Raymond Yu
Another gamble for Disney Mobile
Over the weekend Disney launched its most recent MVNO venture, this time in Japan. Disney Mobile is a joint venture between Disney and Softbank, Japan's third largest mobile network operator. Disney Mobile will use Softbank's distribution network and its tariffs are based on Softbank Mobile's existing plans. Upon launch it offered three Disney branded Sharp 821SH handsets. Comment: Is Disney jumping head first into yet another potentially costly blunder? It has already been unsuccessful with MVNO launches in the US - Disney Mobile and ESPN Mobile (owned by Disney) both failed (as discussed in our Tough times ahead for US MVNOs report). It also scrapped plans to launch in the UK in August 2006. Disney Mobile faces similar obstacles in Japan as in the US and UK. The Japanese market is mature and competition is tough, it competes with three dominant mobile network operators in NTT Docomo, KDDI and Softbank Mobile. However, this time Disney is taking a different approach in Japan, as Disney Mobile is a joint venture. Working with Softbank allows each player to focus its expertise - Softbank should handle the back-end operations, customer services and sales with Disney handling the marketing and branding side - this should help increase its chances of success. In addition, one key distinction between the Japanese and UK and US markets is that mobile data usage is very high in Japan and there is existing demand for Disney content. This bodes well for Disney Mobile as its unique content will allow it to differentiate from the crowd. Hence, in Japan, Disney Mobile's main target will be women in their twenties and thirties rather than solely targeting the families that were its core focus in the US.Nonetheless, we remain sceptical and doubt whether its content and branded handsets will be enough for Disney Mobile to win a large enough subscriber base to make the venture viable.
