According to an exclusive report by Reuters, multiple sources close to the negotiations have confirmed that Amazon is currently interested in purchasing Boost Mobile from T-Mobile U.S. Inc. and Sprint Corp.
One source confirms if the deal goes through, Amazon would gain access to T-Mobile’s new wireless network for a minimum of six years.
Unfortunately, Reuters was unable to track down any information regarding why Amazon was looking into making a deal with T-Mobile and Sprint, as the retail giant declined to comment on the details and the two cell phone companies have yet to respond to the request for more information.
Both T-Mobile and Sprint have previously confirmed plans to sell Boost Mobile to assist in their plans to reduce their stakes in the prepaid wireless business market.
Reuters believes that these moves are all part of Sprint and T-Mobile’s plans to gain regulatory approval for the two companies to join into one as part of a $26 billion merger. If the merge becomes a reality, the United States would only have three different wireless carriers. The possibility of the merger, however, raises concerns with many wireless customers who fear it would prompt an increase in prices. Others speculate it would open the door for a new competitor to join the market.
Previous bidders confirmed that T-Mobile and Sprint could sell Boost for as much as $3 billion.
Amazon is considering a bid for prepaid wireless phone service Boost Mobile from T-Mobile US and Sprint https://t.co/UP4cPZ7xpu
— Bloomberg (@business) May 31, 2019
While Sprint does not disclose how many Boost customers they have, analysts believe there to be anywhere from 7 to 8 million customers. The deal is expected to have a value of $4.5 billion if the wireless spectrum that Amazon is also interested in is included.
So, why would a huge online retailer like Amazon want to buy Boost Mobile? Wired suspects, it has a lot to do with not only adding to their own repertoire of services, but also the potential ability to control a part of the market, while also gently guiding people toward their other services.
T-Mobile and Sprint may have to sell off Boost Mobile to push their merger through, which could pave the way for Amazon to become a wireless service provider https://t.co/gHe0xW43h0 pic.twitter.com/6ffy9Weuzn
— CNET (@CNET) May 31, 2019
As of right now, Amazon depends on the internet and wireless carriers’ services to help reach their customers. If the retail giant gets in on a part of the action, they would not only open up mobile services as a source of additional revenue, but would have the pull to prioritize their services above others by creating incentives for customers and potential customers to use their products or penalize users to opt to go to different carriers for certain services.
Unfortunately for Amazon, they are not the only potential buyers in the mix. Peter Adderton, the former owner and Boost Co-Founder, revealed to CNBC News that depending on how the terms of the merger play out, he might also be throwing his hat in the ring to buy back the company.