Karma Hotspot review: A mobile data plan with no-nonsense pricing

It seems “pay as you go” means one thing to mobile carriers and something else to the rest of the human race.

For instance, my Pay As You Go mobile service with Verizon means buying more service every month whether I need it or not. Sure, there’s no contract, but failure to buy minutes in any month means my phone will be disconnected and all my accumulated minutes wiped clean.

Other carriers have similar ideas about pay-as-you-go. What they all share in common is monthly payments. It seems to me that true pay-as-you-go should allow you to buy service for a flat amount and only buy more when you need it—whether that be next month or next year.

That’s the model the year-old service Karma uses.

“We try to be clear and simple and honest,” said Karma COO Robert Schouwenburg, and that certainly is the case with Karma.

To get started with the service, you must buy a mobile hotspot from Karma for $99. You can buy data at the same time, or purchase it later ($14 for 1GB, $59 for 5GB, or $99 for 10GB). 

Once you buy the data, it’s yours until you use it—without any time restrictions. “If you buy 10 gigabytes today and use two gigabytes, when you turn on your hotspot in however many months, you’ll have eight gigabytes to work with,” Schouwenburg explained.

Karma also has an interesting twist that lets you add data to your account for free. When your hotspot is on, it’s open for anyone to use. Anyone with a Karma account can connect to the Internet with it, and so can others without an account. These new customers can set up an account on the fly and when they do, they and you receive 100 megabytes of data for free. That’s enough data for one or two hours of Web surfing.

When Karma launched, strangers desiring to set up a Karma account also needed a Facebook account. That limitation has been removed and you can now sign up with just an email address.

More the merrier

No one accessed the hotspot during my time with my Karma, so I didn’t receive any data bonuses, nor was I able to see if the hotspot’s performance took a hit as more users began to use it. According to Karma, the hotspot can handle up to eight users without performance degradation.

“We have traffic-shaping software on the hotspot, which insures that everyone gets a fair share of the bandwidth available, and I have never seen a problem with too many people connecting and my connection was too slow,” Schouwenburg said.

When someone connects to the Internet through your hotspot, data usage is charged to their account, so you don’t have to worry about them eating into your data reserves. That can be useful for families. Each family member can have their own Karma account, but you only need to buy one hotspot.

Karma’s hotspot is the size of a lady’s powder compact: 2.25 inches square and a quarter-inch thick. The case is white with a black edge. LEDs on the edge display power information (red indicates two or less hours of power remaining; yellow means two- to four hours; and green, four- to eight hours), Wi-Fi connectivity (blinking green, no devices connected, and green, devices connected) and 4G coverage (red, poor coverage; yellow, weak coverage; and green, excellent coverage).

There are fancier and lower priced hotspots on the market than Karma’s but they don’t exactly square up with what Karma offers. For example, AT&T offers the MiFi Liberate hotspot, which has a touchscreen, for $30 with a two-year contract or $180 without one. Walmart has an ” Internet on the Go” package with an $80 hotspot, but it’s limited to 3G service on StraightTalk.

Near-LTE speed

Karma relies on the Clearwire network. The 4G WiMax net is part of Sprint, which bought it for $2.2 billion at the end of 2012. That limits the coverage of Karma to about 80 U.S. cities. However, Schouwenburg said Karma will expand to the full Sprint network sometime this summer, which will give it full nationwide coverage and access to LTE speeds.

According to Karma, its hotspot will deliver download speeds between three- and six megabits per second, and upload speeds of about 1.5 Mbps. Speed tests I performed with Ookla Speedtest and Speedof.me backed up those claims.

Running the Speedtest app on an iPad Air showed download speeds in the neighborhood of 6.9 Mbps and upload speeds of 1.74 Mbps. On a 2009 MacBook Air, test website Speedof.me showed a download speed of 4.09 Mbps and an upload speed of 1.51 Mbps. Speedtest’s online tool returned higher download speeds for the MacBook Air—9.31 Mbps—but lower upload speeds: 1.36 Mbps.

Those are near-LTE speeds. According to a recent report by OpenSignal, LTE download speeds of the four major U.S. carriers range from 4.3- to 11.5 Mbps.

For common Internet tasks, such as Web surfing and email, Karma’s hotspot with excellent coverage proved to be perky with no noticeable latency. Video clips also played smoothly, as did streaming audio.

Karma is designed for people with an occasional need for Internet access on the go and don’t stray too far from major metropolitan areas — although that will change once Karma gains access to the full Sprint network. At $14 per gigabyte, its data prices are more expensive than alternatives with more restrictions, but less expensive than travel spots where online access may be needed like hotels and airports. What’s most appealing about Karma is its “buy it and forget it” model for data usage, which allows you to truly pay as you go for your data.

Editor’s note: This story was updated on 7/14/2014 with Karma’s new pricing policy.