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IP Cards Precede New Era
A new technology is expected to soon bring more convenience to daily life and significantly reduce spending on telecommunications, according to the China VoIP 2001 held last week, as Business Weekly reports.
Although it sounds very technical, VoIP (voice over Internet protocol) has already entered consumers' daily lives in China. Last year, the IP card - a prepaid Internet telephone card and one of the most frequently used VoIP technologies - became a must-have for many Chinese phone users due to its low cost and high convenience.
Using an IP card can save up to 70 per cent of the cost to call your friends or relatives in a remote city or country.
VoIP is a communication technology based on the Internet in which voice signals are sent by packages instead of individual data, which reduces costs for both customers and operators.
Chinese operators introduced IP cards to local customers two years ago, but the usage has only recently seen rapid growth when the managing Ministry of Information Industry (MII) decided to give the pricing rights for IP business to operators earlier this year.
"China will soon become the biggest VoIP market and every company wants to cut a slice of the cake," said Simon Naylor, vice-president of the US-based VoIP provider, Sonus Networks.
"Sonus will establish offices in China within two or three months, " said Naylor, "We could not afford to lose this market."
Six of China's seven basic telecoms operators, China Telecom, China Unicom, China Netcom, China Mobile, Jitong and the newcomer China Railcom, have all obtained licences from the MII to operate IP business.
Severe competition started this year in the IP market with China Netcom's first price cut of up to 50 per cent.
Jitong and China Unicom had to follow the move.
Beside price cutting, IP cards were sold at a discounted rate of their face value, some are even half of the price printed on the card.
"IP telephony is China's first telecoms sector that has achieved fair competition," said Xie Xiaoxia, a researcher with the Chinese Academy of Social Sciences£¨CASS£©.
"When prices of different operators are almost equal, new services are the key to attract or attain customers," said Xie.
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