What kind of niche will pay-as-you-go mobile broadband fill?

Prepaid provider Virgin Mobile has created a new dynamic in the mobile broadband industry by offering a true pay-as-you-go service called Broadband2Go that uses Sprint's EVDO Rev. A network. (See the story below). Unlike Cricket Communications, which is offering an unlimited broadband service for $40 (which has a soft cap at 5GB if customers abuse the service), Virgin Mobile is breaking its pricing into per-megabit segments, ranging from $10 for 100 MB (customers have to use that one in 10 days) up to $60 for 1 GB, much like a true prepaid minute offering.

Certainly Virgin Mobile plans work out to be much higher than Cricket's offering, which is targeted as a replacement for home broadband. Virgin Mobile, however, said it expects the service to augment customers' connections at home and work.

"Forget the long-term contracts, monthly bills, or desperately seeking a local coffee shop for WiFi. Prepaid mobile broadband is ideal for students, families on the go, freelancers, or anyone who needs wireless Internet access and wants to pay only when they use it," Bob Stohrer, chief marketing officer for Virgin Mobile, said in a press release.

A major factor that Virgin Mobile will have to grapple with is continually educating users on how much bandwidth particular activities such as web browsing, viewing a video clip or downloading email take up. There's a bit of explanation on the company's web site, and Virgin Mobile will also offer an online portal that helps users keep track of how much data they have left.

Will this type of plan fill the same niche the prepaid voice has filled? I have a feeling there will be a whole new world of discovery when it comes to the value of a MB, especially when a student on the go opts for the $10 for 100 MB plan and really begins to understand that just one minute of streaming video takes up 4MB of data or one MP3 download takes up 5MB. Just like on the prepaid voice side, customers may be willing to pay more just so they don't have to sign a two-year contract. Of course, free WiFi could complicate that value proposition or a move on the part of mobile operators to come out with mobile broadband day passes.--Lynnette

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