Sprint, T-Mobile Merger Gets Help From Amazon: Retailer Looking To Buy Boost Mobile

In meeting the DoJ diktat to “do the groundwork for creating a new carrier” as pre-condition to Sprint, T-Mobile merger, Amazon is reportedly ready to help as a potential buyer of Sprint’s Boost Mobile.

According to a Reuter’s report, the online retail giant is interested in buying, Boost Mobile, Sprint’s prepaid cell phone wireless service.

The sale of Boost is planned as a prelude to winning regulatory approval for the $26 billion merger deal between T-Mobile and Sprint. It will help to cut the duo’s market share in the prepaid wireless business.

The purchase of Boost Mobile could catapult Amazon into a wireless service provider with many cushions inherent in the deal.

One of the pulling factors for Amazon, according to Reuter’s report, is the opportunity to use T-Mobile's network for six years. Amazon is also enamored by the spectrum the newly-merged duo would release as a pre-condition to the merger.

The compulsion to put in place a new carrier increased as concerns heightened that the merger would reduce the number of wireless carriers in the U.S. to three.

The merged entity is sought to be known as New T-Mobile. Verizon and AT&T are the other top two players.

Conditions suggested by FCC

In early May, FCC Chairman Ajit Pai evinced support to the merger deal subject to the fulfillment of some conditions.

They include T-Mobile and Sprint divesting Boost Mobile and committing to build out 5G in rural areas and spread wireless home broadband to replace existing fixed-line service.

Noting that Amazon’s taste for mobile business is already known from its Fire Phone venture in the past, the report notes there will be little surprise if Amazon emerges as the new wireless carrier in the United States.

Amazon, T-Mobile, and Sprint did not respond to the news.

Amazon’s entry can meet DoJ’s terms

If Amazon steps in as the buyer of a divested asset, it will have to face the scrutiny of the U.S. Justice Department to ensure that the buyer has the resources to stay competitive.

While the FCC has given the in-principle nod for the deal the DoJ needs to seal the merger.

Consumer groups have upped concerns that a merger that turns monopolistic would hit wireless users badly with higher prices.

Now the DoJ looks convinced and wanted to see the status quo of four players in place while the deal undergoes an approval process.