Karma to cut speeds of its Neverstop data plan

Karma announced about 10 days back that it would be cutting the speeds of its 'Neverstop' data plan in response to a small number of users that were racking up hundreds of gigabytes of usage per month.

Karma is an MVNO (mobile virtual network operator). MVNOs are cell phone carriers, that typically do not their own network infrastructure and license radio spectrum.

MVNOs are resellers of a mobile network operator (MNO) and can typically set their own tariffs on the basis of rates agreed upon with the MNO.

Karma launched Neverstop last year as its first subscription data plan, offering unlimited data usage for $50 per month. Both up and downlink speeds were set at 5Mbps and customers could only use three devices at any given time on the plan (as against eight devices that Karma's pay-as-you-go plan allowed).

But some customers soon adapted the Karma Go hotspot device for home usage, including for large data backups and online gaming, and subsequently racked up unexpectedly high data usage.

According to Karma, Neverstop was not intended to be a replacement for home internet service (though a survey sent out to its users showed that nearly 60 per cent of them were using it for that). Karma's initial response was to throttle the speeds of its Neverstop plan down to as low as 1.5Mbps in order to discourage the excessive usage.

"We made a mistake. We modeled Neverstop usage to be much higher than usage on Refuel. But we never anticipated that some customers would use over 1,000GB a month," reads a blog post from Karma CEO Steven Van Wel.

"Some of you asked why we don't simply kick off the bad guys. Frankly, we don't think there are any bad guys. We offered an all-you-can-surf option, and people took us up on it. That's on us. But usage this high is not something that will work today. The other thing made clear in your feedback is that speed is important. Slowing it down was not a good solution, which is understandable."

Karma yesterday announced a modification of its Neverstop plan, which would restore its speeds to their previous levels, but keep usage in check with throttling after a certain limit has been reached.