August 26, 2010 Update: Virgin Mobile recently announced that they are abandoning the pricing structure I outlined in this post. They are moving to a 2-price structure that includes an unlimited option and a 100 MB option. Verizon also just recently revised their prepaid tiered data pricing as well. Be sure to check the latest pricing before making a final decision. It sounds like competition is heating up, so prices are subject to change anytime.

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Data is like iPad oxygen.  The iPad can hold its breath offline for a little while, but you have to let it breath eventually.

For Wi-Fi iPad owners like me, that means being in range of a hotspot at home or on-the-go.

I really have not regretted the decision to pass on the 3G iPad one bit, though.  The idea of paying $140 more for the privilege of using AT&T’s limited 3G network never sat well with me, and I had this funny feeling that “no contract” meant “no guarantees.” Turns out, it did mean just that, as AT&T rapidly changed their mind about what iPad data should cost.

When the iPad came out, the only other viable option for the on-the-go data-vore was Verizon’s MiFi.  I never liked the idea of another 2-year commitment, which at $60 a month would cost $1440 over 24 months.

I often plug putting mundane aspects of your daily workflows on autopilot, but I don’t think taking an autopilot approach to data plans is a good idea if it can be avoided.

Companies like Verizon know that inertia works in their favor when you agree to a “reasonable” monthly price like $60 because people typically don’t think in terms of annual costs.

With Verizon’s MiFi, 60 is the wrong number to focus on.  1440 is the real number.  That’s the number of dollars you’re committing to pay Verizon over a 2-year period.

Shoot down the autopilot and pay as you go

Chuck Joiner wrote a nice summary of the Virgin Mobile MiFi with a cost comparison to AT&T’s current data plan pricing.

I’ve been trying out the Virgin Mobile MiFi, which runs on Sprint’s network, for a couple of weeks, and I’ve been really impressed with it.

The key selling point for Virgin Mobile’s MiFi is flexibility: There’s no commitment to a contract and no commitment to a device.

With Virgin Mobile’s MiFi, you’re never going to pay more than you’d pay with Verizon.  The tiered pricing maxes out at $60 for 5 GB of data (the fixed price of Verizon’s).

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Data Time Cost
100 MB 10 days $10
300 MB 30 days $20
1 GB 30 days $40
5 GB 30 days $60

The cost of data will vary with your usage.  As you can see, you’ll never pay more than you would with Verizon, but you’ll most likely pay a whole lot less.

Over the course of two years, you can spend anywhere from $0 if you never use the Virgin Mobile MiFi all the way up to $1440 if you pay $60 every 30 days.  With Verizon, you’re paying $1440 no matter what.

Reactivating Virgin Mobile’s MiFi after it runs out is painless.  There’s absolutely no reason not to let your data plan expire.  You don’t even have to think ahead to activate if you’re going on a trip or something.  If you need it, simply connect to it, go to virginmobile.mifi, and buy the chunk of data you need.  In seconds, you’re online.  It really is that simple.

I love the idea of only paying for the data I need. It makes me consider the value of data each time I use it.  By making a decision each time, I’m more likely to make a value-conscious choice.

The Virgin Mobile MiFi device costs $150, whereas Verizon’s MiFi is going for $50 as of the date I’m writing this.  That $100 gap will close rapidly as you save money under the pay as you go approach.

Bottom line: the Virgin Mobile MiFi makes sense for anyone that

  • Doesn’t use 5 GB of mobile data every month
  • Travels occasionally and wants to skip paying for hotel or airport Wi-Fi
  • Wants the extra security that a private network has over public Wi-Fi
  • Has more than one device (iPod, iPad, laptops) that they want connected at once
  • Likes to save money

What do you think?