Telecom stocks fell on Friday on renewed reports about the e-commerce giant Amazon.com (AMZN) plans to resell its mobile services in the United States through its Prime loyalty program. Amid reports about AMZN’s stock, a spokesperson for the company said it has no plans to currently resell wireless services.
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AT&T (t), Verizon connections (VZ) And T-Mobile US (TMUS) All reports have declined, however dish network (DishAmazon shares gained.
A week ago, reports emerged that Amazon might partner with Dish TV. Those reports said that Dish will sell Boost Mobile Wireless prepaid plans through Amazon. Dish is a newcomer to the cordless phone market.
What’s New in Friday Reports, originally from bloomberg, is that Amazon can launch its own program through Prime. Also, Amazon may partner with other wireless carriers.
AMZN Stock: No wireless plans at this time
In an email to Investor’s Business Daily, an Amazon spokesperson said, “We’re always exploring adding more benefits for Prime members, but we have no plans to add wireless at this time.”
Meanwhile, Verizon spokesperson Rich Young said in an email that nothing is happening.
“Verizon is not in negotiations with Amazon regarding the resale of the best, most reliable wireless network in the country,” Young said. “Our company is always open to new and potential opportunities, but we have nothing to report at the moment.”
Furthermore, Amazon aims to have the lowest possible wholesale prices. Bloomberg said the e-commerce giant may offer wireless plans to Prime members for $10 a month or even free.
At RBC Capital, analyst Brad Erickson is skeptical the deal can go through.
“While the conceptual logic is clear since we have more principal members than total American households, we see barriers to this type of deal,” he said in a note to clients.
“We’re grappling with where AMZN’s pricing leverage will come from versus the[wireless]carriers,” Erickson added. “It’s clear the carriers aren’t going to enter into a no-win deal.” “Moreover, having AMZN contract with investors to structure some additional and even inconsequential deals for services through Prime wouldn’t make sense given the broader push to improve retail in the United States.”
Telecom stocks slow, Amazon gains
AMZN stock is up 1.5% to 124.61 while T stock is down 4.4% to 15.11 in today’s stock market. Meanwhile, VZ stock fell 4% to 34.30. Also, TMUS stock fell 7.8% to nearly 128. Dish stock rose 22% to 7.66.
With the exception of T-Mobile, carrier stocks have taken a hit this year amid slowing wireless revenue growth. However, AMZN stock is up 49%.
When reports of an Amazon dish surfaced a week ago, analysts said it could spell trouble for incumbents in the industry. But it depends on the structure.
“Amazon is currently selling wireless services from prepaid providers like Cricket (owned by AT&T), Simple Mobile and Tracfone (owned by Verizon) where Amazon will likely take a cut of the economy,” UBS analyst John Hudolek said in his note to clients. .
He added, “We believe this distribution agreement can help DISH attract subscribers but is unlikely to lead to a meaningful shift in industry competition absent attractive promotions for the handset. We believe the biggest risk to the industry is Amazon selling its wireless service.” “
Follow Reinhardt Krause on Twitter @employee For updates on 5G wireless networks, artificial intelligence, cybersecurity, and cloud computing.
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