Big brands go cellular

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Walt Disney's ESPN first unveiled plans for the mobile service in 2004, announcing it would work with Sprint to develop it.

ESPN will start offering its mobile-service phones, made by Sanyo, at more than 700 Best Buy stores on Feb. 5. Pricing on the service plans ranges from $34.99 a month for 100 minutes of talk time to $224.99 for 4,000 minutes. There is no extra charge for the ESPN data service or other Web usage, regardless of the plan.

ESPN plans to continue offering its content through traditional cell phone operators such as Verizon's V Cast service and Sprint's consumer television service. But Jha said ESPN's decision to also have its own service that closely bundles its content was driven by a feeling that the company is underserved by the existing carriers.

"Verizon updates its content every six hours or so," Jha said. "That's too long for our sports fans who want updates constantly. It also takes 16 clicks to get to our content."

Several technology companies have sprung up in the last couple of years to make it even easier and more cost-effective for just about any company to launch their own cell phone business. Companies such as Visage Mobile, Convergys, Inphonic and Versent Mobile, a business unit of DBS, provide the billing systems, customer care platforms, activation processes and distribution channels for these new providers. They claim they can greatly reduce the time to market and upstart cost for brands wishing to enter the MVNO market.

But experts warn that many of the MVNOs springing up today may not survive for long. They say that even if companies don't have to spend money to build a new network like the traditional cell phone operators have done, it's still not an easy business to enter.

Aside from building the back-end technology to offer the service, there are several other costs to consider. For example, simply acquiring new customers can cost up to $400 per subscriber. Then there are the fees the MVNO must pay to the carrier for the use of its network.

"It's not for every brand," said Marina Amoroso, an analyst at the Yankee Group. "Aside from the cost issue, you also don't want to damage the brand you've built up. Nike may not want to shoulder the burden of a cell phone service that drops calls."