A report from Reuters says that online retail giant Amazon is interested in buying prepaid cell-phone wireless service Boost Mobile from Sprint and T-Mobile. Amazon is said to be interested in Boost because it would give the company access to the New T-Mobile wireless network for at least six years, according to two sources Reuters says are familiar with the matter. “New T-Mobile” is the name used by Sprint and T-Mobile to describe the entity they will form if their merger is approved.
For Sprint and T-Mobile, it’s clear why they would be interested in selling Boost to Amazon–or anyone else. The companies have already pledged to sell Boost, currently owned by Sprint, in order to reduce their market share in the prepaid wireless sector. Such a sale is a requirement if they are to gain regulatory approval for their merger. Why Amazon would want to buy Boost is a bit more opaque.
The company could be looking to start selling its own branded prepaid cell-phone wireless service plans via its main website. This would allow Amazon to offer a one-stop shop for all-things smartphone on Amazon.com.
It’s also possible Amazon could be looking to launch a new hardware product that would rely on a cellular signal for data or add cellular capabilities to their existing hardware products. This could be anything from a new Amazon-branded smartphone to wireless earbuds that rely on Alexa and thus would require a constant internet connection.
If Amazon does swoop in and buy Boost, it would cost the company between $3 billion and $7 billion, according to sources that spoke to Reuters. While that sounds like a lot of money, it’s a drop in the bucket for Amazon, which is currently worth almost $900 billion.