8 ms·

Amazon interested in buying Boost from T-Mobile, Sprint: sources

122 points by Geeek 7y ago

Someone1234 7y ago
I wonder if Amazon or the T-Mobile/Sprint side leaked this? Perhaps T-Mobile/Sprint weren't eager enough to sell, so Amazon wants the regulator to know an offer was made.
tantalor 7y ago
Another perk for Prime members.
- sdan 7y ago
  It strengthens their monopoly.
  - sidr 7y ago
    Huh? Their monopoly in which market?
    - judge2020 7y ago
      I guess the internet? Apparently diversifying is monopolistic.
      - Meandering 7y ago
        Horizontal acquisition extends around the definition of monopoly. I'm not against Amazon. I don't think they should be stopped from expanding... yet. If the other conglomerates copy amazon then the possibility of a corporate dystopian future looks brighter!
        judge2020 7y ago
        The EU regular pretty much sums it up[0]: > “If a company is dominant, that’s fine,” Ms. Vestager told reporters. “But if that dominance is abused, then we have an issue.” Having a monopoly and not abusing it is impossible when you're dealing with humans. Maybe in a hundred years where business decisions run through a DLNN and are cross-referenced with the law to make sure they're in compliance, a monopoly that doesn't abuse its dominance will become a reality. 0: https://www.nytimes.com/2016/04/21/technology/google-europe-antitrust.html?_r=0 https://www.nytimes.com/2016/04/21/technology/google-europe-...
        Meandering 7y ago
        As I inferred with sarcasm, this divergence from vertical to horizontal growth could effectively lead to oligopolies in the major markets(the few where they don't exist). I believe in the competitive market model up until economies of scale and purpose driven occupation out weigh it's benefits. e.g. manufacturing jet engines requires huge amounts of equity and legacy knowledge for safety. e.g. automating warehousing may lead to more fulfilling or mentally stimulating occupations. Amazon as a force in the larger economy versus a subset of markets in the economy could spur innovation in stagnant markets. On the other side of the coin, leveraging their massive infrastructure gives them an unfair advantage as they enter new sectors which can lead to an increased market barrier and prevent firms with new ideas from competing. As they stand, they aren't that much bigger than normal conglomerates[1]. But, they have strategically placed themselves in critical service areas like cloud computing. I think if they can force markets to evolve then we should allow them to grow with a discerning eye. [1]https://en.wikipedia.org/wiki/List_of_largest_companies_by_revenue https://en.wikipedia.org/wiki/List_of_largest_companies_by_r...
    - sdan 7y ago
      I guess I phrased that poorly. What I was trying to convey was that by horizontally scaling (like a comment in this thread said), Amazon, like Apple can create this ecosystem in which they provide consumers an incentive to be a part of and stay within it. Essentially, they're making Prime look better (which is not a problem), but once they have these customers using these Prime services, it'll be hard for them to change (similar to how people who own MacBooks lean a little bit toward buying an iPhone for the ecosystem integration), essentially "locking" them within the Prime ecosystem, giving them control over pricing and other parameters. At first glance, buying Boost doesn't sound like a bad option, but by horizontally scaling their ecosystem, they get better control over pricing since they make a nice ecosystem of products for their customers to use.
minderasure 7y ago
This would be a win-win. Tmobile and Sprint get their merger and a bucketload of cash to build out their 5G infrastructure. Amazon gets to piggyback off of their network and potentially claim some wireless spectrum.
brianbreslin 7y ago
I didn't realize Boost mobile still existed. Would be interesting to see Amazon build a google FI competitor which also rides on t-mobile spectrum in the US.
scarface74 7y ago
Sprint has been hemorrhaging money and customers for years. I have no idea why this merger is being fought. It’s not like Sprint is a real competitor. But back on topic: Boost is just an MVNO running on Sprint’s CDMA network. What worse combination of technology can you have than being on Sprint’s network and CDMA?
- maxerickson 7y ago
  What's wrong with CDMA? I mean, the technology is used in most current wireless standards, so the complaint has to be that you can only use phones that are compatible with Sprint and the largest wireless network in the US?
  - scarface74 7y ago
    GSM is a global standard that lets you use any phone just by putting in a sim. CDMA is not widely supported outside of the US. But even worse, CDMA is slow compared to GSM (HSDPA).
    - maxerickson 7y ago
      Sure, I have a GSM phone partly because I like that the hardware is less tied to the account. Of course, I also had to buy a nano SIM when I bought a new phone, but whatever. On the other hand, I don't think this is a particularly popular concern. It certainly doesn't concern a large share of wireless customers in the US (they are using the Verizon...).
      - ac29 7y ago
        GSM is a 2G standard [0]. Modern phones are pretty hard to put into a single bin. They often support 2G (GSM[TDMA]/CDMA/GPRS/EDGE, etc), 3G (UMTS[W-CDMA]/CDMA2000/EDGE/HSPA, etc), and 4G (LTE/OFDMA/WiMax, etc). A modern US iPhone or Android phone is perfectly capable of moving between every major carrier on every technology (its almost always LTE anyways). Every major US carrier uses SIM cards. [0] https://en.wikipedia.org/wiki/GSM https://en.wikipedia.org/wiki/GSM "The Global System for Mobile Communications (GSM) is a standard developed by the European Telecommunications Standards Institute (ETSI) to describe the protocols for second-generation (2G) digital cellular networks used by mobile devices such as mobile phones"
niftich 7y ago
