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Monday, 08 October 2007 |
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Disney cell phone company bites the dust…
A little over one year after it closed the US Mobile ESPN mobile virtual network operator (MVNO), and weeks after it pulled the plug on a planned UK MVNO venture, Disney Mobile has announced that it will cease its wireless operations altogether as of 31 December, 2007. Disney Mobile offers branded services targeted at the family market segment, with such features as child tracking via GPS, parental control of calling patterns and kids’ access to Disney-themed services on their handsets.
Here’s what the Ovum research company makes of the development in the form of a ‘EuroView Daily Comment’ authored by analyst Meera Singh. “It is not surprising that Disney Mobile has decided to close operations. This will be the third US MVNO in the last year to fail and is also the beginning of a trend that we believe will continue in the near to medium term,” states Singh. “The MVNO market, hailed as the next great opportunity in telecoms, has seen the influx of far too many new ventures targeting every niche market that one can imagine. As a result, in the US MVNOs are now in an over-saturated market phase that has a faltering business model, where it is very difficult to reach scalability given the competitive nature of the wireless market and the large established operators.”
“This is not an easy decision and is a costly one. Reportedly, Disney spent close to US$180mn in launching and closing Mobile ESPN - the numbers for Disney Mobile are sure to be similar,” adds Singh.
But we think it’s difficult to draw any general conclusions about the global MVNO opportunity from the Disney experience. Other geographies, for the moment anyway, seem able to sustain large numbers of MVNOs – according to Pyramid Research, for example there are currently around 50 MVNOs in the
Netherlands, a country with four operators and a population of 16mn. Nor is there any shortage of start-ups willing to chance their arms in the MVNO business – a cursory Google search reveals current MVNO plans and ambitions by Spain’s XL Servicios de Operacion de Telecomunicaciones and the Spanish ISP Sarenet, Frog in Macedonia, Telcro in Croatia, i2 in the Middle East, the Automobile Club of Portugal and Subtel in Chile, to name but some. Meantime, this week sees the IPO of Virgin Mobile in the
USA, with the pundits estimating the exercise will raise in the vicinity of US$450mn.
John Williamson |
