Virgin Mobile has been forced to cancel its over-the-air U.K. mobile TV service after BT pulled out of an agreement to lease the network on which it was predicated. Unlike rival operators’ TV services which use the DVB-H protocol, Virgin Mobile’s suite of five VMTV channels was broadcast over DAB (digital audio broadcasting) spectrum leased by BT’s Movio subsidiary from the U.K. digital radio network Digital One, in which commercial radio leader GCap is a majority stakeholder. But Movio told GCap it was canceling the contract its space on the network from June 2008. Guardian reported only 10,000 customers had signed up: “Five-channel Virgin Mobile TV (VMTV) was launched last October with a £2.5 million ($5 million) advertising campaign fronted by former Baywatch star Pamela Anderson. But it failed to take off with customers, partly because only one rather chunky handset - nicknamed the Lobster phone - was ever available.”

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The outlook for VMTV (which carried BBC One, ITV 1, Channel 4 and E4 and ITN News) and the whole TV-over-DAB method worsened when the European Commission last week told operators they should back the competing DVB-H standard. Currently most operators pump TV channels down their 3G pipes. BT said it was discussing a shutdown timetable with Virgin Mobile, but the ugly Lobster was still on the operator’s website today.