MagicJack’s Making Cell Phone Fees Disappear
MagicJack's new version of the device allows free calls from cellphones in the home and cellular carriers are not happy about it.
The company behind the magicJack, the cheap Internet phone gadget that’s been heavily promoted on TV, has made a new version of the device that allows free calls from cell phones in the home, in a fashion that’s sure to draw protest from cellular carriers.
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 it’s 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 carrier’s cellular tower. No minutes are subtracted from the user’s account with the carrier. Any extra fees for international calls are subtracted from the user’s 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 visitor’s phone with a T-Mobile account successfully placed and received calls through the magicJack. Most phones from Verizon Wireless and Sprint Nextel Corp. won’t connect to the device.
Borislow said the device is legal because wireless spectrum licenses don’t 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 YMax’s 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. They’re called “femtocells.” Like the magicJack, they use the carrier’s 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 carrier’s towers.
But femtocells are complex products, because they’re designed to mesh with the carrier’s external network. They cost the carriers more than $200, though some sell them cheaper, recouping the cost through added service fees. YMax’s magicJack is a much smaller, simpler design.
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By: Medisoft
January 8, 2010 @ 5:32 PM
I'm SURE the iPhone blocks this…
By: Farax
January 8, 2010 @ 9:18 PM
Isn't it supposed to be Wi-Max? These guys wont get far cos their stuff is illegal.
By: Farax
January 8, 2010 @ 9:18 PM
Isn't it supposed to be Wi-Max? These guys wont get far cos their shit is illegal.
By: facebook-503884559
January 8, 2010 @ 9:30 PM
No, it would have to use two or more of the 800/900/1800/1900 MHz bands [that all GSM phones use] in order to communicate with them. Far from WiMax.
As far as the iPhone…no it would not be blocked as the MagicJack is not an app for the iPhone. It's a miniature tower that talks to the phone's antenna just like the cell tower does.
By: facebook-503884559
January 8, 2010 @ 9:30 PM
No, it would have to use two or the 800/900/1800/1900 MHz bands that all GSM phones use in order to communicate with them. Far from WiMax.
As far as the iPhone…no it would not be blocked as the MagicJack is not an app for the iPhone. It's a miniature tower that talks to the phone's antenna just like the cell tower does.
By: keith
January 9, 2010 @ 5:37 AM
I wonder if this will work with tracfone. My friend just paid $200 for a device from verizon that connects his cell phones to a mini tower over his dsl. I believe it still uses his minutes. My tracfone doesn't connect. We are in a hilly area and our houses do not get cell signals but u climb the hills and I usually get good bars.
By: Bob
January 9, 2010 @ 7:16 AM
I have Sprint's AirRave device which costs $100 and $5/month. It essentially is a mini cell tower that connects to my cable modem (router) so I get coverage inside my house. I think the Magic Jack device is similar and that would be bond!!
By: thetulsan
January 9, 2010 @ 7:22 AM
The article is incorrect, it will not make fees 'disappear.' It may enable power users to reduce the number of mins in their plan, but users will still need an active phone number. And if it works poorly or has bad call quality or misses a voice mail who does the customer b**** at? This is a useful device, but not a carrier killer.
By: Dot Come Note
January 9, 2010 @ 7:50 AM
But Magic Jack call quality is terrible.
By: Free Classifieds Blog
January 9, 2010 @ 7:50 AM
But Magic Jack call quality is terrible.
By: chuck
January 9, 2010 @ 8:56 AM
NO it doesn't. My parents have it in the Bahamas and i call them all the time. they sound like they are across the street. Make sure your computer can handle the traffic or pony up some more dollars for bandwidth.
By: bobj3123
January 9, 2010 @ 9:08 AM
This is stupid. It says it uses the carrier's frequencies, but then it says it does it over the internet without using towers.. It's just a bluetooth dongle. You pair your phone and use the 4 digit pin to pair the device like any other bluetooth headset. It just uses your cellphone as a mic and speaker, it doesn't use the tower. Better off just using skype or google voice and get a nice pair of headphones with a mic.
By: Greg
January 9, 2010 @ 10:31 AM
We'll see how stupid this is when Magic Jack takes in millions for it and at the same time cell phone companies lose millions because they can't charge for the call. Hardly stupid. Magic jack is the best phone connection to a PC that exists and this will simply extend its usability and range. I agree with the comments above, make sure you have the bandwidth. Magic Jack saves me THOUSANDS of dollars in my small business.
