Disney to shut down remaining MVNO

In another blow to the bedraggled MVNO business model, one of the final holdouts of the boutique wireless industry announced plans to shut down today. Disney Mobile stopped selling its family-oriented service plans today as well as discontinued the sale of content and applications. It will continue to maintain voice and SMS as well as customer support until the end of the year, when it plans to wrap up the operation completely.

Disney Mobile is the second Disney MVNO to launch and the second to shut down. Mobile ESPN called it quits at the same time last year after only nine months of operation. Disney Mobile made it a little more than a year.

Mobile ESPN, however, reinvented itself as a mobile content company soon after it shut down, selling its innovative sports-centered content through Verizon Wireless as a BREW application. Disney did not say if it planned to do the same for its Mobile Disney applications. Many of its services though, aren't necessarily related to Walt Disney content, but rather family applications, like child-location and call blocking now commonly available from other carriers.

The last year has been a tough time for MVNOs in general with Amp'd Mobile going bankrupt this summer. Of the niche-market MVNOs that garnered so much fanfare over the last two years, only one remains: Helio, which is facing operational issues of its own. Projected to be more than $350 million in the red by the end of the year, Helio received a much-needed $270 million cash infusion from one of its parents, SK Telecom, last week.

The MVNO market hasn't been a complete disaster, though. The original virtual operators such as Virgin Mobile and Boost Mobile have survived and grown rapidly, but their focus was broader, targeting the overall youth segment with a prepaid service rather than focusing narrowly on a small niche. Moreover, they had significant financial backing. Boost Mobile has been a part of Nextel and later Sprint almost since its inception, and Virgin Mobile had the backing of 50-50 owners Virgin and Sprint, despite having never turned a profit.