Adding Cellular Subscribers Is Child's Play

ORLANDO, FLA. — The cellular subscriber base is nearing the saturation point, prompting service providers and handset suppliers to target the relatively untapped children's market here at CTIA Wireless.

Among children, wireless penetration is less than 30 percent, the Telecommunications Industry Association (TIA) said in a recent report. Tween-oriented MVNO startup kajeet claims that 5.3 million U.S. tweens already own a cellphone and that the number will double in the next three years.

In 2006, multiple services were launched to target children and their parents. "By appealing to parents, children's applications open up a new area for market growth," TIA said in its report.

Many of the services appeal to parents by enabling them to restrict who their children can call or text message and who can contact their children. Some are prepaid services allowing parents to impose cost controls on kids. Some services allow parents to use GPS to locate their phone-carrying children.

Here at CTIA, attendees will run into the first Tamagotchi-brand phone, an expanded Disney Mobile selection and an executive from kajeet. Here's what the companies plan to talk up:

Disney Mobile: The family-oriented MVNO is teaming up with Samsung for the first time to introduce the DM-S105 in metallic silver and the DM-S110 in metallic pink. They'll join two Pantech and two LG handsets in the MVNO's selection.

Both CDMA 1x trimode flip phones will be entry-level phones and will feature VGA camera with flash, Bluetooth, color interior and exterior display screens, voice-activated dialing, text messaging and Web browsing. Additional details were unavailable.

Kajeet: The self-described MVNO for tweens, expanded its distribution last week with a retail rollout in more than 500 Best Buy and 360 Limited Too tween clothing stores.

The Bethesda, Md., startup has been selling its "totally kid-centric" kajeet phones and prepaid service on its Web site since February.

The company isn't exhibiting, but cofounder Daniel Neal is attending the show to make the startup's presence known.

Promoted as the "first and only pay-as-you-go cellphone service made from a kid's point of view," kajeet uses the Sprint network to offer tween-oriented game and wallpaper downloads, AOL Instant Messenger (AIM), picture messaging and no-contract pricing plans.

For parents and kids, kajeet offers Web-based tools for managing the use of kajeet phones and who pays for what. The site can be used to purchase additional airtime, place restrictions on who a child can call and e-mail and limit the use of a kid's phone to certain times of the day but always allow the child to be called by a parent.

Although there are no contracts, activation fees, or cancellation fees, there is a 35-cents-per-day access fee. Rates are 10 cents a minute for voice, 5 cents per text message, 25 cents per picture message and $6.99/month for unlimited AIM.

Age-appropriate games cost $4.99 and up and include characters from Nickelodeon shows such as "SpongeBob SquarePants," "Hey Arnold!" and "The Fairly Odd Parents."

Kajeet currently offers four phones priced from $49.99 to $99.99. They're from LG, Sanyo and Nokia. All phones use assisted GPS so they can be located by police.

PlayPhone: The first Tamagotchi-branded mobile phone, sold with prepaid service, is brightly colored and comes with an enhanced version of the original Tamagotchi game embedded in the phone along with a custom Tamagotchi wallpaper. The Tamagotchi mobile game lets kids "hatch" a virtual pet right on the phone and raise it into a well-behaved Tamagotchi.

San Jose-based PlayPhone, a direct-to-consumer mobile content provider, will enable kids to convert prepaid airtime minutes into mobile content credits that can be used on the TamaPhone.com Web site to buy wallpaper, ringtones and games without having to use their parent's credit card.

The phone will also come with parental controls and no-contract, pay-as-you-go payment powered by PlayPhone's mobile storefront. Parents will be able to limit dialing access for incoming and outgoing calls and lock the push-to-talk and Web access capabilities.