China cracks down on internet phone services

2010-12-30 11:15

China has pledged to restrict internet phone services – a move that could affect thousands of businesses and individuals making cheap calls via web-based communications companies such as Skype.

“We are carrying out with relevant authorities a campaign to crack down on illegal Voice over Internet Protocol phone services”, the ministry of industry and information technology said in a circular posted online earlier this month.

In the brief notice, which did not offer details on the crackdown or a timetable for shutting down “illegal” services, the ministry listed a telephone hotline for citizens to report any violations.

The ministry declined to comment immediately when asked for clarification of the policy by AFP today.

However, The Beijing Morning Post today quoted vice-minister Xi Guohua as saying only state-owned major Chinese telecommunications operators were licensed to provide internet phone services linking telephones and computers.

Communications between computers (PC-to-PC) are open to all service providers, Xi said.

That means some PC-to-phone services provided by firms including Skype, which are popular in China due to their low rates as compared with the country’s major telecoms firms, could be banned under the ministry’s new rules.

UUCall, a homegrown Skype-like service which calls itself “the first Chinese internet phone brand“, was shut down in October last year on suspicion of operating illegal web phone services, the report said.

It resumed business in February after moving its domain name to Hong Kong.

Critics say the government move is meant to protect state-owned Chinese telecom operators, according to various domestic media reports.

Other reports say it may be aimed at stemming rampant phone scams under which thieves use web-based phone services to defraud consumers, changing the call origin number to pose as bankers, police or government officials.

Officials at Skype, which has 23?million users worldwide, were not immediately available to comment on the issue.

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