WebProNews

China Telecom, the country's biggest telecommunications operator is trying to put a stop to VoIP use in the country as long-distance revenues fall.

The company has already begun blocking access to Skype's VoIP services in the city of Shenzhen and intends to do the same throughout the entire country.

China Telecom has apparently threatened fines and legal action to those who are caught using VoIP services. According to Chinese newspaper Shanghai Daily, there are only six government-approved carriers in China that are allowed to offer VoIP. Reuters explains:

Long distance business is an important revenue source for both China Telecom and China Netcom, accounting for about 20 percent of China Telecom's total revenue last year.

Internet-based services like Skype are putting pressure on both companies to lower their long-distance tariffs, which have been coming down at a rate of about 12-15 percent annually in recent years, said BOC International analyst Alan Ng.

As VoIP continues to gain popularity, it will be interesting to see how China Telecom is able to handle it, and just how much legal action will be involved.

Chris is a staff writer for WebProNews. Visit WebProNews for the latest ebusiness news.