A year after shutting down its ESPN cellphone operation, Walt Disney Co. is closing its Disney cellphone service.
Disney launched Mobile ESPN and Disney Mobile last year as mobile virtual network operators (MVNOs). The company leased wireless spectrum from Sprint Nextel and sold service to customers, but in the competitive US cellphone market, Disney struggled against the major carriers.
Disney announced in September 2006 that it was closing Mobile ESPN, eight months after its debut. The company initially remained optimistic about its Disney-branded service, which sold phones featuring Disney content and services aimed at children and their parents. However, Disney failed to get enough stores to sell phones and service.
Disney will instead license its content to bigger carriers to sell. Earlier this year, it forged a partnership with Verizon Wireless to sell ESPN sports news and video. Disney is considering offering some of its Disney-branded services through a partnership with a major carrier. Disney Mobile included services that let parents locate their kids as well as content such as ring tones and games with Mickey Mouse and other Disney stars.
Disney isn't the only MVNO company to stumble. Amp'd Mobile Inc. sought Chapter 11 bankruptcy-court protection this year, after its youth-focused service burned through $350 million in start-up funding. Disney declined to comment on how much it had invested in its MVNOs or the cost of closing them. Last year, Disney CEO Bob Iger said the company was investing $150 million in Mobile ESPN in 2006. After announcing its closure last September, Disney CFO Tom Staggs told an analysts conference that the cost of closing it would be about $30 million. (info from The Wall Street Journal)