China bans Skype

China continues to make waves as a burgeoning technology and industrial giant, this time apparently banning VoIP provider Skype.

A local arm of China Telecom, the country's biggest fixed-line telecommunications operator, has moved to block access to the Skype service, according to the Financial Times.

The move, by Shenzhen Telecom, highlights the concerns of Chinese operators about the impact of VoIP on their businesses, the Shanghai Daily newspaper said.

"An employee at a Shenzhen Telecom service centre said staff had been instructed to tell customers who complained about being unable to access SkypeOut that such internet telephone services were illegal in China under a 2004 regulation because they would 'destroy market order,'" the Financial Times reported.

Such services threaten the core business of the state-controlled but internationally listed fixed-line operators, China Telecom and China Netcom, the FT said.

Only six Chinese telcos, including China Telecom, China Mobile, China Unicom and China Netcom, are allowed to operate such VoIP services, according to Shanghai Communications Administration, Shanghai Daily said.