Disney has ditched plans to start a UK virtual mobile network (MVNO), blaming adverse changes in the retail environment for its decision

O2, which was to provide the service for Disney, said Disney content will still be made available, but there won't be Mickey Mouse phones in the foreseeable future.

Part of Disney's problem is that, in the UK, the brand is more associated with young children; official government advice is that children under 16 should only use a phone for "essential" calls - although what's essential to a 15-year-old might not resonate with the rest of us.

Parents in the UK are concerned about the safety of children using mobiles, and they are going to need a very compelling argument to put those concerns aside.

In the US, Disney has successfully launched its MVNO network, based around giving parents control of their children's spending, and the ability to track their kids through their phone handsets.

Tracking children has proved more contentious in the UK where the Data Protection Act guarantees privacy, even for children.

According to OUT-LAW.com, by convention children under 12 have to rely on their legal guardian to give permission, but between 12 and 16 the child must give their permission too, and it seems unlikely that many 15-year-olds would be interested in their parents knowing their location at all times.

Interestingly, it seems that tracking someone without their permission is not illegal, although intercepting the mandatory messages telling them they are being tracked (which are sent at random) would be.

Enabling close parental control of spending might appeal, but pre-paid systems (so pervasive in Europe, but comparatively rare in the US) allow children to safely manage their own spending. So it is far from clear how Disney would have been able to sell themselves to children, or, more importantly, their parents. And if British children under 12 aren't going to use Disney phones, what hope for the MVNO?

According to a recent report from Strategy Analytics, the only MVNOs in the US to get significant customer numbers have concentrated on pre-paid services, which appeal to the youth market. By concentrating on pre-paid they have clearly differentiated their offering, and market differentiation is what's needed.

Innovative services and pricing will attract customers, while teddy-bear-shaped phones and big media brands will not convince anyone that an eight-year-old needs a mobile phone. ®