Just when you thought there was no room left in the bargain basement consumer voice service market, MagicJack.com weighs in with an alluring pricing proposition for “free” local and long distance calling within the U.S. and Canada.
The provider is currently promising a $34.95 flat fee for the first year (not month) for the device, and $19.95 for each successive year. The company offers also include international calling. By comparison, Vonage Holdings Corp. (VG) is running a promotion of $9.95 per month with a regular charge of roughly $25 a month.
MagicJack has been aggressively running TV ads with the seemingly sole focus being on saving consumer money against a backdrop of a deep recession. The deal comes at a time when even triple-play providers are dropping their bundle prices.
The entrant raises questions of what the true value of consumer VoIP actually is, if it’s not price. Residential voice services typically come with the same core set of common, and expected, calling features.
It’s also unclear if VoIP services, used as standalone offerings, pose a significant threat to VoIP services included in double- or triple-play bundles.
MagicJack promises a single phone number “for life” and runs counter to recent efforts by the likes of Vonage to focus on the value of its service features. The company’s device plugs into any phone jack or computer USB port. It works with PCs running XP and Vista, among others.
The company offers free directory assistance, call waiting caller ID, and voice mail. And, until yesterday, it had been offering the service as part of a free trial for 30 days to entice consumers.
