Android Intelligence Analysis

Why Amazon might want to be America's next mobile carrier

Could Amazon provide the cellular service for your next Android phone? Maybe — and it might not be as crazy as it sounds.

Amazon Mobile Carrier
geralt / Amazon / JR Raphael (CC0)

Just when you thought life in 2019 couldn't get any more surreal, here's a wild new nugget of possibility to chew on: What if at some point in the not-so-distant future, America's four major mobile carriers were Verizon, AT&T, T-Mobile, and...Amazon?

Far-fetched as it may sound, it's not entirely implausible. Just ahead of the weekend, when most of us were already tuned out and thinking about what cured meats we wanted to ingest that evening (or whatever it is you think about on a Friday ahead of dinnertime), word broke via Reuters that Amazon was interested in buying the prepaid wireless provider Boost Mobile from Sprint and T-Mobile as part of the carriers' long-pending proposed merger. (Seriously — I can't be the only one sick of hearing about this "will they, won't they" dance, can I? It's starting to feel like a never-ending, mildly nauseating flirtation between two obnoxious people you kinda-sorta know and can't entirely avoid. Just do the frickin' deed or shut up about it already, I say.)

If the merger were actually to happen and such a sale were to go through, Reuters informs us, Amazon would gain access to the newly combined Sprint-T-Mobile network for "at least six years" and could also be in a position to purchase some of the typically-tough-to-acquire wireless spectrum currently in the carriers' control. (Sprint and T-Mobile have already agreed to sell Boost if their merger goes through and may give up additional spectrum, too, in order to help establish a new fourth U.S. carrier. It isn't an act of goodwill, exactly — the idea is to alleviate concerns that the merger could take away choices and create an anticompetitive environment — but either way, it'd open up one heck of an opportunity for someone.)

Now, all of this is incredibly speculative and anything but a done deal at this point. Heck, the Sprint-T-Mobile merger itself is still little more than a theoretical proposal awaiting uncertain government approval. And Amazon's alleged interest in swooping in and taking Boost off the companies' hands, should such a merger ever take place, is completely unofficial — based only on the always-popular unnamed "sources familiar with the matter."

But good golly, it sure is a juicy little melon to consider. So why in the world would Amazon want to own its own mobile carrier — particularly one like Boost Mobile, which isn't associated with its own standalone network in the style of Verizon or AT&T and instead relies on Sprint's infrastructure to deliver its service (in the same way that Google Fi relies on Sprint, T-Mobile, and U.S. Cellular)?

Well, lemme tell ya, Theodore: There are some pretty intriguing possible answers. Let's tackle 'em one by one, shall we?

1. The Amazon Prime appeal

Perhaps the most obvious explanation for Amazon wanting to own Boost Mobile is the way such ownership would position Amazon to act as a traditional mobile carrier — and the value that could have for Amazon's business of selling smartphones to regular ol' schmoes like us.

Think about it: Even if that whole Fire Phone fiasco didn't quite pan out the way Amazon had hoped (to put it mildly), Amazon still has a significant business selling Android phones on its website. And while the phones it hawks come from a variety of third-party manufacturers, it has little by little expanded a program that allows it to put its own mark on a fair number of those devices.

I'm talking about a lil' somethin' called Prime Exclusive Phones — an arrangement in which Amazon sells special versions of existing devices by the likes of LG, Motorola, and Nokia at substantial discounts for members of its $119-a-year Prime program. In the program's original incarnation, the phones came with Amazon-added advertisements on their lock screens, but the company stopped that unpleasant practice a little over a year ago.

Hold the phone, though: Amazon's still got plenty to gain from the arrangement. When you buy a discounted Prime version of an Android device, y'see, you get a boatload of Amazon apps preinstalled on your phone. Many of them can be uninstalled, if you want (and if you're technologically inclined enough to bother), but some core services — such as Amazon Music, Prime Photos, Prime Videos, and the biggest one of all, Alexa — are baked into the operating system for good.

Speaking of Alexa, here's a critically important asterisk to observe: Lots of the Prime Exclusive phones in Amazon's lineup now ship with Alexa hands-free functionality built in by default. Whereas most Android phones typically revolve around Google Assistant, in other words — a key goal of Google's with Android and almost everything else these days — Amazon has come up with a system that allows it to position its virtual assistant as a primary part of the Android phone-using experience, even without having its own self-made device. Well-played, Team Bezos.

Amazon's aim with Alexa, just like Google's ambition with Assistant, is simple: to get you further invested in its ecosystem. In the case of Amazon, that means the company can make it ridiculously easy for you to order anything, anytime, anywhere, especially with the convenience of your $119-a-year Prime membership — its true secret weapon in keeping you as a loyal customer.

