Virgin Mobile goes the other way on mobile data pricing

(This story is part of Connected Planet’s Mobile Data Paradox microsite –  an ongoing collection of features, blogs and opinions on the key question facing mobile operators today: how do you make a business of 4G and mobile data?

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Virgin Mobile over the weekend debuted (via Facebook, talk about targeting your users) a new all-you-can-eat, no-contract mobile broadband plan priced at $40 per month.

The new plan – which goes against the industry trend toward usage-based pricing, including moves from Verizon and AT&T – replaces Virgin Mobile’s existing $20, $40 and $60 plans, the latter of which tapped out at 5 GB. So at the high-end, users will get more data for a cheaper price.

Although Virgin is moving strongly toward unlimited data, it will keep in place a “starter plan” of $10 for 100 MB over 10 days, a plan suited for occasional users with lighter data needs.

The plans are based on dongle-style usage, not smartphones, which makes the unlimited pricing even riskier, given that dongle users typically consume more bandwidth than phone users. The two devices that work with the plan are the MiFi 2200 mobile hotspot and the Ovation MC760 USB dongle.

The MiFi/unlimited data pairing (with the MiFi device costing $150), in particular, represents a strong challenge to tethering style smartphone plans. Perhaps the closest rival offering comes from Clearwire, which offers the Spot 4G+) with a $55 per month unlimited data plan.

Much like with voice minutes and messaging, it’s not surprising to see a budget market emerging for mobile data services. Whether that low-end of the market will cause bigger operators to rethink mobile data usage tiers remains to seen, but would appear unlikely given the momentum toward caps and the network challenges those operators face today.