In brief

On 6 October 2021, the Ministry of Information and Communications (MIC) released a proposal to amend the Law on Telecommunications (“Law“), including an outline for the proposed amendments. The outline of the new Law is still in a skeletal proposal form.

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Key takeaways

• Expanding the scope of application to include Infrastructure as a Service (IaaS) services
• Adjusting market regulations to facilitate the entry of Mobile Virtual Network Operators (MVNOs)
• Codifying international regulations to facilitate the development of satellite internet
• Building a framework to accelerate the development of content services in the telecom ecosystem
• Amending the telecom licensing regulations following international practice
• Enhancing the existing consumers’ rights protection framework, especially the protection of consumers’ data and information processed in the telecom ecosystem

In more detail

I. Expanding the scope of application

The Law will be expanded to also regulate the operation of data centers, digital connection identification, and IaaS services. Regulations regarding the establishment of data centers and providing IaaS and services of data centers, such as the following, shall be included in the Law: 

• Data retention, data sharing and data used by multiple data centers (required under certain circumstances)
• Conditions on quality of service (QoS) (required for the establishment of data centers and providing IaaS)
• Responsibilities of telecom enterprises (“Telcos“) and enterprises providing IaaS services in ensuring QoS, data retention and data transfer across telecom networks 

II. Adjusting market regulations to facilitate the entry of MVNOs

Pursuant to the assessment of the MIC, the entry of MVNO into the Vietnamese market under the current regulations still presents quite a few difficulties. Specifically, MVNOs usually find themselves in the challenging position of competing with Mobile Network Operators (MNOs) in terms of service price due to disagreement in wholesale price. This makes it difficult for MVNOs to reach their target end-users or subscribers. Furthermore, the existing telecom laws are currently not consistent with competition laws with respect to market determination and competition administration methods in the market, resulting in difficulties in assessing dominance/significant market power (SMP).

Accordingly, the MIC is proposing to amend the regulations on the wholesale market, as follows:

• An enterprise shall not provide wholesale telecom services to other enterprises with a price higher than the retail price for the same services such enterprise provides to its subscribers. The service price for wholesale distribution is also required to be published.
• Enterprises with SMP in providing essential retail services are obligated to provide such services in wholesale to any enterprise on demand.

Determining market share and SMP in relevant telecommunication markets was previously proposed in the draft decree amending and supplementing several provisions of Decree No. 25/2011/ND-CP guiding the implementation of the Telecom Law.

III. Codifying international regulations to facilitate the development of satellite internet

In this era of fast satellite internet growth, especially with regard to the development of Low Earth Orbit (LEO) satellite services, the MIC recognizes the need to have a consolidated national legal framework to manage and facilitate the development of satellite telecommunication services. Accordingly, it is proposed that the existing Law be amended and supplemented as follows:

• Codifying international commitment into the national laws on market access restriction and conditions under the WTO and CPTPP
• Supplementing regulations on providing satellite service to individuals (other than business customers) within sea area such as maritime communication users
• Supplementing principles, regulations on information management via satellite, providing cross-border services using LEO satellite to Vietnamese users
• Setting out the jurisdiction of regulatory authorities in requesting for users’ information and handling violating information

IV. Building a framework to accelerate the development of content services in the telecom ecosystem

In order to address unfair competition for content service providers (CPs) in competing with telcos in the telecom industry, the proposal recommends additional rights and responsibilities to be applied to telcos in providing network resources to CPs. All CPs should be treated equally and given equal opportunities to approach their target customers and to make use of the network resources provided by telcos.

V. New telecom licensing regime

The telecom licensing framework is now proposed to be classified into three categories: (i) individual license; (ii) class license / general authorization; and (iii) open entry. This approach has been recommended by the International Telecommunication Union (ITU) and has been adopted by various countries.

With respect to telecom licensing conditions, the MIC is proposing to: (i) remove the statutory minimum charter capital; and (ii) replace the commitment on investment capital by commitment on network and service deployment.

VI. Enhancing the existing consumers’ rights protection framework

The MIC is giving high priority to the protection of consumers’ information in the telecom ecosystem. To mitigate personal data/information risks posing to the consumers due to the digital race in new forms of telecom digital services recently, the MIC proposes to impose more responsibilities to service providers in protecting their users’ data/information. Among other things, users’ personal information, such as internet access period and website addresses (i.e., URLs of the accessed websites), should be extensively protected.

The MIC also proposes to include a complaint-handling process regarding services provided in the digital environment.

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We hope the above is informative. For further information and to discuss what this development might mean for you, please contact us.