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Chinese Government Will Open the VoIP Market

Infobird Call Center news: according to WTO agreements, China must open its basic telecommunication service market to overseas investors and operators. However, there is no evidence showing that Chinese government will open the VoIP market.

So far, China Telecom and China Netcom have been the only two operators which can provide VoIP basic service but not value-added service mode. Therefore, these two companies have gained key advantages in taxes and regulations. They have processed business deployment in four cities: China Telecom chooses Shenzhen and Shangrao, while China Netcom chooses Changchun and Taian. Because they have policy priority, Infobird Call Center forecasts that following the gradually opened VoIP market, these two operators will maintain their leading advantages in VoIP market.

China has deployed broadband since 2001. In the following year, there has been virtual operator. These operators buy “communication time” from Telecommunication service providers at wholesale at a lower price. Then they provide their customers with IP phone and IP gateway connected to PSTN. This is the mainstream of Chinese current business mode.

This IP phone business mode is relatively simple and easy to follow. As more and more virtual operators entering the market, price competition has become the most effective means to attract customers.

However, because their business is still “illegal”, there were many virtual operators exiting the market in 2006, which resulted in the decrease of telephone inter-market growth rate.

Therefore, virtual operators and VoIP equipment providers are under the pressure of searching for higher profit. They target the enterprise customer market.

The enterprise customers adopts VoIP, because it can save costs, enhance the application ability of voice and data, and simplify the technical support. Anyway, price is the key element.

Infobird Call Center estimates that in 2011, Chinese enterprise VoIP market will increase to 223 million U.S. dollars from 176 million U.S. dollars in 2006. Annual compound growth rate is 9%.

International telecommunication equipment provider like CISCO and Avaya has rushed into Chinese enterprise VoIP market. Meantime, Chinese local VoIP providers still control the domestic market. The leading local equipment providers include Datang Gohigh Networks, Maipu Communications and Bdcom Networks. The leading chip providers include Texas Instrument, Mindspeed Technologies and AudioCodes.

The most important factor impacting Chinese VoIP market is government policy. Chinese government delayed VoIP deployment speed. However, Infobird Call Center believes VoIP market will be gradually opened in 2007.

Enterprise market will be the birthplace of advancing Chinese VoIP service. But, because of Chinese special situation, this market will be controlled by licensed telecommunication operators. To win the future VoIP market share, it becomes very important for virtual VoIP operators, equipment vendors and chip providers to cooperate with those telecommunication operators.