Vietnam: Possible Impacts On Digital Service Providers Arising From The Draft Amended Telecommunications Law

Overview of the Telecommunications Law and its draft amendments

In late October 2022, the Ministry of Information and Communication (MIC) announced a request for public consultation on the Draft Amendment to Telecommunications Law 2009 (“Draft Amended Telecommunications Law”). According to the MIC, the new law will support the implementation of Viet Nam’s policies on the 4th Industrial Revolution (4IR) and promote national digital transformation. The amendment of the law also aims to match the development reality of the ICT industry in Viet Nam: in 2021, Viet Nam’s ICT industry’s estimated revenue was 136 billion USD, with over 64,000 digital enterprises operating. The IT industry also recorded accelerated growth, at twice the national average GDP growth rate. The increasing convergence between telecommunications and information technology development has created new types of services and business models. In this context, the Telecommunications Law 2009 has become outdated in providing a suitable legal framework and therefore requires updates. [1]

The Draft Amended Telecommunications Law has 79 articles under 11 chapters. Among a wider range of areas, the draft law has expanded its scope to cover data centre management, data centre services, cloud computing services, as well as communication services that do not use telecommunications number storage (“OTT communication services”).

OTT communication services

The Draft Amended Telecommunications Law promulgates the conditions for the provision of Over the Top (OTT) communication services, including the cross-border provision of the services, and the responsibilities of service providers. The Draft Law promulgates different obligations on registration, notification, as well as consumer protection for both domestic and foreign service providers.

OTT communication services are defined as internet telephony and messaging services that do not connect to telecommunications subscribers assigned to a telecommunications number storage (Article 3.8). This excludes services where the feature of making voice calls and messaging are only secondary and dependent features of another service.

The draft law also categorises OTT communication service as a telecom service (Article 28.9.b). The cross-border provision of any telecom services, including OTT communication services, must be done based on a commercial agreement with a licensed Vietnamese telecom provider (Article 29.2). Furthermore, the Vietnamese telecom provider involving the provision of cross-border telecom services to users residing within Viet Nam’s territory will have to register the commercial agreement form (Article 29.3). It is unclear whether the “commercial agreement form” refers to the model contract registration under the consumer protection regime or another mechanism.

Regarding operating conditions, OTT communication service providers must satisfy the conditions specified in Article 36.1 as follows:

  • Being an enterprise established under Vietnamese law;
  • Have completed the registration for the provision of OTT communication services with the specialised management agency in charge of telecommunications before providing the services.

Furthermore, under Article 36.2, OTT communication service providers have the responsibilities to:

  • Implement measures to ensure information security following regulations on network security and protection of personal information of service users;
  • Implement measures to prevent spam messages and spam calls;
  • Report periodically or at the request of specialised management agencies.

OTT communication service providers whose number of service users or service traffic in the Vietnamese market exceeds the threshold prescribed by the Government (guidance pending) are further required to establish a system for receiving and resolving complaints from service users, as well as to comply with other regulations on consumer protection and competition promotion.

Under the Draft Law, foreign OTT communication service providers providing cross-border services are also subject to the same responsibilities as specified above (except for the provision of Article 36.1). Additionally, foreign OTT communication service providers will have to notify the MIC of its contact point, including name and contact details (phone number, email).

Data centre and cloud-computing services

The Draft Amended Telecommunications Law dedicates Chapter X to regulating data centre and cloud-computing services. Special attention should be paid to the licensing procedures, as well as measures for data protection, reporting, and removal of infringing content.

As a condition for the provision of services, data centre and cloud-computing service providers are required to obtain a license by registering via the MIC online portal. Detailed guidance for such licensing procedures shall be promulgated under a Government Decree following the enactment of the Draft Amended Telecommunications Law.

Furthermore, data centre and cloud-computing service providers shall have the responsibilities as follow:

  • Protection of service users’ data, including data storage in Viet Nam in accordance with applicable regulations (e.g., Decree 53/2022/ND-CP).
  • Notify the MIC when detecting activities that use data centre and cloud computing services to commit illegal acts.
  • Remove information that violates regulations on privacy, copyright, intellectual property rights, or other laws at the request of a competent state agency.

Implications for related service providers

The Draft Amended Telecommunications Law, once passed, will have extra-territorial reach, i.e., it will impose obligations to not only domestic but also foreign service providers. Once brought into force, it can be expected to raise compliance costs for the regulated businesses. The draft law foresees several provisions that will require further guidance by the government (via decrees and circulars) once the law is passed. However, clarity can already be improved for the draft law. Related businesses still have a chance to contribute to ensuring that the law provides sufficient clarity and an enabling environment for the provisions of telecom services, including cross-border services. The Draft Law is open for public consultation from 27 October 2022 to 27 November 2022. Related service providers can now submit their comments to the amended law on either the MIC’s portal or the government’s portal for public consultation.

Authors:

Loan Le |+84 763 281 367 | le@tradeeconomics.com

Paul Baker |+230 263 33 24 | baker@tradeeconomics.com

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about specific circumstances.

Reference: 

[1] MIC (14-02-2022). The Ministry of Information and Communications will amend the Law on Telecommunications and develop the Law on Digital Technology Industry(in Vietnamese, Bộ Thông tin và Truyền thông sẽ sửa đổi Luật Viễn thông và xây dựng Luật Công nghiệp công nghệ số)

This article has also been published on the Mondaq website

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