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Bad Karma: WISP Pares Back Its Monthly 4G Hotspot Plan, Again

Posted by timothy on from the lawyers-should-warn-you-about-certain-words dept.

Robotech_Master writes: The ongoing saga of the Neverstop plan shows that Karma Wireless just can't seem to catch a break as far as high-bandwidth plans are concerned. After starting out with a straight pay-per-bandwidth plan, "Refuel," for its $150 wireless hotspot, Karma thought it would innovate with a throttled-but-otherwise-unlimited 4G plan, "Neverstop." However, it soon discovered that users were taking it at its word and using up considerably more bandwidth than Karma expected or could afford. After experimenting with further throttling, Karma subsequently revamped the plan into a $50 per month, 15 GB plan that throttled to dialup speed after it ran out. However, now it turns out even that plan was too optimistic, and Karma has opted to dump the Neverstop plan altogether in favor of tiered monthly plan called Pulse —whose bandwidth costs significantly more. ($40/mo for 5 GB, $75 for 10 GB, $140 for 20 GB.) Karma's "unlimited" users weren't pleased the first time the plan changed, and now they're practically through the roof.

35 of 59 comments (clear)

  1. Unhappy customers... by Richard_at_work · · Score: 5, Insightful

    Karma's "unlimited" users weren't pleased the first time the plan changed, and now they're practically through the roof.

    If a company can't afford to deliver the product as sold, and they aren't bound to a contract to deliver that product as sold for more than one billing period, then what do these users think is going to happen - Karma Wireless is going to continue to provide a loss making service until the company goes under with massive debts?

    Karma Wireless tried something, it failed (mainly because they screwed up forecasting costs) and now they are moving on.

    1. Re:Unhappy customers... by Registered+Coward+v2 · · Score: 1

      Karma's "unlimited" users weren't pleased the first time the plan changed, and now they're practically through the roof.

      If a company can't afford to deliver the product as sold, and they aren't bound to a contract to deliver that product as sold for more than one billing period, then what do these users think is going to happen - Karma Wireless is going to continue to provide a loss making service until the company goes under with massive debts?

      Karma Wireless tried something, it failed (mainly because they screwed up forecasting costs) and now they are moving on.

      There product probably attracted a disproportionate number of high bandwidth users who knew they would be heavy users and thus attracted to Neverstop. For light users there are too many cheaper options than Karma. For example, T-mobile offers 200mb / month for free, 6GB with BingeOn for $35, and 15GB of tethering for $50 on a phone plan. As you point out, their business model simply is not sustainable as originally conceived.

      --
      I'm a consultant - I convert gibberish into cash-flow.
    2. Re:Unhappy customers... by Registered+Coward+v2 · · Score: 1

      (mainly because they screwed up forecasting costs)

      Whenever I see the words "projections", "forecasts", or "estimations" when it comes to financial issues, I treat what I'm about to read or hear as a fairy tale. Finance is NOT a natural science where the numbers are based on physical reality. Calculating the orbit of a moon is nowhere the same as projecting sales and revenues.

      It's a pet peeve of mine that folks see numbers and they immediately treat it as an undeniable fact without considering context.

      How true. I think computers have made it worse because people simply plug in numbers without thinking about what results make sense; and thus blindly accept whatever results they get.

      And engineers are just as bad as everyone else; maybe worse because they were trained to trust numbers and calculations

      If an engineer's training taught them to trust numbers and calculations something was lacking in their education. I was taught to always questions the results to see if they made sense, the trust was not s much in numbers and calculations but that the theory was correct and would produce the correct results if the numbers were right and calculations were correctly done. Or, as one of my professors put it "Mother Nature doesn't give a damn about your calculations, she's going to do whatever she wants..."

      --
      I'm a consultant - I convert gibberish into cash-flow.
    3. Re:Unhappy customers... by Anonymous Coward · · Score: 2, Insightful

      The calculations in finance can be perfect - it's where the numbers came from.

