Telecommunications In Vietnam

I. Introduction

Decree 121/CP of 15 August 1987, promulgated by the Council of Ministers ("Decree 121"), created the first legal framework for telecommunications and postal activities in Vietnam. Between 1987 and 1997, Decree 121 was the primary piece of legislation regulating the telecommunications industry.

With the rapid evolution of the industry, especially during the late 1990s, Decree 121 soon became obsolete. On 12 November 1997, the Government issued Decree 109/1997/ND-CP on postal and telecommunications activities ("Decree 109") to replace Decree 121. A number of implementing sub-regulations followed. Most of these regulations had the purpose of protecting the State's monopoly through tight control of the market.

Vietnam entered into a Bilateral Trade Agreement ("BTA") with the United States in December 2001, in which Vietnam agreed to gradually open the telecommunications sector to United States entities. This commitment also set a schedule. Vietnam became a member of the WTO in January 2007. In its WTO commitments, Vietnam agreed to open telecommunications services to foreign investors under a prescribed schedule. As such, there was a need for a more comprehensive legal framework to manage a fully liberalized market.

Vietnamese telecommunications law has undergone several reformations in order to meet Vietnam's international obligations. On 25 May 2002, the first Ordinance on Post and Telecommunications was approved by the Standing Committee of the National Assembly and became effective on 1 October 2002 ("Ordinance")¹ . The Ordinance was then replaced by the Law on Telecommunications 2010 ("LOT 2010") which came into effect on 1 July 2010. The LOT 2010 represented the first time that regulations on telecommunications were compiled in a separate comprehensive law. It provides a legal framework for all telecommunications activities. The LOT 2010 was replaced by the Law on Telecommunications 2023 ("LOT") on 1 July 2024² . The LOT is an attempt by the State to modernize its legal regime to catch up with recent digital advances, while simultaneously introducing a light-touch management principle in the telecoms sector.

The LOT includes 73 Articles, which are divided into 10 chapters:

Chapter I : General regulations;
Chapter II : Telecoms business;
Chapter III : Telecoms for public benefit;
Chapter IV : Telecoms licenses;
Chapter V : Connection and sharing telecoms infrastructure;
Chapter VI : Telecoms resources;
Chapter VII : Management of telecoms technical standards, norms, quality, and fees;
Chapter VIII : Telecoms works;
Chapter IX : Governmental management in telecoms sector; and
Chapter X : Implementing provisions.

Decree No. 25/2011/ND-CP dated 6 April 2011 of the Government ("Decree 25") implements the LOT 2010. Decree 25 has been amended and supplemented by the Government's Decree No. 81/2016/ND-CP dated 1 July 2016 and Decree No. 49/2017/ND-CP dated April 24, 2017.³

Along with the LOT, the Law on Electronic Transactions issued on 29 November 2005, the Law on Information Technology issued on 29 June 2006, the Law on Radio Frequencies issued on 23 November 2009, and other lesser regulations all represent steady progress in the development of legislation on information technology and telecommunications.

II. Specific regulations

1. Status and powers of telecommunications regulators

Under Article 69 of the LOT, the Government is empowered to manage the telecommunications activities of the State. The Ministry of Information and Communications ("MIC')⁴ is the State body in charge of telecommunications. The Government has the following powers and duties:

to prepare, promulgate, and implement telecoms development strategies, plans, and policies; legal regulations on telecommunications; regulations on mechanisms for controlled testing of new technologies and models in telecommunications activities; national standards, technical regulations, technical requirements, economic and technical norms on telecommunications;
to manage and regulate the telecoms market; to manage the telecoms service business and telecoms operation;
to publicize information and educate (the public) about regulations on telecoms;
to manage the telecoms reporting and statistics regime via online and direct methods;
to inspect, verify, and resolve disputes, claims, and complaints, and to deal with violations involving telecoms activities;
to train, foster, and develop human resources; to study and apply science and technology in telecoms activities; and
to organize international co-operation in the telecoms sector.

2. Interconnection between networks

Article 44 of the LOT provides general principles for interconnection among networks. The basic principle is that all telecoms enterprises⁵ are entitled to connect with each other's networks and services in order to take advantage of existing infrastructure. Stated differently, a telecommunications enterprise must allow other telecoms enterprises to connect to its network or services. Interconnection is based on negotiations intended to assure the equality, rights and benefits of the parties as well as the rights and benefits of telecommunications service users and related persons.

A facilities-based enterprise is responsible for providing connection at any point in the telecommunications network provided that it is technically feasible. It should not discriminate in terms of charges, technical standards, network quality nor telecommunications services. The interconnection charges must be calculated on the basis of market price, reasonably separate network components, or service phases without distinguishing service forms.

