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January 6, 2025

New Decree Provides Guidance on Vietnam’s Telecom Law

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On December 24, 2024, the government of Vietnam issued Decree No. 163/2024/ND-CP, providing guidelines for implementing the new Telecommunications Law that took effect on July 1, 2024 (“Decree 163”). This new decree replaces Decree No. 25/2011/ND-CP and its amendments (“Decree 25”) and took effect immediately upon issuance, with regulations on data center services, cloud computing services, and basic telecom services over the internet (“over-the-top” or OTT telecom services) having an official effective date of January 1, 2025.

Decree 163 introduces substantial changes across the telecom sector, covering various aspects including service provision, licensing, standards and technical regulations, quality, passive infrastructure planning, dispute resolution, and more. Hence, it is necessary for enterprises to conduct a compliance review to identify gaps between the new decree and their business models, and take necessary steps to ensure lawful business operations in Vietnam.

Below are some highlights of Decree 163.

Expanded Scope of Services

For basic telecom services, Decree 163 has introduced machine-to-machine (M2M) communication and classified it as a basic telecom service. This establishes a regulatory framework for IoT device communication, previously unregulated in Decree 25.

For value-added telecom services, in light of the new Telecommunications Law, Decree 163 provides more detailed regulations for new telecom services such as data center services, cloud computing services, and OTT telecom services, which were not addressed in Decree 25.

Regulation of Three New Telecom Services

Expanding on the Telecommunications Law’s definitions of data center services, cloud computing services, and OTT telecom services, Decree 163 applies a light-touch management approach to regulate these three new services, as follows:

  • Offshore providers: Cross-border service providers are exempt from signing commercial agreements with licensed local telecom companies. They only need to notify the Vietnam Telecommunications Authority (VNTA) using the prescribed procedures and forms before offering services.
  • Onshore providers: The foreign ownership cap is removed, allowing 100% foreign-owned enterprises in Vietnam. OTT telecom and cloud computing providers must notify the VNTA while data center providers must register with the VNTA before providing services.

Management of Subscriber Information

Decree 163 allows subscribers to register their information online via telecom providers’ applications and strengthens mobile subscriber information management to prevent fraud and ensure accuracy.

Telecom enterprises must comprehensively verify subscriber identities by:

  • Matching identity document details with the National Population Database.
  • Using a one-time authentication code (OTP) sent to a previously registered SIM for registering and activating additional SIMs.
  • Implementing video call verification to collect, verify, and confirm customer identification to ensure the same accuracy as in-person verification.

Outlook

Decree 163 tackles modern challenges, including emerging services, subscriber fraud, and cross-border service provision, offering clearer guidance compared to Decree 25. While the government aims to foster fair competition, efficient infrastructure, and consumer protection, Decree 163 also signals increased regulatory oversight in the telecom sector.

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