When Sprint MVNO Karma Mobility launched their "Neverstop" plan on November 5th it sounded like the holy grail of mobile broadband, totally unlimited data for $50 a month. Sure there were some negatives like a proprietary hotspot that cost $150, not so great Sprint coverage and data that was throttled to 5 Mbps. But in many markets wired broadband is either non-existent, slower than 5 Mbps or more expensive than $50. Neverstop's promise of relatively fast data with no cap for $50/month was the best available broadband deal for many people.
Karma did give off mixed messages about how unlimited the service really was, saying on one hand that "Neverstop isn’t meant to be a replacement for your home internet (yet)" and on the other "We are upfront about what this $50 a month gets you: no caps on the amount of data you use at 5Mbps". The two statements contradicted themselves pretty badly, if there are no caps and the speed is 5 Mbps, why not use it as a replacement for home internet?
Neverstop was apparently pretty popular and according to Karma, some Neverstop customers used lots of data, as much as a terabyte (1000 gigabytes) in a month. On January 7th, Karma started throttling Neverstop to 1.5 Mbps, saying that heavy use was "putting a strain on the service" (more like putting a strain on Karma's bottom line, me thinks). Karma said the throttle would vary from 1.5 to 3 Mbs, as an experiment to determine how to modify Neverstop so that it would be both useful and sustainable as a business. Karma also conducted a survey of Neverstop users asking them how they used the service and for suggestions for the Neverstop re-design.
The results of the throttling experiment and survey are in. Karma's CEO told The Verge that 59% of survey respondents said that they used Neverstop as a replacement for home internet. In a blog post today, Karma announced the following changes to Neverstop:
Speed has been restored to 5 Mbps.
A 15 GB soft cap is being imposed. Data is still unlimited but after the first 15 GB in a month speeds will be reduced to a glacial 64 to 128 Kbps.
Customers who use less than 15 GB will get a $1 credit for each unused GB.
The 15 GB data counter starts today.
Any customer who isn't happy with the changes can return their hotspot for a full refund.
I'm disappointed, but not surprised that Karma wasn't able to live up to its promise of unlimited 5 Mbps data for $50/month. Karma is a middleman buying wholesale data from Sprint, which probably charges Karma at least $2 per GB. There's no way that Karma could be making money on any customer who uses more than 25 GB in a month. Karma had to know this when they launched Neverstop. I don't understand why launched Neverstop without a cap. 15 GB of 5 Mbps data for $50 is actually a pretty good deal in today's mobile broadband market. But the returned hotspots, lost customers and negative publicity have got to be costing Karma far more than the publicity, hotspot sales and new customers they gained from the Neverstop launch. Judging by the almost universally negative comments on todays blog post, the company also earned itself a huge dose of bad karma with the Neverstop flip-flop.
Karma Explains Throttled Data Speed on Neverstop Plans
Karma Launches $50/Month Neverstop Unlimited Mobile Broadband Plan
Here's Why We Don't Have Unlimited Mobile Broadband
Source Karma Blog
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