On 24 December 2024, the Government issued Decree No. 163/2024/ND-CP, detailing a number of articles and measures to implement Law on Telecommunications (hereinafter referred to as “Decree 163”), which became effective on 24 December 2024 and replaces Decree No. 25/2011/ND-CP dated 6 April 2011, detailing and providing guidelines for implementation of a number of articles of Law on Telecommunications, including amendments (hereinafter referred to as “Decree 25”).
Based on the amendments and new provisions provided by the Telecommunications Law No.24/2023/QH15, which was adopted by the National Assembly on 24 November 2023 and took effect on 1 July 2024 (hereinafter referred to as the “Telecommunications Law 2024”), the new Decree 163 has a number of notable new or amended provisions when compared to Decree 25. Specifically as follows:
1. Business of telecommunications services
(a) Classification of telecommunications services:
Based on the clear approach of the Telecommunications Law 2024 with respect to data center services, cloud computing services, and OTT services as telecommunications services, Decree 163
(i) expands basic telecommunications services with Transmission services for radio and television; Transmission services for machine-to-machine connections; Virtual private network services; Services for leasing the entire or a part of telecommunications network; Additional telecommunications services of basic telecommunications services (defined as those adding features and utilities to telecommunications service users, are an integral part and are provided together with basic telecommunications services); and
(ii) adds Data center services, Cloud computing services, and Basic telecommunications services on the Internet to value-added telecommunications services.
(b) Provision of telecommunications services:
Decree 163
(i) clearly stipulates that provision of telecommunications services includes resale of telecommunications services to telecommunications service users;
(ii) maintains the provisions of Decree 25, whereby, unless an international treaty to which Vietnam is a member provides otherwise, the provision of telecommunications services across borders to telecommunications service users in the territory of Vietnam (but not only on the mainland as stipulated in Decree 25) must be through a commercial agreement with a Vietnamese telecommunications enterprise that has been granted a license to provide telecommunications services, including international communications; however, this restriction does not apply to data center services, cloud computing services, and basic telecommunications services on the Internet; and
(iii) adds regulations on the provision of telecommunications services via satellite fixed telecommunications networks and satellite mobile telecommunications networks whereby telecommunications enterprises participating in commercial agreements with foreign organizations must have a plan so that all traffic generated by satellite subscriber terminals on the mainland territory of Vietnam must go through the Ground gateway station (Gateway) located on the territory of Vietnam and connected to the public telecommunications network; and
(iv) more clearly define certain rights and obligations of a number of entities when providing and using telecommunications services such as:
• Obligation of enterprises providing basic telecommunications services on the Internet, cloud computing services, email services, voicemail services, value-added fax services; foreign organizations providing basic telecommunications services on the Internet, data center services, cross-border cloud computing services to service users in Vietnam’s territory to notify Telecommunications Department directly under Ministry of Information and Communications (“MOIC”) of service provision.
• Obligation of providers of basic telecommunications services on the Internet to register, store and manage information of service users; and
• Rights and obligations of foreign organizations providing basic telecommunications services on the Internet, data center services, cloud computing services across borders to service users in the territory of Vietnam. For example, foreign organizations providing basic telecommunications services on the Internet across borders to telecommunications service users in the territory of Vietnam have the following rights and obligations:
o To not compensate for indirect damages or unearned profits due to the provision of telecommunications services that do not guarantee time and quality and have other rights as prescribed by relevant laws;
o To not cause harmful interference, damage equipment, construction works, telecommunications networks; or not to harm the legal operations of telecommunications infrastructure of other organizations and individuals;
o To urgently stop the provision of telecommunications services in case of riots, use of telecommunications services to oppose the Socialist Republic of Vietnam, or violations of national security at the request of competent state agencies as prescribed by law;
o To prevent, combat, and block illegal messages and calls as prescribed by the Government;
o To declare the quality of services provided by themselves if they own the network infrastructure or have an agreement with a telecommunications enterprise with a network infrastructure; declare the quality of services provided by themselves depending on the quality of the telecommunications network and telecommunications services managed and provided by other telecommunications enterprises if they do not own the network infrastructure or do not have an agreement with a telecommunications enterprise with a network infrastructure;
o To be responsible for the quality of services according to the declared standards; ensure the correctness, adequacy and accuracy of service prices according to the contract for providing and using telecommunications services;
o To be responsible for notifying users of the necessity and must obtain the user’s consent before accessing to the features on the service user’s terminal equipment to serve the provision of services if necessary;
o To not take advantage of telecommunications activities to oppose the Socialist Republic of Vietnam; violate national security, social order and safety; cause damage to the interests of the State, the rights and legitimate interests of organizations and individuals; etc.
