Amazon.com and Dish Network Corp. have held discussions about the two companies inking a partnership agreement to build-out a new wireless network, or forming an alliance where Amazon Prime members could receive a wireless service for an add-on fee, reports The Wall Street Journal.
An alliance between the two could shake-up the wireless market, now dominated by AT&T, Verizon, Sprint and T-Mobile. Or it could point to Amazon’s ambitions in bringing connectivity to its growing slate of Internet-based devices, like the Echo or Dash buttons.
Citing people familiar with the matter, the WSJ reports that Amazon founder Jeff Bezos and Dish Network CEO Charlie Ergen have grown closer in recent months, sharing interests in space and robotics. The two met at a recent satellite conference, and Bezos also recently entertained Ergen in May in Seattle. The Journal noted that no deal is imminent and an acquisition is unlikely. Dish also has discussed an alliance with at least one other tech company for its new wireless network, which is slated to hit the market in three years.
Amazon moving deeper into the wireless industry would not be a surprise. The company made a failed attempt to enter the wireless phone market — making its own hardware — with the unveiling of Fire Phone in June 2014. And while the Fire Phone was a huge flop, Bezos is one who has always touted the power of long-term thinking and bouncing back from failures.
Could a deal with Dish help re-ignite Amazon’s plans?
It’s unclear whether anything will come to pass, but the two companies have allied before. In May, Dish and Amazon announced that Dish DVRs would get Amazon Alexa integration.
Of course, a new wireless network or an add-on for wireless service for Prime members would be a much bigger deal. The WSJ notes that a new network could be an attractive option for Amazon to do everything from controlling a network of drones to providing better connections to its Amazon Alexa and Dash devices to an enhanced signal for Amazon Prime video.
The move would also continue Amazon’s growing appetite to play ball in a wide array of industries, ranging from entertainment to cloud computing to fashion. However, one must ask just how much bandwidth Amazon has to take on new projects, especially given its plans to acquire grocery store chain Whole Foods for $13.7 billion.
Dish is in the process of building its own next-generation wireless network, a network it has committed to rolling out in 2020. The company raised $1 billion through a debt offering earlier this year for the build-out of the network, and the network and spectrum is one of the main reasons why Dish and T-Mobile have long talked about a potential merger, though those talks are now reportedly on hold. The idea behind Dish’s new network is to target the 5G network for IoT devices, like the Dash or Echo, rather than roll out a full-blown wireless network.
When rumors of a potential tie-up between Amazon and Dish emerged earlier this year, Aaron Pressman at Fortune noted that it was unlikely that Amazon would enter the full wireless arena.
Pressman wrote at the time: “Perhaps Jeff Bezos wants a cheap way to connect some future, portable devices to the net running Amazon’s Alex digital assistant?”
That could be more likely given Amazon’s ambitions in bringing connected devices into your home and workplace.