2.1 Policy framework

There is no specific definition of broadband in Vietnam. The concept of broadband therefore can vary depending on the circumstances and level of development. When narrowband connections are no longer used as a regular service, there will certainly be a changing of broadband concept.

Currently, Vietnam does not have specific legal documents related directly to broadband. However, telecommunications and Internet development strategies often refer to building the information society based on a modern broadband network infrastructure to meet the economic, political, national security and welfare needs of society.

The legal framework is being modified to institutionalize the market-opening policy and create a fair, just and equal competition environment to match the convergence trend of technology and service.

Major telecommunications and broadband related legal documents are:

• Telecom Law No. 41/2009/QH12 dated December 04, 2009 of the National Assembly and effective from July 01, 2010;

• Radio Frequency Law No. 42/2009/QH12 dated December 04, 2009 of the National Assembly and effective from July 01, 2010;

• Decree No. 25/2011/ND-CP dated April 06, 2011 of the Government detailing and guiding the implementation of a number of articles of the Telecom Law;

• Decree No. 97/2008/NĐ-CP dated August 28, 2008 of the Government on managing, supplying and using of Internet service and e-information on the Internet;

• Decision No. 158/2001/QĐ-TTg dated October 18, 2001 of the Prime Minister approving of The Vietnam Post and Telecommunications Development Strategy to 2010 and through 2020;

• Decision No. 246/2001/QĐ-TTg dated October 06, 2005 of the Prime Minister approving The Information and Communications Technology Development Strategy to 2010 and through 2020

• Decision No. 1755/QĐ-TTg dated September 22, 2010 of the Prime Minister approving The Project “Making Vietnam to soon become a strong country in the field of information technology and communications";

• Decision No. 32/2006/QĐ-TTg dated February 07, 2006 of the Prime Minister approving The Master Plan of Telecommunications and Internet Development to 2010;

• Direction No. 04/2008/CT-BTTTT dated May 22, 2008 of the MIC Minister on Management and development telecommunications infrastructure.

2.1.1 Direction of ICT development

In recent years, Vietnam has issued several breakthrough directives to promote the development of the ICT field. In that respect some have been institutionalized, including Decision No. 1755/QĐ-TTg dated September 22, 2010 of the Prime Minister “Approving the Scheme to Early Make Vietnam a Country Strong in Information and Communication Technologies.”*  http://lawfirm.vn/?a=doc&id=2083 This decision sets out the country’s vision and targets for becoming a leading ICT nation by 2020. It envisions several economic and social goals including:

• Internationally recognized ICT human resources
• Software and Digital Content Industry becoming a key driver of the economy
• Nation-wide broadband infrastructure
• ICT usage in all aspects of life, contributing to sustainable development and enhancing the transparency of the government agencies.
• Annual ICT revenue growth rate doubles the GDP growth rate.

In addition to objectives in a number of areas (Table 2-1), the decision also establishes several broadband targets:

• Up to 2015: Basically complete the broadband network to communes nationwide, connect all schools to Internet; mobile broadband signal to cover 85% of the population;
• Up to 2020: Complete the broadband network to most of the villages; mobile broadband signal to cover 95% of the population;
• Up to 2015: 20 - 30% of households have computer and broadband Internet access;
• Up to 2020: 50 - 60% of households have computer and broadband Internet access, in which 25 - 30% use fiber optic cable;
• Up to 2015: provide most of basic online public services to citizens and enterprises at level 2 and level 3 (download forms, interchange information and send/receive records through the network);
• Up to 2020: Most of basic public services are online provided to citizens and businesses at level 4 (service fee payment, receive results of service online).

2.1.2 Policy of broadband development

Vietnam does not have a separate broadband development policy. However, through the directions of ICT development, broadband is covered in the specific policies relating to network infrastructure, technology of providing services and contents for socio-economic development.

2.1.3 Operator ownership guidelines

Decree No.25/2011/ND-CP provides enterprises regulations in the field of telecommunications.*  “Detailing and Guiding a Number of Articles of the Law on Telecommunications.” Available at http://asemconnectvietnam.gov.vn/lawdetail.aspx?lawid=1938 The decree specifies new guidelines for the execution of several articles of the Telecommunication Law relating to ownership ratios, foreign investment, fees and authorized capital. The ownership ratio limitation has impacted the two large mobile networks in Vietnam.

Pursuant to this new decree, an organization or individual who owns over 20 percent of the charter capital or stake in one telecommunications company will not be allowed to hold more than 20 percent of the charter capital or stake in other telecommunications firms operating in the same services.

Due to this regulation, one of the major telecommunications operators in Vietnam, the Vietnam Post and Telecommunication Group (VNPT), is in a dilemma. VNPT Group, which currently owns 100 percent capital of the two big mobile networks Mobifone and Vinaphone, may be forced to sell one of the two networks or merge its two affiliates into one in order to be in accordance with the new rules. At present, there still has not been an official plan or solution submitted by VNPT to the Ministry of Information and Communication (MIC) on this matter. While the merger plan has not been proposed, it is said that schedule of equitizing Mobifone has been determined and VNPT is going to announce and implement the plan that has been delayed for quite a long time.

As per Clause 4.2 of Decree No.25/2011/ND-CP, although full foreign ownership of an operator in the Vietnamese telecom sector is not allowed, overseas investors can enter into business cooperation contracts or joint ventures with licensed Vietnamese operators.