2. Telecommunications service business market
(a) Ownership limit in telecommunications service business:
Previously, according to Decree 25, individuals and organizations that owned more than 20% of the charter capital or shares in a telecommunications enterprise would not be allowed to own more than 20% of the charter capital or shares of another telecommunications enterprise operating in the same telecommunications service market on the List of telecommunications services prescribed by the MOIC. Now, the ownership regulations in Decree 163 have been loosened for shareholders of joint stock companies, accordingly the above-mentioned ownership restrictions only apply to shareholders who own more than 20% of total voting shares at a telecommunications enterprise and do not apply to shareholders who own shares of other types.
(b) Telecommunications service business market:
Decree 163 provides specific criteria to determine the State-managed telecommunications service market and telecommunications enterprises with a dominant market position on the State-managed telecommunications service market. Accordingly:
(i) The criteria for determining the telecommunications service market managed by the State include three criteria, of which two are quantitative criteria: (1) an index measuring the level of market concentration of over 1800 (with formula) and (2) the proportion of service revenue accounting for 10% or more of the total revenue of telecommunications services of the entire market.
(ii) Telecommunications enterprises with a dominant market position on telecommunications service markets managed by the State are determined based on the enterprise’s market share that means the percentage of one of the following factors: telecommunications service revenue, the number of telecommunications subscribers generating traffic or the number of other service units sold over the total telecommunications service revenue, the total number of telecommunications subscribers generating traffic or the total number of other service units sold by enterprises on that telecommunications service market.
A telecommunications enterprise is determined to have a dominant market position if it has a market share of 30% or more or has significant market power on the State-managed telecommunications service market.
A telecommunications enterprise is determined to have significant market power on the State-managed telecommunications service market if it has a market share of 10% to less than 30% on that telecommunications service market and falls into one of the following cases:
• The total assets recorded in the balance sheet in the financial reporting system of the previous year account for 30% or more of the total assets in the financial reporting of the previous year of telecommunications enterprises on that telecommunications service market;
• The North-South backbone capacity (i.e. the design capacity of the wired telecommunications transmission line passing through 3 locations at the same time: Hanoi, Da Nang and Ho Chi Minh City) accounts for 30% or more of the total North-South backbone capacity of telecommunications enterprises participating in that telecommunications service market;
• For the telecommunications service market on the terrestrial mobile telecommunications network (hereinafter referred to as “terrestrial mobile telecommunications services”), in addition to the criteria specified in points (i) and (ii) above, an enterprise is also determined to have significant market power if it falls into one of the following cases:
o The number of telecommunications service points with a specific address owned and established by the enterprise itself accounts for 30% or more of the total number of telecommunications service points with a specific address of telecommunications enterprises participating in the terrestrial mobile telecommunications service market;
o The percentage of the population covered by the enterprise’s terrestrial mobile telecommunications network accounts for 90% or more of the total population of the country.
(c) Competition in telecommunications business activities:
Decree 163 has cancelled the regulations related to the handling of competition cases in telecommunications activities and economic concentration in telecommunications business activities, leaving it the laws on competition. From now on, economic concentration activities in the field of communications no longer need to seek the opinion of the MOIC and will comply with the general provisions of the Competition Law on notification of economic concentrations.
