On December 10 last year the Ministry for Information and Industry Technology announced a crackdown on what it called "illegal VoIP telephone services". It said it was collecting evidence against the services, but did not specify what services or holding companies it was referring to.
The announcement sparked fears of a possible Google-like showdown with the Chinese government involving Skype, and also fueled cries of protectionism from some in the market. "The operation of Skype in China is compliant with local laws and regulations," a TOM Group spokeswoman told Reuters on Tuesday. "Currently, it is business as usual while service provision stays normal."
Skype and UUCall dominate the VoIP space in China, offering free or much cheaper options for long distance communication than the three main carriers in the country. China Mobile, China Telecom and China Unicom all make a loss on their long-distance call services.
Businesses in China that rely on VoIP services to keep communications costs as low as possible might lose the cheaper alternative and be forced to go with one of the main carriers, depending on what level of action the regulators in China decide to take.
Skype was already blocked in parts of China back in 2005 as the government only permitted China Telecom and China Netcom (since merged with China Unicom) to conduct pilot programmes for VoIP services. The pilot programmes never actually happened.
Now it would be politically unpopular in China if the government was to go after services like Skype. The region claims 450 million Internet users.
Written by: James Delahunty @ 5 Jan 2011 8:45
