The Papua New Guinea Post Courier reported that the Radio Communications and Telecommunication Technical Authority, Pangtel, revoked Digicel's licence last week after only four days of operation. It also returned two cheques totalling almost US$333,000 to the Bermuda-based company, which has mobile licenses across dozens of Carribean nations, employs 3,500 people and is currently expanding into Pacific Island territories.

Pangtel said changes in national policy made the award of its interim licence void, but O'Brien's lawyers petitioned the court in Papua New Guinea's capital Port Moresby within hours of the revocation, winning an injunction to prevent Pangtel from rescinding its spectrum licence.

Digicel's director Seamus Lynch said Pangtel's actions were illegal: "I met with the prime minister, Grand Chief Sir Michael Somare, in early March 2007 and he personally gave us the reassurance that our investment and licence to operate in this country was protected."

The licence revocation came as Michael Somare was re-elected in the recent Papua New Guinean general election. Pangtel director general Charles Punaha said the court order was preventing his staff from confiscating telecommunications equipment erected by Digicel. The mobile phone company has also reportedly come under fire from the country's energy regulator.

PNG Power described as "stupid and foolish" Digicel's placing of advertising banners on power poles in Port Moresby. According to a media report, Digicel ". . . went on an advertisement frenzy to capture public excitement" before the launch of its retail business last week.

Digicel Pacific chief executive, Vanessa Slowey, criticised local reporting of the launch. "Despite misleading comments made to the local press, we are overwhelmed at the extremely positive response to our launch. The 20,000 plus customers that have signed on over the last few days have made this one of the fastest-growing mobile operators in the Pacific region."

Digicel has been scooping up mobile licenses in the Caribbean for three years, and began operations in the Pacific with a deal in Samoa.

O'Brien's staff are careful to attract local support for their activities and have engaged in well-publicised sponsorship of local music, sporting and charitable events in each new territory.

Digicel's 20m sponsorship of the West Indies cricket team is probably the most high profile investment of this kind, although a Trinidadian judge, Mr Justice Lucky, raised questions about the original contract in 2005 while investigating cricket sponsorship in the region. In the Pacific, Digicel sponsors the two Fijian national rugby teams and the Pacific Islanders squad.

O'Brien is showing no signs of taking the blow from the Papuan regulator lying down, and Digicel has vowed to continue fighting the decision in the courts if necessary. O'Brien has earmarked 300m in investment for Papua New Guinea which has a population of around six million, and since March Digicel has hired 350 full time and 450 part time staff, 98% of whom are Papua New Guinean citizens.