Boost is an MVNO that runs off of Sprint's networks today, but the sale of Boost is a commitment [1][2] T-Mobile made as part of their efforts to get the FCC to approve their merger with Sprint, with some very generous terms. Remember that with LTE, there's no longer a divide between the GSM camp and the CDMA camp; it's the same LTE, although each carrier operates on various bands. With the merger, and as phone firmwares are updated and incompatible handsets are cycled out, the combined LTE network is compelling. With Boost's current target market of urban youth, the fact most current Boost phones only support the Sprint's CDMA2000 3G and not T-Mobile's GSM-flavored 3G is less of an unfortunate fit than with a more general MVNO. [1] https://newtmobile.com/wp-content/uploads/2019/05/FCC-Filing-May-20.pdf https://newtmobile.com/wp-content/uploads/2019/05/FCC-Filing... [2] https://web.archive.org/web/*/https://newtmobile.com/wp-content/uploads/2019/05/FCC-Filing-May-20.pdf https://web.archive.org/web/*/https://newtmobile.com/wp-cont...
- mehrdadn 7y ago
  > Remember that with LTE, there's no longer a divide between the GSM camp and the CDMA camp; it's the same LTE, although each carrier operates on various bands. Don't they have antennas in different locations though? Like even if your phone doesn't have compatibility issues with SIMs or bands, calling it "the same LTE" makes it seem like you could just pay someone else and get reception in the same areas which I don't think is the case?
  - niftich 7y ago
    Your phone using a different-besides-your-home network is called 'roaming' and it's not uncommon. For this to happen, your phone needs to know which networks it should try to authenticate against. A while back, Sprint and T-Mobile announced they'd launch a roaming agreement for LTE that would last for 4 years, and that would be honored even if their merger doesn't go through. According to some people [1] this went into effect in Summer 2018. [1] https://www.reddit.com/r/Sprint/comments/9548zg/tmobile_data_roaming_has_begun/ https://www.reddit.com/r/Sprint/comments/9548zg/tmobile_data...
    - 7y ago
RyanAF7 7y ago
Maybe cause they don't have any sustainable Revenue to justify their UNGODLY stock price? And, now need to compensate. Let's not forget Microsoft was at $65 the majority lf their life.
- deleted 7y ago
  [deleted]
- adventured 7y ago
  Amazon's stock is expensive, however markets - investors - do not price stocks based on past results typically. Stocks are priced largely on future expectations. This has been particularly true in the case of Amazon for a long time. They'll have near ~$30 billion in profit within the next four to five years, which will bring their PE down to a high, but not ungodly, 30x. AWS is worth $300-$350 billion now. Very soon it will soon be larger than Oracle and it's growing extremely fast for a large business (a high multiple would be granted). Their ad business is worth $100-$150 billion. In the next four to five years, those two businesses together will be worth as much as the entire company is today. That's a big part of what investors are betting on, along with the expectation that Amazon is going to continue to find new profit centers. Sure, you might say, why is Amazon priced for earnings four or five years out? Well, that's the standard practice of pulling future returns forward. Almost always happens with growth companies, inevitably leads to a stagnation period. Amazon will continue to grow into their market cap and their annual returns will drift downward.
  - RyanAF7 7y ago
    You're absolutely wrong and the shit you're parroting is basic Wikipedia crap. Future projections are based on past results. Thats how projections work. Whether fundamental or technical analysis. Manipulating that, especially for Bezos since he's a Wall Street elite, doesn't take but the slightest of changes. Only reason the Stock is priced so high is supply and demand which has been artificially created by Bezos' institutional connections. It will be called Capital Gains fraud in the future.
josephjrobison 7y ago
"It was not immediately clear why the largest U.S. online retailer would want the wireless network and spectrum." I think we can wager a few guesses.
xyzzy_plugh 7y ago
I wonder how much they would save running all the Kindles over their own network (MVNO or not) instead of paying AT&T millions of dollars per month.
objektif 7y ago
Its not just AMZN, other media giants are also interested in buying assets from the merged company to start another provider. If thats the case I would be OK with merger going ahead.
KirinDave 7y ago
Oh. Sure. Just what Amazon needs: to also be a telecom. Sure would be a shame if there was a single industry they couldn't strongarm.
paxys 7y ago
I'm sure Amazon has evaluated every company that's available for sale at some point, but I'm willing to bet that's as far as their interest in Boost goes. This deal makes very little sense for them.
duxup 7y ago
A sort of Google Fi for Amazon?
crucifiction 7y ago
I doubt they want to start a cell company, more likely it is to have favorable terms for embedding 4G into Echo devices, making car and portable echos possible. They have done this for years w/Kindle, which would also benefit.
- whoisjuan 7y ago
  I doubt that would be the intention. At least not only that. Amazon has some incredible network effects that would create a compelling cellphone service offering. They could bundle cellphone plans as an extra in Prime an undercut competition while giving unlimited access to Amazon.com, Alexa, Twitch etc. Having a cellphone company makes a lot of sense for any of the big tech companies. It allows them to create end-to-end experiences that are compelling just because they can vertically integrate different moments of their customers journey.
axaxs 7y ago
I'm honestly curious why. Boost is the worst major MVNO of the worst major carrier. I feel it would be less expensive to build an MVNO from scratch than it would be to try and improve that image..
- knd775 7y ago
  Sprint and T-Mobile are trying to sell Boost in order to get the merger approved. Amazon would most likely secure a promise the the MVNO agreement would carry over to T-Mobile after the merger. Additionally, the brand image doesn't matter. They'd likely just rename it to something like 'Amazon Wireless'
  - axaxs 7y ago
    Gotcha. That makes some sense, thank you.

