Prime wireless service

Running Point and its chief investment officer, Michael Ashley Schulman, CFA, were quoted by Reuters in an article — by reporters Medha Singh and Yuvraj Malik, “Dish Network partners with Amazon to offer wireless services” — regarding the implications of Amazon’s partnership with DISH Network to offer mobile phone service.

Benefits to Dish Network and to Amazon

A technology and consumer giant like Amazon creates huge ripples when it enters any market. In the capital intensive world of 5G mobile telecom, were service is increasingly a utility with heavy fixed costs, such a transference of demand could make or break a carrier.

Several possible benefits may accrue to Amazon from such a move including improving Prime member retention rates, allowing Amazon to slightly increase annual subscription costs because of the uplift in perceived benefits, attracting new customers to Amazon Prime, and providing Amazon a direct channel to the lucrative multi-billion dollar market of selling and financing mobile phones and possibly tracking mobile phone data.

Article excerpts are below:

“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.

Beware any “merger of equals.” The idea is noble, the reality a mess. The reason is in the premise. If the merging companies are so darned equal, why should either adopt the practices, policies, or people of the other?

Jack Welch

Disclosure: The opinions expressed are those of Running Point Capital Advisors, LLC (Running Point) and are subject to change without notice. The opinions referenced are as of the date of publication, may be modified due to changes in the market or economic conditions, and may not necessarily come to pass. Past performance is not indicative of future results. Forward-looking statements cannot be guaranteed. Running Point is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. More information about Running Point’s investment advisory services and fees can be found in its Form ADV Part 2, which is available upon request. RP-23-73