Amazon wants to offer internet service over the networks of existing European broadband providers, a report in The Information revealed this week. The company will exploit wholesale network access laws in some European countries to sell broadband connectivity without laying its own cables.
In some regions of Europe, broadband providers have to offer wholesale access to their networks to rival providers. This helps to create a level playing field and gives customers more choice. Once a provider has laid a certain cable type in their area, all the other providers can also use the cable to offer competitor services.
Such systems are used by countries including the U.K. and Germany. Amazon may register as a broadband reseller, using other networks’ cables to sell internet as part of its Prime subscription service. The report suggested Amazon may launch a Prime internet and video bundle. In many ways, this would be very similar to the combined phone, broadband and TV packages offered by current internet providers.
This approach wouldn’t work for Amazon in the U.S. because internet providers don’t generally offer wholesale access to their networks. Unlike regions such as the U.K. and Germany, most U.S. consumers don’t have a choice when it comes to broadband providers. ISPs set up their own networks and actively block rivals from sharing their infrastructure. This makes it highly unlikely Amazon would be able to simply resell broadband in the U.S.
The most viable way of providing internet access to Prime subscribers in the U.S. would require the use of the country’s mobile networks. Most mobile carriers offer wholesale access to their networks, something that’s less common in Europe. This is why Google’s Project Fi mobile network is widely accessible but Fiber, the company’s Gigabit broadband service, is only available in a handful of cities.
Selling broadband services with a Prime subscription could be a significant move for Amazon. It is rapidly expanding its list of Prime services to create a more attractive fixed-price deal. Offering an internet subscription, streaming video, music, online storage, free delivery and exclusive offers for a single monthly price could make Amazon the one online provider you need for all your online activities. With existing infrastructure powering the connections, customers could have good reason to switch.
Amazon has not commented on the reports, describing the rumours as “speculation.” There’s currently no timeframe for when the online shopping giant could start selling the service that makes its website accessible. The countries Amazon intends to enter also remain unclear, although larger wholesale regions such as the U.K. and Germany are likely to be at the top of its starting list.
