Telecommunications

Telecommunications in Vietnam – Telecoms, mobile and cable communications

INTRODUCTION

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

With the rapid evolution of the industry, particularly in the late 1990s, Executive Order 121 quickly became obsolete. On November 12, 1997, the government issued Decree 109/1997/ND-CP on Post and Telecommunications Activities (“Executive Order 109“) to replace Executive Order 121. A number of implementing sub-regulations followed. Most of these regulations were intended to protect the state monopoly through strict market control.

Vietnam has a bilateral trade agreement (“BTA“) with the United States in December 2001, in which Vietnam agreed to gradually open up the telecommunications sector to American entities. This commitment also set a timetable. Vietnam became a member of the WTO in January 2007. In its WTO commitments, Vietnam agreed to open telecommunications services to foreign investors on a prescribed schedule, hence the need for a more comprehensive legal framework to manage a fully liberalized market.

Vietnam’s telecommunications law has undergone several reforms in order to meet Vietnam’s international obligations. On May 25, 2002, the first Ordinance on Posts and Telecommunications was approved by the Standing Committee of the National Assembly and entered into force on October 1, 2002 (“Arrangement“)1. The ordinance was later superseded by the Telecommunications Act (“PLOT“) which came into force on July 1, 2010. The Telecommunications Act represented the first time that telecommunications regulations were compiled into 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: Telecom activity;

  • Chapter III: Telecoms of public utility;

  • Chapter IV: Establishment of networks and provision of telecom services;

  • Chapter V: Telecommunications operating authorizations;

  • Chapter VI: Connection and sharing of telecom infrastructures;

  • Chapter VII: Telecom Resources;

  • Chapter VIII: Management of technical standards, norms, quality and telecom royalties;

  • Chapter IX: Telecommunications works; and

  • Chapter X: Provisions of application.

Government Decree No. 25/2011/ND-CP of April 6, 2011 (“Decree 25“) implements LOT. Decree 25 was amended and supplemented by Government Decree No. 81/2016/ND-CP of July 1, 2016 and Decree No. 49/2017/ND-CP of April 24, 2017.

In addition to the LOT, the Electronic Transactions Act of November 29, 2005, the Information Technology Act of June 29, 2006, the Radio Frequency Act of November 23, 2009, and other lesser regulations all represent steady progress. in the development of legislation on information technology and telecommunications.

II. SPECIAL REGULATIONS

1. Status and powers of telecommunications regulators

Under Section 9 of the LOT, the government is empowered to manage state telecommunications activities. The Ministry of Information and Communications (“microphone‘)2 is the state agency responsible for telecommunications. The MIC has the following powers and duties:

  • promulgate or prepare draft legal regulations, technical specifications and standards, economic and technical standards, telecommunications strategies and telecommunications development plans;

  • implement telecommunications legal regulations, telecommunications development strategies and plans;

  • manage and regulate the telecoms market; manage the telecommunications services business and telecommunications operations;

  • actively coordinate with the Ministry of Industry and Commerce in the management of competition in the formulation of telecommunications infrastructure and ensure that telecommunications services are provided in accordance with competition laws;

  • inspect, verify and resolve disputes, claims and complaints, and address violations in telecommunications activities;

  • train, encourage and develop human resources; study and apply science and technology in telecommunications activities; and

  • organize international cooperation in the telecommunications sector.

LOT designates the specialized telecommunications management agency (“TSMAThis is a specific agency under the MIC which supports the MIC to ensure the management by the State of the telecommunications sector. Decree 25 entrusts the TSMA with the following missions:

  • participate in the development of telecommunications policies, strategies, plans and legal regulations;

  • manage the telecommunications market;

  • organize the implementation of telecommunications regulations; and

  • exercise other state management functions in the telecommunications sector on delegation of the Minister of MIC.

2. Interconnection between networks

Article 42 of the LOT sets out the general principles of interconnection between networks. The basic principle is that all telecommunications companies3 have the right to connect to each other’s networks and services in order to take advantage of existing infrastructure. In other words, a telecommunications company must allow other telecommunications companies to connect to its network or its services. Interconnection is based on negotiations intended to ensure equality, the rights and benefits of the parties as well as the rights and benefits of users of telecommunications services and related persons.

A facilities-based company is responsible for providing connection at any point in the telecommunications network provided it is technically feasible. It should not discriminate in terms of tariffs, technical standards, network quality or telecommunications services. Interconnection charges should be calculated on the basis of the market price, reasonably distinct network elements or phases of service without distinction of forms of service.

A private network can connect to a public network based on a written contract between a telecommunications company and the owner of the private network. A private network cannot connect directly to another private network without the written consent of the TSMA.

3. Fee Guidelines

Upon its accession to the WTO, Vietnam committed to apply price controls in a manner consistent with WTO rules. Telecommunications prices include tariffs applicable to users of telecommunications services and tariffs applicable between telecommunications companies. The LOT stipulates the following principles for the determination of telecommunications prices:

  • respect the rights of carriers to determine price and to compete on price;

  • guarantee the legitimate rights and benefits of service users, telecommunications companies and the State;

  • ensuring fair competition and carrying out telecommunications activities for public purposes; and

  • ensure equality and non-discrimination in the determination and management of telecommunications charges, except in cases aimed at encouraging new companies to enter the market.

Telecommunications costs must be calculated on the basis of:

  • applicable policies and telecommunications development objectives; regulations on price management and international treaties to which Vietnam is a signatory;

  • market price, market demand and supply, and appropriate correlation with regional and international country telecommunications tariffs; and

  • no cross-compensation between telecommunications services.

A telecommunications company can determine the price of the services it provides except for the price of the services which must be determined by the State. On May 13, 2013, the MIC published circular 11/2013/TT-BTTTT promulgating the list of telecommunications services whose actual prices and projected prices must be communicated. They are:

  • Fixed land telecommunications services: local telephone services, data transmission service, image transmission service, conference services, long distance local telephone services, international telephone services, leased line services, Internet connection services , Internet access services;

  • Fixed satellite telecommunications services: telephone services, data transmission services, image transmission services, leased line services, Internet access services;

  • Land mobile telecommunications services: telephony, SMS and MMS services, Internet access services (2G, 3G);

  • Mobile satellite telecommunications services: telephony services, data transmission services, SMS and MMS services, Internet access services (2G, 3G);

  • Vinasat satellite system services: tape rental services, transponder rental package.

Services such as 4G and 5G are considered premium, so apparently the prices aren’t protected.

Like the price of services, discount rates for telecommunications services can generally be decided by a telecommunications company, as long as it meets the universal 50% discount limit set by the law of commerce for all goods and services. However, on December 29, 2017, the MIC issued Circular 47/2017/TT-BTTT which sets a stricter discount limit on land mobile telecommunications services. Thus, post-paid mobile subscribers are still entitled to a maximum promotional value of 50% while from March 1, 2018, the maximum discount is 20% for prepaid mobile users.

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Footnotes

This book was written by lawyers from Russin & Vecchi. This edition is current to August 2022.

1. An ordinance is a legal instrument adopted 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 Ministry of Posts and Telecommunications) was established in August 2002 to assume the telecommunications functions of the General Directorate of Posts and Telecommunications, People’s Committees and some other ministries.

3. Article 3.23 of the LOT stipulates that a telecommunications company is a company incorporated under Vietnamese law which is granted a telecommunications business license. Telecommunications carriers include carriers that provide facilities-based services and carriers that provide non-facilities-based services.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.