Karma, an MVNO that rewards customers with additional data when they share their hotspot connection with others, is launching its first LTE hotspot, called Karma Go, on Sprint's (NYSE: S) tri-band LTE network. The company previously only offered service on Sprint's WiMAX network.
Karma has also doubled its user base to more 100,000 users in less than a year, according to CEO Steven van Wel.
The company said around 50,000 people signed into the service in November 2013, and the firm has more than doubled that monthly customer figure since then. Van Wel said that the company has also seen a four-fold increase in the amount of data that people are consuming each month on average. When the service first launched in December 2012 on Clearwire's mobile WiMAX network, customers were using around 300 to 400 MB per month, he said, and are now consuming on average 1.4 to 1.5 GB per month.
"To us, that really shows that people get hooked into Karma every day," Van Wel told FierceWireless. "With that use case, we were also getting more and more requests from existing customers to expand the network [footprint]."
Prior to launching on Sprint's LTE network, Van Wel said Karma only supported customers in 80 markets via WiMAX. Now, the service covers 400 markets nationwide via Sprint's LTE network.
Karma is taking pre-orders for the new Karma Go hotspot now, and the product will start shipping in December. The new hotspot will cost $99 if customers pre-order the device in the first four weeks, and existing customers will get $25 off that price. After the initial period of pre-order sales, the device will cost $150.
Karma previously offered 1 GB of free data with a device purchase, van Wel said, but the company is no longer offering that.
When customers turn on the Karma hotspot, they transmit an open W-Fi signal that anyone can connect to. If someone connects to the hotspot and registers for Karma service, they get 100 MB of free data and the person who owns the hotspot gets 100 MB. That model is not changing, van Wel said. Customers who own hotspots can purchase more data as they need it, including 1 GB for $14, 5 GB for $59 ($11.80 per GB) and 10 GB for $99 ($9.90 per GB). The company's plans aren't based around monthly data allotments; instead, users simply pay as they go and data never expires.
Karma first announced plans to move onto Sprint's LTE network in November 2013 but it has taken until now to launch the company's first LTE product. Part of the delay related to Sprint's staggered buildout of its LTE network, which now covers 254 million POPs with 1900 MHz LTE. Sprint also aims to cover 150 million POPs with 800 MHz LTE and 100 million POPs with 2.5 GHz TD-LTE service by year-end. The Karma Go hotspot device supports all three LTE bands as part of Sprint's Spark service, van Wel said, but it does not support carrier aggregation for Sprint's 2.5 GHz airwaves.
"For us it's important to launch new products that outperform previous products," he said. "When we announced [the plans to move to Sprint's LTE network], the LTE network wasn't better than the WiMAX network. It was on par." The new device will also support Sprint's CDMA network as a fallback option where the carrier does not have LTE coverage.
Karma will continue to support its existing WiMAX devices for at least another year and maybe into 2016. Van Wel said customers' data balances can be transferred from its WiMAX device to its new LTE device.
Van Wel said Karma has no plans to expand to other U.S. carriers, but is open to doing so in the future. "For now, I think Sprint is the best option and the most advanced network in terms of upgrades and performance for years to come," he said.
Still, he added: "One of the things we decided early on is that we decided Karma will remain carrier agnostic. We don't want to exclude any future partnerships."
Also, for now, Karma has no plans to expand internationally. "We want to keep focusing on the U.S. market for at least the next few years," van Wel said.
The comments are notable considering Karma's fellow Sprint MVNO FreedomPop is working to expand its freemium business model internationally. The company recently announced that it has partnership with KPN's Belgian subsidiary BASE, which hopes to launch service in Belgium by the end of 2014.
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