GSM Femtocell on a USB stick coming soon

Magic Jack We’ve looked at ever smaller packaging formats for femtocells, including embedding in picture frames. But I was taken aback by the product announcement from one company which plans to integrate a full GSM femtocell into a USB stick which you can plug into your laptop. Having sold over 3 million USB sticks for landline phone service in the last 18 months, this company needs to be taken seriously – even though they’ve never been mentioned in the femtocell space before.


Who and what is Magic Jack?

The Magic Jack is a USB stick which plugs into any laptop or PC. It also has a socket for a standard (landline) phone. You can make and receive phone calls using your landline phone, effectively replacing your existing landline phone service with your internet broadband connection. Magic Jack provides a telephone service to US customers and includes free national calls for a year, and provides you with an additional personal phone number. The hardware and first year’s telephone service including free national calls is $39.95, thereafter $19.95/year. Additional charges apply for international calls using prepaid top-up - premium rate calls are not supported.

It competes with Vonage and other VoIP providers in the US market.

Why is it so successful?

  • It’s incredibly cheap: Compared with other VoIP providers, such as Vonage, it’s only  $39.95 for a year including the hardware.Thereafter, only $19.95/year including calls.
  • It’s very simple: Plug into your computer, plug in your phone, signup on a webpage.
  • It works with a regular phone: No special headset or webpages to use for dialling. Just pickup the phone and dial the number you want.
  • It works when travelling: You can use it with a standard hotel phone plugged into your laptop in most countries worldwide – you just pay for the internet connection in your room (which is becoming free/included more often).

Over 3 million units have been shipped to date - and its only been available since September 2007.

But there have been problems with Magic Jack

With this low cost, there clearly isn’t a lot of money to spend on customer service. After launching, Magic Jack was rated “F” by the Better Business Bureau (that’s about as bad as it gets) and investigated by the Attorney General’s office. It was swamped by its success.

But these issues have been addressed, a chat system now responds to enquiries within 4 seconds – as a result, their rating is now “A” and the AG’s office has closed its investigation without filing any charges.

Magic Jack Roadmap

Dan Borislaw, the inventor of the Magic Jack, spilled the beans about his future product plans in a scoop with laptopmag. Features such as number portability, which we’d take for granted with larger telcos, are to be introduced later in the year. This means you can transfer your existing number across to the Magic Jack service once you’re happy with the service, or transfer out if leaving to join another provider. There are also other technical improvements in the pipeline.

Magic Jack Femtocell

What really stirred my interest was the proposal to incorporate a GSM femtocell inside a slightly enlarged Magic Jack USB stick, with additional functionality enabling use with a standard GSM phone. This is the same technology used by ATT, T-Mobile and the vast majority of mobile operators worldwide.

Some issues which need consideration:

  • Licenced Spectrum, Interference, SIM card. You need licenced spectrum to run this service, even at very low power. Has Magic Jack done a deal with an existing network to use some of theirs? Will the power level be so low that the network isn’t worried about interference? Does it require you to switch mobile network and/or install a different SIM card?
  • Location Lock. Different networks have different licenced spectrum in different places. How will the system ensure that you are using the permitted frequencies, or block service where it is not available.
  • E911. How will the system be able to report your location when making emergency calls. If the service is restricted to your home, then it would use your registered home address as it does today for VoIP calls. The article suggests that triangulation will be used to determine location - this implies that you'll need to be in an existing GSM coverage area
  • Frequency accuracy. The GSM system has some very tight tolerances for transmission frequency, which helps reduce the cost of handsets, avoid interference and poor network performance in the neighbourhood, and ensure a clean continuous quality. This needs a very good, accurate and stable clock reference within the basestation – typically requiring an expensive crystal oscillator that is calibrated for long term accuracy. You can’t just use the crystals found in handsets which cost less than a dollar.
  • Travelling abroad. The attraction of large savings for business travellers wanting to continue to use their mobile phone in the hotel room will be high. Magic Jack can solve this problem today for wireline use over the internet, but regulators and operators would be concerned about both the technical interference and commercial impact of this device if it were widely used by travellers abroad.

Some user implications to bear in mind

  • You have to have your laptop/computer switched on to make/receive calls
  • It’s GSM, not 3G, so primarily aimed at voice/text
  • Unlikely to be able to handover calls when entering/leaving premises
  • Might need a new SIM card for the specific operator

Why not just support WiFi capable phones?

Many phones have WiFi capability now, especially those used by the more technically adept. Skype has been made available for use over WiFi from Microsoft and Apple devices. Since WiFi is unlicensed spectrum, it can be used almost by anyone/anywhere.

If you were travelling/out and about, you would need to login to a hotspot on your laptop/netbook and then connect through it with your GSM phone/Magic Jack. You may as well use Skype directly on the laptop/netbook instead.


This has the potential to be a really disruptive innovation. Whilst I will watch for developments closely, the goals are very ambitious and we’ll await reports from trials and early launches.

At this time, the Magic Jack is only sold in the US and Canada.

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#1 Anon said: 
This isn't a femtocell the size of a USB stick; it's a bit of RF hardware that will attach to a computer and the computer will be running the femtocell application. So you have a femtocell the size of a laptop. What's good about that?
+1 Quote 2009-04-24 10:13
#2 ThinkFemtocell said: 
Thanks for the clarification - it makes sense it needs a PC and broadband connection to work fully.

Yes, there is a lot of scepticism about this format. And yes, describing it as a femtocell may also not fit with the existing scope. But this does open up other potential formats, applications that are "outside the box" - we'll need to await for much more detail about the product and how it works/what it's limitations are before we can judge it completely.
-1 Quote 2009-04-24 18:14
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