Skype competitor magicTalk launching on Christmas

VocalTec already has a major hit with its magicJack internet phone device, but now the company is ready to step up and offer completely free calls to users with the launch of its magicTalk service on Christmas.

Given the recent downtime issues Skype has been seeing, many consumers may be looking for a similar internet calling service. By launching on Christmas Day, VocalTec may be able to take advantage of frustrated Skype users as well as consumers just looking for a cheap way to call family and friends during the holidays.

We covered magicTalk back in August, and since then it has spent a few months in public beta testing. To refresh: The service, available for PC and Mac, offers completely free voice calls to the US, Canada, Puerto Rico and the Virgin Islands from anywhere in the world. (Although according to the magicTalk software, this may only last until February 2011). In addition, it lets you call existing magicJack users and other magicTalk users for free.

Incoming calls are a bit wonky with the free service, as people calling you will first need to dial into an access number, then enter your unique magicTalk number (which isn’t a real phone number). Additional credit purchases are required to call international numbers.

A few annual subscription options unlock even more features. For $19.95 a year you’ll get unlimited free calls to the US and Canada and a free US phone number. You can register up to 5 devices with the service, although every additional device will cost an extra $10 a year. You also have the option of signing up for the traditional magicJack service for a $40 annual fee ($20 for every additional year), which includes all of the features of the $20 magicTalk plan, as well as the traditional magicJack device.

When we first reported on magicTalk, the company also said that it was aiming to make mobile apps for the iPhone, iPad, Android and BlackBerry. VocalTec tells me those apps are scheduled to roll out within the next 90 days.

Given how successful the magicJack device is, I suspect that VocalTec will find some way to market and make its magicTalk service successful. In my brief testing, the software didn’t appear as mature as Skype or other VoIP competitors — something that may turn off some users.

In July, VocalTec merged with YMax, the company originally behind the magicJack. The combined company’s value is around $300 million, and this year it expects to earn $110 – $125 million in revenue.

Photo via Flickr