T-Mobile and Sprint said a few days back that the combined company would sell Sprint’s pre-paid Boost Mobile unit as part of some conditions they agreed on in order to appease regulators. Well, the promising thing here is that it worked on the FCC and its Chairman Ajit Pai, but ultimately it failed to excite DOJ antitrust chief Makan Delrahim. The latter is concerned that the deal will eventually reduce the number of major U.S. carriers to three although that third carrier would be nipping at the heels of AT&T. As we told you yesterday, that a new report says that Delrahim will demand that Sprint and T-Mobile help create a new carrier to replace Sprint in return of the DOJ approval.
According to one securities house, Boost has almost 7-8 million subscribers and could be worth as much as $4.5 billion if in a deal some wireless spectrum is included. Reportedly, there are several companies putting together bids for Boost Mobile. According to Reuters, one of them is Amazon. The news agency also cites a pair of sources in its report and mentions that Amazon is interested because the deal would eventually allow it to access the network of T-Mobile for six years. Amazon is also allegedly interested in the purchase of wireless spectrum that the combined T-Mobile-Sprint would be forced to divest if they close on their merger.
It seems that the idea of buying Boost comes out of nowhere, the interest of Amazon in the industry isn’t completely a surprise to many. The company has been moving into new businesses from time to time ever since it started as an online seller of books in the mid of 1990. But over time, the company has grown so fast that it became the second publicly traded U.S. company to reach a valuation of $1 trillion.
Approval by FCC and DOJ Is Required To Buy Boost Mobile
With its line of Echo smart speakers and smart displays and the AWS (Amazon Web Services) cloud services unit, Amazon is considered a tech company with a large customer base. The ability of this company to reach a massive number of customers through different platforms, and its main focus on undercutting competitor’s pricing, and in that case owning Boost Mobile might go right for Amazon’s alley. Ironically, any purchaser of Boost Mobile will have to face the approval of FCC and DOJ.
Amazon could face a huge number of competitions for Boost from companies which are rumored to be prepping bids like pre-paid carrier Q Link Wireless, Boost founder Peter Adderton, and several other cable firms and some private equity groups. However, selling Boost Mobile to Amazon might be the best chance for T-Mobile and Sprint at fulfilling the Justice Department’s alleged demand that the two companies help create a new carrier.
And there is one thing in which Amazon is pretty good at, it is fulfillment.
(Via: Reuters )
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