Moody’s Investors Service predicted if Amazon entered the US market with a low-priced tariff it will disrupt cable operators and resellers as well as established players AT&T, Verizon and T-Mobile US.
In a report Moody’s VP Emile El Nems stated Amazon would increase competitive pressure on the existing companies, which face substantial debt from buying spectrum and building their networks to meet high demand for mobile broadband.
El Nems noted Amazon’s large Prime membership and expertise in leveraging customer relationships could lead to it winning significant market share.
He noted Amazon’s local market presence, strong distribution network and billing services would be well-positioned to compete for a sizeable share of the marketplace.
“Similar to Amazon’s disruptive approaches to other industries, we believe the company has the expertise to leverage customer relationships and successfully offer wireless services in a bundled manner that enhances the value proposition of being an Amazon Prime customer.”
He stated if Amazon became a competitor in the wireless industry and gained significant share by undercutting pricing the credit metrics for all of the large mobile operators could be pressured.
Verizon, T-Mobile, AT&T and Amazon denied reports stating they were in discussions to offer mobile services to Amazon.
The Wall Street Journal previously reported Dish Network was also in talks with Amazon.