Amazon’s Next Phone Could Actually Be an MVNO

Is Amazon’s “Transformer” project just a phone, or a Star Trek vision? Discover why an MVNO backbone could be the secret to Jeff Bezos’ dream of a Captain Kirk Computer with AI.

What we do know is that the Transformer project represents a departure from the app/play-store model we know from today’s smartphones. Instead of a screen full of icons, Amazon is building a device where Artificial Intelligence (AI) is the interface, and tasks are executed without you  needing to download, register for, or open a traditional app.

It sounds like the fundamental idea is to move from a “Pull” economy (where you find an app, open it, and pull the data) to a “Push” economy (where you tell the AI what you want and it handles the execution.

In example, instead of opening your food delivery app, you tell the device, “Order my usual Thai dinner.” The integrated AI handles the backend API calls to food delivery, confirms the payment via your Prime account, and completes the task.

While the device may run an Alexa+ its operating system is rumored to be a Linux-based Vega OS for lighter tasks, while AI is the core engine.

The “phone” becomes a mobile personalization device. It learns your habits to anticipate needs rather than just reacting to taps on apps. The device is meant to be an “always-on” assistant that syncs seamlessly with your devices at home, creating a continuous thread of assistance from your living room to your pocket.

Amazon is also said to be exploring a secondary, stripped-down version of the device, heavily inspired by the Light Phone. This smaller version might lack a web browser or social media apps, focusing strictly on core utility such as calls, maps, a calendar, and an Alexa interface.

Amazon knows it is nearly impossible to make people ditch their Androids or iPhones. By offering a minimalist device that acts as a secondary phone they can get into your pocket without requiring you to switch your primary platform.

A smaller, more focused device centered on voice, AI, and essential functions could coexist alongside an iPhone or Galaxy, gradually building its own role in the user’s daily routine. In this context, bundled connectivity becomes not just advantageous but necessary. A secondary device cannot succeed if it introduces additional complexity or cost. It must arrive preconfigured, always connected, and seamlessly integrated into the user’s existing account.

If Amazon intends to move users away from app-centric interactions toward an experience mediated by AI, the ecosystem must function continuously and without friction 24/7, inside and outside. Requests must resolve instantly, services must integrate seamlessly, and the boundaries between tasks must disappear. None of this is possible if connectivity is inconsistent, constrained, or externally controlled.

Owning, or at least orchestrating, that connectivity becomes essential.

This is where the MVNO strategy becomes critical. Amazon already bundles video, music, reading, and shipping discounts with its Prime membership. Integrating low-cost or potentially “free” wireless service as another Prime perk would create an incredibly powerful value proposition.

By becoming an MVNO (meaning it rents space on major mobile networks like T-Mobile or Verizon and resells it under its own brand), Amazon can bypass the traditional model. They could offer Prime members a simplified, potentially data-optimized plan that ensures the phone’s AI and data-heavy services just work without the user constantly worrying about data caps.

In this MVNO 2.0 model, the traditional telecom bill begins to dissolve. Connectivity is no longer a separate expense but an embedded feature of membership, subsidized and justified by increased engagement across commerce, media, and services.

The MVNO 2.0 model is not new, we have already seen the success of this with bank MVNOs and retail MVNOs. A useful real-world example of this dynamic would be Walmart de México, who operates BAIT, now the largest MVNO globally by subscriber count, with well over 20 million users.

On paper, it looks like a telecom business. In practice, it behaves very differently. Average telecom revenue per user is around $2 per month, several times below traditional mobile network operators, showing that connectivity itself is not the primary profit engine.

What matters more is what happens around it. BAIT users are not just mobile subscribers, they are more engaged retail customers. Internal data shows they spend significantly more – up to 2.5 times more – across Walmart’s physical and digital channels, while incentives like free data tied to purchases reinforce that loop.