122 points by Geeek 7y ago

I wonder if Amazon or the T-Mobile/Sprint side leaked this? Perhaps T-Mobile/Sprint weren't eager enough to sell, so Amazon wants the regulator to know an offer was made.

tantalor 7y ago

Another perk for Prime members.

sdan 7y ago
It strengthens their monopoly.
- sidr 7y ago
  Huh? Their monopoly in which market?
  - judge2020 7y ago
    I guess the internet? Apparently diversifying is monopolistic.
    - Meandering 7y ago
      Horizontal acquisition extends around the definition of monopoly. I'm not against Amazon. I don't think they should be stopped from expanding... yet. If the other conglomerates copy amazon then the possibility of a corporate dystopian future looks brighter!
      - judge2020 7y ago
        The EU regular pretty much sums it up[0]: > “If a company is dominant, that’s fine,” Ms. Vestager told reporters. “But if that dominance is abused, then we have an issue.” Having a monopoly and not abusing it is impossible when you're dealing with humans. Maybe in a hundred years where business decisions run through a DLNN and are cross-referenced with the law to make sure they're in compliance, a monopoly that doesn't abuse its dominance will become a reality. 0: https://www.nytimes.com/2016/04/21/technology/google-europe-antitrust.html?_r=0 https://www.nytimes.com/2016/04/21/technology/google-europe-...
        Meandering 7y ago
        As I inferred with sarcasm, this divergence from vertical to horizontal growth could effectively lead to oligopolies in the major markets(the few where they don't exist). I believe in the competitive market model up until economies of scale and purpose driven occupation out weigh it's benefits. e.g. manufacturing jet engines requires huge amounts of equity and legacy knowledge for safety. e.g. automating warehousing may lead to more fulfilling or mentally stimulating occupations. Amazon as a force in the larger economy versus a subset of markets in the economy could spur innovation in stagnant markets. On the other side of the coin, leveraging their massive infrastructure gives them an unfair advantage as they enter new sectors which can lead to an increased market barrier and prevent firms with new ideas from competing. As they stand, they aren't that much bigger than normal conglomerates[1]. But, they have strategically placed themselves in critical service areas like cloud computing. I think if they can force markets to evolve then we should allow them to grow with a discerning eye. [1]https://en.wikipedia.org/wiki/List_of_largest_companies_by_revenue https://en.wikipedia.org/wiki/List_of_largest_companies_by_r...
  - sdan 7y ago
    I guess I phrased that poorly. What I was trying to convey was that by horizontally scaling (like a comment in this thread said), Amazon, like Apple can create this ecosystem in which they provide consumers an incentive to be a part of and stay within it. Essentially, they're making Prime look better (which is not a problem), but once they have these customers using these Prime services, it'll be hard for them to change (similar to how people who own MacBooks lean a little bit toward buying an iPhone for the ecosystem integration), essentially "locking" them within the Prime ecosystem, giving them control over pricing and other parameters. At first glance, buying Boost doesn't sound like a bad option, but by horizontally scaling their ecosystem, they get better control over pricing since they make a nice ecosystem of products for their customers to use.

