(AFP) – Nov 12, 2007
TOKYO (AFP) — US entertainment giant Disney said Monday it will launch a mobile telephone service in Japan in a tie-up with Softbank Corp., hoping to use its popular characters to win a slice of the cutthroat market.
Walt Disney Japan, the local unit of Walt Disney Co., applied to the communications ministry to start "Disney Mobile" in spring 2008 by leasing networks from Softbank Mobile, the two companies said in a joint statement.
Disney will become Japan's first so-called mobile virtual network operator (MVNO), or a company that buys capacity from another firm to provide cellphone services.
It is entering the tough Japanese market despite the flop of Disney Mobile in the United States, another MVNO which will shut down at the end of the year.
Disney, a major studio and television operator best known for iconic characters such as Mickey Mouse, is expected to use its cartoons for handset designs in Japan and to offer exclusive multimedia content to subscribers.
"This relationship will enable us to deliver an innovative and integrated mobile service to the broad range of Disney customers in Japan," Paul Candland, president of Walt Disney Japan, said in the statement, which confirmed weekend news reports.
Masayoshi Son, head of the Softbank conglomerate and one of Japan's richest people, said: "We're confident that this collaboration with Disney will enable Softbank to further expand its range of customers."
The tie-up is expected to fuel competition in Japan, where three companies including third-ranked Softbank hold nearly the entire mobile telephone market.
"Disney Mobile is expected to attract a certain group of Japanese customers as the company can easily introduce value-added services with its animation characters," said Hitoshi Hayakawa, a telecommunications analyst at Credit Suisse Securities Japan.
"This tie-up is unlikely to directly threaten their rivals, but competition will heat up to some extent as customers will have additional choice," Hayakawa said.
"And the chances are very high that similar tie-ups can be expected to come out from now on," he added.
Disney has a longstanding fan base in Japan. Tokyo Disneyland opened in 1983 as the entertainment giant's first theme park outside the United States and visits there have almost become a rite-of-passage for Japanese children.
The handsets will be sold at Softbank Mobile's 2,400 sales outlets across Japan, a spokesman for Walt Disney Japan said.
"We are also considering selling our handsets at other places in Japan," the spokesman said.
Japan, a nation of 127 million people, has more than 100 million mobile phones in operation, spelling major challenges for service providers to achieve growth.
Japan's cell phone market is dominated by NTT DoCoMo, KDDI Corp. and Softbank Mobile, and launching a new service would require a massive initial investment.
Softbank started cellphone services by buying British giant Vodafone's struggling Japanese unit for 15 billion dollars last year.
Softbank quickly embarked on an aggressive promotional campaign, taking advantage of a rules change last year that allows Japanese mobile subscribers to switch carriers without changing their numbers.
In the United States, Disney Mobile marketed itself as a family-friendly mobile letting parents talk easily to children. But the MVNO with Sprint is shutting down after only a year and a half, with Disney finding it more profitable to sell its contents through other service providers.
Disney is already a major content provider for mobile phones in Japan, with some 3.5 million people subscribing to its site.
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