In other words, Walmart is not using telecom to make money on telephony services. It is using the MVNO to drive its core business. Connectivity becomes a behavioral layer, one that drives frequency, loyalty, and spend, while the device and the plan simply anchor the relationship.

Chinese MVNOs like Alibaba, JD, Snail, etc. were forced into MVNO 2.0 from day one. Unlike the West, Chinese MVNOs essentially buy data at retail prices, there is zero margin in the connectivity itself. This forced them to treat mobile service as a loss leader to drive their core business.

Alibaba used their MVNO Ali Telecom to capture users into the Tmall/Alipay ecosystem, proving that an MVNO is a loyalty engine fueled by ecosystem data.

They are currently doubling down on Wukong, their AI-native agent platform, while Ali Telecom provided the pipe for the user, Wukong is designed to be the brain that executes tasks across Taobao and Alipay. For Project Transformer, Amazon could similarly use their LEO Satellite Pipe to ensure their AI Agent is never offline.

JD Mobile, Amazon’s closest operational peer, used its MVNO to pioneer the Connectivity as a Perk model. By offering shopping-for-data rewards, JD linked mobile usage directly to retail spend.

They further integrated this into their JD PLUS membership, where data packages and 5G service became a bundled lifestyle benefit. This effectively turned the mobile plan into a high-frequency engagement tool. JD PLUS members now spend an average of 10 times more than non-members, with shopping frequency increasing by over 120% after joining the ecosystem.

Snail Mobile provides another example in the gaming sector. As a game developer turned MVNO, they used zero-rated data and in-game rewards to keep users inside their gaming ecosystem, even launching their own gaming-optimized hardware.

These cases shows MVNO 2.0 in action. Connectivity is not the end goal it is the hook. By providing telephony services (data) to drive retail or gaming, these brands are seeing a level of engagement and spending that traditional mobile operators simply cannot compete with.

There are already several versions of this pattern, each pointing in the same direction from different angles.

Google’s MVNO Fi, abstracts away carrier complexity, positioning connectivity as a flexible extension of its broader ecosystem rather than a standalone product.

India’s largest telecom network, Reliance Jio took a more aggressive route, collapsing the cost of data to accelerate adoption and then monetizing through services layered on top.

There is a also useful precedent in European markets. Xplora who sells devices such as smartwatches for children, special smartphones for seniors and smartphone + special services for those in between – but the hardware is not the center of its business. The real engine is the MVNO subscription layer that comes with it.

Connectivity is bundled, controlled, and simplified, turning what could have been a one-time hardware purchase into an ongoing relationship through generations. The device exists to anchor that relationship and the network sustains it.

Even in newer categories, the same logic appears. Devices like the Rabbit R1 and Humane AI Pin attempt to remove the smartphone interface entirely, replacing it with an AI-mediated experience. While their execution has been uneven, the underlying assumption is notable, connectivity must be bundled, simplified, and largely invisible for the experience to hold together.

We see a similar vertical integration with hardware manufacturers like Xiaomi, which launched its own MVNO to tie its smartphones and massive AIoT ecosystem together under a single “Mi” identity. By controlling the connection, Xiaomi ensures that its devices, from phones to smart home sensors are always part of a unified, high-frequency loop that the user never has to leave.

HMD Global (the home of Nokia phones) also follows this blueprint with HMD Mobile. They recognized that in a fragmented market, the “one-stop-shop” is king. By bundling a Nokia device with an HMD SIM, they turned a one-off hardware sale into a recurring service relationship, simplifying the experience for the user while securing long-term brand retention.

Also in the industrial and enterprise space, Panasonic has used its MVNO capabilities to move beyond just selling rugged Toughbook laptops. Through their connectivity platforms, they provide a managed service where the hardware, the software, and the global roaming are all handled under one roof. For a logistics firm or a utility company, Panasonic is not just a hardware vendor they are the engine that keeps their field teams connected regardless of geography.

