Amazon Prime Could Include Phone Service

Amazon has reportedly talked with mobile operators about a plan to cut cellphone service costs for Amazon Prime subscribers. The deal could mean customers getting service for $10 a month or even being a "free" part of the Prime subscription.

Bloomberg broke the story, citing inside sources. Amazon says it doesn't currently have plans to add wireless to Prime but didn't deny having had talks. (Source: bloomberg.com)

According to the report, Amazon is currently speaking to T-Mobile and Verizon, along with Dish Network which is trying to establish itself in the cellphone industry. Amazon is also said to have spoken to AT&T recently.

It's not clear if Amazon is looking to reach an agreement with multiple carriers or playing them off against one another for the best deal.

Pricing Tricky

Making the pricing work for all concerned would likely be the trickiest part of any negotiations. The carriers would be losing out on the money they could have made in direct fees from subscribers. However, with an estimated 147 million Prime subscribers in the US, they'd be looking at a healthy income from Amazon. (Source: snopes.com)

From Amazon's perspective, a cellphone deal wouldn't necessarily be just about attracting new Prime subscribers. It may also be looking to find a way to stop customers from canceling  their accounts, for example when looking to tighten household budgets.

Data Limits Could Apply

Bloomberg didn't have any details on exactly what Prime customers might get for their deal. One possibility is that the free (or cheap) plan might have strict data limits. In that scenario, there'd be an obvious temptation for Amazon to say that streaming its Prime video or music service didn't count towards the data limit. That would likely spark the latest round in the ongoing battles over net neutrality, the concept that all (lawful) Internet traffic should be treated equally.

The other question would be how handset supplies and subsidies would work with any deals.

What's Your Opinion?

Do you think Amazon will wind up offering cheap or free phone service? Would it make you more likely to get or keep a Prime subscription? Would it matter how much data the plan included or which handsets you could use?