2.1.4 Technology guidelines

Regulatory policies related to broadband infrastructure are relatively neutral. Nevertheless, Vietnam is not a technology producer but rather a technology-applying nation, so it prefers technologies that have global mass deployment. One of the most important deployment success factors is that the network equipment is inexpensive and advanced and that terminal devices are diverse with a reasonable price. In addition, application of common technologies will allow Vietnam to have better and deeper international exchange and cooperation (roaming from Vietnam to other countries and vice versa).

For new technologies, the MIC reviews trends applied in the world, develops appropriate frequency planning and make standards and recommendations for enterprises to follow. MIC suggests that enterprises apply new technologies used in advanced countries. There will be a trial license issued by MIC for a certain period in specified areas before allowing mass deployment. There is a risk in wasted investment or even bankruptcy if the selected technology does not achieve widespread market acceptance. One example is Hanoi Telecom that has to convert to GSM technology after deploying a nationwide CDMA network (Box 2-1).

2.1.5 Service guidelines

Services based on broadband infrastructure are regulated by the content of the service. Regulations differ depending on the service such as: online gaming, distance learning, banking and e-commerce transactions, etc.

Online gaming services are being managed carefully regarding content and technical conditions to ensure that the youth are not addictive and it matches recreational needs of users.

Content services are not diverse and abundant at the present. This relates to promotion policy of the enterprise and also relates to the improving ICT skills for users policy.

2.2 Institutional structure

2.2.1 Government institutions involved in broadband

As with most governments, setting policy for a complex sector like telecommunications requires action from multiple ministries and agencies. Given the complexity of the telecommunications sector and its impact on the entire economy, Vietnam’s policy-making includes multiple organizations (Table 2-2).

The Ministry of Information and Communications (MIC)

The Ministry of Information and Communication (MIC) was created in 2007 from its predecessor, the Ministry of Post and Telematics as well as several departments from the Ministry of Culture and Information. The MIC is responsible for both policy and regulation. Its mandate covers a range of fields including press; publishing; posts; telecommunications and Internet; radio frequency; information technology; electronics; broadcasting and management of public services on behalf of the government.

MIC’s main functions include submitting drafts of laws, ordinances, regulations, strategies and development plans to the Government. It also provides guidance on the implementation of laws, ordinances and regulations as well as development strategies and plans.

The Viet Nam Telecommunications Authority (VNTA) was established under the MIC by merging two units under the former Department of Telecommunications and Authority of Information and Communications Technology Quality Control, in August 2011.*  Viet Nam Telecommunications Authority. “Announcement of the establishment of the Viet Nam Telecommunications Authority”, Press Release, August 15, 2011. http://english.mic.gov.vn/tintucsukien/Trang/AnnoucementofestablishmentoftheVietNamtelecommunicationsauthority.aspx. The VNTA assumes regulatory activities including advice on management of the telecommunications sector on a national scale. Specifically, the VNTA will focus on monitoring the implementation of the commitments of operators and supervision of infrastructure development. The VNTA will also be the focal point for management, supervision and inspection of regulations on tariffs and quality of service as well as telecommunications sector promotion. Competition issues, disputes and complaints between operators in the telecommunications sector shall also be reviewed by VNTA.

The Vietnam Internet Network Information Center (VNNIC) is a government agency under the MIC established in 2000. It manages the country’s Internet resources including domain names, addresses, and autonomous system numbers as well as the Vietnam National Internet eXchange (VNIX).

2.2.2 Major telecom operators

Vietnam has a high degree of competition in its telecommunication sector with a number of operators providing services (Table 2-3). Eight provide fixed telephone services, seven offer 2G mobile services and five offer 3G services. In addition there are 90 licensed Internet Service Providers (ISPs) although the top five control 99% of the market. Most operators are owned by the government or state-owned corporations. Some have foreign partners although the structure of the investment is often not straightforward.

Vietnam Posts & Telecommunications (VNPT)

Wholly owned by the government, Vietnam Posts and Telecommunications (VNPT) is the country’s main service provider. The group’s holdings span a range of activities ranging from telecom services to equipment manufacturing as well as postal and financial services (Figure 2-1). VNPT operates the national backbone network that connects the provincial operating companies in 63 cities and provinces and indirectly controls the country’s two leading mobile operators, Vietnam Telecom Company (VinaPhone) and Vietnam Mobile Telecom Services (MobiFone), both operating GSM networks. VNPT controls 63% of the fixed telephone market, 54% of the mobile market (through VinaPhone and MobiFone) and 69% of the Internet market.

that connects the provincial operating coVNPT owns eight state-affiliated companies, eight joint ventures (with other state-owned enterprises as well as with private entities) and 13 other subsidiaries. In addition to VinaPhone and MobiFone, the state companies include Vietnam Telecom National (domestic services), Vietnam Telecom International (international long-distance services) and Vietnam Data Communication Company (data services).mpanies in 63 cities and provinces and

2.3 Conclusions

Vietnam has made fundamental changes to its legal environment with the objective of creating a robust and competitive telecommunications sector, which in turn provides the foundation for economic growth for telecommunications and IT-enabled business. However, Vietnam’s reform process remains incomplete. There are concerns that the country’s policies limit private sector and foreign investment. The current regulatory environment does not fully meet international norms of independence, and this effects licensing, non-discriminatory interconnection and cross-subsidies in tariffs. These issues produce uncertainty and risk for new market entrants and investors, which in turn limits network expansion, the introduction of new services and overall economic growth.

Fully liberalizing Vietnam’s telecommunications sector, however, is not a short-term proposition; the process requires a long-term approach that impacts three primary government activities: developing a strategy and policy; providing the legal foundation for action, for example, through laws and regulations; and ensuring efficient implementation of a consistent and transparent regulatory environment that will ensure effective policy implementation and compliance.