Will Skype Be Banned in China?

China has reportedly moved to block private VoIP services such as Skype, and will only allow China Telecom and China Unicom to offer such services, according to China’s Ministry of Industry and Information Technology. It’s unclear when this will take effect, or if it means the outright ban of services such as Skype. China previously banned outside VoIP companies in 2006 for two years to help its homegrown companies compete ahead of the 2008 Olympics. Skype currently partners with Chinese Internet company Tom Online and said in a statementvthat users can still access Skype through Tom.com, though it declined to speculate on future access being blocked.

The introduction of Skype video calls over iOS devices (s aapl) may have prompted the Chinese government to issue the ban again. The country may be looking to give its local operators time to catch-up with Skype’s latest offering. Or perhaps China is worried about the power of video calls enabled through smartphones, especially in the hands of dissidents. Either way, it’s a blow for Skype in particular, and VoIP providers in general, and underscores the difficulty of doing business in China for Internet companies. Facebook, YouTube (s goog) and Twitter are already blocked in China and Google had to move its servers to Hong Kong.

This might just be a temporary situation or something Skype can work out behind closed doors. Users in China will likely still be able to access Skype by downloading international versions.

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