All of this is to say that selling phones through that Prime Exclusive program has much more value for Amazon — ongoing value, no less — than what you see on the surface. Just as the company had hoped but failed to gain from its Fire Phone, the program effectively allows Amazon to put an Amazon Trojan horse right into your pocket. That device creates a powerful connection between you and Amazon, after all, using the most intimate and frequently caressed interface of 'em all. And you'd better believe the bucks Amazon loses on that initial sale are more than made up for via that arrangement.

Now think about how much value Amazon could offer you, as a customer, if you were saving money not only on the initial purchase of a shiny new Android phone but also on your monthly bill for cellular service. Just like Google with Fi, Amazon can afford to sell such service at a heavily discounted rate (compared to the current U.S. standard). And just like Google with Fi, Amazon could more than make up for any revenue lost via its low rates with the gains it'd make in having you on board as an always-connected customer.

And there's more: Remember that the current state of net neutrality means it's possible for internet providers to prioritize certain types or sources of content and to slow down others or require extra payments in order to access them at the fastest possible speeds. As it stands now, Amazon is as vulnerable as anyone else to an internet service provider's position and the ways that could impact customers' access to its services. If Amazon itself were to control at least some of the systems used to provide internet services, however — presumably for some of its most loyal and engaged customers — it'd not only avoid becoming a victim; it could actively use the newfound lack of regulation to its own advantage by prioritizing its services over competitors'.

Whew! That all makes for one hefty matzo ball of an explanation for why Amazon might be interested in Boost Mobile, don't you think? But compelling as that all may be, it's only a fraction of the reason Amazon could benefit from having Boost under its umbrella.

2. The constant connection factor

Prime Exclusive phones may be the most frequently overlooked way Amazon is weaving Alexa into customers' lives and encouraging casual shoppers to become Amazon regulars, but we can't forget about the company's more prominent method of getting Alexa into the world — both in homes and in businesses: its own self-made Echo devices and the Fire gadgets and Ring smart home products that surround 'em.

From smart speakers to tablets and set-top TV boxes, Amazon's got an impressive array of hardware that puts its virtual assistant (and thus also its storefront) front and center. And while most of those devices are designed to function in environments where Wi-Fi is readily available, it's easy to imagine how having a built-in mobile data chip with active-out-of-the-box service could be beneficial.

With Amazon's Fire Tablets, the application is pretty apparent: Tablets are frequently taken out of our abodes and into the world, and being able to buy a tablet with a ready-to-roll and super-affordable data service present whenever you need it would be a powerful perk.

But even beyond that, having devices that could connect to the internet when Wi-Fi isn't available could go a long way in enhancing the user experience — whether we're talking about simplifying the initial setup process, filling in the gaps when a regular network goes down, or expanding the ways a device can supplement your phone. And if Amazon owns its own mobile carrier, all of that is possible to implement at a minimal cost and with complete control for the company.

But the biggest benefit of all for Amazon to own an entity like Boost Mobile may be the one that'd be least visible to those of us on the outside.

3. The delivery enhancement allure

Amazon, just like Google, has been working for a while now to directly manage as much of its process as possible and rely less on other companies' assets and services. It's generally a more cost-effective way to handle things, for one, and it gives Amazon complete control over the entire experience.

Part of that, for Amazon, is taking control of the physical delivery of products purchased from its online store. A report earlier this year noted that Amazon had expanded its "dedicated air network" with a fleet of 50 planes and "several new regional hubs." Already, the report indicated, Amazon is handling its own deliveries for more than a quarter of its orders.

What does a mobile carrier have to do with any of that, you might be wondering? Well, consider this: Amazon, in particular, is known to be obsessed with efficiency and optimizing every possible area of its physical operations (sometimes to almost frightening degrees, from an actual human perspective). The main area where Amazon presently lacks this level of optimization and control is — yup, you guessed it — in shipping.

As Amazon ramps up its own delivery efforts, having a mobile carrier of its own would allow it to easily, inexpensively, and (at least in theory) securely implement advanced forms of communication all throughout the delivery process. That could mean better tracking and subsequent analyzing and optimizing of every step of the process — or it could mean more advanced methods of secure deliveries with complete end-to-end control. Just think how that might change Amazon's approach to handling sensitive business packages, prescription drugs, or anything else that'd require an identification or a signature.

Only time will tell how much truth there is to the idea of Amazon wanting to buy Boost Mobile — and how likely that is to happen, on any number of levels — but when you really stop and think about things from Amazon's perspective, the possibility makes an awful lot of sense.

Is it still a surreal thought to consider the notion of Amazon becoming one of America's major mobile carriers? Of course! Quite frankly, it sounds like the setup to a joke I would've written in 2009. But, well, it's 2019 now. What isn't weird?

The question now is whether this surreal thought will ever turn into a surreal reality. And with any luck, it won't be too much longer until we know the answer.

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[Android Intelligence videos at Computerworld]

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