China bans VoIP, Tom Online & Skype halt SkypeOut

Recent reports have revealed that China will block computer to landline phone calls for two years to protect its own local telephone services. China’s telecom companies fear that cheap phone calls made using the Internet could damage their fixed-line business.

According to the Financial Times, Wang Leilei, the head of the Hong Kong-based Internet provider Tom Online, confirmed that China would not be issuing any voice over Internet protocol licenses until 2008. Skype, an Internet telephony company owned by Ebay, has a partnership with Tom Online. The Financial Times states that negotiations were underway to sell computer-to-landline services to China, but a license was never obtained.

The two year ban will hinder Skype’s attempts towards tapping their largest available market; Asia. Skype, the world’s leading provider in Internet telephony, refused to comment on how the ban will affect the company’s plans.

Tom Online’s plans to reveal SkypeOut to China‚Äôs mainland apparently conflicted with China, who feared cheaper phone service offered by Skype and other Internet telephony companies would reduce business substantially of local landline and wireless providers.


Tom Online has confirmed that VoIP licenses will no longer be issued by China which will prevent Tom Online from releasing SkypeOut to the nation.

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