Homegrown cell-phone provider Mobi PCS has come up with a formula that seems to be a success in an industry renowned for low customer satisfaction and prohibitive fees.

Launched in January 2006, Mobi is the only Honolulu-based cell-phone company that owns and operates its own phone network. It's also the only company to offer flat-rate unlimited wireless local and long-distance calling and text messaging without an accompanying annual contract.

The company, which has spent more than $75 million launching its no-strings attached wireless phone service, recently passed two major milestones, according to Bill Jarvis, president and CEO. Mobi now is profitable, when costs such as interest, taxes, depreciation and amortization are excluded. And Mobi has handled more than 1 million calls on a single day, Jarvis said. Mobi would not disclose profit or subscriber figures for competitive reasons.

So far, the company seems to have successfully squeezed its way into an already crowded wireless market by not offering what competitors often require — annual contracts. That means subscribers can drop the service at any time without penalty. Mobi's flat-rate plans also eliminate the possibility of excessive fees when customers exceed their monthly allotment of minutes.

So-called overage fees are a sticking point with many cell- phone customers, Jarvis said.

"We're figuring about 20 percent of our customers have never had wireless service, so that leaves you only one guess as to where the rest are coming from," he said. "They get $200 and $300 bills, and it drives them crazy. They get stung by that surprise. They don't want to be surprised and they don't want to be bound by a contract."

Roger Wilkerson, a Honolulu wireless telephone and service plan consultant, said Mobi's service plans, which start at $40 and top out at $80 excluding taxes, are resonating with consumers.

That's because most traditional wireless plans are complex and require users to predict their phone usage patterns 12 and even 24 months in advance. If consumers guess wrong and go over their monthly minute allotment, they could be hit with a massive bill.

"This idea of a flat rate is gaining momentum in all aspects," he said. "It only takes one time for someone to get a $500 bill before you want to change your plan."

In addition, Mobi customers don't have to pass a credit check, because each month's service is billed in advance. So far, there's no sign that larger rivals Sprint Nextel, Cingular, Verizon Wireless, T-Mobile and Hawaiian Telcom are adapting to the new cell-phone business model introduced by Mobi, Wilkerson said.

"They're in a contract culture, and they'll remain in that contract culture as long as they can," he said.

Mobi and other wireless telephone companies could benefit from an increase in customers as people such as Kara Honda, a Mobi customer in Punchbowl, migrate away from traditional, wired phone service. Honda said she was attracted by the company's flat-rate calling plans.

"I knew that I would need a lot of minutes, and I didn't want to sign a contract just in case they did not work out for me," she said. "When we discovered that it worked and the reception was better than the other carrier we had before, then we eliminated our land line" phone service.

Going forward, Mobi plans to open new branches, introduce new family-oriented calling plans and introduce a new service offering local music-themed ring tones and song downloads and information services such as surf reports.

"We think that's something that's sorely missing from the mobile data content in Hawai'i," Mobi's Jarvis said.

Mobi expects to launch the new service within 45 days. The company also expects to boost local employment from 65 to 85 people by year's end in preparation for launching Neighbor Island service.

Mobi is financed by Boston-based M/C Venture Partners and Alexandria, Va.-based Columbia Capital. Columbia partner Harry Hopper said several interested parties already have expressed an interest in acquiring Mobi.

"It's much too early in Mobi's growth to seriously consider any of them," he said. "Mobi has a lot of potential that we want to explore first before we pursue these overtures."

Reach Sean Hao at shao@honoluluadvertiser.com.