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July 19, 2007

CCID Consulting Report Forecasts Period of Growth for VoIP in China

By Calvin Azuri, TMCnet Contributing Editor

CCID Consulting, China’s leading research, consulting and IT outsourcing service provider and the first Chinese consulting firm listed in Hong Kong, has released a report that analyzes the growth of VoIP services in China.

VoIP services are on the verge of replacing traditional long-distance services in Europe and America, where they are currently the mainstream of long-distance voice services. This growth is predicted to reflect in China as well.

The report forecasts that VoIP services in China will make great progress in the next few years. It has been noticed that all major telecom operators and a few virtual operators have already switched over to VoIP, although policies for these services haven’t been specified yet.

Telecom operators have begun to actively adopt VoIP services in a few regions, since there is a lack of traditional telephone services in these areas. In May 2004, China Railcom had started to discreetly promote “broad phone” in certain regions. Statistics show that “underground” VoIP call volume in China is experiencing a 30% annual growth. However, the only shortcoming of VoIP is the high initial cost associated with it, which makes it expensive for ordinary families to adopt it. Consequently, enterprise users or IP phone bars are the only current users. Over 1,000 small companies have adopted the VoIP services of “virtual operations.”

The development of industries and technology has posed a challenge to telecom operators in terms of offering better and cheaper services. Hence, they have turned to VoIP as a potential solution.

VoIP services are the ideal alternative to traditional services and China Telecom alone has switched 800 million to 2 billion Yuan to VoIP each year. China Telecom and China Netcom (News - Alert) are also driving VoIP in several regions hoping to gain a competitive edge in their weak regions by introducing this new communication method.

In 2005, the Ministry of Information Industry had specified that, barring China Telecom (News - Alert) and China Netcom, which can conduct commercial experiments with IP phone of the PC-Phone mode in some regions, no other units or individuals can experiment with the service. In the meantime, four experimental regions - Shenzhen in Guangdong Province, Shangrao in Jiangxi Province, Changchun in Jilin Province and Tai'an in Shangdong Province - were specified. In September 2005, telecom operators had cancelled the Internet access authorization for Shenzhen Telecom's broadband users who used SkypeOut. Consequently, China Telecom and China Netcom initiated a large-scale ban on VoIP. A similar ban on VoIP had successively followed in Guangdong, Guangxi, Sichuan and Jiangsu. Stopping Skype’s (News - Alert) early free network phone services was a determined measure adopted to ensure that the telecom operators' would maintain their dominant position in the voice services field.

CCID Consulting Co., Ltd. (also known as CCID Consulting) is the first Chinese consulting firm listed in the Growth Enterprise Market of the Stock Exchange (GEM (News - Alert)) of Hong Kong (stock code: HK08235). It is a direct affiliate of the China Center for Information Industry Development (hereinafter known as CCID Group). CCID Consulting, based in Beijing, has so far set up branch offices in Shanghai, Guangzhou, Shenzhen and Harbin, with more than 300 professional consultants and industry experts. The Company's business scope has extended to over 200 large- and medium-sized cities in China. In addition to home market development, CCID Consulting is establishing international cooperation links across the United States, the Asia-Pacific region and Europe, by setting up agents in the U.S., Japan, South Korea, Australia, Singapore, Italy and Russia, with the aim of going global.

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Calvin Azuri is a contributing editor for TMCnet. To see more of his articles, please visit his columnist page.


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