      For example, my county was convinced by a professional sports team to foot the bill to build a new stadium. They provided all these projections and estimations of all the extra tax revenue the county will make and projections of the benefits to our economy.

      All pie in the sky. And no one bothered to look to see that every city and county that paid for a sports stadium has gotten screwed.

      Projections are a fancy way of saying "predicting the future."

      So, replace "projections" with "predicting the future" and things sound real kooky - like late night psychic ads. Now, bear in mind, I am strictly speaking of financial issues and not science or engineering matters.

      I brought this up to an engineer regarding revenue projections once and he replied. "They got the number from somewhere." Yeah, out of their ass. All the other calculations looked awesome and were perfect of course - thanks to Excel. Spreadsheets are a great way to fool people with real fancy looking numbers and calculations.

      Perfect calculations are easy in this day and age, but the premise still has to be correct. And these tools can make the unreasonable look reasonable to those who don't ask hard and seemingly stupid questions.

    4. Re:Unhappy customers... by Mr+D+from+63 · · Score: 1

      If a company can't afford to deliver the product as sold, and they aren't bound to a contract to deliver that product as sold for more than one billing period, then what do these users think is going to happen

      It appears they did deliver what was sold, they just could not keep delivering it, so they changed what they were swelling. But they never sold any promises the plan would continue to be offered as is. It seems they tried, but it just didn't work financially due to those who's usage model was basically downloading a full bandwidth constantly.

      It actually seems to me this company is trying to offer an option for heavy users, but the cost model just doesn't work due to a certain slice of users, and they are trying to find a plan that accounts for those impacts.

    5. Re:Unhappy customers... by Curunir_wolf · · Score: 1

      so they changed what they were swelling.

      Apparently, it was swelling TOO much.

      --
      "Somebody has to do something. It's just incredibly pathetic it has to be us."
      --- Jerry Garcia
    6. Re:Unhappy customers... by plague911 · · Score: 1

      In financial issues one of the most basic criteria for a good analysis is a sensitivity analysis. Its not perfect but you state your underlying assumptions and test them. Often due to reality, your underlying assumptions are wrong. The difference between financial modeling and say, trajectory modeling is that when moving from prototyping, or small scale market tests, is that there are just more variables when running some kind of business. The result is you have more missed calls due to blindsiding. IMHO and I've been involved with both.

    7. Re:Unhappy customers... by schnell · · Score: 1

      people simply plug in numbers without thinking about what results make sense; and thus blindly accept whatever results they get

      I don't think that's the issue so much as that financial projections are in many ways more art than science. I think a lot of the Slashdot readership, being generally from the "technical" side of their employers rather than the "business" side have a view of what is actually involved.

      Let's take the example of an ISP. Forecasting your data usage needs is simple, right? Costs are subscribers x bandwidth rates. Your revenue is subscribers x monthly fee. Do you make a profit?

      In reality, though, you never estimate your costs that way because of "breakage." Breakage is the fraction of what people pay for that they don't actually use, such as minutes on your cellphone plan that you don't use, or a rebate coupon that you don't send in. Every business has breakage, and they all use that as part of their modeling.

      So if you tried to estimate your costs in the straightforward way where all your users used all their bandwidth all the time, your costs would be (probably much) higher than your competitors and you wouldn't get any customers. You have to factor in a breakage/utilization estimate in your own numbers - based off what people really use vs. what they could use - in order to arrive at a competitive rate. And the amazing thing is that most of the time, that works out pretty well.

      But all you really have to assume proper breakage rates is what people have done in the past. If people in general start using more (or less) bandwidth, or you start attracting a particular customer base with different usage patterns (such as heavy Torrent users vs. senior citizens who just want to check e-mail) then your calculations can be way off. That sounds like exactly what happened here.

      It is probably a result of bad forecasting on their part, but not from a simple engineering error. They had to make some educated guesses, but the guessing part is unavoidable. Sometimes you're right, sometimes you're wrong.

