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MagicJack's next act: disappearing cell phone fees

Discussion in 'BBS Hangout' started by Rockets34Legend, Jan 9, 2010.

  1. Rockets34Legend

    Rockets34Legend Contributing Member

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    http://tech.yahoo.com/news/ap/us_tec_gadget_show_magicjack

    LAS VEGAS -

    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.
     
  2. Tfj4

    Tfj4 Member

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    That's asking for a lawsuit..
     
  3. DaDakota

    DaDakota If you want to know, just ask!

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    That is brilliant.....and precedent is set in the radio frequencies that modems and wireless phones use in the home already.

    Fricken brilliant.

    Cell phone fees are the biggest rip off in the business especially text charges...just outrageous profit in there...

    This could be great...it would probably be cheaper for the companies to just buy them out.....

    DD
     
  4. Eric Riley

    Eric Riley Contributing Member

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    I can see where companies like AT&T and T-Mobile might be pissed, but as far as the wow factor on the device, I don't see what's so special.

    So essentially this let you use your cell phone inside your home, without using up any of the cell phone's minutes. What's the benefit of this, other than saving minutes? You'd still need a cell for use outside the home, so you'd still have a usage plan with the cell carrier.

    The only benefit I can see from this is perhaps downgrading on a usage plan if you use your cell phone at home a lot. And in regards to saving fees on international calls, you can do that anyway if you have the original magicjack with a landline phone, no? So for home phone use, why not just stick with the original magicjack instead of getting this device?
     
  5. BetterThanEver

    BetterThanEver Contributing Member

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    It's great for people who don't use their cell phone for business. Many people use their phones at home alot. You would be surprised at the usage plans and how low they can go. I switched from a $50/month T-Mobile bill to $98 for 1000 minutes for a year. $50/month=$600. It's also great, because you don't have to wait for nights and weekends for unlimited calling.

    I wonder if magic jack has applications for police and other emergency staff during hurricanes. They usually have electricity from back up generators. I don't know what kind of internet connection the city uses. A magic jack call placed over the internet would solve the problem of overloaded cell towers, though.
     
  6. BEAT LA

    BEAT LA Member

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    I would like to make this post just to say **** AT&T.
     
  7. DaDakota

    DaDakota If you want to know, just ask!

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    My cell phone is also my office phone so a good amount of time is in house.

    I will be first in line.

    DD
     
  8. Major

    Major Member

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    Not only that, but as more and more cell phone companies move to unlimited plans, this just saves them money. You still are going to buy your phone and pay for the plan (especially as more people get smartphones and want data services), but it reduces the load on their networks if you just use it less.
     
  9. rocketsjudoka

    rocketsjudoka Contributing Member
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    I was thinking that this doesn't seem like a big deal since if you have VOIP this would be the same as using a wireless phone in your house. I guess the advantage is that its your own cell phone number and not a second line but I guess this depends on what your usage is like.
     
  10. Yonkers

    Yonkers Contributing Member

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    Sounds pretty awesome. A lot of folks have gotten rid of their land lines at home. This will help those guys too. In addition, it will also be good for people who have bad carrier signal inside their house - act as a repeater.
     
  11. thadeus

    thadeus Contributing Member

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    I'm sure AT&T/T-Mobile will do everything in their power to shut down the free-market competition.
     
  12. wakkoman

    wakkoman Contributing Member

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    T-Mobile used to offer a similar service called Hotspot at Home. It was limited to a couple specific handsets you could use though. I may be wrong, but I think you could make free calls on ANY WiFi connection.
     
  13. Space Ghost

    Space Ghost Contributing Member

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    If i understand it correctly, you're basically using your cellphone as a cordless phone. I don't think you are using your cellular number, just the phone. Its a bit overhyped because you can simply plug in a magic jack and a cordless phone as it is.

    The advantage is for places that have poor GSM coverage and a different flow of users in the area (like a business instead of a home).
     
  14. Eric Riley

    Eric Riley Contributing Member

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    We have home phone service through T-Mobile's @Home service. Basically VOIP. It's not free but it is pretty cheap at only $10 a month for unlimited nationwide calling for existing T-Mobile customers.
     
  15. FrancisFan

    FrancisFan Contributing Member

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    I think you're right, but imagine having an application on the phone that will (automatically) forward your cell number to your magic jack number when you're "in range".
     
  16. lpbman

    lpbman Member

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    That is still $120 per year vs $20. Or just get NBA league pass broadband and call it a wash.
     
  17. across110thstreet

    across110thstreet Contributing Member

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  18. BetterThanEver

    BetterThanEver Contributing Member

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    The big difference is that you don't need to pay for a basic landline and the associated taxes also. Landline customers have canceled their accounts in record numbers this year.
     
  19. Rocket River

    Rocket River Member

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    Think about this. Hook it to you laptop and user McDonald's Free WiFi
    or your buddies?

    What is the SHORT CODE? Does that tell the Magic Jack if it has Cell Service or not? I mean . . . I wonder if the Cell Phone will have to be on some one's network?

    I got several old cell phones around

    Rocket River
     
  20. RedRedemption

    RedRedemption Contributing Member

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    Isn't this illegal? You can't sell commercialized products under market value, etc. etc.
     

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