Knowledge Highlights 20 November 2024
Vietnam’s Telecoms Law overhauled to align with digital economy
Vietnam has sought to modernise its telecommunications regime to better reflect the impact of digital advances since the first iteration of the Law on Telecommunications in 2009. The new Law on Telecommunications (“new Law”) will come into effect on 1 July 2024, with the exception of certain provisions including those related to data centres, cloud computing, and over-the-top (“OTT”) communications which will take effect from 1 January 2025. The new Law will repeal and replace the 2009 Law on Telecommunications (“current Law”).
This article provides an overview of some of the key provisions of the new Law.
Expanded scope of new Law
The scope of the new Law has been expanded to incorporate, among other changes, the regulation of new digital infrastructure and providers relating to data centres, cloud computing, and OTT communications (collectively, “digital services”).
The new Law applies to both Vietnam and foreign organisations and individuals directly involved or related to telecommunications (“telecom”) activities in Vietnam, which include:
- investment in telecom services;
- provision of telecom services;
- trading in telecom goods; and
- construction of telecom works or infrastructure.
New telecom licensing
The new Law provides for two types of licences for telecom enterprises depending on whether the services to be provided are infrastructure-based as follows:
- Individual licences (i.e. the type of licences that will be issued on the basis of satisfying the customised conditions and obligations to be imposed on a particular applicant, and such conditions and obligations may not be the same for different applicants) for telecom services with network infrastructure that use radio frequencies or operate in certain government-designated areas; or
- Class licences (i.e. the type of licences that will be issued on the basis of satisfying the general conditions and obligations imposed on the applicant, and such conditions and obligations will generally be the same for different applicants) that cover standard infrastructure services (i.e. telecom services with network infrastructure which are not subject to the individual licences) and certain non-infrastructure services.
This is a departure from the current Law, which provides for a licence for the establishment of telecom networks and a licence for the provision of telecom services.
Licences granted under the current Law will continue to be valid until the expiry of their term.
It should be noted that the new Law provides that the provision of certain non-infrastructure services will not be subject to the class licences regime set out above. Instead, applicants who intend to provide such non-infrastructure services may be subject to certain registration or notification obligations. The new Law does not provide details of the registration or notification obligations or the scope of the non-infrastructure services subject to the same, and it is contemplated that further legislation will be issued to elaborate on such matters.
Regulation of digital services
The new Law introduces a separate and distinct regulatory regime for the digital services. Note that under the new Law, digital services (including data centres services, cloud computing services, and OTT services) will be regarded as a type of telecom services. Such services are not expressly regulated under the current Law.
Definitions
The new Law includes the following definitions for digital services:
- “Data centre”: A telecom facility that includes a building, station, cable system, computer system, electrical system, and auxiliary equipment installed therein to process, store, and manage data for one or more organisations or individuals.
- “Data centre services”: Telecom services that provide information processing, storage, and retrieval features to users via telecom networks by leasing part or the whole of the data centre.
- “Cloud computing”: A model that allows flexible use, adjustment, and management of shared computing resources including networks, servers, storage devices, applications according to needs.
- “Cloud computing services”: Telecom services that provide information processing, storage, and retrieval features for users over telecoms networks through a cloud computing model.
- “Basic telecom services on the Internet”: Telecom services that provide the main functions as sending, delivering, receiving of information between two individuals or groups of telecom services’ users over the Internet. The definition includes in its ambit the management of OTT services (which include OTT applications such as WhatsApp, Zalo, Viber, and Telegram).
Regime
Data centre, cloud computing, and OTT service providers will not be required to obtain a telecoms licence but must instead comply with registration or notification procedures for providing its telecom services. Details on these procedures are expected to be issued via decree prior to 1 January 2025 when the new Law’s provisions relating to digital services will come into force.
All of the above providers must comply with obligations relating to disclosure of the quality of services provided, storage and management of service user information, and strict adherence to regulations concerning network security, cybersecurity, and personal data protection.
The new Law does not impose restrictions relating to foreign investment for the provision of these digital services enabling them to be fully foreign owned.
Cross-border supply of these services appears to be allowed under the new Law but additional guidance is expected to be issued for more clarity.
Wholesale telecoms activities
The new Law introduces the concept of “wholesale telecom activities” which will involve a telecom company leasing its network or selling its traffic and telecom services to another telecom company for the provision of telecom services. The Ministry of Information and Communications (“Ministry”), in a recent press conference, stated that the scope of this provision will include network leasing or traffic selling undertaken by a mobile virtual network operator. The Ministry is expected to issue further details on the regulations that will apply to wholesale telecom activities at a later stage.