      --
      "95% of all Slashdot .sig quotes are incorrect or completely fabricated." -Benjamin Franklin
    8. Re:Unhappy customers... by Mr+D+from+63 · · Score: 1

      My spelling of selling was also swelling.

  2. Wrong technology by gsslay · · Score: 2

    The obvious lesson here would be that 4G is really not the technology you want to be using for downloading +15GB/month of data. Currently it is simply incapable of supporting that, so demand has to be throttled one way or another. Cost is as good as any.

    If you have need for that kind of bandwidth on the go, look elsewhere or expect to pay for it.

    1. Re:Wrong technology by Puls4r · · Score: 1, Insightful

      Uh, really? Is there something inherent in 4G that somehow limits the total amount of data you can use per month? Or did you MEAN to say that the obvious lesson is that our mobile broadband companies in this country suck? Because the technology has nothing to do with the companies that are screwing folks over. 4G Seems to work for a whole lot less cost in many other places. Don't give me the old infrastructure bullshit either. You plan for huge volumes of data to be used, you make the capital outlay ONCE for the equipment, and you're good for 10-15 years. Instead, these companies do estimates of expected usage, drastically understate it, then purposefully buy the absolutely minimum about of infrastructure that will provide to their estimates. I.e., they'll continue to underprovide intentionally because scarcity allows them to jack up the prices.

    2. Re:Wrong technology by Anonymous Coward · · Score: 2, Informative

      wireless is somewhat like the old layer 1 and 2 switches in that if one user's netflix stream is broadcasting then everyone else's traffic has to wait. granted the antenna does it very fast but too many people using high bandwidth data will slow the network to a crawl because the one antenna will have to alternate between transmitting everyone else's content and receiving data from end user devices. and that's not even going into the fact that other devices from other carriers on neighboring frequencies are also doing the same thing and everyone is always having to filter out unwanted traffic. I live close to a major NYC traffic artery and every night at rush hour my AT&T service is pretty much useless because everyone is driving home and streaming their music. Wireless is not like switched network traffic where the data can be switched to the right wire and not interfere with anyone else's data

    3. Re:Wrong technology by Mr.+Slippery · · Score: 2

      The obvious lesson here would be that 4G is really not the technology you want to be using for downloading +15GB/month of data.

      I used to have Sprint's WiMax 4G service as my home ISP, same service as Clear/Clearwire but under a different branding. Downloaded on the order of 90GB some months. Worked fine for several years, other than that I was on the very edge of the service area and occasionally dropped signal in bad weather.

      4G can get bits to homes. If an ISP sets out to do that and fails because it oversells, it's not a technical problem, it's poor planning and people have a right to be pissed about that.

      --
      Tom Swiss | the infamous tms | my blog
      You cannot wash away blood with blood
    4. Re:Wrong technology by Anonymous Coward · · Score: 1

      I live in an internet backwater (central London) where my only viable option for broadband is 4G. I'm currently capped at 25GB, which is plenty for non-streaming use. It's actually much more reliable than my old landline ADSL, which would go flaky for months at a time regardless of provider. It's also pretty fast at ~70Mbps down (compared to 2.5Mbps for ADSL). Up speed is decent too at ~20Mbps. Cost is ~$35pcm (23 quid, with EE, monthly contract).

    5. Re: Wrong technology by Lenny369 · · Score: 1

      Huh? Baseless statement. I've been using my unlimited unthrottled (grandfathered from 5 years ago) plan from Verizon for my only home Internet for 5 years now. I use on average 300gb a month while getting average 25mbps. Don't tell me the 4g technology is the problem. It works great for me. And I cut the cable cord completely so I went from $170/mo to $20/mo and myou Internet works in my truck, in the woods (hunting mapping) etc.

    6. Re:Wrong technology by antdude · · Score: 1

      Yeah, it's like satellite when nothing else is available except dial-up. :(

      --
      Ant(Dude) @ Quality Foraged Links (AQFL.net) & The Ant Farm (antfarm.ma.cx / antfarm.home.dhs.org).
    7. Re:Wrong technology by gsslay · · Score: 1

      I said exactly what I meant to say, but unfortunately I can't make you read it.

