China Telecom Blocks Skype Services14.09. 2005 Technology
China's largest telco, China Telecom, is blocking some types of calls made with the Skype Voice over Internet Protocol (VoIP) service. Customers in China have reported to news sources that they are unable to use the SkypeOut service to call standard telephones, although computer-to-computer services seem unaffected. SkypeOut lets users make calls to phones anywhere in the world, for significantly lower rates than traditional phone services. The service is not offered in mainland China because VoIP services are not permitted there, but some users have registered for SkypeOut outside of China to use it in the country. Market Maneuvers China Telecom's block comes a week after Skype announced that it has signed a deal with TOM Online, China's top wireless company, located in Hong Kong. The two companies forged an alliance to tap into China's quickly growing online communication market. The combination of VoIP calling services with wireless Internet could cause further grumbling from China Telecom because such a team-up will probably cut into its revenues through decreases in the number of traditional long-distance calls. Although China often has been criticized for limiting technology use because it wants to limit discussion among dissidents, it is more likely that China Telecom is blocking Skype because of commercial rather than political reasons. Global Glare Many countries have begun to examine how VoIP is affecting telecom providers, said Gartner analyst Ron Cowles. "China is very controlling of its industries, but what's happening there may start happening elsewhere as VoIP evolves," he noted. "This is a very disruptive technology because it transcends geographic boundaries. That means regulators will have to find new ways to create licensing requirements." Already, Mexico has adopted a licensing scheme that allows telecom providers to realize revenue from VoIP, and it is possible that other countries, including China, will try to put similar controls into place, Cowles believes. "There will be further restrictions as countries try to figure out how to profit from VoIP," he said. "Of course, the further they restrict it, the more it will flourish underground."