As of today Honolulu has a new startup cell phone company that's hoping to shake things up in an industry plagued by low customer satisfaction.

Mobi PCS is breaking from the industry's traditional practice of tying customers to long-term contracts that allow only a limited amount of calls each month. Instead Mobi (pronounced Moh-bee) is offering unlimited calling for a fixed monthly fee of about $50.

Mobi customers don't have to pass a credit check because each month's service is billed in advance. And because subscribers don't have to sign annual contracts, they are free to drop the service at any time without penalty.

Mobi, which has 50 employees, will be competing against much larger rivals, including Sprint Nextel, Cingular, Verizon Wireless, T-Mobile and Hawaiian Telcom.

"What we're trying to do is really turn things upside down and rethink the way people buy telecom services," said Bill Jarvis, president and chief executive for Mobi. "We think that they (customers) don't want to be bound by contracts and we think they don't want to count minutes."

With its official launch today Mobi becomes the only Honolulu-based cell phone company that owns and operates its own phone network.

The company started service for a limited number of customers last year. One of those customers, Kimo Keawe, said he was attracted by the idea of a wireless plan with no strings attached. Keawe, who serves as an emcee for the annual Keiki Hula Competition, switched from T-Mobile to Mobi PCS — a move he said shaved $50 a month from his wireless bill.

"There was no contract and no minutes associated with it and no hidden charges," he said. "I thought there has to be a catch to this."

Keawe said there was no catch. However, the Kane'ohe resident realizes that switching to a new company comes with a few drawbacks. For example, Mobi is still expanding its cellular coverage in Kane'ohe. The company's network currently can serve about 75 percent of O'ahu's population and the plan is to increase coverage to 90 percent of the island's population by the end of June, Jarvis said.

In addition, Mobi subscribers currently are unable to use their phones to make and receive calls while visiting the Mainland.

"I know it's going to be a process of growing," Keawe said. "As long as Mobi sticks to what they're saying now, I'm OK."

Mobi, which was previously known as Coral Wireless, had planned to launch its service several years ago. However, its federal government license to operate in Honolulu was tied up in a lengthy court battle with former license holder American Wireless License Group LLC.

Now, with help from investors such as Boston-based M/C Venture Partners and Alexandria, Va.-based Columbia Capital, Mobi is close to completing construction of a local phone network costing more than $50 million, Jarvis said.

Whether Mobi succeeds in Honolulu remains to be seen. One observer said the company's unlimited calling plans could resonate with local consumers. That's because most traditional wireless plans are complex and require users to predict their phone usage patterns 12 months in advance. If consumers guess wrong and go over their monthly minute allotment, they could be hit with a massive bill.

With unlimited calling plans that can't happen, said Roger Wilkerson, founder of Honolulu-based cell phone plan consultant www.cellphonedoctor.com.

"If you're a consumer, what drives you nuts? Choosing a plan," he said. "When you have an unlimited plan, you've removed that issue."

Mobi and other wireless phone companies could benefit from an increase in customers as people migrate away from traditional, wired phone service. Worldwide, wireless subscriber growth is experiencing robust expansion after several years of slower growth because of the economic downturn of the past few years, according to high-tech market research firm In-Stat.

By 2009 the worldwide wireless market will grow to more than 2.3 billion subscribers. The total number of new subscribers between 2004 and 2009 is expected to be 777.7 million worldwide.

That means there's likely to be little let-up in the battle for customers between cell phone companies.

"Competition is good for the consumer," said Georgia Taylor, a spokeswoman for Verizon Wireless, when asked about Mobi's entrance into the Honolulu market.

Verizon Wireless recently announced that it spent more than $22 million on phone network improvements in Hawai'i last year and more than $77 million during the past four years.

"We would put our network up against any competitor in the Hawaiian Islands," Taylor said. "The proof is in how much a company spends in an area."

Reach Sean Hao at shao@honoluluadvertiser.com.