By: bobj3123
January 9, 2010 @ 10:38 AM
The key word is “connection to a PC.” it has nothing to do with a cellphone. The difference between this and the normal magic jack is that with this you're forced to hold your cellphone to your head the whole time instead of just using a headset. Seems less convenient than the other plethora of VOIP services out there.
By: roger
January 9, 2010 @ 11:19 AM
Any idea on savings for international calls?
By: Mike C
January 9, 2010 @ 12:02 PM
I think you misunderstand… It isn't connecting over Bluetooth. It's connecting over the carriers' own frequencies to your phone. Specifically, it's using the GSM frequencies, which is why some carriers' devices will work with it and others won't. If it was Bluetooth, then any Bluetooth-enabled phone ought to work.
Essentially, what happens with a cell phone is you use a radio connection to “talk” to the tower, which turns your conversation into (possibly digital) electrical signal it backhauls into its communication network.
As explained, it seems like this version of the MagicJack hardware spoofs the tower to replace the phone-to-tower portion of the communication.
The authenticating call bit looks like its done to authorize the specific phone to use that “tower” by providing a PIN to the tower through that phone. This is similar but not the same as the Bluetooth pairing procedure, which isn't a call but a software setting in your phone.
As for the back-end, the MagicJack does the same as it did with the previous hardware… it digitizes the call and sends it out over the Internet using VOIP technologies (previous rev was G711, probably the same with this one to keep processor requirements lower than for G729) and bridging SIP to PSTN for only the annual fee within USA/Canada.
By: Nicola
January 9, 2010 @ 12:08 PM
Hi i live in New Zealand. and i use the magic jack, to talk to my friends in USA as they only have cell phones not a land line and its very expensive to ring cells overseas.
I works ok and the magic jack thinks i am in usa. but it breaks up quite bad sometimes. buts its free. and all i do is plug it into the laptop and into my phone line and it connects and goes over the internet.
i won't be buying the newer one when it comes out.
By: Michael C
January 9, 2010 @ 12:11 PM
Two things… The carriers get to charge what they like to carry LD. They tend to overcharge because they can. The specifics of the savings depend on your carrier's LD offer for you, which can differ from customer to customer, much less plan-to-plan or carrier-to-carrier.
You can compare against MJ's list, which is currently at:
magicjack.com/international
The other thing to note is that the cell carriers bill you for your use after the fact. Looking at the MJ FAQ, it seems they require you to prepay for your LD, and they then deplete your account balance at the rate determined for your call. Annoying if you have to call somewhere and have nothing left in the account.
Also, I didn't purchase an MJ, so I don't know if you can prepay as you wish, or only in predetermined increments (eg: $5, $20, or $50 at a time).
By: David
January 9, 2010 @ 2:40 PM
This majicjack device is exciting and interesting because a) people will hack it quickly and use the device with asterix and the like, just like they have with the previous majicjack offering, and b) it may force cells companies to lower the cost of femtocells. The current model of a cell company charging YOU to backhaul THEIR traffic over YOUR internet connection is the height of arrogance. They should be PAYING me to use MY connection, not the other way around.
By: J7
January 9, 2010 @ 4:21 PM
Makes me curious, since cell phones are programmed to use certain tower codes only, do we have to know how to reprogramm our phones, what about the phone lock codes. Or do they magically have a list of tower codes to put in their device.
By: Alvin
January 10, 2010 @ 11:03 AM
can you just make call or will you be able to receive calls
By: Chris Siburt
January 10, 2010 @ 11:13 AM
My thought exactly Sprint wanted to charge me for my Airave, but thankfully I was in a bargaining position being out of contract on 1 of my 2 lines. They gave me the device for free and waived the monthly fee, but since a large majority of my calls go out over my own Internet connection by rights they should be giving me a discount for lowering the load from their tower. Oh well, I guess.
This device has promise, I'd like to see it in a CDMA version, and I also wonder if I could use a non activated GSM phone to send and receive calls?
Maybe I'll go ahead and bite the bullet and switch to a T-Mobile month to month plan on a Nexus One and pick up one of these little toys for in the home calls. I do loathe cellular contracts.
By: Nappzman
January 10, 2010 @ 4:25 PM
Very interesting disruptive technology. I also wonder if this is only for outgoing calls? if it truly works like a cell tower the carriers wouldn't be able to detect this as part of their grid or an adjacent interconnect carrier so the call would get routed through to the cellphone via traditional means. I guess you could be virtually anywhere there is a broadband connection and use a GSM phone with this tower.
