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.

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Longtime Fool contributor Rick Munarriz has been a mobile broadband customer since 2005, with the worthless PCMIA broadband card to show for it. He owns shares in Novatel Wireless and is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.