TELECOM Digest OnLine - Sorted: China Blocks VOIP Calls For Two Years

China Blocks VOIP Calls For Two Years

Agence Frane Presse News Wire (afp@telecom-digest.org)
Tue, 21 Mar 2006 22:11:31 -0600

China has moved to protect its fixed telephone line business by
banning free Internet telephone services for at least two years, the
Financial Times reports.

Wang Leilei, chief executive of Chinese internet portal group Tom
Online, which has a joint venture with Luxembourg-based telephony
provider Skype, said China would not issue any licenses for
computer-to-telephone calls until 2008.

The government "is not going to issue VoIP (Voice over Internet
Protocol) licences until 2008," Wang told the newspaper.

The move would likely be major setback to Skype, which was reportedly
in talks last year with Chinese telecom operators to launch its
computer-to-telephone service, SkypeOut.

Wang, whose company is controlled by Hong Kong's wealthiest
businessman Li Ka-shing, played down the decision.

For Tom Online, "our strategy is to grow our user base. With a big
user base, there is a lot you can do. Revenue (from SkypeOut) is not
important to us because we have not put in a lot of cost," he said.

Skype is a leader in VoIP and provides a subscriber service that
enables web users to make ultra-cheap or free phone calls using an
Internet connection on their computers.

Skype's computer-to-computer calls are free while
computer-to-telephone calls are charged at rates often much less than
with fixed line services.

China Telecom has described Skype's services as illegal and the
newspaper said last year that China was experimenting with software in
Beijing, Shanghai, Guangzhou and Shenzhen to block them.

Fixed-line operators are concerned that SkypeOut could undermine their
core business.

Last September US technology group Verso Technologies admitted that it
had sold software to an unnamed major Chinese telecoms firm that would
allow China to block such telephony services.

Copyright 2006 Agence France Presse.

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