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What is China Doing with VoIP?

As China looks set to continue its relentless economic growth into the foreseeable future, in all areas of its industries, how it reacts to the strong influence of VoIP will be carefully monitored by industry experts.

According to BDA, an IT based consultancy, China's China Telecom revenue got hit hard during the first half of 2005, all because of the nation's increase in VoIP use.

Dongming Zhang, BDA's research director explained to UPI that the revenue from long distance calls, for China Telecom, had fallen by 2.8% from the first half of 2004 to the first half of 2005, from $1,858 to $1,805.

VoIP has by far and away been the greatest factor influencing the decrease in revenue. With China Telecom's second largest money stream (18.2% of its total 2005 revenue) coming from long distance calling the company is worried.

Foreign and Chinese media have in the past reported that the Shenzhen branch of China Telecom started to blacklist users, block VoIP calls and threaten to punish anyone caught attempting to use Skype to maneuver around imposed blocks. All this was made to try to stop the sliding revenue in advance of the country's over 100 million internet users realizing available and free long distance PC based calling services were cheaper.

China made Skypeout internet telephone services illegal in 2004 so that its so called 'market-order' could be preserved.

China Telecom has made conversed with a number of software and hardware vending companies over efforts to be able to monitor or disable skype more when it eventually becomes more popular. Indeed, new systems of monitoring have been implemented already in Shanghai, Guangzhou, Shenzhen and Beijing. Further implementation will happen nationwide during 2006-2007.

China Telecom, China Mobile, China Netcom, China Unicom, Satcom and Railcom are the major and dominant telecom carriers in China. Regulators from the government are able to control competition between these companies through only allowing the use of telephone to telephone VoIP services via cards that are pre-paid for by the consumer.

No other companies in China's VoIP market are allowed to operate.

Many opinions from analysts worldwide vary widely on the subject of whether lowered competition in China's VoIP market is right or not. The mainland has the highest number of government imposed VoIP laws. These laws have come in to question often, concerns have been raised over the mainland's openness with its telecoms market, alongside the willingness to adopt new service technologies and software.