Is Amazon weighing an alliance with Dish Network to develop a wireless phone service, or links to a new generation of web-connected devices? It seems so: The companies are talking about these, and other, possible collaborations, The Wall Street Journal reports this morning — building on a May story from Satellite Business News.
Amazon’s Jeff Bezos and Dish’s Charlie Ergen “have gotten to know each other better over the past year,” the WSJ says. That’s led to wide-ranging conversations about ways they could join forces.
Dish shares are up 1.3% in mid-day trading, while the benchmark Standard & Poor’s 500 is down 0.4%.
In addition to its satellite TV service, Dish has been amassing rights to terrestrial wireless spectrum. Ergen has yet to spell out exactly what he hopes to do with the licenses.
He told analysts in May he expects to build — “with or without partners” — what he calls “a new narrowband [Internet of Things] network that doesn’t exist today.” Internet of Things, or IoT, refers to a new generation of devices that enable users to remotely monitor, and often control, things including health, home appliances, pets or farm animals, manufacturing, electrical systems, and environmental activity.
Such a service might tie into Amazon’s Echo, its voice-controlled home device for people who want to access news and entertainment, and control some connected appliances.
An Amazon-Dish collaboration also might create a wireless phone system that the e-retailer could offer to its Prime customers to deepen their loyalty — and provide it with user data.
The Journal says that a deal isn’t imminent and may not take place. A full acquisition of Dish, it adds, citing unnamed sources, “is highly unlikely.”
Wells Fargo Securities’ Marci Ryvicker said in May, when talk of a possible Amazon-Dish alliance surfaced, that it “confirms our view that Charlie had a definitive plan — likely with someone outside the incumbent wireless ecosystem — when he entered the incentive auction” to buy wireless rights.
She added that a deal could “take on a number of different forms given [Amazon’s] sizable cash war chest ($21.5 billion as of 3/31) that could allow for a significant investment towards a buildout.”
Since then, Amazon committed $13.7 billion to buy Whole Foods.
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