Proactive Investors - Amazon.com Inc (NASDAQ:AMZN) moved to deny reports of an entry into the US mobile market on Monday, though a prospective telco deal cannot be ruled out, according to JP Morgan.
Indeed, offering subscribers free unlimited mobile coverage would be unlikely, JP Morgan noted, with Prime’s US$139 annual cost way off the average US$240 unlimited data plan.
Analysts wrote that they “cannot rule out some form of future wireless market entry” though, and that massive share price reductions “serve as a timely reminder” of scepticism in the US telco market.
JP Morgan did acknowledge Amazon’s denial of a move into the market, alongside AT&T Inc, T-Mobile US Inc (NASDAQ:TMUS) and Verizon Communications Inc (NYSE:VZ) comments that no talks were underway with the online giant.
Analysts also questioned whether Amazon would be willing to sign an agreement with Dish Network (LON:NETW), which is largely bound from reselling data due to deals with AT&T and T-Mobile.
“Our telco analyst […] suspects Amazon may hope for talks with Dish to draw out a deal with one of the big three,” JP Morgan added.
Bloomberg’s report that Amazon was planning to roll out potentially free mobile data coverage had prompted shares in the big three US telco firms to fall on Friday, with denials later causing a slight resurgence.