You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

March 18, 2024

New Telecom Services Set Out in Vietnam’s Telecom Law and Draft Decree

Subscribe to Updates

Vietnam’s new Telecom Law 2023 was promulgated on November 24, 2023, and will take effect on July 1, 2024, for most telecom services. For three newly introduced telecom services—OTT telecom services, internet data center services, and cloud computing services—implementation and compliance will be delayed until January 1, 2025. These new services will be explored briefly below.

The Ministry of Information Communication (MIC) is currently in the process of developing a number of decrees and circulars that will detail the implementation of the Telecom Law 2023, including one main decree that guides the new law in general. This decree is scheduled for prompt promulgation to coincide with the law’s effective date of July 1, 2024.

The draft version of this decree, dated February 22, 2024 (“Draft Decree”), was shared for consultation with international organizations, associations, and enterprises by the Vietnam Telecom Agency (VNTA) in early March 2024 to gather feedback. The Draft Decree is expected to undergo further revisions before being sent to relevant state agencies for input and submission to the Ministry of Justice for assessment by the end of March 2024. The MIC anticipates submitting the subsequent version to the government by April 15, 2024.

 

New Telecom Services: OTT Telecom Services, IDC Services, and Cloud Computing Services

In comparison to the Telecom Law 2009, the Telecom Law 2023 has three new telecom services:

  • Basic telecommunications services on the internet (OTT telecom services) are defined as services whose primary functions including the sending, transmission, and receipt of information between two persons or a group of people using telecommunications services on the internet (Article 3.8 of the Telecom Law 2023). By incorporating the term “primary functions” into the definition, the Telecom Law 2023 aims to exclude services such as ride-hailing platforms where the primary function is transportation, not telecom services for sending and receiving messages between users. This intention has been clearly confirmed by the VNTA in its series of consultation meetings with industry groups during the development process of the new law.
  • Internet data center (IDC) services are services that provide functions including processing, storage, and retrieving information for users via the telecom network by partially or fully leasing a data center.
  • Cloud computing services are telecom services that provide functions including processing, storage, and retrieving information for users over the telecom network via cloud computing.

Under the Draft Decree (Article 5.3), these three new services are all classified as “value-added telecom services.”

 

Indications of Light-Touch Management Principle

Unlike traditional telecom services, these three new services will be subject to a light-touch management principle. While this was not clearly provided in the new Telecom Law 2023, which left it to future decrees to provide further guidelines, the Draft Decree reflects this intention much more clearly.

Cross-border service provision: In particular, the Draft Decree excludes these three new services from the requirement of subjecting offshore companies to sign a commercial agreement with a local licensed telecom company for service provision. Providers of these three new services only need to notify the VNTA before service provision.

Nevertheless, there are certain unclear matters that require refinement in a subsequent version of the Draft Decree. One such issue is whether offshore service providers can commence services immediately after notifying the VNTA, or if they must wait for the VNTA to issue a confirmation of notification. During its meeting for gathering feedback in early March 2024, the VNTA affirmed that offshore companies could provide services immediately upon notification, eliminating the need for any confirmation, and noted that it will consider removing the confirmation requirement from the Draft Decree.

Onshore service provision: The Draft Decree has also lifted the foreign ownership restriction applied to these three new telecom services. It requires onshore service providers of OTT telecom and cloud computing services to merely notify VNTA before providing their services. Onshore IDC service providers must register with VNTA before beginning service provision.

Similarly, there is ambiguity regarding whether IDC service providers must wait for the issuance of a confirmation of registration before providing the services, or can provide the services immediately upon registration. In response to this query, VNTA clarified that IDC service providers are required to obtain a registration certificate before commencing their services.

 

Key Obligations of Service Providers

The Draft Decree introduces a few key obligations of service providers:

  • Verify information about users’ mobile phone numbers before providing services, and store users’ information (service username and mobile phone number) and information about the service usage for the duration specified in the cybersecurity law with regard to OTT telecom service providers.
  • Store and manage user information (full name and telephone or email for individuals; organization name and address, and full name, telephone or email of contact person for organizations) with regard to IDC and cloud computing services. The industry has expressed concerns that this Draft Decree might pose a trade barrier, as current trends among OTT service providers involve minimizing the collection and storage of users’ personal information, aligning with their obligations for personal data protection. By reducing the collection and storage of personal information, not only are costs lowered, but the risk of user data leakage during system attacks is also diminished. Despite these concerns, VNTA has justified the inclusion of telephone numbers, asserting that they are essential for tracking violators in the event of violations through OTT services. Furthermore, VNTA highlighted the effective management of junk SIM cards by the MIC, reducing the risk of being unable to trace individuals based on such junk SIM cards. It is worth noting that the name provided to OTT service providers is the service username, not the actual name of the users.
  • Protect state secrets pursuant to the law on protection of state secrets: This requirement introduces compliance risks as service providers primarily serve as intermediaries without direct access to user information, which is typically encrypted. In response, VNTA has expressed an intention to review and clarify the wording, emphasizing that the obligation applies when service providers are aware of violations but fail to comply with authorities’ requests to prevent or stop such violations.
Related Professionals

