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Amazon unlikely to launch wireless service for Prime users soon - CFRA Research

Published 08/06/2023, 12:14
© Reuters.

Investing.com -- Amazon (NASDAQ:AMZN) is unlikely to pursue a potential deal to offer steeply discounted, or even free, mobile services to its Prime members in the near term, analysts at CFRA Research have argued.

According to a Bloomberg report last week, Amazon has been in discussions with a number of mobile carriers -- including Verizon (NYSE:VZ), T-Mobile (NASDAQ:TMUS), AT&T (NYSE:T), and Dish Network (NASDAQ:DISH) -- over possibly offering Prime users nationwide wireless plans for $10 a month or lower. The talks have been ongoing for six to eight weeks, with Amazon keen to secure the lowest possible wholesale prices, the Bloomberg report said.

Verizon and T-Mobile, as well as AT&T, denied any negotiations were underway, Reuters said, while Dish did not provide a comment to the news agency.

In a note, the CFRA analysts said that the e-commerce giant is currently focused on boosting its retail margins, particularly as growth at its key cloud-computing division Amazon Web Services shows signs of flagging.

Amazon may subsequently be dissuaded from spending heavily on subsidizing wireless phone plans for Prime members at the current moment, they added.

Meanwhile, the deal could see wireless carriers lose direct access to customers, which may outweigh the amount of indirect consumers they gain from Amazon, the analysts said.

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