MagicJack VocalTec Launches VoIP Service for SMB Market

MagicJack VocalTec, Ltd. (MVT) recently announced that it had launched magicJack for Business (MfB), a business-grade version of its consumer phone service, magicJack, which allows users to connect a landline phone to their proprietary device, which is connected to a computer that has broadband service. This announcement follows an earlier announcement in February that the company was entering the VoIP market for SMBs.

MfB will be available in three different plans: magicJackGO, an entry level plan; a mid-range plan known as Home & Office for Business; and a premium plan that is not yet available. All plans have at the minimum three-way calling, voicemail, call waiting, caller ID, unlimited calling in the U.S. and Canada, and e911 service. Features like caller ID blocking, auto attendant, and call transfer are advanced features not available in the entry-level plan. International calls are supported with per minute pricing with a rate that varies among different locations.

According to MVT, the biggest benefits of the MfB service are 99.99 percent uptime, scalability, 24/7 support, and flat rate pricing. The company estimates that a business can save about $770 annually using its service compared to a regular landline.

A couple of reports shed some light on why MVT decided to tap into the SMB VoIP market. A 2015 study commissioned by Edgewater Networks of 1,250 SMBs found that most were using dated TDM systems, about six years old on average. Seventy percent of respondents stated they expect to purchase IP communications within two years. Assuming that this is a representative sample, the report bodes well for a company like MVT, since it indicated a significant market of companies using dated equipment, but that also expect to upgrade to IP phones soon.

Zion Research predicts that the global VoIP services market will grow from $83 billion in 2015 to $140 billion by 2021, a CAGR of 9.1 percent. International calls, which MfB supports, currently make up 52 percent of total revenue share; that’s expected to increase to 62 percent by 2021. That’s not surprising, given the considerable cost of international landline calls and the savings that VoIP offers.

The latest financial reports indicate that MVT had nearly $101 million in revenue for 2015, a significant drop from 2013, when revenue was $143 million. Given that the global VoIP services market is expected to exceed $100 billion in the next few years, if MVT gets even a small sliver of market share, the potential for increasing revenue dramatically is huge. The decision to create the MfB service was a no-brainer.