Vietnam: New Telecom Law’s implications on over-the-top communications, data center, and Cloud services in Vietnam

Briefly

• On 24 November 2023, the Nationwide Meeting formally authorised the brand new Legislation on Telecommunications (“New Telecom Legislation“). This new regulation will quickly supersede the prevailing 2009 Legislation on Telecommunications, which has been efficient since 2010.
• The New Telecom Legislation will take impact on 1 July 2024, however its notable provisions regulating over-the-top (OTT) communications, knowledge heart (DC), and cloud computing (“Cloud“) providers will take impact six months later, on 1 January 2025.
• Many points below the New Telecom Legislation will likely be defined in a number of governmental decrees and ministerial-level circulars. OTT communications, DC, and Cloud providers will likely be regulated below one of many decrees, which is the decree detailing a number of articles and measures to implement the Telecommunications Legislation (“Draft Telecom Decree“).
• In early February, the Ministry of Data and Communications (MIC) made the Draft Telecom Decree public for feedback from related stakeholders.

Beneath are a number of key takeaways/implications of this new regulation, which can influence international companies offering related on-line providers in Vietnam.

1. New definitions

Native lawmakers introduce three notable definitions within the New Telecom Legislation: 

• Primary telecom providers on the Web: Providers that present customers with the options for sending, transmitting, and receiving data on the Web.¹

Native lawmakers’ intention is to make use of this definition to seize OTT providers. Nevertheless, primarily based on the wording of the regulation, many on-line providers may very well be deemed primary telecom providers on the web.

• DC providers: Telecom providers that present customers with the options for processing, storing, and retrieving data through telecom networks by leasing part of or the entire knowledge heart.²

This definition targets the providers of leasing house or gear in knowledge facilities.

• Cloud providers: Telecom providers that present customers with the options for processing, storing, and retrieving data over telecom networks via a Cloud mannequin.³

The definition of Cloud providers is mostly aligned with worldwide requirements. The language is sufficiently broad to cowl frequent sorts of Cloud providers akin to Infrastructure as a Service (IaaS) or Platform as a Service (PaaS).

Nevertheless, the New Telecom Legislation doesn’t think about whether or not a service may very well be deemed each a primary telecom service on the Web and a Cloud service.

2. International funding cap for OTT communications, DC, and Cloud providers

There isn’t a cap for international possession in corporations within the subject of OTT communications, DC, and Cloud providers.⁴ This implies {that a} international investor would have the ability to arrange a wholly-owned subsidiary in Vietnam to supply OTT communications, DC, or Cloud Providers. With that stated, given the brand new regulation’s infancy, it could take a while for native funding authorities to align with each other on this difficulty.

3. Obligations of suppliers of OTT communications, DC, and Cloud providers

The New Telecom Legislation gives two units of obligations for onshore and offshore suppliers of OTT communications, DC, and Cloud providers, respectively.

Whereas onshore suppliers will shoulder an extended checklist of obligations, offshore suppliers’ obligations are usually not set out within the regulation. 

As an alternative, the federal government will additional regulate their rights and obligations on the precept of respecting independence, sovereignty, equality, guaranteeing security, data safety, and customary commitments in worldwide treaties to which Vietnam is a signatory.

4. Draft Telecom Decree

On 2 February 2024, the MIC revealed the Draft Telecom Decree, which goals to elaborate on many points below the New Telecom Legislation, together with the regimes relevant to offshore suppliers of OTT communications, DC, and Cloud providers. The deadline for stakeholders to submit feedback to the MIC is 2 April 2024.

Native lawmakers purpose to have the Draft Telecom Decree finalized and issued by 1 July 2024, which is the efficient date of the New Telecom Legislation.

A extra detailed alert on the Draft Telecom Decree will likely be offered shortly.

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1 Article 3.8, New Telecom Legislation.

2 Article 3.9, New Telecom Legislation.

3 Article 3.11, New Telecom Legislation.

4 Articles 28.1(a) and 29.1(a), New Telecom Legislation.