UPDATED 18:33 EDT / JANUARY 06 2010

EXCLUSIVE: MagicJack to Announce World’s Lowest-Priced Femtocell

image I spent this morning with Dan Borislow and Y.W. Sing, the CEO and Vice Chairman of MagicJack.  In mid-November, I met with Dr. Sing in his Silicon Valley office for a preview of what we discussed today, enabling me to noodle on applications and show up with a raft of questions.  Dan has been talking about the femtojack for nearly a year, but I can confirm based on today’s meeting that it’s real, and it’s spectacular.

We started our discussion by revisiting some of the customer service issues MagicJack faced earlier in the company’s development.  I’d never used a MagicJack until I picked up a couple at the 2009 It Won’t Stay in Vegas party; in the year since, I’ve used mine from all over the world, providing me exactly what they advertise—seamless phone service anywhere that I had a decent Internet connection.  A year ago, I took Dan and team seriously to task for their approach to privacy during the sign-up process.  While I’d still like to see them tweak some of the verbiage in the user agreement, I can’t argue with two points Dan made to me.  First, users now receive 30 minutes of registration-free calling in a 48-hour period from first use, enabling consumers to try MagicJack without having to go through a registration process.  Second, Dan pointed out the MagicJack has never sent an advertising e-mail to any of their five million subscribers.

Think about that for a minute.

When was the last time you signed up for something, anything, and didn’t receive follow-on e-mail about, well, anything?  That’s pretty freakin’ cool.

By the way, let’s not overlook that statistic I just threw out.  Five million subscribers.  I don’t have statistics in front of me, by I have to believe that five million subs puts MagicJack comfortably in the top ten of landline phone companies in North America.

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Here’s another statistic for you—a billion minutes.  MagicJack subscribers currently consume one billion minutes per month.  If my math works, that’s an average of 200 minutes per MagicJack per month, or a little over three hours each.  Realistically, that’s about the amount of time I spend on my landline on a monthly basis, so it’s entirely believable that the average user might consider dumping their landline in favor of a MagicJack (the need for an always-on computer notwithstanding).  Of course, while I spend three hours a month on my landline, I spend about three hours a day on my cell phone.  Unfortunately, my cell coverage at home isn’t very reliable; even more unfortunately, my experience with T-Mobile’s UMA-based Hotspot @Home has been less than stellar, so I suffer from frequent coverage drops.

Enter the Femtojack.

image Picture the MagicJack—a USB-attached analog terminal adapter, with one end a USB jack plugged into your computer, and the other end an RJ-11 jack into which you plug a phone (or simply use your computer’s speakers and built-in microphone).  Now, remove the RJ-11 jack, replacing it with a couple of small antennae.

Voila.  Femtojack.

What’s a femtojack?  First, let’s define what a femtocell is.  Have you ever been in a situation where your cell reception was spotty or non-existent, making you yearn to be closer to a cell tower?  What if you could bring that cell tower into your home or office, all but guaranteeing you awesome cell coverage?  In effect, that’s a femtocell—a device which takes the signal from your cell phone and sends it back to the telephone network (using your computer’s Internet connection), mimicking the behavior of a cell tower.

image Initial attempts at improving cellular coverage involved cellular repeaters, which weren’t very efficient for one reason—they were merely amplifying or repeating an existing cell signal.  Meaning, if your cell signal really sucked (or was non-existent), the repeater might not work at all.  Unlicensed Mobile Access (UMA) has had a spotty record of success, with only one U.S. carrier of note deploying UMA; as noted above, my experience with UMA has been (to put it kindly) brutal.  Now comes the femtocell, typically sold by or in conjunction with your cellular carrier for $150-300.  Femtocells are very early in their adoption curve, and have kind of struggled to find a footing to date.

Enter Dan Borislow.  Again.

Dan’s history as a telecom rebel is well-known.  Now, he’s likely to stir up the telecom world again, with MagicJack’s announcement of their femtojack, a low-cost, easy-to-use femtocell targeted towards novice users.

How low-cost?  How about double digits?  For well less than a hundred bucks, you’ll be able to enjoy a mini cell tower in your home (or office), piggybacking your voice calls on your existing Internet connection via your computer.  The best part about it?  It just works.  The demo calls we made today offered the same quality as typical cell calls.  And, while we were in a hotel suite, Dan and Y.W. assure me that the femtojack will offer coverage throughout a 3,000 square foot home.

Sign me up!

(Part two of our interview will follow tomorrow, after MagicJack’s press release hits the wires.)

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