{"id":17910,"date":"2023-06-04T03:42:50","date_gmt":"2023-06-04T07:42:50","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/amazon-taking-on-att-and-verizon-unlikely\/"},"modified":"2023-06-04T03:42:51","modified_gmt":"2023-06-04T07:42:51","slug":"amazon-taking-on-att-and-verizon-unlikely","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=17910","title":{"rendered":"Amazon Taking on AT&#038;T and Verizon? Unlikely."},"content":{"rendered":"<div id=\"js-article__body\" itemprop=\"articleBody\" data-sbid=\"WP-BAR-0000662609\">\n<div data-layout=\"wrap\n              \" data-layout-mobile=\"\" class=\"\n        media-object\n        type-InsetMediaIllustration\n          wrap\n  article__inset\n        article__inset--type-InsetMediaIllustration\n          article__inset--wrap\n    article__inset--lead\n  \"><\/p>\n<figure class=\"\n        media-object-image\n        enlarge-image\n        img-wrap\n        article__inset__image\n      \" itemscope=\"\" itemtype=\"http:\/\/schema.org\/ImageObject\"><\/p>\n<div style=\"padding-bottom:66.66666666666666%;\" data-subtype=\"photo\" class=\"image-container  responsive-media article__inset__image__image\"><\/div>\n<\/figure><\/div>\n<p>Telecom stocks got clobbered on Friday following a Bloomberg story that said<br \/>\n        Amazon<br \/>\n       was holding talks with wireless carriers\u2014including the nascent wireless service from Dish Networks\u2014while considering offering service to Amazon Prime subscribers for $10 or potentially free.<\/p>\n<p>That would be exciting to a lot of consumers\u2014and fear-inducing for telecom investors. But there are significant doubts about any such plan.<\/p>\n<div class=\"paywall\">\n<p>Amazon (ticker: AMZN), T-Mobile US (TMUS), and<br \/>\n        Verizon Communications<br \/>\n       (VZ) all denied on Friday that anything is happening. T-Mobile\u2019s statement on the matter goes so far as to say \u201cAmazon has told us they have no plans to add wireless service.\u201d That echoes Amazon\u2019s own statement which said they \u201cdon\u2019t have plans to add wireless at this time.\u201d<\/p>\n<p>Wall Street analysts are skeptical that there is anything actually going on. MoffettNathanson analysts Craig Moffett and Michael Morton wrote in a research note published late Friday that any deal for Amazon to start its own phone service seems highly unlikely. (Moffett covers telecom and Morton covers internet stocks.)<\/p>\n<p>For one thing, Moffett and Morton note that while Amazon could make it happen, the cost to the company of providing even a single line would be about<strong>\u00a0<\/strong>$240 a year\u2014above the annual cost of an Amazon Prime membership, currently at $139. And that\u2019s just for one line\u2014the costs would multiply with bigger families. <\/p>\n<p>Another issue, they add, is that Amazon would suddenly be subject to regulation from the FCC. They point out that customer information is more tightly regulated in telecom than in related industries. That adds more risk to Amazon\u2019s existing regulatory worries. \u201cEven a minimal risk like this would be a deal breaker, in our view,\u201d they write.<\/p>\n<p>From a telecom perspective, the analysts also pour cold water on any potential deal. As for<br \/>\n        Dish Network<span>,<\/span><br \/>\n       Moffett and Morton write, \u201cthere is virtually no chance\u2026that Amazon would allow itself to play guinea pig on a start-up Dish wireless network.\u201d Dish did not respond to a request for comment about the report.<\/p>\n<p>In an interview with <em>Barron\u2019s<\/em>, Moffett noted that Dish only has partial coverage\u2014 the company has launched service in 120 cities so far, but not in places like New York, Chicago, Los Angeles, Washington, or San Francisco. To cover the parts of the country it can\u2019t reach, Dish has reseller agreements with both<br \/>\n        AT&amp;T<br \/>\n       and T-Mobile. Moffett says that T-Mobile likely\u2019s agreement with Dish doesn\u2019t allow it to resell access to a third party\u2014like Amazon. And AT&amp;T\u2019s agreement has similar language.<\/p>\n<p>\u201cWithout the ability to resell AT&amp;T or T-Mobile service, Dish simply isn\u2019t a credible partner,\u201d Moffett and Morton write. \u201cNot only is their coverage insufficient to be a viable offering, but they\u2019ve never operated a wireless network before, let alone a large-scale MVNO. [An MVNO is a carrier that has no network but instead resells service from other carriers.]\u201d<\/p>\n<p>With T-Mobile and Verizon having denied discussions, and Dish seeming very unlikely, that leaves only AT&amp;T. And Moffett and Morton see little chance of that happening. <\/p>\n<p>\u201cAT&amp;T is smart enough to understand what an awful idea it would be to let Amazon into the hen house, in our view,\u201d they write.<\/p>\n<p>AT&amp;T declined to comment about the report on Friday.<\/p>\n<p>The two analysts also contend that a Prime Wireless plan wouldn\u2019t do much to help Amazon grow its subscription business. They point out that Prime already has signed up about 80% of U.S. households and that churn rates for Prime are already \u201cextremely low.\u201d\u00a0<\/p>\n<p>Moffett and Morton conclude: \u201cWe\u2019re skeptical that the incumbents would be willing to ink a deal with Amazon. We\u2019re skeptical that Amazon would really want to. We\u2019re skeptical that Amazon would be willing to do business with Dish Network. We\u2019re skeptical about\u2026well, all of it.\u201d<\/p>\n<p>Adds Moffett to <em>Barron\u2019s<\/em>: \u201cKind of a cockamamie story on every level.\u201d<\/p>\n<p>Dish shares spiked 17% Friday on the news. T-Mobile shares were 8% lower, while AT&amp;T fell 4% and Verizon was off 3%. Amazon added 2%.<\/p>\n<p>Write to Eric J. Savitz at eric.savitz@barrons.com<\/p>\n<\/p><\/div>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.marketwatch.com\/articles\/amazon-prime-phone-service-telecom-stocks-b439ae5a?mod=investing\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Telecom stocks got clobbered on Friday following a Bloomberg story that said Amazon was holding talks with wireless carriers\u2014including the nascent wireless service from Dish Networks\u2014while considering offering service to Amazon Prime subscribers for $10 or potentially free. That would be exciting to a lot of consumers\u2014and fear-inducing for telecom investors. But there are significant [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":17911,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[239],"tags":[83],"class_list":["post-17910","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-investing","tag-featured","post_format-post-format-video"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Amazon Taking on AT&amp;T and Verizon? Unlikely. | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Telecom stocks got clobbered on Friday following a Bloomberg story that said Amazon was holding talks with wireless carriers\u2014including the nascent\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/ifintechworld.com\/?p=17910\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Amazon Taking on AT&amp;T and Verizon? 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