minderasure 7y ago

This would be a win-win. Tmobile and Sprint get their merger and a bucketload of cash to build out their 5G infrastructure. Amazon gets to piggyback off of their network and potentially claim some wireless spectrum.

brianbreslin 7y ago

I didn't realize Boost mobile still existed. Would be interesting to see Amazon build a google FI competitor which also rides on t-mobile spectrum in the US.

scarface74 7y ago

Sprint has been hemorrhaging money and customers for years. I have no idea why this merger is being fought. It’s not like Sprint is a real competitor. But back on topic: Boost is just an MVNO running on Sprint’s CDMA network. What worse combination of technology can you have than being on Sprint’s network and CDMA?

maxerickson 7y ago
What's wrong with CDMA? I mean, the technology is used in most current wireless standards, so the complaint has to be that you can only use phones that are compatible with Sprint and the largest wireless network in the US?
- scarface74 7y ago
  GSM is a global standard that lets you use any phone just by putting in a sim. CDMA is not widely supported outside of the US. But even worse, CDMA is slow compared to GSM (HSDPA).
  - maxerickson 7y ago
    Sure, I have a GSM phone partly because I like that the hardware is less tied to the account. Of course, I also had to buy a nano SIM when I bought a new phone, but whatever. On the other hand, I don't think this is a particularly popular concern. It certainly doesn't concern a large share of wireless customers in the US (they are using the Verizon...).
    - ac29 7y ago
      GSM is a 2G standard [0]. Modern phones are pretty hard to put into a single bin. They often support 2G (GSM[TDMA]/CDMA/GPRS/EDGE, etc), 3G (UMTS[W-CDMA]/CDMA2000/EDGE/HSPA, etc), and 4G (LTE/OFDMA/WiMax, etc). A modern US iPhone or Android phone is perfectly capable of moving between every major carrier on every technology (its almost always LTE anyways). Every major US carrier uses SIM cards. [0] https://en.wikipedia.org/wiki/GSM https://en.wikipedia.org/wiki/GSM "The Global System for Mobile Communications (GSM) is a standard developed by the European Telecommunications Standards Institute (ETSI) to describe the protocols for second-generation (2G) digital cellular networks used by mobile devices such as mobile phones"

niftich 7y ago

Boost is an MVNO that runs off of Sprint's networks today, but the sale of Boost is a commitment [1][2] T-Mobile made as part of their efforts to get the FCC to approve their merger with Sprint, with some very generous terms. Remember that with LTE, there's no longer a divide between the GSM camp and the CDMA camp; it's the same LTE, although each carrier operates on various bands. With the merger, and as phone firmwares are updated and incompatible handsets are cycled out, the combined LTE network is compelling. With Boost's current target market of urban youth, the fact most current Boost phones only support the Sprint's CDMA2000 3G and not T-Mobile's GSM-flavored 3G is less of an unfortunate fit than with a more general MVNO. [1] https://newtmobile.com/wp-content/uploads/2019/05/FCC-Filing-May-20.pdf https://newtmobile.com/wp-content/uploads/2019/05/FCC-Filing... [2] https://web.archive.org/web/*/https://newtmobile.com/wp-content/uploads/2019/05/FCC-Filing-May-20.pdf https://web.archive.org/web/*/https://newtmobile.com/wp-cont...

