(Reuters) – Dish Network Corp <DISH.O> Chief Executive Charlie Ergen and Amazon.com Inc <AMZN.O> head Jeff Bezos have discussed a partnership to enter the wireless business, the Wall Street Journal reported, citing people familiar with the matter.
Amazon could help bankroll a network Dish is building focused on the “Internet of Things”, and could possibly offer its Prime members an option to pay a little more per month for a connectivity or phone plan, the Journal reported on Thursday, citing one person.
Dish’s shares were up 1.2 percent at $63.53, while Amazon shares were down 0.3 percent.
Dish has been buying up spectrum, or radio frequencies that carry the data flowing through devices, making it a potential acquisition target for U.S. wireless carriers such as Verizon Communications Inc <VZ.N>, according to industry analysts.
Dish faces a Federal Communications Commission deadline to use the spectrum by 2021 to build its first wireless network. Some investors say Ergen will likely want a partner to help share the cost of the investment, even though he has said the company can build the network by itself.
An IoT platform would possibly benefit several Amazon Web Services products as well as its drone delivery plans, Citi analysts said in a note in May.
“With its own wireless network … (Amazon) could consider real-time changes in directions or multi-stop delivery routes through messages from the network,” the note said.
As part of a partnership, Amazon could also offer a one-way broadcast signal for its Prime video on Dish’s airwaves, the Journal said, citing a person close to Dish’s plans.
As the market for smartphones and mobile devices becomes saturated, the wireless industry is betting that “Internet of Things” will provide new revenue streams.
Citi analysts added that Verizon was pressing hard on the IoT front, while T-Mobile recently announced plans for a 5G IoT network.
An acquisition of Dish by Amazon is highly unlikely, the WSJ report added. Dish declined to comment, while Amazon was not immediately available for comment.
Analysts have said that the telecoms and cable sectors are primed for a wave of deal activity, and executives have openly talked about potential mergers.
U.S. wireless company Sprint Corp <S.N> was reportedly holding talks with peer T-Mobile US Inc <TMUS.O>, before putting those plans on ice to explore a wireless partnership with Charter Communications Inc <CHTR.O> and Comcast Corp <CMCSA.O>.
(Reporting by Anya George Tharakan in Bengaluru; Editing by Saumyadeb Chakrabarty)