The massive growing conglomerate that is Amazon has been famous for moving into new industries over the last decade. But it is one proposed move - a foray into the wireless industry – that has one Wall Street analyst calling the company "batshit crazy", according to Bloomberg.
Amazon could be interested in purchasing prepaid phone service Boost Mobile from Sprint and T-Mobile, Reuters reported last week. The move may align with Amazon's recent strategy to "broaden the value of its offerings to lower-income shoppers", Bloomberg noted. Both Amazon and Wal-Mart have recently been tapped to try out a pilot program to accept U.S. government food assistance for online orders.
MoffettNathanson’s Craig Moffett didn't mince words in a note to clients about the possibility of such a purchase: "Every once in a while, a news item comes along that is so batshit crazy – sorry for the profanity, but your author is at a loss for a better word here – that one is simply brought up short."
T-Mobile and Sprint are proposing the sale of some airwaves in order to win Justice Department approval of their pending merger. Amazon may also be interested in any wireless spectrum that would be divested between the two groups, it was reported. FCC Chairman Ajit Pai said he would recommend that his agency approve the $26.5 billion T-Mobile and Sprint merger, but under the condition that they sell Boost, build a 5G network in the next 3 years, and pledge not to raise prices while the new network is being constructed.
Moffett, who has 30 years of experience in the telecom business, continued: "Amazon may harbor long-term visions of wirelessly piloted delivery drones and driverless delivery vehicles, but the idea that one would want to operate their own proprietary network for such purposes is economically insane."
While Amazon already leases proprietary undersea cables and long-haul facilities, Moffett explained that it is still a far cry from operating a full coverage network: "Networks must, out of economic necessity, be open to all comers. So running your own wireless network to gain a competitive advantage in another business, like drone delivery or autonomous delivery trucks, is a fool’s errand."