Disney Shutters Kids’ Cell Phone Service

BURBANK, September 28: The Walt Disney Company is closing
down its branded cell-phone service for kids at the end of this year and is
looking instead to develop a partnership with “a major U.S. carrier.”

The mobile virtual network (MVNO) service is operated by the
Walt Disney Internet Group (WDIG). Launched in January 2006, the Disney Mobile
offering includes a branded phone with a built in camera and Disney-inspired
ringtones and content, as well as the Family Center suite of functions. These
allows parents to display the location of a child's handset on a map, limit
when and how the child's phone is used, and to set limits on expenditures in
terms of voice and data. Disney is looking to offer these services through
another carrier.

"It's been clear since we launched the MVNO that we
were offering something both unique and useful for families that wanted to
provide their kids with a mobile phone with suitable content and features while
retaining a measure of control on how and when it would be used," said
Steve Wadsworth, the president of the Walt Disney Internet Group. "Our
feedback from customers and critics from the beginning has been that we
exceeded the mark in that respect. However, the MVNO model has proven, as we've
seen with other companies this past year, to be a difficult proposition in the
hyper-competitive U.S. mobile phone market. In assessing our business model, we
decided that changing strategies was a better alternative to pursue profitable
growth in the mobile services area."

Current Disney MVNO customers will continue to receive
service and support until December 31, 2007. Disney will offer a reimbursement
program for eligible customers. Additional details surrounding the
reimbursement program will be available in early October.

The closure of Disney Mobile follows the shuttering of
ESPN’s MVNO last year; the sports broadcaster opted instead to license its
content to Verizon Wireless’s V CAST service.