End near for Skype in China?

Gadget blog Engadget brings us the latest news on Skype in China:

China's got some businesses to protect -- landline phone businesses, that is -- and it sounds like no Skype VoIP licenses (enabling, for example, SkypeOut calling) are to be issued for another two years over there per government intervention. That's bad, but what's worse is apparently China Telecom's declared the software "illegal" (we assume that claim carries over to other VoIP software, too -- and isn't law) and the government's experimenting with ways to entirely restrict Skype usage as they see fit (which is a little more difficult than flipping a switch on the Great Firewall, being that Skype runs on standard HTTP / HTTPS ports). Sure, VoIP is disruptive, and we all know it'd be best to let the carriers sort it out in the marketplace, but damned if this isn't one of the more visible hands, so to speak, that we've seen in a while.

Engadget got the story from the AFP, which got the story from the Financial Times. Here's part of the AFP story:

The government "is not going to issue VoIP (Voice over Internet Protocol) licences until 2008," Wang [Leilei, chief executive of Chinese internet portal group Tom Online] told the newspaper.

The move would likely be major setback to Skype, which was reportedly in talks last year with Chinese telecom operators to launch its computer-to-telephone service, SkypeOut.

Shanghaiist uses SkypeOut to call family, although we haven't used it in a while, which reminds us: Call family more often.

Anyone having any Skype problems out there?

Also on Shanghaiist:
Ask Shanghaiist: Expat phone home
Damn you, China Telecom!
Skype 'optimistic' about future in China