In a major setback to Yahoo! Messenger with Voice and Skype, China has decided to ban the use of VoIP services that allow PC users to make long-distance calls to overseas fixed line telephones.

The state-owned fixed-line phone operators in China are concerned that VoIP services, which allows users to make calls from computers via the internet to fixed-line or mobile telephones at lower rates, could undermine their core business.

China will not issue VoIP licences until 2008.

Source: FT.com | O'Reilly