"BT can confirm that, following a review of its wholesale solutions, the decision has been made not to continue with the Movio service," said the telco in an official announcement.
"While the feedback from users on the service has been complimentary, Movio sales have been slower than expected, mainly due to a lack of compatible devices from the big brands."
However, BT suggested that it may launch a service using the competing DVB-H format in the future, depending on market conditions.
"BT will review market conditions for a DVB-H service periodically in the future but we would expect the technology and spectrum situation to be different," a spokesman told vnunet.com.
BT's announcement also blamed the "fragmented nature of the mobile TV market " which came to a head last week when the European Union backed Nokia's DVB-H service over Virgin's DAB service.
The EU made its choice because the DAB service offered only five TV channels and a larger selection of digital radio channels, while the competing DVB-H format can carry around 16 channels.
Virgin Mobile's television service launched in October 2006, using a £2.5m advertising campaign to try and draw in viewers. Despite that spend, reports early in 2007 suggested that only 10,000 people had signed up.
The BT Movio website, which is now unavailable, had originally talked up Virgin's Mobile TV offering following successful tests in London.
"Initial trials have shown customers are not only excited about receiving this service, but would actively look to attain it," said the Movio website.
"In fact, more than a third of pilot users said they would be willing to leave their current network to get digital TV and DAB radio, to this quality, in the palm of their hands."
Had the service been a success in the UK, BT Movio had intended to expand it into other countries.
BT said that it is currently in discussions with Virgin Mobile on a timescale for the closure of the service.
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