On my last visit to Vanuatu I needed a mobile phone to coordinate an expedition. I bought a Smile prepaid SIM card and phone and used it to call and text overseas. I even used it to book accommodation and transport (which I have never done before)! I could receive calls but unfortunately not texts from overseas.
Note: In this article I have not considered international roaming (using your foreign phone and SIM in Vanuatu) because I expect that it is a more expensive option than prepaid.
Vanuatu has two mobile phone networks: Digicel and Smile (Telecom Vanuatu). When Digicel started, they had the best coverage and lowest rates. Today, the two have similar pricing. Networks are still expanding and coverage on the outer islands can be patchy. On Vanua Lava and Mota Lava, for example, Smile was the better service in 2011. Coverage maps are rarely up-to-date and sales staff in Port Vila (Efate) or Luganville (Santo) are mostly unaware of the situation on the outer islands. The best way to find out is to ask an islander. Or buy two different SIMs and use the one that works best!
To get started, you need an unlocked mobile phone. If your phone is locked (which is generally the case for phones bought on prepaid or postpaid plans), you can buy a cheap handset for about 4000 to 5000 Vatu in Port Vila or Luganville (which will be locked). Unlocked phones can be cheaper overseas. Next, purchase a prepaid SIM card (about 400-500 Vatu). Recharge credits are widely available although larger denominations are scarce on the outer islands. Exchange Rates.
Now, calling people in villages can be difficult because they may be out of coverage and they don't charge their phones regularly. Another problem is that people let their prepaid SIM cards expire and change phone numbers each time they buy a new SIM. Many have two phones (Digicel and Smile) as well. Patience is required! Early-evening is a good time to call. Sunday (or Saturday) afternoon is another good time to call.
It's a good idea to transfer remaining credits to a friend when you leave Vanuatu.