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If Sprint and T-Mobile wants regulators to approve their $ 26.5 billion merger, they will have to lose weight. Operators have already agreed to withdraw the prepaid wireless service from Sprint, Boost Mobile, said the chairman of the Federal Communications Commission, Ajit Pai, last month. According to Reuters, Boost could already have an unlikely buyer interested: Amazon.
Boost, which is part of Sprint after the merger of the carrier with Nextel in 2005, provides its services on the Sprint network. Any new owner would be able to use the new T-Mobile network for six years, reports Reuters. It is also possible that Amazon or another company acquires rights to a portion of the wireless spectrum that FCC currently holds licensed from Sprint or T-Mobile, or even some of the infrastructure owned by these companies. two operators. The Department of Justice would be less satisfied with the idea of a Sprint-T-Mobile merger than the FCC, and would like the two companies to divest other units to ensure the presence of four major wireless services. Amazon declined to comment.
Why could the retail giant and cloud computing be interested in buying a wireless network? In the short term, Boost would give Amazon another service to sell. The company is expanding its portfolio of Amazon branded products, from batteries to clothing to kitchenware. Amazon already sells phones and, via third party sellers, prepaid SIM cards. It is no exaggeration to think that Amazon could sell phones supplied with an Amazon branded wireless service. Amazon would not be the first technology giant to operate a mobile operator. Since 2015, Google offers its own mobile service "Google Fi" based on the services of T-Mobile and Sprint. Amazon has already resold Comcast's Internet and telephone services and the smallest telecommunications company, Frontier, but ceased in 2017.
In the longer term, the acquisition could be part of Amazon's efforts to better control the networks it relies on to reach its customers. From its Echo devices to its video streaming service Prime Video to its potential, delivery drones rely on Internet connectivity provided by other companies. Like Facebook, Microsoft and Google, Amazon has invested in the construction of submarine cables and other fiber optic infrastructure in order to have sufficient bandwidth to transfer huge amounts of data around the world. Technology giants have also been working to bring more people online. Microsoft, for example, is developing technologies that allow rural broadband providers to use the unused television spectrum to provide wireless Internet access; Google and Facebook have invested in a range of projects, ranging from fiber trenching in Ghana to building drones that can teleport the Internet to remove zones. Amazon follows the example of SpaceX from Elon Musks and OneWeb backed by Richard Branson by investing in a low-orbit satellite internet experiment.
Having your own wireless network, especially if Amazon had its own spectrum and network infrastructure instead of relying entirely on T-Mobile, would give Amazon another way to reach customers directly. This could be important now that the FCC has emptied its rules of Internet neutrality, prohibiting operators from setting priorities or discriminating certain content. This means that operators could soon ask Amazon to promote its services to its competitors. By owning its own network, Amazon could prioritize its own services over those of its competitors.
If Boost ended up on the market, Amazon would not be the only interested buyer. Boost co-founder Peter Adderton, who oversaw his 2004 sale to Nextel, told CNBC last week that under the terms of the deal, he might be interested in buying back the company.
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