Disney drops family mobile service

The happiest place on mobile Earth is on an established carrier's service, the operator of Disney Mobile acknowledged Thursday.

Disney Mobile, launched by The Walt Disney Co.'s Internet group last year, sells its own handsets and voice and data services. But the service will shut down at the end of this year, and Disney is now looking into offering its specialized features through a major U.S. mobile operator, according to a company press release. Subscribers can keep using voice, messaging, and some other services through Dec. 31, but content and downloadable applications were available only through Thursday.

Like other MVNO (mobile virtual network operator) businesses, Disney Mobile buys capacity on another mobile operator's network and resells it to consumers. The service is marketed to parents and offers specialized features such as a tracking system for childrens' phones and controls on how children use them.

But MVNOs in the United States have had a hard time making money, with huge marketing costs to attract a target audience, then convince it to pay a premium for specialized services. Some have also had trouble building infrastructure, such as billing systems, that bigger carriers have had for years. Amp'd Mobile folded earlier this year, and SK Telecom and EarthLink's Helio joint venture is losing millions per quarter. Earlier this month, SK Telecom agreed to invest another $270 million in it.

Disney Mobile was well received, spokesman John Spelich said Thursday, but it wasn't able to expand its distribution channels without significant investments, he said. Changes over the past several months in the business of selling phones and services through large retailers made it hard for Disney Mobile to get space in those stores, he said. Disney has never disclosed how many subscribers the service attracted, he said.

Disney has moved specialized mobile offerings to major carriers before. It shut down the sports-oriented Mobile ESPN last year and started licensing the content.

Disney Mobile has offered a special line of phones for kids, with features that let parents control who children can talk to, when they can use their phones, and how much they can spend on each type of service per month. The parents can make those settings via a Web browser on a PC. Using GPS on the phones, parents can also keep track of where their children are. The service also offers content related to Disney films and other entertainment properties.

The company will offer a reimbursement program for handsets, accessories, and content. It provides answers to questions about the shutdown on its Web site.