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January 19, 2024

Highlights of Vietnam’s New Telecom Law

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On November 24, 2023, the National Assembly of the Socialist Republic of Vietnam adopted Law No. 24/2023/QH15 on Telecommunications (“Telecom Law 2023”) after a lengthy period of extensive discussions and revisions. The Telecom Law 2023 is set to take effect on July 1, 2024, except for the requirements relating to basic telecom services on the internet (otherwise known as over-the-top services, or “OTT”), data center services, and cloud computing services, which will take effect on January 1, 2025.

Some important highlights of the Telecom Law 2023 are discussed below.

Updates on Telecom License Requirements

With a few exceptions and save for certain types of telecom services, enterprises in Vietnam are required to obtain Telecom Licenses in order to provide telecom services. There are two types of Telecom Licenses: licenses for the provision of telecom services, and licenses for telecom operations.

Telecom Licenses can be granted in two forms. The first is separate licensing, which is for telecom services with network infrastructures that use radio frequencies or operate in areas with special requirements set by the government. The second is group licensing, which covers telecom services with network infrastructure (except in certain cases), telecom services without network infrastructure (except in certain cases), and telecom operations.

New Regulations for OTT, Data Center, and Cloud Computing Services

The Telecom Law 2023 provides the definitions for OTT services, data center services, and cloud computing services, recognizing them as different types of telecom services. It also outlines the rights and obligations of service providers in these fields.

Regarding market-entry conditions, foreign direct investments in OTT services, data center services, and cloud computing services are subject to no restrictions on share ownership ratio or capital contribution. Foreign investors can establish 100% foreign-owned enterprises in Vietnam to offer these services.

Enterprises offering these services are not required to obtain Telecom Licenses, but must adhere to registration or notification procedures. The Telecom Law 2023, however, does not provide any detailed guidance on these procedures. Instead, the list of specific telecom services subject to these procedures and detailed information on the procedures will be further specified by the government, most likely in a new decree that will guide the Telecom Law 2023.

The changes in this regard are a direct result of the state’s recent shift in policies, which now strongly support data center services and cloud computing services. Considering that the registration or notification procedures rely mostly on self-declaration, these changes will lessen the administrative burden of obtaining a Telecom License and motivate enterprises in these sectors to focus on infrastructure development and service quality enhancements.

Cross-border supply of these services is allowed, pending additional guidance from the government.

Other Notable Regulations

Wholesale activities in telecommunications are a new type of telecom activity that was not provided under the old telecom law regime. The Telecom Law 2023 defines these activities as the practice where one telecom company leases its network or sells its traffic and telecom services to another telecom company to serve the provision of telecom services. These new regulations on wholesale activities in telecommunications will give telecom enterprises an additional option/model for conducting their business in Vietnam.

The Telecom Law 2023 addresses the outdated regulations regarding information security in the old telecom law regime by explicitly referring to the regulations under the network information security and cybersecurity regimes. Accordingly, telecom service providers must adhere strictly to the relevant requirements under these regimes in order to ensure the safety of telecom infrastructure and network information security.

Unlike the old telecom law regime, the Telecom Law 2023 divides the private information of telecom service users into two categories: information on telecom subscribers and information about the use of telecom services. The Telecom Law 2023 also explicitly refers to the new personal data protection regime under Decree No. 13/2023/ND-CP dated April 17, 2023, on Personal Data Protection (“PDPD”). As a result, it is crucial for telecom service providers to thoroughly review the PDPD and ensure that they meet all applicable requirements therein.

Outlook

The Telecom Law 2023 is set to enhance the current legislative framework on telecommunications, enabling the government to effectively manage the ever-changing telecom market, particularly with regard to non-traditional telecom services such as OTT services, data center services, and cloud computing services. The Telecom Law 2023 also highlights the competent authorities’ light-touch approach to governing these services, which clearly welcomes foreign enterprises in the relevant sectors.

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