Phone
The new magicJack uses, without permission, radio frequencies for which cellular carriers have paid billions of dollars for exclusive licenses.
YMax Corp., which is based in Palm Beach, Fla., said this week at the International Consumers Electronics Show that it plans to start selling the device in about four months for $40, the same price as the original magicJack. As before, it will provide free calls to the U.S. and Canada for one year.
The device is, in essence, a very small cellular tower for the home.
The size of a deck of cards, it plugs into a PC, which needs a broadband Internet connection. The device then detects when a compatible cell phone comes within 8 feet, and places a call to it. The user enters a short code on the phone. The phone is then linked to the magicJack, and as long as its within range (YMax said it will cover a 3,000-square-foot home) magicJack routes the call itself, over the Internet, rather than going through the carriers cellular tower. No minutes are subtracted from the users account with the carrier. Any extra fees for international calls are subtracted from the users account with magicJack, not the carrier.
According to YMax CEO Dan Borislow, the device will connect to any phone that uses the GSM standard, which in the U.S. includes phones from AT&T Inc. and T-Mobile USA. At a demonstration at CES, a visitors phone with a T-Mobile account successfully placed and received calls through the magicJack. Most phones from Verizon Wireless and Sprint Nextel Corp. wont connect to the device.
Borislow said the device is legal because wireless spectrum licenses dont extend into the home.
AT&T, T-Mobile and the Federal Communications Commission had no immediate comment on whether they believe the device is legal, but said they were looking into the issue. CTIA – The Wireless Association, a trade group, said it was declining comment for now. None of them had heard of YMaxs plans.
Borislow said YMax has sold 5 million magicJacks for landline phones in the last two years, and that roughly 3 million are in active use. That would give YMax a bigger customer base than Internet phone pioneer Vonage Holdings Corp., which has been selling service for $25 per month for the better part of a decade. Privately held YMax had revenue of $110 million last year, it says.
U.S. carriers have been selling and experimenting with devices that act similarly to the wireless magicJack. Theyre called “femtocells.” Like the magicJack, they use the carriers licensed spectrum to connect to a phone, then route the calls over a home broadband connection. They improve coverage inside the home and offload capacity from the carriers towers.
But femtocells are complex products, because theyre designed to mesh with the carriers external network. They cost the carriers more than $200, though some sell them cheaper, recouping the cost through added service fees. YMaxs magicJack is a much smaller, simpler design.