What happened
The two leading U.S. telecom stocks, AT&T (T -1.28%) and Verizon (VZ -0.48%), came under significant pressure on Thursday. The source of this was a media article about the market entry of a potentially powerful new rival. This put enough fear in investors to drive AT&T's share price down 5% on the day, while Verizon's suffered a nearly 3% decline.
So what
That morning, The Wall Street Journal published an article stating that Dish Network (DISH) is in discussions to sell plans for its wireless telecom service to customers through Amazon (AMZN -1.89%). Citing "people familiar with the matter," the business newspaper wrote that the details of such plans might be announced as soon as next month.
Known chiefly as a satellite TV broadcaster, Dish has been acquiring mobile assets for years. The company spent roughly $30 billion on mobile spectrum licenses alone, according to the Journal's reporting, and has been building out its network of cell towers in the U.S. for several years.
An unnamed Dish spokeswoman denied the newspaper's report. The article quoted her as saying that Dish does "not have any type of distribution plan or partnership with Amazon at this time."
Now what
Investors clearly weren't buying the Dish denial on Thursday. Assuming the article is accurate, a Dish/Amazon tie-up would quickly make the former company a strong contender in the mobile wars in which competition is already hot and opportunities for meaningful growth limited.
It seems the industry is about to get much more interesting, not to mention contentious. AT&T and Verizon will surely have their work cut out for them.
