Skype users in China could be dealt a blow after the authorities reportedly declared the service and other internet telephony services like it illegal
According to the People's Daily, the decision was taken to protect the businesses of carriers China Telecom and China Unicom, which hold a duopoly in the telecoms market in the country.
As such, all VoIP communications will be illegal on the Chinese mainland except for those provided by the state-owned carriers, according to the ruling by Ministry of Industry and Information Technology.
"It's ridiculous," Kan Kaili, a professor at Beijing University of Posts and Telecommunications, told the People's Daily. "VoIP is a popular technology worldwide."
The news will be a blow to Skype users in the region and firms that use VoIP services to communicate cheaply with branch offices or partners on the mainland.
It will also present a significant challenge to Tony Bates, Skype's new chief executive and former Cisco senior vice president, as he tries to market the service to more businesses while taking the firm public.
Skype filed its intention to launch an IPO in August and expects to raise as much as $100m.
It remains to be seen whether internet users in China will be able to work around any restrictions on their VoIP service.
The authorities already ban web sites such as Facebook and YouTube, and filter internet traffic containing pornographic or politically non-conformist content.
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