Instead, ESPN will return to its core competency of distributing content and license its video and info to other mobile providers.
The service will be shuttered some time after the end of the year. Customers can receive a full refund for the Mobile ESPN phones they purchased.
Salil Mehta, executive vice president at ESPN Enterprises, said: "We have been approached by well-entrenched carriers about a licensing model. We have decided to pursue it. With a redefined approach, we have a greater opportunity to reach millions of fans while achieving our strategic and financial goals."
Fortune magazine praised the service when it launched: "Mobile ESPN is a winner, and a good example of the coming era of highly personalized phones and mobile content services." But Merrill Lynch said Disney should abandon the service this summer, given its lack of paying subscribers.
More recently, Magna Global Chairman-CEO Bill Cella said much of ESPN's struggles were the result of the service being overpriced upon launch, although costs were eventually reduced. "They came out too expensive (and will admit it)," he said. "They realized they had an interesting opportunity, and they overpriced it."