Mobile & Wireless

3GSM: Disney Mobile Eyes Asian Expansion

‘Value Proposition Can Work Without Brand Name’

by Ken Wieland

In September 2006, Disney launched its commercial MVNO operation in the US over Sprint’s PCS network. Sunir Kochhar, vice president of product development and operations for Disney Mobile, does not disclose take-up rates but is confident that the value proposition will succeed both in and outside the US. “We’re looking at other opportunities, particularly in Japan and other Asian markets,” he says.

Disney’s value proposition revolves around giving parents control of their children’s mobile phone by setting voice, SMS and MMS usage thresholds remotely from their own phone or the Web. Other features include GPS monitoring and the prioritisation of text messages from parents. If a parent sends a text message, the child’s phone is disabled until he or she sends a reply.

“Our addressable market in the US is around 25 million,” says Kochhar. And what percentage of that market does Disney Mobile expect to get? “Your guess is as good as mine,” replies Kochhar.

Despite some uncertainty surrounding the business case, Kochhar believes that the value proposition is strong enough to survive even without the Disney brand name. “Our brand is associated with trust but that is not enough in itself to attract customers,” he said. “The services themselves have to be attractive to the parents we are targeting. For expansion in some markets we would even consider dropping the brand name if we thought that would help us.”

Disney did consider entering the UK mobile sector but withdrew on the grounds of the market being ‘over-competitive’. There was perhaps also the issue of the Disney brand being appealing to only very young children in the UK whereas in the US, as Kochhar says, Disney has ‘family appeal’.

In the US, Disney is offering only post-paid contracts using ‘easy-to-use’ phones from Pantech and LG. “Our rates are comparable with other mobile operators but we bundle in these extra monitoring features,” says Kochhar.

Next year, Kochhar says that more attention will be given to driving up revenue from value-added services based on Disney video and radio content. Kochhar maintained that Disney, like other MVNOs in the US, would be able to break even after 3-5 years of operations.

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