Earlier this month, we reported that Amazon is in talks with major telecom providers in the United States to offer low-cost or potentially free mobile phone service exclusively to its Prime subscribers.
The tech giant is negotiating with Verizon Communications, T-Mobile US Inc., and Dish Network Corp. to provide wireless plans priced at $10 monthly or lower. While discussions with AT&T Inc. have also taken place, no concrete plans have been announced as of yet.
More Perks for Prime Members
According to rumors, this move would not only entice more users to sign up for Prime membership but could also disrupt the mobile phone market, particularly for the three major carriers.
Currently, the lowest unlimited individual plan available is priced at around $60 per month through Verizon.
Amazon spokesperson Bradley Mattinger neither confirmed nor denied ongoing talks, stating, "We are always exploring adding even more benefits for Prime members, but don't have plans to add wireless at this time."
Behind Amazon's Possible Mobile Phone Service
The motivation behind Amazon's interest in creating its own phone plan is multifaceted.
By offering a low-cost plan, Fox News notes that the company aims to revitalize its customer base, which has shown signs of plateauing since the annual subscription price of Prime was raised from $119 to $139.
Furthermore, Amazon's ambition to outshine its primary rival, Walmart, whose membership plan boasts similar perks and free grocery delivery on orders of at least $35, further fuels its drive to innovate and provide a more attractive offering.
Regarding implementing the phone plan, Amazon has several options to consider:
- resell mobile services from established carriers,
- offer wireless plans at an enticing price exclusively to Prime members,
- or extend the Prime wireless service to anyone interested in switching carriers and becoming a Prime member.
While this news may worry major mobile carriers due to increased competition, there is a silver lining.
Collaboration with Amazon could allow the wireless industry to create additional wholesale revenue and attract more users to their newly extended 5G networks.
Moreover, analysts suggest that if Amazon was to function as a reseller rather than investing in creating its mobile network diminish the carriers' concerns about additional market saturation.
Data Protection Concerns
Fox News notes that the potential downside of Amazon's phone plan lies in the vast amount of data the company would gain access to.
With its existing data collection practices from Prime memberships, user searches, and Alexa devices, Amazon would likely amass even more personal information to deliver targeted advertisements and further monetize its services.
Reports tell us that Amazon's database includes the following:
- Customer order history.
- Payment information.
- Data obtained through its advertising business.
- Forms of identity for vendors on its platform.
Whistleblowers told POLITICO in 2021 that Amazon's practices expose the company to potential breaches or cyberattacks that might place extremely sensitive information in the hands of criminals.
What's In the News
The negotiations between Amazon and the telecom firms come at a critical time when Amazon is experiencing a slowdown in new Prime sign-ups.
Since the annual subscription price increase, Prime membership growth in the United States has stagnated.
Furthermore, the emergence of Walmart's Walmart+ membership, offering comparable perks at a lower cost, has intensified the competition for Amazon.
By partnering with telecom companies, Amazon aims to introduce an enticing benefit for its Prime members, potentially boosting revenue for the participating carriers.
However, specific details of the potential deals remain undisclosed at this stage.
Stay posted here at Tech Times.
Related Article : Amazon Freevee Brings More Prime Video Originals to its Ad-Supported, No-Cost Platform
