Amazon May Offer Mobile Phone Service to Prime Members

By Erin Bendig.
Kiplinger Consumer News Service (via TNS)

A new perk from Amazon is potentially on the way, one that could help you save a good chunk of cash each month. For the last six to eight weeks, Amazon reportedly has been in contact with several wireless carriers as they consider offering low-cost or free phone service to U.S. Prime members.

An anonymous source told Bloomberg that Amazon has been in negotiations with Verizon, T-Mobile, Dish Network and, at times, AT&T to discuss using their networks to provide wireless services for Prime customers for only $10 a month (or potentially free).

However, Amazon’s Prime reported wireless plan could take several months to launch, and could even be canceled entirely. Speaking to Bloomberg, Maggie Sivon, an Amazon spokesperson said, “We are always exploring adding even more benefits for Prime members, but don’t have plans to add wireless at this time.”

Offering a wireless plan for Prime members is one way Amazon can keep current subscribers and attract new customers. Last year, rates for a Prime membership went from $119 to $139 annually, and this price increase slowed subscriber growth.

Making a Prime membership more attractive for customers with the launch of an affordable wireless phone service could help Amazon combat stagnating subscription rates. Plus, this additional benefit could help Amazon compete with similar services on the market. Walmart+, for example, offers many of the same benefits a Prime membership does, including free grocery delivery, but for a lower cost ($98).

Partnering with Amazon could be a double-edged sword for wireless carriers. The deal would be a boost to wholesale revenue and attract more traffic to 5G networks, but at the same time, the deeply discounted cost of Prime wireless could chip away at big carriers’ existing subscribers.

Currently, the average cell phone bill is $144, JDPower told CNBC, and according to Bloomberg, unlimited plans start at $60 a month for Verizon and T-Mobile, and $65 a month for AT&T. With such a large price difference, it’s likely customers would opt for Amazon’s cheaper wireless plan, cancelling their current mobile service.