Karma is cutting the speeds of its unlimited data plan
Dan Seifert / The Verge :
Context & Ripple Effects
Karma launched Neverstop in November 2015 as a $50/month unlimited data plan for its mobile hotspot — a rare flat-rate offer in a market dominated by capped tiers. Two months later the company is cutting the plan's speeds, the first visible retreat from that promise.
The move lands mid-arc: within weeks Karma will restore 5 Mbps speeds but add a throttle to 64-128 Kbps after 15GB, and by February it abandons unlimited entirely, replacing Neverstop with the tiered Pulse plans at $40/$75/$140 plus $15/GB overages.
First-order effects
- Existing Neverstop subscribers see their effective service degrade immediately — heavy users on an 'unlimited' plan get slower throughput without any change to what they pay.
- Karma's headline differentiator against capped competitors is weakened while the plan still exists, putting its own marketing claim ('unlimited') in tension with the delivered product.
Second-order effects
- Speed-cutting as a de facto cap forces Karma into a pricing reset: once throttling proves unpopular, the company moves customers onto metered tiers where overage fees ($15/GB under Pulse) monetize exactly the usage unlimited was meant to absorb.
- Rival hotspot providers face less pressure to match flat-rate pricing, since the most aggressive unlimited entrant has demonstrated the model doesn't hold up economically.
Third-order effects
- The Neverstop-to-Pulse sequence is a case study in why small MVNOs struggle to sustain unlimited offers against carrier wholesale costs — expect 'unlimited' plans from niche players to carry throttles or short lifespans by default.
- With subscription revenue restructured around tiers, Karma pivots to upselling premium features like private network support, signaling a shift from competing on raw data price to layered services.
The trend: Unlimited-data promises from small mobile carriers are converging toward throttled or tiered products, with usage-based pricing winning out over flat rates.