According to exclusive Reuters reports, people familiar with the matter revealed on Thursday (May 31) that Amazon is expected to purchase Boost Mobile, a prepaid mobile wireless service provider, which is currently part of Sprint. This will allow Amazon to use the new-T-Mobile wireless network for at least 6 years.
New-T-Mobile (New T-Mobile) is a new entity name used by T-Mobile and Sprint to refer to the merger.
According to sources, in addition to wireless mobile services, Amazon is also interested in entering the independent wireless spectrum field.
Amazon declined to comment on the matter. T-Mobile and Sprint did not respond to the request immediately.
It's unclear why the largest online retailer in the US wants to enter the wireless network and spectrum.
Amazon, which started out as an online book, has a long history of exploring new areas. For example, making original TV shows for Amazon Prime. It is currently one of the top four technology companies with the same name as Alphabet Inc., Apple Inc. and Facebook Inc. It is also a leading cloud service provider.
T-Mobile and Sprint have promised to sell Boost as one of the measures to reduce their market share in prepaid wireless services, thereby gaining regulatory approval for their $26 billion merger.
The US Department of Justice needs to scrutinize buyers who have been sold off to ensure long-term viability and maintain market competition.
T-Mobile and Sprint are also considering divesting their wireless spectrum or radio wave traffic carrying data to drive the merger.
Once the two companies merge, the number of nationwide wireless communication service providers that American consumers can choose will be reduced from the original four to three. Some consumer protection groups are concerned that the merger may raise the price of wireless services and therefore call for an increase in competitors.
Potential bidders have previously told Reuters that the price of Boost may reach $3 billion.
This month, Cowen analysts estimate that Boost has 7 million to 8 million customers. If the transaction includes wireless spectrum, or radio waves with data, the amount can reach $4.5 billion.
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