3. Charter capital and conditions for telecommunications network deployment
(a) Fixed-land public telecommunications network:
An enterprise applying for issuance of a license to provide telecommunications services with network infrastructure, which is a type of fixed terrestrial public telecommunications network, without use of radio frequency bands, must continue to meet the conditions on charter capital and conditions on telecommunications network deployment as prescribed in Decree 25; however, if the applicant uses radio frequency bands, it must meet the conditions on charter capital and conditions on telecommunications network deployment as amended as follows:
(i) For establishing a network within a region (i.e. from 02 to 30 provinces and centrally run cities; instead of from 15 to 30 provinces and centrally run cities according to Decree 25): Having a minimum charter capital (instead of the legal capital as prescribed in Decree 25) of VND 100 billion and having fully contributed the charter capital according to the provisions of the law on enterprises (this is a new provision) and meeting the conditions for telecommunications network deployment, which is a commitment to invest a total capital investment of at least 300 billion VND in the network within the first 3 years from the date of being licensed to establish a telecommunications network (similar to the provisions of Decree 25).
(ii) For establishing a nationwide network (over 30 provinces and centrally run cities): Having a minimum charter capital (instead of the legal capital as prescribed in Decree 25) of VND 300 billion and having contributed sufficient charter capital as prescribed by the laws on enterprises (this is a new provision) and meeting the conditions for deploying a telecommunications network, which is a commitment to invest a total capital investment of at least VND 1,000 billion in the network in the first 3 years from the date of being licensed to establish a telecommunications network (similar to the provisions in Decree 25). Thus, Decree 163 has removed the condition under Decree 25 that this enterprise must commit to invest at least VND 3,000 billion in 15 years to develop the telecommunications network as prescribed in the license.
If the use of radio frequency bands or radio frequency channels is granted through auctions or competitions for the right to use radio frequencies or re-issuance of radio frequency band use licenses, the conditions for deploying the telecommunications network shall be implemented according to the commitment to deploy the telecommunications network when participating in the auction or competition for the right to use radio frequencies or applying for re-issuance of radio frequency band use licenses according to the provisions of the law on radio frequencies.
(b) Terrestrial mobile public telecommunications network:
Enterprises applying for a license to establish a terrestrial mobile telecommunications network that does not use radio frequency bands (virtual mobile telecommunications networks) must meet amended conditions on charter capital and conditions on telecommunications network deployment as follows:
(i) Conditions on charter capital: Having a minimum charter capital (instead of the legal capital under Decree 25) of VND 300 billion and having fully contributed charter capital according to the provisions of the law on enterprises (this is a new provision).
(ii) Conditions on telecommunications network deployment: Commitment to invest a total investment capital of at least VND 1,000 billion in the network in the first 3 years from the date of being licensed to establish a telecommunications network (similar to the provisions in Decree 25) and having a written agreement on leasing a terrestrial mobile telecommunications network (this is a new provision). Thus, Decree 163 has removed the condition stipulated in Decree 25, according to which this enterprise must commit to invest at least 3,000 billion VND in 15 years to develop the telecommunications network as stipulated in the license.
Enterprises applying for a license to provide telecommunications services with network infrastructure, which is a type of public terrestrial mobile telecommunications network, using radio frequency channels, must meet amended conditions on charter capital and conditions on telecommunications network deployment as follows:
(i) Conditions on charter capital: Having a minimum charter capital (instead of the legal capital as prescribed in Decree 25) of VND 20 billion and having fully contributed charter capital as prescribed by the laws on enterprises (this is a new provision).
(ii) Conditions on telecommunications network deployment: Commitment to invest a total investment capital of at least VND 60 billion in the network in the first 3 years from the date of being licensed to establish a telecommunications network (similar to the provisions in Decree 25).
If the use of radio frequency channels is granted through auctions or competitions for the right to use radio frequencies, the conditions for deploying telecommunications networks shall be implemented according to the commitment to deploy telecommunications networks when participating in auctions or competitions for the right to use radio frequencies in accordance with the provisions of the law on radio frequencies.
