Vietnam: Key Changes in Draft Telecoms Law regulating Data Centers, Cloud Computing, and Over-The-Top (OTT) Communication Services

The National Assembly of Vietnam is set to discuss the Draft Telecoms Law in May 2023 and finalize it in October 2023. The proposed law aims to expand the coverage of the existing legislation to include IoT devices, data centers, cloud computing businesses, and OTT communication services. It is worth noting that the draft law also applies extraterritorially to these new services.

Some of the noteworthy new requirements under the draft Telecoms Law include:

• The definition of OTT communication services (also called “information communication service not using telecom number storage”) will only include standalone messaging or calling apps. Messaging or calling functions of social networks that are not essential to the service will not be included.
• The draft law’s wording suggests that only standalone OTT messaging or calling apps will be viewed as OTT communication service. In other words, OTT messaging or calling functions of a social network, which are non-essential functions of another service, will not fall into this category.
• Offshore service providers will be required to notify the Ministry of Information and Communications (MIC) of their contact point, notify users of emergency numbers, ensure access to emergency numbers, and waive fees for calls to emergency numbers.
• The draft law considers OTT communication services as a telecom service. Therefore, any cross-border provision of telecom services must be based on a commercial agreement with a licensed Vietnamese telecom provider (Foreign service providers will have to contract with a local entity to provide services across borders into Vietnam). Additionally, the Vietnamese telecom provider that contracting with a foreign service provider will have to register the agreement form with a competent state authority.
• Service providers of data center and cloud computing services will have to register through an online portal of the MIC and comply with a set of requirements that will be later specified by the Government. Other notable obligations include protecting users’ information, removing illegal content, and reporting illegal activities such as service abuse to local state agencies.

Implications for foreign service providers

Draft Telecoms Law, once passed, will have extra-territorial reach, i.e., it will impose obligations to not only domestic but also foreign service providers. Once brought into force, it can be expected to raise more compliance costs for the regulated businesses. The draft Law foresees several provisions that will require further guidance by the Government (via decrees and circulars) once the law is passed.