Amazon appears to be the latest party interested in buying Sprint’s Boost Mobile prepaid brand, according to a new Reuters report citing unnamed sources familiar with the matter.
Divesting Boost is one of the concessions T-Mobile and Sprint agreed to as the nation’s third and fourth largest wireless providers continue to negotiate for regulatory approval of their $26.5 billion merger.
The FCC last week said it will greenlight the deal, after the companies agreed to divest Boost and committed to 5G network buildouts and not to raise prices for three years. However, reports have surfaced that the Department of Justice has not been won over yet and is still concerned about impacts to competition from reducing the number of nationwide carriers from four to three. Reports this week said the DOJ could require additional concessions including moves by T-Mobile and Sprint that would enable a new national competitor to enter the wireless scene.
Reuters’ sources indicated that Amazon is interested in a deal that would allow the online retail giant to keep Boost as a wholesale agreement, using the new T-Mobile’s network for six years.
The FCC did not say it would require any spectrum sales from T-Mobile or Sprint, but if the DOJ requires spectrum divestitures for deal approval then Amazon would be interested in buying the airwaves too, according to Reuters.
While Amazon’s deep pockets could cause some concern about the online retail giant entering the wireless space, Wells Fargo Senior Analyst Jennifer Fritzsche noted the fluidness of the situation and said “scariness” of the headline should be considered in perspective of Amazon’s would-be spectrum position.
“Spectrum is the life blood of a wireless network – and while AMZN could buy some spectrum divestitures if required to get this done – it is impossible for us to see how it will amass the necessary spectrum to mirror that of the wireless incumbents,” wrote Fritzsche in a Friday research note to investors.
She noted that when thinking about spectrum sales it’s important to keep in mind that T-Mobile has stated it won’t accept any deal conditions that would change the combined company’s value by more than $7 billion.
Other parties that have surfaced as potential buyers for Boost include prepaid brand Q Link Wireless, as well as Boost Mobile founder Peter Adderton, who sold Boost to Nextel in 2004, which was eventually acquired by Sprint.
Q Link Wireless CEO and founder Issa Asad told Reuters that the company is using private equity backing to put together a bid for Boost that could range between $1.8 billion to $3 billion.
