Don't believe the hype – ‘banning Skype’ is tripe

7 Jan 2011

China’s Ministry of Industry and Information Technology (MIIT) has attempted to clear up confusion over VoIP services in the country by issuing a statement that the ministry is not looking to ban IP telephony operators, ‘but only those operating illegally in the country.’ Wen Ku, director of the ministry’s technology department, quoted by the China Daily, added: ‘VoIP phone service is a world trend in the telecom industry. We are not against that technology.’ The department was seeking to clarify an announcement from the MIIT last month calling for a crackdown and ban on illegal VoIP services, which appeared to imply that only state-run telcos would be allowed to offer the service and sparked concerns that companies such as Skype will be forced out of China. According to the newspaper Wen would not clarify what constituted an illegal VoIP service, but noted that the crackdown is mainly to fight ‘online crime and fraud’ using VoIP. TeleGeography’s GlobalComms Database indicates that the likely cause of the confusion is the country’s existing regulations that say the three basic telecoms service providers (China Telecom, China Unicom, and China Mobile) are theoretically the only companies allowed to provide phone-to-phone VoIP services to the public, whilst the MIIT has hinted previously that it may look to tighten regulations on PC-to-phone VoIP services (known locally as web phone), of which there are many providers. The regulator does not intend to regulate PC-to-PC IP telephony services. Another rule states that ‘non-Chinese’ companies may not offer VoIP services that connect to the PSTN. Skype’s partner in China, TOM Group (51%-owned by Hong Kong billionaire Li Ka-shing), said earlier this week that its web-based calling service complies with all laws in China, one of its major markets.

The latest data from TeleGeography shows that growth in international call traffic has slumped while international traffic routed via Skype continues to accelerate. Cross-border traffic routed by Skype, by far the world’s largest provider of internet-based voice communications, is projected to grow by an astonishing 45 billion minutes in 2010 – more than twice the volume added by all of the world’s phone companies, combined. ‘Demand for international communications remains strong,’ notes TeleGeography analyst Stephan Beckert. ‘But ever more people are discovering that they can communicate without the services of a telco.’

For more information on the annual TeleGeography Report – a comprehensive source of data and analysis of the international long-distance market – visit the TeleGeography website (http://www.telegeography.com/product-info/tg/index.php).

China