August 14, 2006 7:59 AM PDT

Disney cancels U.K. mobile kid-tracking

Disney has shelved plans to launch a mobile virtual network operator in the U.K., saying the market is in flux.

The media giant had been planning to launch its family friendly mobile virtual network operator (MVNO) this year, piggybacking on wireless provider O2's network. Now Disney has changed its mind, putting the plan on ice indefinitely.

A Disney spokeswoman said the decision had been made as a result of "the rapidly changing competitive environment."

"Retail distribution outlets in particular have consolidated in recent weeks, which has impacted our distribution opportunities," she added.

Disney launched its MVNO in the U.S. earlier this year, positioning itself as an operator for families and allowing the sharing of calls and texts among family members--a move it was planning to repeat in the U.K.

The sharing proposition raised some eyebrows in the U.K. Nick Lane, principal analyst at industry watchers Informa Telecoms Media, said that "the concept is quite good--the family--but it's very much against the grain by capping spending. Everyone else in the industry is getting people to spend more."

The service also prevents children from using certain services, such as chat rooms, and from calling particular numbers.

More controversially, the MVNO version in the U.S. also offers a service that lets parents track the location of children using GPS (Global Positioning System) and have the results displayed on maps available online.

Alex Zadvorny, senior analyst at Analysys, said the company's experience in the U.S. may have led to its decision to hold off on the launch in the U.K.

"The (U.K. market) is quite saturated, and maybe there's some experience in the U.S. that's putting them off... They have a lot of content and they can push that without an MVNO," Zadvorny said.

Disney has experience running a second MVNO in the U.S., based on sports channel ESPN. Subscriber numbers are thought to be very low--around 10,000--although the MVNO has been running for six months.

Disney's kid-tracking service may reach the U.K. yet, however. "We will continue to evaluate the U.K. retail landscape for mobile services and remain positioned to move on this initiative as the environment becomes more conducive," the company's spokeswoman said.

Jo Best of Silicon.com reported from London.

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Disney Corp., U.K., The Walt Disney Co., spokeswoman, U.S.

 

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