Heavily-backed mobile advertising firm Rhythm New Media, based in Mountain View, CA, has pulled out of UK, and closed its offices there, according to NMA, citing sources. The pull out is surprising considering the company is UK’s largest supplier of pre-roll mobile video advertising and handles ad sales for operators 3, Orange and T-Mobile…it has also been touting its deals with these UK operators for the last year or so. It has also announced deals with music labels and companies such as CBS (NYSE: CBS), EMI, ITN, Ministry of Sound and Sony (NYSE: SNE) BMG.

The reason? High CPMs charged by the company prevented the uptick. Of course mobile video is still very nascent with no discernible explosion in video consumption as predicted by experts.

RNM received big second round in 2006: $18 million, led by Carlyle Venture Partners. It was seed funded by Rembrandt Venture Partners. Lightspeed and Morgenthaler co-led the first round in July 2005. More as we hear more…

Update: ME reports it has pulled out of India as well, to focus on U.S. market.