By: spys
January 10, 2010 @ 10:17 PM
Seems great but I've heard some real stories about the original Magic Jack. Apparently it used to be great but as more people got on to it alot of the calls don't get made and instead get a message telling that the available connections are overloaded. So you end up not being able to use it most of the time and really can only use it if you make calls at irregular hours of the day like early in the morning when post people are asleep.
I assume it's using the same network structure as Magic Jack so prepare for even more overloading.
By: Jacob Ross
January 18, 2010 @ 9:08 PM
GSM only goes up to 800MHz, Verizon and Sprint use CDMA which uses 800, 900, and 1900Mhz, There is no 1800Mhz frequency fone.
By: Chuck
January 20, 2010 @ 9:04 PM
If you own a phone with biult in Wi-Fi (like the HTC Shadow 2009) and you have a wireless router in your home, you do not need this.
By: SE
January 21, 2010 @ 1:10 PM
thank you, good point. it made no sense…'uses cell towers/frequencies and viop'…? and for anyone considering a femtocell purchase, save your money, as we shouldn't be paying the mega-carriers additional monies for a service (i.e.-coverage in your own home!!!!) that should already be provided…and that we are currently paying for! ta ta
By: leswards
January 22, 2010 @ 6:44 PM
i know you know better than that, the time you didn't spend reading up on the keywords in this thread you wasted on writing your wrong opinion, picocells are to cellphones like your ipod fm transmitter, they are low powered radios covering short distances and therefore excempt from frequency management authorities, to the service provider they're good only if its theirs, however, magicjacks version is a service providers business model nightmare, furthermore, the bluetooth stack never allowed a cell phone to become headphones, it's just not in the protocol unless this has changed is harder to accomplish than a 50 buck picocell.
just need one thats open source, to use them old nokias with skype, that would be sweet
Leswards
By: jayjay
February 3, 2010 @ 5:06 PM
how can you do that bro because i have a phone with wifi, and everytime i connect it to my router to check email or chat at&t charged me in my every minute that i'm connected to my router. thar's how crazy the at&t.
By: dang
February 3, 2010 @ 5:11 PM
Do you have an unlimited data plan?
By: jayjay
February 3, 2010 @ 9:31 PM
no im a pre-paid but what i mean is it's connected to my router
By: dang
February 4, 2010 @ 12:14 AM
Isn't AT&T just charging your for the data you are sending/receiving then? Or, are you using MagicJack and still getting charged?
By: Gary
February 12, 2010 @ 1:00 AM
I have used the regular magic jack for two years and I love it. As long as you have high speed bandwidth then your phone service is as good as the good old fashion phone. I signed up for “dry loop” 30.00 a month (no phone service needed) High Speed Internet service. And I surf and watch videos on my PC while using the phone it's awesome and if this new magic jack supports cell phones then I'm in. Keep up the great work magic jack you have saved me a lot of money if you can come up with a way to just provide Internet service we could totally drop the phone companies. Thanks Gary
By: Mike
March 25, 2010 @ 3:35 AM
I use a Jabra bluetooth speakerphone to make calls with MagicJack plugged into a bluetooth-enabled computer. Could a bluetooth-enabled cellphone take the place of the Jabra?
I do not own a cellphone so I can't test the idea.
By: vin
April 12, 2010 @ 6:42 PM
You comment made no sense. Its not Bluetooth at all and it uses the cell phones signal and then sends the call over the web via a magic jack service.
By: calling cards
April 23, 2010 @ 9:34 AM
nice gadget, that was the technology can do and help us in many ways like improving more machine, invented a device which can repair a things, and also our medicine which is the list in the most person needed to live in this world, and that gadget is a cellphone and you know cellphone help us to give a communication to our relatives around the world
By: mark ali
April 24, 2010 @ 7:07 PM
cud it make to cell phones in the us or only landlines?
By: canadian
April 28, 2010 @ 10:53 PM
apple could do it, but for now it would work because if you had on in your home, you can simply go to the settings and tap “carrier”, where it will scan and find the magicjack. You tell it to connect and it works! It could happen
By: Gadgets and gifts for men
June 3, 2010 @ 10:03 PM
The gadgets looks cool to me, so no problem. :D