Amazon Reportedly In Talks With Carriers To Add Mobile Service To Prime

In an attempt to reinvigorate flagging subscriptions to its Amazon Prime service, the world's largest online retailer is said to be in discussions with up to four different mobile carriers to provide a discounted rate of $10 per month — or possibly even free mobile phone service — to Prime members in the United States. According to several sources, the number of Amazon Prime subscribers has tapered off following a price increase from $119 to $139 in 2022. For comparison, Walmart's competing subscription program, called Walmart+, costs only $98 per year.

A person familiar with the situation told Bloomberg, "The talks have been going on for six to eight weeks ... but the plan may take several more months to launch and could be scrapped." 

The four companies reportedly involved in the negotiations with Amazon are Verizon, T-Mobile, Dish Network, and AT&T. It's also worth noting that at least one spokesperson from Amazon has denied that the company has plans to add wireless service at all, according to TechCrunch. Either way, this Amazon-powered mobile service won't be launching any time soon.

The financial implications of such a deal are interesting because even the low wholesale rates that Amazon negotiates with a service provider will likely be greater than $10 per month, so there's little doubt that Amazon will be losing money on Prime subscribers who take advantage of the offer. Of course, that may be an acceptable trade-off for gaining market share, especially considering that Amazon's retail business was established on razor-thin margins and occasional losses.

Such an agreement could also be a mixed blessing to the partnered cell phone service provider, which would gain a bulk quantity of accounts, but risks cannibalizing potential or existing customers who would otherwise have paid a higher rate directly to the carrier.

Amazon is no stranger to the wireless industry, as the company plans to begin testing its Project Kuiper satellite internet service next year. In 2014, Amazon also marketed a gimmicky Fire Phone, which was largely considered a flop, and was quickly discontinued thereafter.