China - Govt is to crack down on illegal VoIP services, this apparently includes Skype

[washington post] China will crack down on what it called illegal Internet telephone providers, according to a government circular seen Friday, in a move that could affect the popular calling service Skype.

The statement, from the Ministry of Information and Industry Technology, did not mention any carriers by name.

It called for a crackdown on "illegal VoIP telephone services" and said it was collecting evidence for legal cases against them.

VoIP is voice-over-Internet protocol, which allows users to make international calls at a much lower price than commercial providers - or even free, if both parties are using VoIP. Many businesses that use VoIP services to cut down on their international telephone costs could lose access to the cheaper alternative.

Skype, partly owned by Web retailer eBay, has been growing in popularity among Chinese individuals and businesses to make cheap or free international phone calls.

The circular, dated Dec. 10, did not say what amounted to illegal services and did not name any VoIP providers it considered to be breaking the law.

Spokesmen for the ministry and the ministry's office gathering information for the campaign did not answer telephone calls Friday. Skype could not immediately be reached for comment.

The move appeared to be aimed at protecting China Telecom, China Unicom and China Mobile, three government-controlled carriers that provide the bulk of China's telephone service.

The Hong Kong-based South China Morning Post quoted an unidentified official at the ministry on Thursday as saying VoIP services could be provided only by the big three Chinese operators.

Representatives of China Telecom and China Unicom did not answer phone calls Friday. A spokeswoman for China Mobile, reached in Beijing, referred calls to the company's Hong Kong office. Attempts to reach that office were unsuccessful.

Skype, which has about 124 million users worldwide, hopes to raise about $1 billion in an initial public offering expected this year.

China targets Internet phone service, potentially dealing a blow to Skype