Taken together, these examples shows the shift in how connectivity is positioned. It is no longer just a utility delivered by network operators, but something that can be absorbed into a broader service layer – one that is ultimately monetized somewhere else.

Amazon’s strategic positioning for an MVNO is further strengthened by its own Leo satellite internet constellation (formerly Project Kuiper), which has begun scaling significantly as of 2026. This adds a critical layer of infrastructure independence that most MNO and MVNOs lack = Hybrid Connectivity.

A “Transformer” phone with a Prime Wireless MVNO could utilize this hybrid model, leveraging traditional MNO networks in dense urban areas and seamlessly shifting to Amazon Leo satellite backhaul in rural or underserved locations. This anywhere connectivity would be essential for an always-on AI assistant.

Owning a portion of the connectivity pipes through its satellite network makes the financial model of being an MVNO infinitely more sustainable for Amazon compared to companies that have to rent 100% of their bandwidth from external network operators. This financial leverage could allow Amazon to offer extremely competitive, potentially market-disrupting pricing to Prime members.

Such a system would not merely connect users to the internet. It would connect them to Amazon’s version of it.

When Amazon abandoned the Amazon Fire Phone, it seemed to close the book on its ambitions in mobile hardware. The failure was clear and instructive, consumers had little reason to leave the mature ecosystems of Apple and Samsung for a device that offered neither a compelling app experience nor a meaningful shift in how smartphones were used.

More than a decade later, Amazon appears ready to try again. But the emerging contours of its internal “Transformer” project suggest something far more ambitious than a second attempt at a handset. This time, the company might not be trying to win the smartphone market. It may be looking to redefine the layer beneath it.

Smartphones are no longer the primary battleground in consumer technology. The real opportunity now sits below the surface, in the infrastructure that connects users to services, data, and increasingly, artificial intelligence.

For Transformer to succeed, it will not be because Amazon built a better phone. It will be because Amazon found a way to own that underlying connection.

A mobile virtual network operator model offers a path toward that goal. For Amazon, however, an MVNO would not simply be an adjacent business. It would be the connective tissue that allows its broader ecosystem to function as a unified whole.

The logic becomes clearer when viewed through the lens of Amazon’s most successful strategy: bundling. Over time, the company has turned its Prime subscription into a gravitational center for consumer behavior, folding in shipping, video, music, and other services into a single recurring relationship. Adding wireless connectivity to that bundle would not just enhance Prime, it would transform it into something closer to a comprehensive access layer for daily life.

There are, of course risks. Telecommunications remains a complex and in some countries, a heavily regulated domain, and even a partial move into this space would introduce new operational challenges. The timeline for satellite infrastructure remains uncertain, and early iterations of any such product would still depend heavily on traditional carrier relationships. At the same time, the aggregation of ever more user data raises questions about privacy and trust which may limit the scale into some markets.

But perhaps the greatest risk lies in execution. The history of AI-first hardware is, so far, defined more by ambition than by success. For Amazon, the difference must come from integration. It is not enough to build a device that showcases artificial intelligence. The company must embed that intelligence within a broader ecosystem that already plays a central role in users’ lives.

Transformer would represent a shift in how consumers access digital services, moving from a model defined by discrete applications and devices to one characterized by continuous, ambient interaction.

Amazon’s next phone, in other words, may not really be a phone at all. It may be the first visible piece of a much larger attempt to build a personal infrastructure layer, one that quietly but persistently reshapes the relationship between users and the digital systems they rely on every day.

Ultimately, Amazon’s success will depend on its ability to leverage its unique strengths, Prime, AWS, Alexa, and its own satellite network, to deliver an experience that feels genuinely intuitive, personalized, and financially compelling. The potential addition of an MVNO offering could be the missing piece that transforms the Transformer project into a true breakthrough, proving that Amazon has learned the painful lessons of the Fire Phone and is ready to compete in the era of ambient intelligence.

Curious to see how this plays out. Does Amazon actually go down the MVNO route, or is this just another hardware experiment?

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