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China clamps down on Web telephony

Country declares voice-over-Internet Protocol services not offered by China Telecom and China Unicom illegal, reports note. Skype says service still available through its Chinese joint venture.
Written by Vivian Yeo, Contributor

The Chinese government is clamping down on Internet telephony services in the country, a move that could stumble players such as Skype, according to news reports.

The Ministry of Industry and Information Technology (MIIT) announced a crackdown on "illegal" voice-over-Internet Protocol (VoIP) services in China in a circular released earlier this month, AFP reported on Thursday. It did not say when the ruling will take effect, the news agency added.

Xi Guohua, vice minister at MIIT, noted only state-owned major Chinese telcos were licensed to provide PC-to-phone services, AFP said, citing the Beijing Morning Post.

According to him, China Telecom and China Unicom have licenses to provide PC-to-phone services in four cities on a trial basis. The government is considering an expansion of the program, he said.

PC-to-PC communications, Xi pointed out, remained open to all service providers in the country.

Kan Kaili, a professor at the Beijing University of Posts and Telecommunications, told AFP the decision was to "protect the interests of state-owned monopolies". VoIP services, which offer a cheap alternative for long-distance calling, have impacted the margins of carriers' international call services, he explained.

The government, he added, could also be attempting to block VoIP services such as Skype which use encryption that make communications difficult to monitor.

A Skype spokesperson ZDNet Asia contacted did not comment specifically on the development, but noted in an e-mail that users in China can currently access Skype via TOM Online, the majority stakeholder in the two companies' joint venture. TOM Online is the Internet business division of TOM Group, a leading Chinese-language media corporation,  its Web site stated.

According to the spokesperson, TOM Online offers local versions of Skype for Windows and Mac operating systems as well as mobile platforms such as Symbian and Windows Mobile.

He added that the Luxembourg-based VoIP service provider has around 25 million concurrent users logged into Skype globally at any given time, but could not state the numbers for China.

Governments' rising intervention
Earlier this year, Indian authorities were said to have security concerns over services offered by Google and Skype. This follows the Indian government's threat in August to shut down Blackberry services offered by Research In Motion (RIM).

China's move comes at a time when Net usage in the country is growing rapidly. As of end-November, China's online population hit 450 million, with around one in three Chinese having accessed the Internet. This represents a year-on-year jump of 20.3 percent, Chinese news agency Xinhua reported.

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