A private network may connect to a public network based on a written contract between a telecommunications enterprise and the owner of the private network. A private network cannot directly connect to another private network without the written consent of the MIC.

3. Pricing guidelines

In its accession to the WTO, Vietnam committed to apply price controls in a WTOconsistent fashion. Telecommunications prices comprise charges applicable to telecoms service users and charges applicable as between telecoms enterprises. The LOT stipulates the following principles for determining telecommunications prices:

to ensure that the costs of production and commercial provision of telecommunications services, and spending power of service users in sectors regulated by the State are taken into account;
to respect the rights of telecoms enterprises to determine the price and to compete in terms of price;
to ensure the legitimate rights and benefits of service users, telecoms enterprises and the State;
to review the pricing basis in order to change pricing as needed;
to ensure fair competition and to perform telecoms activities for public purposes;
to ensure equality and non-discrimination in the determination and management of telecoms charges;
to comply with international treaties to which Vietnam is a signatory; and
to prevent any enterprise from using profits from its provision of certain telecoms services to support its unrelated provision of other telecoms services (no cross compensation among telecoms services).

Telecommunications charges must be calculated on the basis of:

elements which affect the telecoms market price at the time of pricing; and
market demand and supply with respect to telecoms services.

A telecommunications enterprise may determine the price of services that it provides except for the price of services that must be determined by the State. On 13 May 2013, the MIC issued Circular 11/2013/TT-BTTTT promulgating the list of telecommunications services whose actual prices and projected prices must be reported. They are:

Terrestrial fixed telecommunications services: local phone services, data transmission service, image transmission service, conference services, local longdistance phone services, international phone services, leased line services, Internet connection services, Internet access services;
Satellite fixed telecommunications services: phone services, data transmission services, image transmission services, lease line services, Internet access services;
Terrestrial mobile telecommunications services: phone service, SMS and MMS services, Internet access services (2G, 3G);
Satellite mobile telecommunications services: phone services, data transmission services, SMS and MMS services, Internet access services (2G, 3G);
Services of Vinasat satellite system: band lease services, transponder lease package.

Services such as 4G and 5G are considered to be high end, so apparently pricing is not protected.

Similar to the price of services, discount rates of telecommunications services generally can be decided by a telecommunications enterprise, provided that it must comply with the universal discount limit of 50% which is set by the Commercial Law on all goods and services. However, on December 29, 2017, the MIC issued Circular 47/2017/TTBTTT (as amended by Circular 18/2023/TT-BTTTT dated 30 November 2023) which sets out a tighter discount limit on terrestrial mobile telecommunications services. Accordingly, post-paid mobile subscribers are still entitled to a maximum promotional value of 50%.

4. Telecoms business

a. Telecommunications services' classification

Decree 25 provides non-exhaustive lists of basic telecommunications services and value-added telecommunications services. The MIC is entitled to add more services to each list.

Basic telecommunications services include: (a) talking services; (b) facsimile services; (c) data transmission services; (d) image transmission services; (e) message services; (f) video conference services; (g) leasing private channel services; (h) Internet connection services; (i) and other basic telecommunications services as regulated by MIC.

Value-added telecommunications services include: (i) e-mail services; (ii) voice mail services; (iii) value-added facsimile services; (iv) Internet access services; and (v) other value-added telecommunications services as regulated by the MIC.

On 18 May, 2012, the MIC issued Circular 05/2012/TT-BTTT to classify telecoms services ("Circular 05"). Circular 05 sets forth different criteria to categorize telecommunications services:

According to technological characteristics, transmission methods, there are fixed telecommunications services (ie, terrestrial fixed telecommunications services, satellite fixed telecommunications services); and mobile telecommunications services (ie, terrestrial mobile telecommunications services, satellite mobile telecommunications services, maritime mobile telecommunications services, air mobile telecommunications services);
According to the payment method, there are pre-paid services and post-paid services; and
According to the scope of communications, there are home-network services (ie, services to send, to transmit, to receive and process information among service users of the same telecommunications network); and inter-network services (ie, services to send, to transmit, to receive and process information among service users of different telecommunications networks).

Circular 05 introduces the term "additional telecommunications services" which is intended to include more functions, utilities for telecommunications service users. Additional telecoms services are integral parts of and are supplied together with basic and value-added telecommunications services. They include services showing the number of callers, services which hide the number of callers, ID caller display services, service of call waiting, service of call transfer, call baring, service of abbreviated dialing, and additional telecommunications services as prescribed by the MIC.

