China in VoIP U-turn

China Daily

In a surprising move that has signalled a complete about-face, the Chinese Ministry of Industry and Information Technology (MIIT) has declared that it completely supports IP telephony.

This stance contradicts a notice that was served by the Ministry in December that signalled a clampdown on so-called ‘illegal’ Voice over Internet Protocol (VoIP) telephony services operating in the country. Many industry commentators criticised the move, suspecting that it was a measure to protect the profit margins of many state owned telecommunications companies.

However, at a recent conference, the director of the MIIT, Wen Ku, told newspaper The China Daily that it was only targeting ‘illegal’ internet telephone services. He said:

“VoIP phone service is a world trend in the telecom industry. We are not against that technology.”

This is being taken as a sign that the Ministry may not carry out its crackdown, but what constitutes as an illegal service is unclear.

At a conference on December 10th, Mr Ku stated that the MIIT was gathering evidence against such services, but refused to define in what sense they meant ‘illegal’. However, he indicated that the measures were targeted at those who carried out online fraud and other crimes.

The move prompted fears not only from domestic users, but also some business VoIP providers. Authorities in China have, since 2005, permitted only China Netcom and China Telecom to trial IP telephony in several cities across the country. Legal experts declared that this restriction mean that any other domestic or business VoIP services provided by any other company are therefore against the law. However, as these trials did not take off, other companies began to fill the gap in the market.

Professor at the University of Posts and Telecommunications in Beijing, Kan Kaili, said that he suspects that the Ministry is proceeding with its plans with extreme caution, as it does not want to be seen to be forcing foreign companies out of the country in the wake of its spat with Google.