Industries

Technology

Location

RELATED INSIGHTS​ 

July 4, 2024
The rapid development and deployment of artificial intelligence in various industries is increasingly attracting the attention of regulators, who aim to encourage the progression of AI technologies while ensuring their responsible use. Recent regulatory developments around the world, including in the European Union and Southeast Asia, serve as evidence of this emerging trend. Here we shall discuss the effect of AI regulatory approaches in the  EU on Southeast Asian countries. Approach and Action The EU Artificial Intelligence Act has been officially adopted by EU colegislators and will enter into force 20 days after its publication in the EU Official Journal.[1] Most of its provisions will apply two years after its entry into force. The act establishes a harmonized EU legal framework, aiming at ensuring that AI systems placed on and utilized in the EU market are safe, have managed risks, and are aligned with EU fundamental rights and values. Countries in Southeast Asia, predominantly governed by civil law systems, often adopt statutory frameworks similar to those in the EU when addressing new legal matters. In the rapidly developing field of AI, Southeast Asian countries are adopting a wait-andsee approach toward global regulatory trends. This cautious stance allows them to observe and analyze international developments in AI regulation before crafting their own frameworks. Compared to the EU, countries in Southeast Asia are generally more focused on using AI for national development. Common themes include building human resource capability, developing ecosystems and building infrastructure. Some countries emphasize governance and ethics more than others. Over the past five years, governments across Southeast Asia have been focusing on promoting AI by implementing national policies to strengthen AI promotion and governance. While there may be less regional integration in the approach to AI of countries in Southeast Asia, there are some efforts to create
Read More
June 27, 2024
Thailand recently made history by becoming the first country in Southeast Asia to legalize same-sex marriage. This landmark decision recognizes the equality and dignity of all people, regardless of their sexual orientation or gender identity. It also opens up new opportunities for couples who wish to start or grow their families through adoption. One of the benefits of adopting a child in Thailand is that the law does not discriminate based on the gender or sexual orientation of the adoptive parents. As long as the married couple meets the age and legal requirements, they can adopt a child and become their loving and supportive family. This means that same-sex couples who are married can also enjoy the same rights and responsibilities as any other adoptive parents and provide a caring and nurturing environment for their adopted child. One of the main reasons why same-sex couples can adopt a child in Thailand without any discrimination or prejudice is the strong and comprehensive privacy law that protects the personal data of individuals and families. Thailand’s Personal Data Protection Act (PDPA) ensures that the personal data of people, especially children, is collected, used, and disclosed only for legitimate and lawful purposes, and with respect to their rights and dignity. The PDPA also grants the right of consent and other data subject rights to the legal representatives of children, such as their parents or guardians, regardless of their gender or sexual orientation. This means that same-sex adoptive parents can decide how their adopted children’s personal data is processed and can also protect their children’s privacy and interests from any unauthorized or harmful access. The PDPA also safeguards the personal data of same-sex adoptive parents from any unlawful or discriminatory processing that may damage their reputation or violate their rights. In these ways, the
Read More
June 26, 2024
Tilleke & Gibbins’ Fintech Law in Southeast Asia provides fintech operators and service providers with an overview of relevant regulations across all of our full-service jurisdictions—Cambodia, Laos, Myanmar, Thailand, and Vietnam.
Read More
June 21, 2024
On June 4, Thailand’s Ministry of Commerce (MOC) issued a new notification on e-commerce business registration pursuant to the Commercial Registration Act B.E. 2499 (1956) (CRA), replacing a similar notification from 2010. The new notification (officially titled “Notification Re: Business Regulations that Commercial Operators Must Register and Businesses that Are Not Subject to the Commercial Registration Act, B.E. 2549 B.E. 2567”) took effect on June 5, 2024. While the previous notification required all individuals and legal entities engaged in regulated activities, such as selling goods or services online, to register their businesses with the local district office, the new notification effectively lifts this requirement for certain legal entities. The new notification clearly states that the CRA does not apply to regulated activities conducted by: Private limited companies, registered ordinary partnerships, and limited partnerships (i.e., legal entities under the Civil and Commercial Code); and Public limited companies (i.e., legal entities under the Public Limited Companies Act). Now that the new notification is in effect, limited companies and other specified legal entities are no longer required to register their e-commerce activities and obtain an e-commerce certificate from the MOC. E-commerce certificates previously issued to these legal entities are also voided by the new notification. Nevertheless, the requirement to register for direct marketing and obtain a direct marketing certificate under the Direct Sales and Direct Marketing Act B.E. 2545 (2002) remains in effect for any online sales or e-marketplace platforms administered by legal entities. Given the recent proactive enforcement of penalties for noncompliance with direct marketing registration requirements, we strongly advise business operators to assess whether their operations fall within the scope of direct marketing regulations and require a direct marketing certificate. For more information on e-commerce and direct marketing registration in Thailand, please contact Athistha (Nop) Chitranukroh at [email protected], Nopparat Lalitkomon
Read More