China today took another controversial step as it has decided to block all VoIP calls for a period of two years for now. VoIP or Voice Over Inter Protocol lets user make phone call via the PC and the standard telephones at much cheaper rates. This has been confirmed by Tom Online, a Chinese internet portal which has a joint venture with Skype, the internet telephony company. Wang Leilei, Tom Online's chief executive said that the Chinese government will not issue VoIP licenses until 2008.
This would directly affect companies like Yahoo and Skype which has big investment plans in China. Skype a couple of months ago had highlighted it plans to launch the service dubbed SkypeOut. This move by China has been made in keeping in mind the Chinese fixed operators who fear that these new international companies will undermine their business. Skype currently offer free calls from China for 5 minutes and wanted to extend this service. "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," said Mr Wang.
China blocks VOIP Calls source
Sourced By Tanya Palta. Edited by Colbert Low
I predict this will not stick. The Chinese consumer will pressure the government to repeal it.
Posted by: China Law Blog | March 23, 2006 10:04 PM | Permalink to Comment