Internet Protocol: Cheap Phone Calls to Full Convergence?

China's Killer Application?

Internet Protocol (IP) could be China's "killer application", according to Kaili Kan from the Beijing University of Posts & Telecommunications.

Available over a regular telephone line, one IP application, Voice over IP (VoIP), is expected to take 30% of China's long distance call market this year. VoIP delivers long distance service, for as little as half the price of calls made over the conventional Public Switched Telephone Network (PSTN) service. In spite of lower charges, providers claim that VoIP is extremely profitable. Enhanced IP services will become available, which will accelerate Chinese communication networks towards a full convergence of voice, video and data transfer services.

Undeniable Attractions

VoIP in China was first publicized when two brothers were arrested in March 1999 for using the internet to provide cheap long distance services to local customers. They succeed in court because there were no regulations banning the provision of such services.

Despite the threat it represented to China Telecom's monopoly over long distance services, the Ministry of Information Industries (MII) granted VoIP operating licenses to China Mobile, China Netcom, Jitong Communications and China Telecom. The latter three were involved in a six month trial of the service across 26 cities. The MII issued the Notice Concerning the Opening Up of China's IP Telephony Business, which granted full VoIP operating licenses to the above telecoms providers. Now, disposable IP cards ranging from Rmb50 to Rmb500 are readily available, and billboards advertising their access numbers dot the nation's skylines.