draft decree sets guidelines for foreign telecom service providers in Vietnam, vietnam draft decree sets guidelines for foreign telecom service providers, guidelines for foreign telecom service providers in vietnam, vietnam guidelines for foreign telecom service providers

Vietnam Draft Decree Sets Clear Guidelines for Foreign Telecom Service Providers

The Ministry of Information and Communications (MIC) of Vietnam has taken a significant step towards providing clarity and facilitating the operations of foreign telecom service providers within the country.

The release of a new Draft Decree aims to detail the implementation of key aspects of the amended Telecommunications Law of 2023 (the “2023 Telecom Law”). This legislative move is poised to impact three crucial service segments: data centers, Over-the-Top (OTT) services, and cloud computing.

The 2023 Telecom Law, which was passed in November 2023 and is set to take effect on July 1, 2024, introduces provisions for these three new telecom services. Among its pivotal aspects, the law removes ownership restrictions, allowing foreign entities to hold 100 percent ownership in these sectors. To further streamline market entry, the Draft Decree proposes to simplify administrative processes, reducing the hurdles for companies aiming to enter these sectors.

Classification and Definition of Telecom Services

The Draft Decree clarifies the classification of telecom services, particularly focusing on the three newly introduced categories:

  1. Basic Telecom Services on the Internet (OTT Services): These encompass the transmission of information between individuals or groups over the Internet, commonly known as Over-the-Top services.
  2. Data Center Services: These services involve the processing, storage, and retrieval of information via telecom networks by leasing part or all of the data center.
  3. Cloud Computing Services: This category pertains to services offering information processing, storage, and retrieval capabilities over telecom networks through cloud computing infrastructure.

The proposed classification categorizes these services as value-added services.

Regulatory Framework and Obligations

The Draft Decree outlines the rights and obligations of both foreign and domestic entities involved in providing telecom services in Vietnam. Notably, it highlights certain legal protections afforded to telecom service providers and protects them from liabilities for indirect damages or unearned profits under specific circumstances.

Additionally, the Decree lays down stringent requirements concerning the registration, storage, and management of user information. For instance, companies offering OTT services must verify users’ mobile phone numbers and store contract-related information as mandated by the Law on Cybersecurity. Similarly, data center and cloud computing service providers must adhere to strict guidelines for storing user data, particularly when serving state agencies, necessitating compliance with Vietnam’s cybersecurity laws.

The Draft Decree also proposes a streamlined process for foreign companies looking to provide telecom services in Vietnam. Unlike traditional telecom services, which necessitate commercial agreements with Vietnamese telecom companies, the provision of data centers, cloud computing, and OTT services only requires notification to the Vietnam Telecommunications Authority (VNTA).

Under the provisions outlined in Article 44 of the Draft Decree, companies intending to offer telecom services must submit detailed notifications to the VNTA, including pertinent business information and service quality parameters. Upon receipt, the VNTA is mandated to issue confirmation certificates promptly, facilitating expeditious market entry for foreign entities.

The Draft Decree issued by the MIC represents a significant milestone in clarifying regulations and facilitating the entry of foreign telecom service providers into the Vietnam market. By providing comprehensive guidelines and streamlining administrative procedures, the decree aims to promote competition, spur innovation, and enhance the quality of telecom services within the country.

***ASL Law is a leading full-service and independent Vietnamese law firm made up of experienced and talented lawyers. ASL Law is ranked as the top tier Law Firm in Vietnam by Legal500, Asia Law, WTR, and Asia Business Law Journal. Based in both Hanoi and Ho Chi Minh City in Vietnam, the firm’s main purpose is to provide the most practical, efficient, and lawful advice to its domestic and international clients. If we can be of assistance, please email to info@aslgate.com.

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