China Announces Skype Ban

by Gaurav Kheterpal on January 3, 2011

It’s well a known fact that China lives in a different world. After having pulled the plug on so-called “foreign websites” such as Facebook, Twitter and YouTube in the last couple of years, the dragon land has now banned Skype as part of a crackdown on the illegal provision of Internet Telephony services.

While the State Ministry of Industry calls it a “necessary” move in wake of national interests, this conservative decision is yet another measure to protect the duopoly of state-owned telecom carriers – China Telecom and China Unicom.

Interestingly, The Ministry of Information and Industry Technology refuses to say what amounts to illegal Internet Telephony services and did not name any VoIP providers it considered to be breaking the law.

So, what’s next for Dragon Land- a total Internet ban called the “Great (Fire)Wall of China”? And perhaps build another China-only version of the internet? I, for one, do not rule out that possibility.

Skype has so far denied any knowledge of the ban and maintained that it’s business as usual in China. The VoIP giant has been running a joint service in China with Hong Kong-based Tom since September 2007 and claims to have obeyed all rules defined by the regulatory authorities. I guess it’s a matter of time before Skype is forced to come out of denial mode. Either way, it’s a big blow for the “Big Daddy” of Internet Telephony world as it hopes to raise about $1 billion in an initial public offering expected this year.

Apart from Skype, this announcement is a massive setback for other Internet Telephony providers and technology heavyweights including Microsoft (MSN) and Google (Gtalk) which have been working with the Chinese government on resolving issues amicably. Though China currently ranks amongst the fastest growing telecom markets worldwide, such moves are likely to kill the emerging competition and curb innovation in the country.

While Europe and North America have been busy debating the various aspects of “Net Neutrality” in year 2010, China has been enforcing new “Net Censorship” rules.  VoIP calls allow users to make international calls for nearly one-tenth the cost of commercial provider rates and many businesses in China use it to cut down on their international telephone costs. Needless to mention, this is a “lose-lose” deal for everybody including the service providers, local businesses and China as a nation.

I have no doubt that VoIP represents the future of mobile telephony. Though it initially met stiff resistance from telecom carriers amidst fears of declining call revenues, it is gradually gaining more acceptance worldwide. Skype has been a great advocate for promoting “Mobile VoIP” forging breakthrough partnerships in the carrier fraternity.

As for China, it seems to be taking one step forward and three steps back in the technology world each year. A report released last year by Juniper Research indicated that the number of mobile VoIP minutes carried annually on 3G and 4G networks will rise from 15 billion minutes in 2010 to 470.6 billion by 2015.  Too bad, the world’s most populated nation won’t be a part of the ongoing VoIP revolution!

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Written by: Gaurav Kheterpal. www.digitcom.ca >. Follow TheTelecomBlog.com > by: RSS>, Twitter >, Identi.ca >, or Friendfeed >

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