mehrdadn 7y ago
> Remember that with LTE, there's no longer a divide between the GSM camp and the CDMA camp; it's the same LTE, although each carrier operates on various bands. Don't they have antennas in different locations though? Like even if your phone doesn't have compatibility issues with SIMs or bands, calling it "the same LTE" makes it seem like you could just pay someone else and get reception in the same areas which I don't think is the case?
- niftich 7y ago
  Your phone using a different-besides-your-home network is called 'roaming' and it's not uncommon. For this to happen, your phone needs to know which networks it should try to authenticate against. A while back, Sprint and T-Mobile announced they'd launch a roaming agreement for LTE that would last for 4 years, and that would be honored even if their merger doesn't go through. According to some people [1] this went into effect in Summer 2018. [1] https://www.reddit.com/r/Sprint/comments/9548zg/tmobile_data_roaming_has_begun/ https://www.reddit.com/r/Sprint/comments/9548zg/tmobile_data...
  - 7y ago

RyanAF7 7y ago

Maybe cause they don't have any sustainable Revenue to justify their UNGODLY stock price? And, now need to compensate. Let's not forget Microsoft was at $65 the majority lf their life.

deleted 7y ago
[deleted]
adventured 7y ago
Amazon's stock is expensive, however markets - investors - do not price stocks based on past results typically. Stocks are priced largely on future expectations. This has been particularly true in the case of Amazon for a long time. They'll have near ~$30 billion in profit within the next four to five years, which will bring their PE down to a high, but not ungodly, 30x. AWS is worth $300-$350 billion now. Very soon it will soon be larger than Oracle and it's growing extremely fast for a large business (a high multiple would be granted). Their ad business is worth $100-$150 billion. In the next four to five years, those two businesses together will be worth as much as the entire company is today. That's a big part of what investors are betting on, along with the expectation that Amazon is going to continue to find new profit centers. Sure, you might say, why is Amazon priced for earnings four or five years out? Well, that's the standard practice of pulling future returns forward. Almost always happens with growth companies, inevitably leads to a stagnation period. Amazon will continue to grow into their market cap and their annual returns will drift downward.
- RyanAF7 7y ago
  You're absolutely wrong and the shit you're parroting is basic Wikipedia crap. Future projections are based on past results. Thats how projections work. Whether fundamental or technical analysis. Manipulating that, especially for Bezos since he's a Wall Street elite, doesn't take but the slightest of changes. Only reason the Stock is priced so high is supply and demand which has been artificially created by Bezos' institutional connections. It will be called Capital Gains fraud in the future.

josephjrobison 7y ago

"It was not immediately clear why the largest U.S. online retailer would want the wireless network and spectrum." I think we can wager a few guesses.

xyzzy_plugh 7y ago

I wonder how much they would save running all the Kindles over their own network (MVNO or not) instead of paying AT&T millions of dollars per month.

objektif 7y ago

Its not just AMZN, other media giants are also interested in buying assets from the merged company to start another provider. If thats the case I would be OK with merger going ahead.

KirinDave 7y ago

Oh. Sure. Just what Amazon needs: to also be a telecom. Sure would be a shame if there was a single industry they couldn't strongarm.

paxys 7y ago

I'm sure Amazon has evaluated every company that's available for sale at some point, but I'm willing to bet that's as far as their interest in Boost goes. This deal makes very little sense for them.

duxup 7y ago

A sort of Google Fi for Amazon?

crucifiction 7y ago

I doubt they want to start a cell company, more likely it is to have favorable terms for embedding 4G into Echo devices, making car and portable echos possible. They have done this for years w/Kindle, which would also benefit.

whoisjuan 7y ago
I doubt that would be the intention. At least not only that. Amazon has some incredible network effects that would create a compelling cellphone service offering. They could bundle cellphone plans as an extra in Prime an undercut competition while giving unlimited access to Amazon.com, Alexa, Twitch etc. Having a cellphone company makes a lot of sense for any of the big tech companies. It allows them to create end-to-end experiences that are compelling just because they can vertically integrate different moments of their customers journey.

axaxs 7y ago

I'm honestly curious why. Boost is the worst major MVNO of the worst major carrier. I feel it would be less expensive to build an MVNO from scratch than it would be to try and improve that image..

knd775 7y ago
Sprint and T-Mobile are trying to sell Boost in order to get the merger approved. Amazon would most likely secure a promise the the MVNO agreement would carry over to T-Mobile after the merger. Additionally, the brand image doesn't matter. They'd likely just rename it to something like 'Amazon Wireless'
- axaxs 7y ago
  Gotcha. That makes some sense, thank you.