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 ("LOT") which came into effect on 1 July 2010. The Law on Telecommunications 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 includes 63 Articles, which are divided into 10 chapters:
- Chapter I : General regulations;
- Chapter II : Telecoms business;
- Chapter III : Telecoms for public benefit;
- Chapter IV : Setting up networks and telecoms service supply;
- Chapter V : Telecoms operation licenses;
- Chapter VI : Connection and sharing telecoms infrastructure;
- Chapter VII : Telecoms resources;
- Chapter VIII : Management of telecoms technical standards, norms, quality, and fees;
- Chapter IX : Telecoms works; and
- Chapter X : Implementing provisions.
Decree No. 25/2011/ND-CP dated 6 April 2011 of the Government ("Decree 25") implements the LOT. 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.
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 9 of the LOT, the Government is empowered to manage the telecommunications activities of the State. The Ministry of Information and Communications ("MIC')2 is the State body in charge of telecommunications. The MIC has the following powers and duties:
- to promulgate or prepare drafts of legal regulations, technical specifications and standards, economic-technical norms of telecoms strategies and telecoms development plans;
- to implement legal regulations on telecoms, strategies, and telecoms development plans;
- to manage and regulate the telecoms market; to manage the telecoms service business and telecoms operation;
- to actively co-ordinate with the Ministry of Industry and Trade to manage competition in the formulation of telecoms infrastructure and to assure that telecommunications services are provided in accordance with the laws on competition;
- to inspect, verify, and resolve disputes, claims, and complaints, and to deal with violations in 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.
The LOT refers to the telecommunications specialized management agency ("TSMA"). This is a specific agency under the MIC that supports the MIC to carry out state management of the telecommunications sector. Decree 25 assigns TSMA the following tasks:
- to participate in drafting policies, strategies, plans, and legal regulations on telecommunications;
- to manage the telecommunications market;
- to organize the implementation of regulations on telecommunications; and
- to carry out other state management functions in the telecommunications sector as delegated by the MIC's minister.
2. Interconnection between networks
Article 42 of the LOT provides general principles for interconnection among networks. The basic principle is that all telecoms enterprises3 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 TSMA.
3. Pricing guidelines
In its accession to the WTO, Vietnam committed to apply price controls in a WTO-consistent 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 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 ensure fair competition and to perform telecoms activities for public purposes; and
- to ensure equality and non-discrimination in the determination and management of telecoms charges, except in cases designed to encourage new enterprises to enter the market.
Telecommunications charges must be calculated on the basis of:
- applicable policies and objectives of telecoms development; regulations on price management and international treaties to which Vietnam is a signatory;
- market price, market demand and supply, and an appropriate correlation with telecoms charges of regional and international countries; and
- no cross compensation among telecommunications services.
A telecommunications enterprise may determine the price of services that it provides except 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 long-distance 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/TT-BTTT 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% while, from 1 March 2018, the maximum discount is 20% for pre-paid mobile users.
This book was written by lawyers from Russin & Vecchi. This edition is current through August 2022.
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. 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.
3. 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.
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.