If the use of radio frequency bands is granted through auctions or competitions for the right to use radio frequencies, or a license to use radio frequencies is re-granted, the following conditions on charter capital and conditions on telecommunications network deployment must be satisfied:
(i) Conditions on charter capital: Having a minimum charter capital (instead of the legal capital as prescribed in Decree 25) of at least VND 500 billion and having fully contributed charter capital as prescribed by the laws on enterprises (this is a new provision);
(ii) Conditions on telecommunications network deployment: Commitment to deploy telecommunications network when participating in the auction or competition for the right to use radio frequencies or applying for the re-issuance of a license to use radio frequency bands as prescribed by the law on radio frequencies (in lieu of a commitment to invest at least VND 2,500 billion in the first 3 years and at least VND 7,500 billion in 15 years to develop the telecommunications network as stipulated in the license under Decree 25).
(c) Satellite fixed and satellite mobile public telecommunications networks:
Enterprises applying for issuance of a license to provide services with network infrastructure, which is fixed satellite or mobile satellite public telecommunications network, must meet amended conditions on charter capital and conditions on telecommunications network deployment as follows:
(i) Conditions on charter capital: Having a minimum charter capital (instead of the legal capital as prescribed in Decree 25) of VND 30 billion and having fully contributed charter capital as prescribed by the laws on enterprises (this is a new provision).
(ii) Conditions on telecommunications network deployment: Commitment to invest a total investment capital of at least VND 100 billion in the network in the first 3 years from the date of being licensed to establish a telecommunications network (similar to the provisions in Decree 25).
(d) Determining compliance with investment capital requirements in the conditions for telecommunications network deployment:
This is a completely new provision of Decree 163, according to which an enterprise applying for issuance of a license to provide telecommunications services with network infrastructure is deemed to have met the investment capital requirements in the conditions for telecommunications network deployment if the investment amount in the commitment document to implement the conditions on telecommunications network deployment is not lower than the corresponding minimum investment capital prescribed in Decree 163; except for the case of an enterprise applying for amendment to or re-issue of a telecommunications service business license, the enterprise shall be deemed to have met the regulations on investment capital in the conditions on telecommunications network deployment if it falls into one of the following two cases:
(i) The actual amount invested to establish the previous telecommunications network (calculated according to the value at the time of investment) is not lower than the corresponding total minimum investment capital prescribed in Decree 163.
(ii) The investment amount stated in the written commitment to implement the conditions on telecommunications network deployment is not lower than the difference between the corresponding total minimum investment capital prescribed in Decree 163 and the amount the enterprise has invested to establish the actual telecommunications network previously (calculated according to the value at the time of investment).
4. Administrative procedures in the telecommunications sector
Based on the administrative procedure reforms stipulated in the Telecommunications Law 2024, Decree 163 provides specific measures and guidelines, including:
(a) For some application dossiers for issuance of, amendment to, and renewal of telecommunications service business licenses, licenses for installing telecommunications cables at sea, licenses for establishing private telecommunications networks, and licenses for testing telecommunications networks and services, instead of sending from 3 to 5 sets of dossiers to different agencies of the MOIC, collectively called the “telecommunications management agencies”; according to the new Decree, organizations wishing to apply only need to send 1 set of dossiers to the Telecommunications Department directly managed by the MOIC.
(b) In addition, Decree 163 also adds the dossier handling time limit and process to a number of specific procedures regarding the dossier handling steps, the handling time of the steps and the agencies responsible for implementation.
5. Management of terrestrial mobile subscriber information and terrestrial mobile SIMs
Previously, the authentication, storage, use of terrestrial mobile subscriber information and processing of terrestrial mobile SIMs with non-compliant mobile subscriber information in telecommunications service business were regulated and guided in different circulars and guidelines; now Decree 163 has for the first time provided specific and systematic instructions on this issue.
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