Telecom stocks fall on report Amazon considers launching mobile service for Prime members

Amazon is in talks with several wireless carriers to launch a mobile service for Prime members, according to a Bloomberg report.

The news sent telecom stocks lower on Friday. Verizon fell more than 3% in afternoon trade, while T-Mobile fell over 7%. AT&Tthe company’s shares fell more than 3%. A plate shares jumped more than 15%.

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The e-tailer is in talks with Verizon, T-Mobile and Dish about the possibility of reselling their mobile services to its Prime members at a low cost or potentially for free, Bloomberg reported. Discussions have been ongoing for six to eight weeks and include AT&T, but it could be several more months before the plan materializes, according to the report.

“We’re always exploring the possibility of adding even more benefits for Prime members, but we currently have no plans to add wireless,” Amazon spokesman Bradley Mattinger said in a statement.

A T-Mobile spokesperson told CNBC in a statement, “Amazon is a great partner for T-Mobile in many areas, and we’re always interested in working more closely with our neighbors in other cities in new ways. However, we are not in discussions to include our wireless in the Prime service, and Amazon has told us they have no plans to add wireless service.”

Verizon and AT&T said they are not in discussions with Amazon to resell wireless services. Dish representatives were not immediately available for comment.

Amazon has already experimented in the mobile category, launching its ill-fated Fire Phone in July 2014 before ditching it a year later. More recently, it has focused on high-speed Internet through its Kuiper program, which aims to build a network of 3,236 satellites in low Earth orbit.

The mobile plan could serve as an attractive hook for Amazon to attract more Prime subscribers. Launched in 2005, Amazon Prime members pay $139 a year for access to free two-day shipping, access to exclusive movies and TV shows, and newer perks like generic prescription discounts and Grubhub delivery benefits.

Amazon is looking for ways to attract more Prime members as it faces increasing competition WalmartWalmart+ loyalty program Walmart+ and concerns about slowing membership growth. The company has more than 200 million subscribers worldwide as of April 2021.

Mattinger said Prime membership has grown steadily year over year “as the value members receive continues to increase.”

By partnering with a company like Verizon or Dish, Amazon would essentially function as a mobile virtual network operator. Instead of owning its own wireless network, the company will buy data from a major carrier and resell it to consumers.