Updated below: Later this morning, sources close to the situation tell mocoNews.net, the Walt Disney (NYSE: DIS) Company will announce that it is closing its second MVNO in as many years rather than continue to invest in the expensive service. The decision was based on a recommendation by the Walt Disney Internet Group to corporate that Disney Mobile be close and that, instead, a focus will be placed on licensing its Family Center suite. Disney was happy with the product overall, with those sources saying that subscribers were using its data services actively, but the costs of distribution and the inability to gain traction in big-box stores were insurmountable. Also, the company learned that selling the message on data services—despite its massive promotional ability with Disney ABC, the theme parks, etc.—was a tougher message in the marketplace than the carriers’ message of “buy one handset, get three free.”
Unlike Mobile ESPN, Disney subsidized its handsets and, overall, took a more pragmatic approach. In the end, it wasn’t enough.  We’ll have more throughout the day.

—WDIG is working to place members of the 120-person group - which is learning now of the decision—in other areas of Disney.

Updated: The official release came out. The focus will be on its Family Center suite, as we mentioned above: “The Family Center suite allows users the ability to display the location of a child’s handset on a map, to limit when and how the child’s phone is used, and to set limits on expenditures in terms of voice and data.” In the statement, Steve Wadsworth, president of the Walt Disney Internet Group said: “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 Dec. 31, 2007.