What happened
Shares of Dish Network (DISH) initially climbed more than 9% early Wednesday, according to data provided by S&P Global Market Intelligence. The stock then gave up those gains to trade lower on the day and lost further ground on Thursday after the telecom provider announced a new partnership with Amazon.com (NASDAQ: AMZN) to sell its Boost Infinite Unlimited wireless postpaid plan to Amazon Prime members. Amazon shares were down slightly on the news.
So what
Starting this week, Amazon Prime members will be automatically pre-qualified to sign up for Boost Infinite's $25/month unlimited wireless plan, with the price locked in for life. They'll also receive a 20% discount off a SIM kit and a $25 bill credit toward their first month of service with Boost Infinite.
With around 200 million Amazon Prime members as of this writing, the market's positive knee-jerk reaction to the announcement was understandable. Dish will enjoy a massive sales funnel for prospective new subscribers looking for an affordable unlimited postpaid wireless service, while Amazon can tout it as another modest perk for its Prime members.
However, investors are likely disappointed that the news is a far cry from early speculation that Amazon was looking to partner with Dish on an even lower-cost or no-cost wireless service to Prime members.
Now what
In any case, this news isn't exactly a disruptive game-changer to the mobile industry but rather appears to be a modest positive for Dish at best. That could change over time if Amazon and Dish decide collectively to lower or even eliminate the cost to consumers, but for now, it's no surprise to see Dish shares falling in response.
