China cracks down on Internet phone services

China has pledged to restrict Internet phone services - a move that could affect thousands of businesses and individuals making cheap calls via web-based communications companies just as Skype.

"We are carrying out with relevant authorities a campaign to crack down on illegal Voice over Internet Protocol phone services", the Ministry of Industry and Information Research said in a circular posted online previously this month.

The brief notice

In the brief notice, which did not offer details on the crackdown or a timetable for shutting down 'illegal' services, the ministry listed a telephone hotline for citizens to report any violations.

The Beijing Morning Post on Thursday nevertheless quoted vice-minister Xi Guohua as saying only state-owned major Chinese telecommunications operators were licensed to provide Internet phone services linking telephones and computers.

Xi said communications between computers remain open to all service providers in China, which has the world's biggest Internet population at 450 million.

That means some PC-to-phone services provided by firms including Skype, which are popular in China due to their low rates as compared with those of the country's major telecoms firms, could be banned in accordance with the ministry's new rules.

UUCall, a homegrown Skype-like service which calls itself "the first Chinese Internet phone brand", was shut down in October 2009 on suspicion of operating illegal web phone services, the report said.

Xi said China Telecom and China Unicom had licences to provide PC-to-phone services in four cities on a trial basis. He added the government was considering an expansion of the programme.

The interests of state-owned monopolies

"Overall this is to take furthermore strong measures to protect the interests of state-owned monopolies," Kan Kaili, a professor at the Beijing University of Posts and Telecommunications, told AFP.

The move may as well be aimed at stemming phone scams in accordance with which thieves use web-based phone services to defraud consumers, changing the call origin number to pose as bankers, police or government officials, some Chinese reports said.

Kan speculated that the government as well could be attempting to block VoIP (Voice over Internet Protocol) services just as Skype that are difficult to monitor due to their high encryption levels.

Skype - which channels voice, video and text conversations over the Internet - was hit by a major outage last week that left millions of users unable to use the service, due to technical problems.