      Provision of 4G is a limited resource, just like anything else. Maybe one day 4G will have no problem handling 15GB+ a month for everyone, but currently it can't. If there's any fault to be allocated about that, I don't know. But if you want to live in reality, rather than planet what-should-be, 4G is a poor choice for that volume of data.

  3. Re:POT (Personal Open Terminal) lowers isolation by malditaenvidia · · Score: 2

    TimeCube, is that you?

  4. I think I speak for everyone here when I say by DirkDaring · · Score: 1

    'Who?'

  5. This article is irrelevant by koan · · Score: 1

    The only question that should be asked is why it cost so much.

    --
    "If any question why we died, Tell them because our fathers lied."
    1. Re:This article is irrelevant by Robotech_Master · · Score: 1

      The thing that makes Karma worth using in my book—and the thing I personally use it for—is its "Refuel" plan, where you can get data for $10 a gigabyte. That's a reasonable price, basically on par with what Google's Project Fi offers, and even better, every so often they sell bandwidth for half price, so $5 a gigabyte. I don't use much mobile data, but having a Karma hotspot through which I can lets me save money on my Project Fi bill.

      (Plus, well, I've earned over $2,000 in referral credit from people buying routers with my referral code, so I'm going to be getting my mobile Internet "free" for quite some time, assuming Karma doesn't go under.)

      --
      Editor Emeritus and Senior Writer, TeleRead.org
    2. Re:This article is irrelevant by Curunir_wolf · · Score: 1

      The thing that makes Karma worth using in my book—and the thing I personally use it for—is its "Refuel" plan, where you can get data for $10 a gigabyte. That's a reasonable price,

      Seems high to me. I pay $100 for 15 GB on my smart phone plan, and that includes unlimited talk, text, and no-hassle hot-spot (so built-in wi-fi to 4G LTE). Yea, it's bulk, but I use most of that. It rolls over, so in the summer when I'm wandering more, I have plenty of extra allotment that I built up during the winter. If I do go over, it's $10 / GB if I do nothing, but I get notifications so I can just bump up my plan for the month, which is much cheaper.

      --
      "Somebody has to do something. It's just incredibly pathetic it has to be us."
      --- Jerry Garcia
    3. Re:This article is irrelevant by Dalmarf · · Score: 1

      To be sure you're comparing the same thing - Karma's refuel plan means I pay $10/gigabyte, but it never expires. When it's at half-price special it's $5/gigabyte. So I spent $100 for 20 Gigabytes last August, and I've barely used 2 gig that is still available to me. At the rate I use data it will probably be at least a year or more before I refill, so my monthly cost is trivial, maybe well under $10/month. And no monthly charge.
      For someone with moderate-to-low data needs on my phone and laptop and tablet, it makes sense. If I needed more data, like a lot of my friends do, I'd probably do better with some other mobile phone plans

      So I wanted to to clarify - do you mean $100/month for the 15 GB, or $100 for 15 GB that doesn't expire?

      As for the Neverstop plan - Karma tried it, and the way it was actually put to use turned out to be too expensive for them to maintain. (I never tried that plan btw)

    4. Re:This article is irrelevant by Curunir_wolf · · Score: 1

      So I wanted to to clarify - do you mean $100/month for the 15 GB, or $100 for 15 GB that doesn't expire?

      It expires, but only after a year. That is, the 15 GB I bought in January will still be available in August, but it will be gone after the NEXT January.

      --
      "Somebody has to do something. It's just incredibly pathetic it has to be us."
      --- Jerry Garcia
    5. Re:This article is irrelevant by Robotech_Master · · Score: 1

      I've been limiting my Karma data buying to when they have it on buy-one-get-one sale, so I get 20 GB for $100. (And it's $100 I didn't even pay for personally, given I've still got $1,600 of referral credit left.) The only thing is, there's no way to know when they're going to run another sale, so I typically just buy a couple of bundles when it is and cross my fingers it'll happen again before my last purchase runs out.

