited plans start at $60 and $65 per month, respectively. Customers would likely terminate their current mobile service in favour of Amazon’s cheaper wireless plan, given the substantial price difference.
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