Disney to End U.S.-Based MVNO Operations

NORTH HOLLYWOOD, Calif.--(BUSINESS WIRE)--The Walt Disney Internet Group (WDIG), which has received both critical and customer acclaim for its Disney-branded mobile phone offering, will cease operations of its U.S.-based mobile virtual network (MVNO) phone service later this year and will instead explore a new business model for its content and services that might include offering its popular Family Center product through a partnership with a major U.S. carrier. 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.

“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, 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.”

WDIG, a worldwide leader in the mobile content business, is exploring opportunities with major U.S. carriers with regard to a new business model for the Family Center features.

Current Disney MVNO customers will continue to receive service and support until Dec. 31, 2007. Customers who have questions should see www.DisneyMobile.com [1] or call Guest Services at 1-866-DISNEY2 for more information.

Disney will offer a reimbursement program for eligible customers. Additional details surrounding the reimbursement program will be available on the aforementioned Web site no later than Oct. 8, 2007.

About the Walt Disney Internet Group

The Walt Disney Internet Group (WDIG) offers a compelling mix of interactive entertainment and informational content and services for Internet and mobile devices for audiences around the world. WDIG is both a developer of unique new media experiences specifically designed for Internet and mobile media and a developer of new platforms for distributing content selected from broad, existing entertainment divisions and libraries of The Walt Disney Company (NYSE:DIS). With a portfolio of products and services designed with quality and guest safety in mind, WDIG’s integration of Disney’s unmatched breadth of content with a best-practices approach to Internet and mobile technology drives multiple revenue streams from premium content offerings, advertising and e-commerce. WDIG’s suite of properties includes Disney.com, Family.com, Movies.com and mDisney mobile entertainment. WDIG is an industry leader in online virtual worlds for kids and families, with offerings including Club Penguin, Disney’s Toontown Online and the upcoming Pirates of the Caribbean Online and Disney Fairies. WDIG, which is headquartered in North Hollywood, Calif., has operations in Asia-Pacific, Europe and across the Americas.

Forward-looking Statements

Certain statements in this press release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are made on the basis of our views and assumptions regarding future events and business performance as of the time the statements are made and we do not undertake any obligation to update these statements. Actual events may differ materially from those expressed or implied. Such differences may result from actions taken by the Company, as well as from developments beyond the Company’s control, including international, political, health concern and military developments and changes in domestic and global economic conditions that may affect retail businesses generally. Additional factors are set forth in the Company’s Annual Report on Form 10-K for the year ended September 30, 2006 and in subsequent reports on Form 10-Q under Item 1A “Risk Factors.”