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Instant Analysis: Sprint Offering Amazon Prime, but Buyer Beware

By Daniel B. Kline - Apr 1, 2016 at 9:20PM

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The wireless carrier is making customers an offer they should refuse.

Sprint (S) has found a new way to overcharge its customers that may actually appeal to a select handful of them. The company has begun offering Amazon (AMZN 0.25%) Prime as an add-on to its wireless service for $10.99 month.

Of course, that has customers paying $131.88 a year for the $99-per-year service that offers free two-day shipping, Amazon Prime Video, a music service, and a few other perks. For most, this will be a thanks-but-no-thanks offer. In a few cases, though, some Sprint customers may like the idea of not having to pay for Prime in a single lump payment. Still, the number of customers who want Prime, can't afford to pay upfront, but are willing to pay more is probably limited.

Sprint, of course, does not see any problem with its offer and crowed about the new relationship in a press release:

"Amazon Prime is another example of the innovative options that Sprint delivers every day to its customers," said Marcelo Claure, Sprint CEO. "With this monthly add-on, Sprint customers will have great flexibility and will have the opportunity to easily access Amazon's full entertainment package on America's fastest LTE network."

That's mostly true (all three other wireless carriers would dispute the "fastest LTE" claim), but it does not point out that Sprint customers could pay less and still get all of that.

Does it matter?
People still make bad short-term financial decisions, and spending $131.88 a year for a $99 product is in line with renting a couch rather than saving up to buy one. The audience for this should be pretty small. Perhaps there are some people who simply don't know the price of buying Prime direct from Amazon, and there may be a few people with so much money they don't care (though it's hard to see that audience choosing Sprint).

Ultimately, this promotion won't do much for Sprint or for Amazon. It's kind of a silly offer that most consumers will understand is a bad deal. This won't impact the stock price of either company, and in reality, it will probably be the kind of idea that gets a little attention and then disappears, never to be heard of again.

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