As noted back in January, MagicJack was gearing up to offer a new femtocell product that will allow users to make cheap calls using a GSM-based mobile phone. There’s still very limited technical details about the product, outside of the fact it detects a compatible phone within eight feet of the USB femtocell device, and allows users to make VoIP calls with it.

Back in January MagicJack said the device was supposed to go on sale right around now (present time) for somewhere between $20-$40.

More recently the company started telling blogs that the product is still expected to come out this year but with a new wrinkle: the company’s partnering with an as-yet-unnamed mobile carrier. Except given the technology is GSM based, here in the States obviously the company would have to partner either with AT&T or T-Mobile.

But according to a new article by Peter Svensson of the AP, the project is now “on hold” as finding that partner has apparently proven difficult:

Borislow said plans for the device are now on hold. The device had to use low signal power levels to get around legal restrictions on the use of licensed spectrum, but that also shortened the range and reduced sound quality. He’s now looking for a carrier partner that would allow him to turn the power up.

In other words, neither AT&T or T-Mobile were interested in promoting a technology that could cannibalize their own business models. Of course MagicJack creator Dan Borislow has something else cooked up: he’s launching a software version of MagicJack this week called MagicTalk that offers free calls to landlines or cellphones in the U.S. or Canada.

Link to the original article…