Cable operators in Taiwan are pushing ahead with voice over internet protocol (VoIP) services, despite government restrictions that prevent them from offering telephony to customers. China Network Systems is the latest to launch a VoIP product. Eastern Multimedia has already started rolling out a VoIP service, while Taiwan Broadband Communications is undergoing the testing phase. China Network - 20 per cent-owned by Star TV - will bundle VoIP free of charge as part of its 'triple play' package, which also includes cable modem and digital television services. Although the cable operators hope to attract and retain customers with new service offerings, the Taiwanese cable regulator - the Government Information Office (GIO) - has been slow to respond with the appropriate regulation. 'There are some legal barriers to providing the service, but technically we can do it,' China Network vice-president Gary Tsai said. Vivek Couto, executive director of Media Partners in Hong Kong, said: 'VoIP is a very cheap service and it's a no-brainer to prevent churn and keep customers.' The very public launch of China Network's VoIP service last month was seen as a stab at the GIO, which critics say has failed to recognise the swiftly changing technology landscape, to the detriment of cable operators. 'The GIO looks at cable TV as an utility, and their first instinct is to control,' China Network president Nelson Chang said. In Taiwan, cable operators are regulated by the GIO, a cabinet-level department, while telecoms firms are regulated by the Ministry of Transportation and Communication (MOTC). Attempts to roll out new services such as digital TV and interactive services have been met by restrictions on subscription pricing and channel packaging. These restrictions - coupled with price ceilings for analogue channels - have given system operators little room to boost their revenues. By contrast, the telecoms industry has been allowed to move into the TV market, with government-controlled Chunghwa Telecom rolling out multimedia and on-demand services. The result is that the telecoms companies can offer some kinds of TV services, but cable-TV operators cannot offer telecoms products. 'The MOTC has a different mentality, looking at it as a technology' rather than just a utility service, Mr Chang said. GIO head Pasuya Yao said easing restrictions and allowing cable companies to offer voice services were not on the horizon. 'It could be a long time before that happens,' he said. Mr Couto said: 'They are boxed in by regulations, but at the same time they can do things despite the regulations.' To sidestep the legal issue, China Network has partnered with licensed fixed-line operators Taiwan Fixed Network and Sparq, which entered the market in 2001 to compete against Chunghwa. These new players have rolled out backbone networks around Taiwan but have suffered from a lack of last-mile access into properties - last-mile access that cable TV operators enjoy. 'The cost-down nature of the business makes it an attractive option,' said China Network chief financial officer Winston Hsia. 'We own the last mile, and we still need to work with them in order to get overseas bandwidth.' China Network signed up 3,000 new customers during the soft launch of its triple-play package. VoIP call charges have yet to be determined. The move to bundle the three services is risky, given the upfront hardware costs. China Network is also rolling out an urban Wi-fi service that will hook up to the company's backbone and will be made available to subscribers.