      --
      Editor Emeritus and Senior Writer, TeleRead.org
  6. Operating at a loss, or not high enough profits. by Lumpy · · Score: 2

    Honestly you really need to read closer. IS it really they can't afford it or they can't afford it after thinking they need to increase profits by 25%. You really cant believe anything out of the mouths of the executives because they believe they are entitled to record profits and will word it as they are losing money..... losing imaginary money they want.

    --
    Do not look at laser with remaining good eye.
  7. Here we go again... by Maxwell · · Score: 1

    1) promise unlimited something, quickly realize what everyone on earth already knew except for you, that is never going to work. Ever. 2) ??? 3) profit.

  8. Ordered one...right when the plan changed by kk5wa · · Score: 1

    I saw this as a solution to my rural broadband access woes (no cable, no DSL, AT&T access horrible, Sprint access fantastic). Maybe I could dump my satellite TV and get into the modern world of Netflix, Hulu, and other services, and decrease my AT&T data plan.

    Alas, roughly the time I ordered my Karma the infamous blog post appeared. Just received the gadget yesterday. As I already paid for a month, I'll use my (unlimited) 15 gig before I return it.

    Shame...it's a nice implementation.

    --
    sine puella vita suget
  9. underpriced by Spazmania · · Score: 2

    Back when I worked for an ISP my boss had a line he used to describe some of the competitors: "It takes no particular talent to sell a dollar for fifty cents."

    --
    Moderating "-1, Disagree" is simple censorship. Have the guts to post your opinion.
  10. Obligatory by U2xhc2hkb3QgU3Vja3M · · Score: 1

    Karma Wireless: I am throttling the speed once you get past 15GB of data.
    Users: You said the plan was unlimited!
    Karma Wireless: I am altering the deal. Pray I don't alter it any further.

  11. Re:not a wisp by Ash-Fox · · Score: 1

    Real wisps provide there own network on licensed and unlicensed spectrum and are designed for unlimited use

    Too bad trying to get spectrum is pretty hard for any new competition.

    --
    Change is certain; progress is not obligatory.
  12. Re:This is a shining example of socialism, folks by Curunir_wolf · · Score: 1

    When I went to college back in the 1980's it was pretty freakin cheap to go to a state school. Tuition was very low and affordable - the people that got loans (at market prices, not rates fixed by congress) paid them off pretty quick. It's outrageous that a state school should cost as much as it does. Bloated, inefficient, and overpaid administration is a major issue.

    --
    "Somebody has to do something. It's just incredibly pathetic it has to be us."
    --- Jerry Garcia
  13. Re:This is a shining example of socialism, folks by fbobraga · · Score: 1

    This is a shining example of why socialism doesn't work. You cannot promise everyone unlimited free (or low-cost) stuff when that stuff is a finite resource.

    socialism has nothing to do with it

  14. Re:Operating at a loss, or not high enough profits by DRJlaw · · Score: 1

    Honestly you really need to read closer. IS it really they can't afford it or they can't afford it after thinking they need to increase profits by 25%. You really cant believe anything out of the mouths of the executives because they believe they are entitled to record profits and will word it as they are losing money..... losing imaginary money they want.

    If I'm on a month-to-month contract and decide that you're not paying me enough, I quit at the end of the month. Whether I'm making or losing money has nothing to do with whether I can or not. Similarly, even if they've decided that they're merely not making enough money, they are only obligated to fulfill the terms of their contract and then it's adios.

    You can question the motives all that you want, but neither side can force the other to continue to deal. If they don't want to sell to you at the old price, your choice is to pay the new price or walk.

  15. 250GB for $48 per month. by pcjunky · · Score: 3, Interesting

    I run a WISP in a heavily competitive area with both CenturyLink and Comcast as competitors. We sell a residential service that averages 25Mbps down and 9 up. 250GB per month for $48/per month. We use the cheapest radios available, Ubiquiti.

    I don't understand a WISP who can't make money at a $50/month and 15GB limit plan.