I think Karma is a great deal. It's an especially good deal for the "typical" person. But the problem with saying "typical person" is that there's no such thing. Everyone has different needs for internet usage. They need internet in specific places, for specific devices, at specific times, and in specific amounts. Most people (including myself) don't know exactly how much data they use, or when and where they'll use need it. That's why Karma lets you buy data when you need it, and that data never expires. It's entirely flexible, and you never pay for the simple "privilege" of having access to a hotspot.

That said, for the purpose of this comparison I've created a fictional "typical" person who uses on average 1.5GB of data a month. That number is based on the average data usage of Karma customers. You can save money if you limit yourself to under 1GB a month, but that's just not realistic, and leaves zero headroom for exceptional use cases.

The problem with saying "typical person" is that there's no such thing

Most hotspot plans are structured like a phone plan: you sign a two year contract (to get the device for "free"), you pay a flat monthly amount for a certain usage level, and pay overages for any usage beyond that. Unless you're some sort of internet wizard, it's unlikely you'll ever use exactly your monthly allotment and never more or less. That means either you'll pay for data you don't use, or you'll pay the inflated overage price. Of course, each provider has its own specific quirks, so let's look at the basic options which would cover our fictional "typical" (non-wizard) person for two years of service:

Verizon - $1235

Verizon has an expansive and fast nationwide LTE network, which makes it great for a high-end hotspot user. It's also incredibly expensive. You can get the basic Ellipsis Jetpack for $149.99, or $0.99 with a two year plan. A 4GB monthly plan costs $50, which Verizon details as $20 for "monthly line access" and $30 for the data. It's $15/GB for overages, and the activation fee is $35. Two years of Ellipsis Jetpack usage rings up at $1235.99, including a device and activation.

AT&T - $1240

Somehow, AT&T manages to be even more expensive than Verizon... thanks to a $40 activation fee. The Unite hotspot is free with a two year contract, $149.99 without. Service is $50 a month for 5GB, overages are $10/GB. The resulting $1240 for two years is remarkably similar to Verizon. Suspiciously similar.

Sprint - $875

Something different! Sprint's upfront costs are similar to Verizon and AT&T: $200 for the MiFI 500 LTE (or free with a two-year contract), and a $36 activation fee. Thankfully, there's a cheaper plan available for Ms. Typical: $35 a month for 3GB. Overages are wild, though, at $50 per extra GB, so look out for that. Two years of usage adds up to $875.

T-Mobile - $622

The best deal among the "big four" carriers. T-Mobile currently is offering 3GB "for the price of 1GB" at $20 a month, through the end of the year. The Sonic 2.0 Mobile Hotspot LTE is $132 which you can pay off monthly without signing a two year contract. There's a $10 "SIM starter kit," but the activation fee (normally $35) is waived during this special offer. If the current prices hold, it adds up to $622 for two years.

StraightTalk Wireless - $559

A popular option for pre-paid service, StraightTalk's Mobile Hotspot U240C is only capable of 3G internet, which won't be sufficient for streaming video or rapid web browsing, but might be enough to check your email in a pinch. The device costs $79.99, with no activation fee, and then you can buy packs of pre-paid data. The 4GB pack expires after 60 days and costs $40, so with 12 of those, Ms. Typical can make it through two years for $559.99 total.

Karma - $545

The Karma device is $149, and data costs $14 for 1GB, $59 for 5GB, and $99 for 10GB. With four 10GB data packs, Ms. Typical will have more than enough for two years of usage and spend $545 total.

Did I fudge the numbers so Karma comes out on top? Probably. If you can spot a cheaper solution for Ms. Typical, please shout it out in the comments. But in fact, Karma could be even cheaper: 1.5/GB a month for 24 months is 36GB, which means you could buy three 10GB packs, one 5GB, and one 1GB, which adds up to $519 for two years with a Karma purchase. But that's a little crazy, because it would require perfect knowledge by Ms. Typical of how much data she'll need. Better to buy data when she needs it, and the 10GB pack is the best deal for her.

And that's the moral of the story, for me: pay for what you need. Is Verizon worth two years of lock-in and $1235? Maybe. But you’ll pay for a whole lot of data you never use, because it expires each month. Is Karma worth $99 and $14/GB? I'd say absolutely. And especially for Ms. Typical, whoever she is.

Update, October 27: This post was written in July 2014. Competitor plans, services, deals, and devices mentioned in this post were accurate as of that date, and are liable to change over time. Expect an updated version of this article in the coming weeks.

About Paul Miller

That guy who left the internet for a year