A pay-as-you-go mobile data service from startup company Karma should be stronger beginning in mid-2014. According to an announcement made this morning, that’s when the company plans to begin offering service based on LTE from Sprint. Previously the company’s offering was based on Clearwire’s WiMax network, which is geographically limited.
Karma’s offering goes beyond simply reselling other carriers’ networks and devices, however, as Karma CEO Steven van Wel explained in an interview. Instead the company offers customers a hotspot that enables multiple Wi-Fi users to share a mobile broadband connection – a type of device sometimes called “MiFi.”
Currently Karma users purchase a WiMax hotspot with Wi-Fi capability for $99. Customers then pay in advance for connectivity at a rate of $14 per gigabyte – and they can earn free data by allowing other people to use their hotspots.
“One gigabyte is enough for most people for one month,” said van Wel. If customers don’t use their entire allotment in one month, they can use it in the future. Data allotments never expire, van Wel said.
“One of the biggest use cases is people who use Karma when they buy a tablet,” commented van Wel. “Instead of adding a subscription, they simply buy a Karma device and the data they want to use.”
Customers get a credit of 100 megabytes every time someone else uses their hotspot. Karma encourages customers to leave their hotspots open, even when they are not using them so others can use them — and hotspot owners can earn additional data.
When someone else uses a customer’s hotspot, only the person using the service is charged, van Wel explained. “Everyone picks up his own tab,” he said.
New hotspot required
To use the Sprint-based offering, Karma customers will need to purchase a new hotspot that is expected to be available in mid-2014. The new hotspot will only work on the Sprint network, van Wel said. Pricing has not yet been determined, but Karma hopes it will be about the same as for the WiMax offering.
The reason Karma is announcing plans for the Sprint network now is so that customers can begin earning credits toward the price of the new hotspot by letting others use their existing hotspots, said van Wel.
Karma also plans to make sure that customers with both types of hotspots can use their data allotment on either the Sprint LTE or Clearwire WiMax networks.
“Karma is all about giving one unified experience regardless of the network they want to use Karma on,” said van Wel.
The Sprint-based offering will have a new capability not available with the current offering, however. Customers will be able to use the new hotspot with Wi-Fi base stations that are connected via landline broadband, in which case usage will be at no charge.
In addition van Wel said customers will get seamless hand-offs from landline-based Wi-Fi to LTE-based Wi-Fi.