Novatel Wireless (Nasdaq: NVTL) may finally be catching a break.

The company that pioneered the mobile-hotspot revolution with its MiFi is teaming up with Sprint Nextel's (NYSE: S) Virgin Mobile USA to roll out a portable hotspot with a cost-effective prepaid usage plan next week.

If you've never seen a MiFi, it's a pocket-sized hotspot that can provide online connectivity for up to five products at a time. Novatel seemed to be doing brisk business with these puppies through Sprint and Verizon (NYSE: VZ) until late last year.

Shares of Novatel were slammed in November, after the company warned of flat sequential MiFi growth as a result of initial overstocks on the device by distributors.

Things have only gotten worse this year. Sierra Wireless (Nasdaq: SWIR) hit the market with the speedier Overdrive 4G, and now even smartphones -- led by Sprint's EVO -- are doubling as mobile hotspots for wireless customers willing to pay up for the perk.

The competitive landscape is what makes next week's rollout so compelling. Virgin Mobile has carved a niche in the prepaid market, which works for teens, penny-pinchers, and infrequent wireless customers.

Virgin Mobile's MiFi offers the same chunky $60-per-month data plan for 5 gigabytes of data available through Sprint and Verizon Wireless, but it's also available in smaller morsels. Users can pay $10 for 100 megs that expire in 10 days or pay just $20 for a month of 300 megs of data. There are no contracts, which is great -- though it does mean that buyers won't be subsidized as they fork over $150 for the mobile hotspot.

Now that AT&T (NYSE: T) is no longer marketing unlimited data plans to new wireless customers, folks will have to get used to metered consumption. There will be less of a learning curve when it comes to Virgin Mobile's prepaid data plans.

Novatel isn't out of the woods, naturally. As more smartphones embrace tethering -- including tomorrow's debut of Apple's (Nasdaq: AAPL) iPhone 4 -- and mobile hotspot features, this will become an even more competitive niche. Analysts are expecting a loss out of Novatel this year after a profitable 2009. The pros also see a 10% decline in revenue. Virgin Mobile's MiFi release isn't factored into those metrics, so success on that front may go a long way to adding some shine to a stock that is essentially trading for just a little more than the cash on its balance sheet.

It's not much, but it's the best news out of the Novatel camp this year.

Do you have a mobile broadband subscription? What are you using, and what do you think about the MiFi? Share your opinions in the comments box below.