Protective parents: Gold for cellular services?

Disney's new mobile phone service for kids and their parents highlights an important market for the cell phone industry.

LAS VEGAS--You might think kids are too young for cell phones, but your mobile operator doesn't. Services catering to the under-14 age group and their parents could be the next big driver of growth in the cell phone industry.

While cell phone penetration rates are high among the U.S. population as a whole--roughly 69 percent--there is still plenty of opportunity in selling phones to kids. According to George Grobar, general manager of Disney Mobile, cell phone penetration among about 24 million children between the ages of 10 and 14 in America is only 24 percent.

Charles Golvin, an analyst at Forrester Research, said the family market has solid potential: "Families will definitely be a meaningful market for mobile operators. There are some parents who want their kids to have cell phones for emergencies but aren't comfortable giving their kids a phone with no limits or restrictions."

For years, the major U.S. mobile operators have been selling family plans that let parents share buckets of cell phone minutes with other family members. And this segment of the market has been growing recently, said Clay Owen, a spokesman for Cingular Wireless.

So it's not very surprising that Disney, the omnipresent family entertainment brand, would target kids and their parents for a new cellular service, called Disney Mobile, which will launch in June.

Disney hasn't built its own cellular network but is instead leasing capacity from Sprint Nextel. This arrangement, often referred to as a mobile virtual network operator, or MVNO, setup, is a growing trend in the cell phone industry.

Unlike the family plans offered by the big carriers, Disney Mobile gives parents more power over how and when their children use mobile services.

"Today's plans from the big carriers don't address parental control issues," said Parry Aftab, executive director of WiredSafety, an advocacy group of Wired Kids for parental control of Web usage. "There are a lot of parents who want their kids to have cell phones so they can get in touch with them when they need them, but many of them have been holding off buying them phones because they don't feel comfortable."

The Disney service was designed specifically for parents who want their kids to have cell phones for safety and convenience reasons but are either afraid of what their kids might do with the phones or are concerned about getting surprised at the end of the month with a huge cell phone bill.

Disney has created a call control center that can be accessed either on the parents' handsets or from a Web site on a PC to allow parents to set up a monthly allowance of voice minutes, text messages or other services for each child. Alerts are sent to parents and kids when the limit is reached, allowing parents to either increase the allowance or restrict the phone's use. Unlike prepaid phone service, the Disney service offers exceptions to imposed limits on available minutes so that even when a limit is reached, kids are able to call Mom and Dad or reach 911 in case of an emergency.

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