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The Boost Infinite Unlimited SIM kit will be available to Amazon Prime subscribers at $25 a month for unlimited talk, text and data services. Dish and Amazon did not disclose their financial arrangement.
Shares of Dish were down 4%, while those of AT&T (NYSE:T) and Verizon Communications (NYSE:VZ) were marginally up after the announcement of the partnership, which analysts suspect could potentially pressure telecom prices in the United States.
“US wireless is pretty fully penetrated and (so) the most obvious way for Dish-Amazon to accelerate additions is to cut price which I believe is an inevitability,” said Jeff Wlodarczak, analyst with Pivotal Research.
For Amazon, the deal could draw more customers to its Prime service at a time growth in key markets including the United States has plateaued.
“With its bulk buying power, Amazon can undercut pricing and potentially draw millions or tens of millions of consumers away from their current mobile plans and deliver customers at scale to a single carrier,” said Michael Ashley Schulman, chief investment officer at Running Point Capital.
For Dish, which has been facing tough competition from larger carriers, the deal will help expand its wireless infrastructure.
