“MagicJack seeks to banish calling costs”

Posted: 16 Aug 2010 09:25 PM PDT

NEW YORK The company behind the magicJack, the Internet phone gadget heavily advertised on television, has another trick up its sleeve: free phone calls from computers, smartphones and iPads.

The cost of phone calls routed over the Internet has been on a long slide. There are already a multitude of programs that allow free calling between computers, and some that allow free, but short, calls to regular phone numbers.

Another alternative, Google Voice, provides "free" calls to the U.S. and Canada, but you need a phone to use it, and if you're using a cellphone, it uses minutes.

MagicTalk would go one better by eliminating fees for calling landline and cellphones in the U.S. and Canada, with no time limits on the calls.

The software will be available next week for Windows and Mac computers. Versions for the iPhone, iPad, BlackBerry and Android phones will follow in September or October, said Dan Borislow, the CEO of VocalTec Communications Ltd.

Each magicTalk user gets a phone number that's associated with the software. Users will also be able to move their existing phone numbers to the service, for a fee, a feature that will be extended to magicJack users soon as well.

The reason the calls can be free is that VocalTec operates as a phone company, so it can charge other phone companies for calls placed to magicTalk and magicJack numbers. It also charges its users who dial phone numbers abroad.

Still, magicTalk will likely have slimmer profit margins than magicJack, which costs $40 and comes with a year of free calling in the U.S. and Canada (an extra year costs $20).

Although magicTalk calls won't be limited in duration, Borislow said it's not intended for nonstop calls around the clock. The company hasn't quite decided if the smart-phone versions will run over "3G" cellular broadband or if it will be restricted to Wi-Fi for better sound quality.

Borislow said magicTalk won't be advertised on TV as the magicJack has been. Slightly bigger than a matchbox, the magicJack plugs into a computer's USB port. A regular home phone can be plugged into it. MagicJack then routes the calls over the computer's Internet connection.

Borislow said the company is working on a standalone version of the magicJack, one that wouldn't need to be connected to a computer. That would make it similar to the Internet phone adapters sold by Vonage Holdings Corp. and some other companies.

The magicJack's sound quality can be shaky, and not all users are happy with it. In a few tests with magicTalk, however, the sound quality was excellent, even on an international call.

-- The Associated Press

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