magicJack VocalTec to Offer VoIP Services to SMBs

magicJack VocalTec is capitalizing on the success of its cloud-based Voice over IP (VoIP) communications technology and services by launching an SMB subsidiary, which will focus exclusively on serving that market segment with low-cost solutions.

This new subsidiary will offer simple, yet highly functional, cost-effective VoIP services based on the company’s reputed network infrastructure and telecom software. Furthermore, it will leverage some other magicJack VocalTec core assets such as its proprietary ultra-low cost termination structure and softswitch assets. The robust technologies and capabilities already developed by the company in coordination with extensive research regarding product positioning, pricing, go-to-market strategy and its competitors make the upcoming product a promising ordeal.

Keith Reed, magicJack VocalTec’s new General Manager and Senior Vice President of Enterprise Sales as of December 2015, will lead this new operation. Boasting an extensive and successful career in sales, Reed is focusing his efforts on marketing the new product to smaller companies who may not recognize the considerable advantages afforded by a robust VoIP communications solution.

According to magicJack, the SMB subsidiary will begin offering its first product in Q2 2016 with targeted gross profit margins of 65 to 70 percent and EBITDA margins ranging from 20 to 25 percent. It will operate separately in terms of financial reporting in order to maintain distinctiveness from magicJack VocalTec’s core enterprise VoIP business.

“We believe we are well positioned to strongly compete for market share in the SMB VOIP category, which is expected to experience continuing growth for years to come,” commented Gerald Vento, magicJack VocalTec’s President and CEO. “We look forward to reporting fourth quarter 2015 financial results and issuing 2016 guidance for our core business in March.”

Communications is one of the most important considerations for businesses of all sizes, and the market is becoming increasingly flooded with a wide range of solutions and services; as a result, it can be difficult for providers to differentiate their offerings in a way that is appealing. By capitalizing on the success of its enterprise efforts and taking a specialized approach to serving the SMB segment, magicJack VocalTec shows promise of being a reputable contender in this competitive market.

Edited by Maurice Nagle