New law on telecommunications brings new opportunities

January 30, 2024 | 11:08
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Vietnam's new telecommunications law expands the definition of telecommunications services to include over-the-top telecommunications (OTT), data centre, and cloud computing services, and eases foreign investment restrictions and reinforces user data protection. Bui Thi Viet Ha, partner and Trinh Linh Chi, trainee associate of Dentons LuatViet, provide some pivotal impacts of this new regulation.

OTT services, data centre, and cloud computing services, collectively referred to as 'new services', have been introduced and defined as 'telecommunications services' in Law on Telecommunications No.24/2023/QH15 which was passed by Vietnam’s National Assembly last November, and shall become effective from January 1, 2025.

New law on telecommunications brings new opportunities
Bui Thi Viet Ha (left) and Trinh Linh Chi

New regulations shall create more opportunities for foreign investors who intend to carry out the above services, as the foreign shareholding through business cooperation contracts in such areas shall not be restricted.

Specifically, under the new law, enterprises providing new services are entitled to construct, install, and own telecommunications equipment system and transmission line; lease transmission line to interconnect their own telecommunications equipment system; be allocated with telecommunications resources; and research, develop, and implement new technologies and new models in telecommunications activities. Enterprises providing data centre services or cloud computing are not responsible for the information of service users during the process of processing, storing, and retrieving information, unless otherwise prescribed by law.

Under the new law, enterprises providing new services have to register, announce the provision of telecommunications services with the telecommunications regulatory agency; register contracts according to standards, and general transaction conditions in accordance with the provisions of the law on consumer rights protection with the telecommunications regulatory agency.

Businesses providing OTT services are only responsible for announcing the service quality which they provide under certain conditions, while this obligation is applied to all enterprises providing data centre services, and cloud computing services.

In the rollout of new services, the safeguarding of user personal data remains a paramount concern for telecommunications companies. The disclosure of such sensitive information is tightly regulated, adhering to stringent conditions to ensure both user privacy and compliance with the law.

The first condition under which user data may be shared is upon receiving explicit consent from the telecommunications service user.

Additionally, telecommunications firms are permitted to disclose user data under the framework of a written agreement with their customers, primarily for the purposes of accurate pricing and efficient invoicing. This approach ensures that financial transactions between the provider and user are transparent and accountable.

In situations where a user evades payment for services, telecommunications companies may release subscriber information as a necessary step in pursuing their financial rights. This action serves as a deterrent against non-compliance and protects the economic interests of the service providers.

Lastly, the disclosure of user data is permissible when mandated by competent state agencies, in accordance with legal provisions. This clause underscores the commitment of telecommunications firms to adhere to national regulations and legal directives, ensuring that their operations remain within the bounds of the law.

In the case of providing services with payment from users, enterprises must determine the service price, make billing and payment, refund service fees if telecommunication services are not provided on time and with the quality agreed to in the contract, and compensate the other parties for direct material damage caused by their fault, except in cases of force majeure.

Finally, enterprises providing data centre and cloud computing services are responsible for the quality of telecommunications networks and services under the list of telecommunications networks and services with mandatory quality management, and ensuring telecommunications businesses can connect and provide services to data centre services users.

In conclusion, the new law will open up more opportunities for investors in the 'new services'. It is expected that the government will issue a decree that provides more detailed regulations on how provisions of the new law should be implemented.

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By Viet Ha and Linh Chi

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