This telephone revolution with the Internet as its medium has found fertile soil in China. According to a report released by the China Internet Network Information Center, as of June 30, 2005, the number of Internet users in China reached 103 million, with 53 million having broadband access, both of which ranked second in the world after the United States.

"If Skype can develop smoothly in China, it's possible for it to break up the monopoly of big operators and provide low-cost phone services, benefiting ordinary people," said Zhang Ni, a Skype user.

According to TOM Online Vice President Feng, the number of Skype users in China has reached 3.4 million, with a daily growth of 170,000 to 190,000.

"If the PC-to-phone service of Skype can be promoted in China, it will involve the interests of operators, end providers, value-added service providers and end users," said Chen at the Ministry of Information Industry, adding that telecom operators' participation is of vital importance.

Experts familiar with the situation agree that VoIP, if allowed in China, will dominate the market soon, which will greatly affect local telecom companies that have profited from traditional telephone services. To compete with low-price Skype international calls, telecom companies will have to lower their prices. Thus, it's foreseeable that the cost of international calls will drop.

The integration of the Internet and traditional telecom services is likely to bring new challenges.

Chen said, "If Skype can operate closely with domestic telecom operators and share profits with them in large proportions, the restriction on Skype can be eliminated. To follow the trend of development is a permanent solution." 

Talks With Skype Skype provides services including computer-to-computer text and voice communication, as well as the pay service SkypeOut, which allows communication from computer to telephone, except emergency calls such as 911. By downloading the Skype software and paying by credit card, people can call ordinary telephones in most countries through their computers. In China, the per-minute cost of using SkypeOut is far less than local operators' charges for international calls.