The Triumphant Consumer? VoIP, “Little Smart,” and Telecom Service Reform in China

Abstract

Can innovations in communications technology dilute the power of China's authoritarian government? When Voice over Internet Protocol (VOIP) and Little Smart (xiao lingtong) personal handyphone service first broke into China's market, they were illegal. However, consumers loved the services and demanded more. Using VOIP consumers can make cheap long distance calls. Little Smart introduced an old technology to China that makes mobile phone services more affordable to the masses. Eventually, the Ministry of Information Industry (MII), which initially had banned both, then legalized both under pressure from other parts of the government and from consumers. The planned economy is breaking down and the government is constructing piecemeal the foundation for a rules-based economy.