Demise of ESPN Mobile Indicates Weak U.S. MVNO market: Report

 @ibtimes
on October 03 2006 4:46 PM

Last week Disney announced that it was closing down its ESPN Mobile service that failed to catch on, however the some experts contend the failure is a sign of weakness in the mobile business model, rather than the service itself.

The Mobile ESPN service follows the mobile virtual network operator (MVNO) paradigm, where companies will host mobile content across another company's licensed airwaves. This model is not attractive, especially in the U.S., according to Pyramid Research.

“We have consistently argued that the MVNO model is less attractive than the hype would suggest,” comments Ozgur Aytar, Manager of Communications Media and Technology Research at Pyramid.

“Offering compelling voice plans in a context where the cost of voice minutes has declined sharply; MVNOs cannot keep up, as they have to pay the MNO for each minute of traffic used, whether or not the user pays for it,” continues Aytar.

Mobile ESPN, launched in February on the Sprint network with a 60-second Super Bowl commercial, offered real-time sports content on a specially designed Sanyo handset, but the service never gained critical mass.

The Walt Disney Co. said on Tuesday that it will spend about $30 million to shut down its Mobile ESPN wireless telephone services.

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