The Chinese government is ready to block VoIP services to keep citizens using local fixed-line services

Chinese PC users are now currently able to make free PC-to-PC calls but will have to wait a little while longer for PC-to-phone call capabilities from Skype.  The Chinese government will not issue any licenses for VoIP (Voice over Internet Protocol) calls until at least 2008, it has been reported.   Skype officials have been trying to negotiate a deal with the government since November, which had people optimistic a deal would be reached.  The main concern is that SkypeOut would undermine Chinese fixed-line operators.  According to AFX News:

Chinese fixed-line operators are concerned that SkypeOut, which allows users to make calls from computers via the internet to fixed-line or mobile telephones at lower rates, could undermine their core business, the report said.   

With China being one of the largest potential markets in Asia, this is clearly a hard blow to Skype.  Several weeks ago, Skype was hit with subpoenas from AMD over "locked" features in the software that would only work if the PC running the software had an Intel CPU

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