MagicJack Takes on Mobile Phones

With the fluctuations of wireless phone service prices, it's a bit difficult to know which end is up sometimes. First, the rates were insanely steep. Then, once the technology and markets changed, they were relatively low. In this day and age though, with the economy crunch and mass competition, consumers are still looking for the best available deal.

You've seen their TV commercials: magicJack! Just connect it to your computer (with broadband connection, of course), and there you have it: Instant, cheap phone service. This platform is marketed to families that still have landline phones (yes, they do still exist). Now, the makers of the almost revolutionary device are targeting the mobile phone marketplace. Should wireless carriers be concerned?

To better understand why they may be, let's first discuss how the device works. It's basically the same system: You connect a piece of hardware to your computer (with broadband connection, of course), but instead of instant service, the device calls your mobile phone once it is within about 8 feet of the signal. Next, it calls your phone and prompts you for a unique code to establish the connection. After that, you can use magicJack's service as long as you are within a certain distance from the broadcasted signal. The reason this is a concern is because in order to call the phone, the magicJack must first use the radio signals wireless corporations have invested uncountable sums of money and many years to make accessible.

The next issue is customer retention. Wireless companies already have to deal with competition from other carriers, internet based communication, and exclusive device deals. With this new development, they now have to contend with a service that could, possibly, divert customers to a less expensive (though limited) service. On the other hand, with ever increasing network capacity loss, you'd think they may be somewhat excited about the temporarily added bandwidth.

Consumers, by nature, want to be able to get the best with the least loss. This piece of hardware could, considerably, reduce cost to many of today's users. People could potentially save half of their available "anytime" minutes, alone, by simply switching to "magicJack mode" when they get home from work, school, or wherever else the world takes them and their mobile devices. Also, what about those of us that can get great service when on-the-go but can barely call a cop when sitting on the couch? This could, almost, be the most attractive selling point. If you get bad wireless service when at home, simply connect to your latest piece of modern-day technology and talk away.

It would seem that the downside to this newest option is entirely experienced by the companies that offer the status quo. The only thing that could really make this a competition, is if wireless carriers begin providing more "anytime" minutes for lower prices. Even that, though, appears to leave them at a steep disadvantage when it comes being the exclusive provider of our wireless communications.