Mobile ESPN Cuts the Cord

After less than nine months in operation, ESPN's mobile phone service is expected to announce that it will cease operations, and instead focus on licensing out its content to other carriers. According to the Wall Street Journal, the service has struggled to build a customer base.

Known as a Mobile Virtual Network Operator (MVNO), the company leases access from another wireless provider who owns the towers and spectrum - in this case Sprint Nextel. However, Mobile ESPN could never gain footing in a highly competitive market.

Its loyal television viewers scoffed at having to buy an ESPN phone to access the network's content, rather than accessing it through their current cellular provider. Additionally, launch issues crippled the company from the beginning, say insiders.

Mobile ESPN's quick rise and fall shows just how difficult it is for MVNO's to make money by leasing other carriers network space. Oftentimes, the licensing fees are quite steep, leaving little room for error, and making a quick return on investment a necessity.

In a statement, Mobile ESPN head Salil Mehta said that it had been approached by other mobile providers and had decided to pursue that route. "With a redefined approach we have a greater opportunity to reach millions of fans while achieving our strategic and financial goals," he added.

According to a statement on its Web site, service will be provided to current customers until the end of this year. As a service to its members, there wwill be no early termination fee to current members and the company will refund the purchase price of the handset.

The company said it planned to announce transition options for consumers before the end of the year, and would assist in porting telephone numbers to new carriers. Until December 31, all customer service and functionality will continue to operate, it assured.

Even though Mobile ESPN is backed by the Walt Disney Co., the WSJ said that its sources indicate the decision to shutter Mobile ESPN would have no effect on Disney Mobile. The paper gave no indication as to the success of that venture.

Rafat Ali and Staci Kramer, who first reported Mobile ESPN's demise on Wednesday on the Moco.News Web log, said sentiment among investors for MVNOs remains low. According to their sources, the company only had 30,000 subscribers, far off its 240,000 target.

"A lot has changed since [Mobile ESPN's launch], with the sentiment for MVNOs swinging like a schizophrenic off medication," they wrote.