Additionally, the LOT introduces a number of "non-traditional" telecoms services, including:

Basic telecommunications services on the Internet (or OTT services), which are defined to be services of sending, transmitting, and receiving information between two or more telecommunications service users on the Internet and between terminals via telecommunications networks;
Cloud computing services, which are defined to be services that provide information processing, storage, and retrieval features for users via telecommunications networks through cloud computing; and
Telecommunication application services, which are defined to be services that use telecommunications networks to provide application services in the fields of information technology, radio, television, commerce, finance, banking, culture, information, healthcare, education and in other domains.

As of the date of this revision, classification of the above "non-traditional" telecoms services have not yet been provided by the LOT. A decree guiding the implementation of the LOT and/or a classification circular by the MIC to provide a more detailed classification system of these new set of services is expected.

b. Telecoms enterprises and agencies

A telecoms enterprise that provides non facilities-based telecommunications services has the following rights:

to construct, install and own telecoms equipment systems and transmission lines within its units and public utility points to provide telecommunications services to telecoms service users;
to hire telecoms transmission lines to link its telecoms equipment system, units and public utility points together and to connect to public telecoms networks of other telecoms enterprises;
to hire transmission lines or buy telecoms output of other telecoms enterprises in order to resell to telecoms service users;
to sub-lease telecoms infrastructure to other telecoms enterprises;
to allocate telecoms resources in accordance with regulations on the management of telecoms resources;
to conduct development research and tests to implement new technologies and models in telecommunications activities; and
other rights as provided by the Law on Enterprise and other applicable laws, plus the following obligations:
to fulfill public utility telecoms obligations as assigned by the State and to make financial contributions to the Vietnam Public Utility Telecoms Service Fund⁶ ;
to be responsible for service quality according to standards that have been registered or declared;
to assure that the calculation of telecoms charges in a telecoms service use contract are correct, sufficient, and exact;
to be responsible to the competent state agencies and to implement regulations on the assurance of telecoms infrastructure and information security;
to make periodic reports on certain business activities to telecoms management agencies;
to be responsible for the accuracy and timeliness of contents and data contracts;
to implement measures to block accesses to Internet addresses, domain names and other blocking measures for telecommunications equipment systems, telecommunications services, telecommunications application services for the purpose of illegal activities (as provided under Article 9 of the LOT) upon a written request from a competent state agency;
to have a ready technical connection plan for the purpose of data reporting by electronic means to meet management requirements on telecommunications as provided by the MIC;
to comply with requests from competent state agencies to mobilize part or all of telecommunications infrastructure and telecommunications services in case of emergency in accordance with the laws on national defense, national security, and state of emergency;
to ensure that telecommunications subscribers retain their telecommunications subscription number when changing telecommunications service providers (for the same type of telecommunications services);
to provide services to telecommunications service users who have sufficient and matching personal information according to identification documents presented by them when entering into contracts in accordance with the law;
to authenticate, store and use telecommunications subscription information and handle SIMs with incomplete or inaccurate telecommunications subscription information;
to prevent, combat and block illegal messages and calls;
to terminate the provision of telecommunications services to telecommunications subscribers who violate telecommunications laws; and
other rights as provided by the Law on Enterprise and other applicable laws

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Footnotes

1. An Ordinance is a legal instrument passed by the Standing Committee of the National Assembly when the National Assembly is not in session. An Ordinance has the same effect as a Law.

2. Certain provisions under the LOT will come into effect on 1 January 2025 but they have nevertheless been discussed in this text.

3. For the purposes of this latest update and absent a new Decree to guide the LOT, Decree 25 and other guiding documents of the LOT 2010 remain in effect.

4. The MIC (formerly the Ministry of Post and Telecommunications) was established in August 2002 to assume the telecommunications functions of the General Department of Post and Telecommunications, People's Committees, and certain other Ministries.

5. Article 3.23 of the LOT states that a telecommunications enterprise is one that is incorporated under Vietnamese law and is granted a telecoms business license. Telecoms enterprises include enterprises which provide facilities-based services and enterprises which provide non facilities-based services.

6. The Vietnam Public Utility Telecoms Service Fund is a non-profit financial organization managed by the State. Its purpose is to assist in the realization of the State's policies on the provision of universal telecommunications services. The Vietnam Public Utility Telecoms Service Fund is financed by: (i) contributions from telecoms enterprises in proportion to their income; (ii) sponsorship and voluntary contributions from local and foreign organizations and individuals; and (iii) other legitimate sources.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.