Mobi to expand cell service to neighbor isles

Mobi PCS is looking forward to a big year.

The local wireless provider is launching local service on the Big Island, Maui and Kauai, tackling mainland roaming rates and starting a broadband Internet network on Oahu.

In 2007, revenue grew 142 percent year-over-year, and is expected to climb 55 percent in 2008.

Mobi, which is entering its third year of service, attributes this success to its no-surprises unlimited calling plans and a feel for what isle residents want.

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Bill Jarvis had his doubts when he was first approached about starting a local wireless company in Hawaii, where the majority of people already had mobile phones.

"I thought I was crazy," he said. "It is in some ways still a surprise for me that it could all come together."

Crazy, maybe. Profitable? Absolutely.

As Mobi PCS enters its third year, annual profits are expected to more than quadruple from 2007 and revenue is expected to climb 55 percent. The wireless provider is also in the midst of a service expansion plan to neighbor islands, and will launch a mobile broadband service on Oahu next year.

Jarvis, who once led the Western U.S. division of Nextel Communications, now Sprint Nextel Corp., said Mobi's success is founded in its no-surprises business model, which allows customers to prepay for a monthly unlimited cell-phone plan without a contract or credit check.

"It flies in the face of all the cellular norms," he said. "We always make sure the customer comes back and says, 'Wow that was better than I thought it was going to be.' "

This type of contract is appealing to what Jarvis calls "freedom buyers," who don't want to be tied down by annual contracts and cancellation fees.

"What was really resonating with these customers is that they have total freedom," he said. "If it's not working out for me, I ought to be able to leave anytime."

And it seems that few people want to. After launching on Jan. 3, 2006, Mobi now has "tens of thousands" of customers, and a 97 percent customer satisfaction rate, according to an April study by QMark Research.

Mobi, which will grow to 120 employees this year, this month did a soft launch of its network for Big Island customers and plans to launch service on Maui in several weeks, with Kauai to follow in the second quarter of next year. Mobi is likely to finish the neighbor island launch with four times the number of customers it planned, Jarvis said.

The company has grown from three Oahu locations to seven, with two kiosks on the Big Island and one on Maui. He declined to release the number of Mobi cell sites.

To keep plan costs down to as little as $40 a month, the company sends a text message to the user when a payment is due instead of mailing a bill, and spends 20 to 35 percent of what its competitors do on local advertising. About 40 percent of new customers sign up for family plans, which start at $76.

The company is also investing up to $5 million to enter the broadband Internet market in mid-2008. By using a small device that hooks into a computer's USB port, a customer can pay a flat monthly fee to get DSL-speed Internet access in any location with Mobi wireless coverage on Oahu.

"The service will be launched at a fairly dramatic reduction over current broadband rates -- particularly mobile broadband rates," Jarvis said. Mobi is also looking into offering the service in places where there isn't any broadband Internet available, such as rural areas on the Big Island, he said.

In an effort to expand its mainland service, Mobi is in negotiations to cut its roaming rates, which are currently at 29 cents a minute. It will also simplify the process by eliminating the need for a user to type in a code to access the network.

Jarvis said the company is still on track to beat its five-year goal of being ranked as one of the top 150 companies in Hawaii. Mobi, owned by parent Coral Wireless Holding LLC, has been so successful that it hasn't needed to raise more capital beyond the $50 million in initial investments. Mobi took out a $35 million line of credit last year and doesn't expect to use more than $12 million of it, Jarvis said.

"There is a real power in knowing the market and having that kind of eyeball-to-eyeball intimacy with a customer," said Jarvis, who can be found in a Mobi store on a weekly basis. "You feel every bit of their passion. You just get it."