Telecommunications – China Shuts Down VoIP Vendor

A man suspected of managing an illegal voice-over-IP (VoIP) telephone service in China faces a prison sentence of at least five years if convicted, according to a China Daily report.

The man, identified only by his surname (Zou) and hometown of Qingdao in eastern China, was arrested in March this year after police and telecommunications officials found a number of facilities, including an illegal Internet gateway, according to the Beijing-based newspaper. The police investigation apparently began in February when Zou’s company was advertising his cheaper call service to foreign companies.

Zou’s business allegedly took in $360,000 in VoIP business, according to local police. That represents a loss of around $1 million in revenue to state telephone companies when measured at their higher call rates, according to the newspaper.