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July 7, 2017

Amazon might partner with Dish Network to offer a wireless service

by John_A

Why it matters to you

If you’re a Prime subscriber, it might not be long before you can get smartphone service from Amazon.

Fast on the heels of its $13.4 billion acquisition of upscale grocery chain Whole Foods, Amazon’s going on another shopping spree — but this time for cell service. According to the Wall Street Journal, Amazon CEO Jeff Bezos and Charlie Ergen, CEO of Dish Network, have entered talks to partner on future “wireless projects,” including an internet of things network and a subscription cellphone plan.

The Wall Street Journal, citing people familiar with the matter, reports that Bezos and Eregen have floated the idea of an add-on, metered data plan for Prime, Amazon’s premium subscription service, and always-on connectivity for devices like thermostats, connected bulbs, and smart kitchen appliances.

Under the terms of one proposal, Amazon Prime members, who pay $100 a year for free two-day shipping, streaming music, movies and TV shows, and cloud storage, would gain an optional, metered allotment of smartphone data. But the Dish-powered, Amazon-branded network could benefit the retailer’s services behind the scenes, according to Fox Business sources.

Dish’s network might make Amazon’s AI-powered Echo speakers “faster” and “more human-like” in its responses by “putting intelligence throughout the nodes of a wireless network,” and provide the infrastructural foundation for Amazon’s planned Prime Air drone delivery service. And Dish executives have reportedly floated the idea of a “one-way broadcast signal” for Amazon’s Prime Video service that would ensure shows and movies streamed “without hiccups everywhere.”

The idea isn’t as farfetched as it might sound. Bezos and Eregen, who have reportedly gotten to know each other better over the past year, have shared interests in space and robotics, and there’s history between Amazon and Dish. In May, Dish made its streaming TV apps available on Amazon Fire devices, and some Dish customers gained the ability to control their set-top boxes through Amazon’s Alexa voice assistant.

Dish Network has long sought out deals with telecom companies in an effort to get its nascent cellphone network off the ground. It’s unsuccessfully pitched Sprint, T-Mobile, and AT&T, and spent more than $21 billion over the course of a decade to acquire airwaves nationwide. But it lacks a network to deploy the spectrum.

Amazon, meanwhile, has dipped more than a few toes in the wireless market. The Seattle-based retailer debuted its ill-fated Fire Phone, a high-end smartphone with object recognition features and perspective-shifting 3D interface, in 2014, and launched its Prime Exclusive Phones program in June 2017.

In exchange for putting up with advertisements on the phones’ lockscreen, Prime Exclusive Phones offers Prime subscribers steep discounts on devices like the Moto E and Blue R1 HD.

Analysts at Citi say Amazon is unlikely to acquire Dish. Instead, they predict that the internet retailer could become a “preferred customer” on the new wireless network and commit to spending a certain amount on connectivity in exchange for a below-market rate, or invest cash upfront in Dish’s network to help pay for the build-out.

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