An Amazon/DISH Partnership Wouldn't Be That Crazy

Amazon.com, Inc. AMZN is reportedly in talks with DISH Network Corp DISH to become a “foundational customer” for the satellite provider’s upcoming Internet of Things (IoT) network ━ so what’s the big deal?

“The idea of Amazon partnering with DISH may seem unusual, but their aspirations may be intersecting around connected devices and the IoT opportunity,” Citi analyst Michael Rollins wrote in a Tuesday note.

The relationship could prove mutually beneficial, securing Amazon a platform to connect devices across its Amazon Web Services and DISH a strategic relationship supporting its pursuit to meet Federal Communications Commission buildout requirements by 2020.

It would also position DISH for continued revenue and partnership development.

“I can think of a thousand things that need to get connected, and there's probably another million things that we can't think of that other people will think of to be connected,” DISH chairman, Charles Ergen, said in the company’s May 1 earnings call. “And part of what we're looking at is our system to be open so that anybody who wants to participate in the network can invent things for the network.”

It certainly seems Amazon wants to participate. The company has invested in a range of internet-connected products, from Echo and the online retail service to drones and autonomous vehicles, with the capacity to exchange and aggregate data.

A Reasonable Route

According to Rollins, DISH’s IoT network, with its low buildout cost, “could make a lot [of] sense on several fronts.”

For one, the network infrastructure could potentially be converted into a 5G mobile broadband network, which would further expand DISH’s reach. Additionally, the company could sell or lease its spectrum capacity to corporate clients to compensate for declining contracts.

“We believe IoT platforms are going to become a larger focus for the wireless industry, especially with customer-centric revenues stagnating,” Citi analysts wrote.

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