Disney to launch cellphone service in Japan: paper

TOKYO (Reuters) - Walt Disney Co, the No. 2 U.S. entertainment company, plans to launch mobile phone service in Japan next spring offering customers animated content, the Nikkei business daily said on Sunday.

Disney would use Japan's No. 3 mobile phone carrier Softbank Corp's network and the two would jointly develop handsets, the paper said without citing sources.

While the tie-up would secure Softbank stable revenues from leasing unused frequencies, Disney's entrance into Japan as a mobile virtual network operator is likely to trigger further competition in a saturated mobile market.

Disney aims to win 1 million users by targeting families with an offer of handsets and downloads featuring Disney characters, the paper said.

Initial costs of building base stations have prevented many would-be entrants into Japan's mobile phone market, dominated by NTT DoCoMo Inc, No. 2 KDDI Corp and Softbank. Disney would be the first company to launch mobile phone service in Japan using another firm's network.

In Japan, carmakers and telecom ventures have used carriers' network, but the lines have been used to enable car navigation or PC data transmission.

Internet access provider Internet Initiative Japan also plans to use DoCoMo's network to provide data services by March, and targets 7,000 firms, the Nikkei said.

(Reporting by Mayumi Negishi; Editing by Tomasz Janowski)