From "Financial Investor" dated Feb. 5, 1999.
China's telecoms ministry retreated yesterday from previous expressions of outrage over internet telephony in China, saying licensed companies would be permitted to offer low-cost international calls over the internet sometime later this year.
But Wu Jichuan, the minister of information industry insisted that the responsibility for licensing internet telephony operations belonged solely to the ministry, which he said was responsible for ensuring the development of a strong dominant state carrier, China Telecom.
Another senior ministry official, Zhang Chunjiang accused foreign companies of colluding with illegal Chinese firms to offer internet telephony services, which cost China Telecom "billions of renminbi" in lost revenues last year.
"This is tantamount to information smuggling....We will crack down very harshly on these illegal internet phone operations." Mr. Zhang said.
He said business licenses for internet telephony services would be provided later this year, but he did not say which companies would receive them. Analysts suggested that Unicom, the second state carrier could be granted a license.
Last month, a court in the south-eastern province of Fujian ruled that a local shop offering international internet calls was not acting illegally because internet technology differs from traditional telephone services. The ministry of information industry fulminated against the ruling, and claimed that the judge did not know what he was doing.
In the past, such a powerful ministry would probably have been able to prevail against a provincial court decision but China's top leaders now say they are building the "rule of law". "We respect the court's judgment in this case." Mr. Zhang told a news conference.
One internet telephony operation in Fujian said he had been emboldened by the court decision and was now advertising his product openly in newspapers. "It costs RMB 1.2 (14 cents) per minute to call America, compared with RMB 18 with China Telecom," said Zheng Yun Fei, who was installing the technology for 300 corporate clients. But, Mr. Zheng said, there were problems with local officals, who argued his business was unlicensed and therefore unlawful.
Analysts said the threat to China Telecom was considerable. |
