The Vietnam Telecommunications Sector
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CASE STUDY The Vietnam Telecommunications Sector Good Practices in Regulatory Reform in Relation to Competition Policy & Law Issues This study is published as part of the “Support to Enhance Development of Trade in Services Negotiations” initiative jointly undertaken by ILEAP, CUTS International Geneva and the University of Sussex’s CARIS. It aims to contribute to the increased and more effective participation of Least Developed, Low and Lower-Middle Income Countries and their Regional Economic Communities in multilateral, regional and bilateral services trade negotiations. The initiative promotes understanding among policy makers, regulators and negotiators about their services sectors and the role that trade negotiations can play in pursuing their strategic interests therein. Author: Alice Pham Published by: INTERNATIONAL LAWYERS AND CUTS INTERNATIONAL, GENEVA CENTRE FOR THE ANALYSIS OF REGIONAL ECONOMISTS AGAINST POVERTY (ILEAP) 37-39, Rue de Vermont INTEGRATION AT SUSSEX (CARIS) 1240 Bay Street, Suite 600, 1202 Geneva, Switzerland University of Sussex Toronto, Ontario, Canada Ph: +41.22.734.6080 Sussex House, Brighton, BN1 9RH, United Tel: +1 416 309 2330 Fax:+41.22.734.3914 Kingdom Fax: +1 416 309 2331 Email: [email protected] Tel: +44 (0)1273 606755 Email: [email protected] Web: www.cuts-geneva.org Email: [email protected] Web: www.sussex.ac.uk/caris Web: www.ileap-jeicp.org Funding support This publication should be cited as: PHAM A. (2015). ‘The Vietnam Telecommunications Sector: Good Practices in Regulatory Reform in Relation to Competition Policy & Law Issues'. Toronto, Geneva and Brighton: ILEAP, CUTS International Geneva and CARIS. Cover image: © Alex Steffler © 2015. The material in this publication may be reproduced in whole or in part and in any form for education or non-profit uses, without special permission from the copyright holders, provided acknowledgment of the source is made. The publishers would appreciate receiving a copy of any publication, which uses this publication as a source. No use of this publication may be made for resale or other commercial purposes without prior written permission of the copyright holders. 2 Table of Contents Table of Contents Abbreviations .................................................................. 2 Foreword ....................................................................... 3 Introduction .................................................................... 4 The History of Reforms .................................................... 6 Market Structure ........................................................... 14 Fixed-line telephone services ...................................................................14 Mobile phone services .............................................................................15 3G services .............................................................................................16 Broadband Internet services ....................................................................16 The Regulatory Framework ............................................. 17 The Competition Law 2004 (VCL) .............................................................17 The Law on Telecommunications 2009 (LOT) ............................................19 Competition problems in the Vietnam telecom sector ......... 23 Conclusions .................................................................. 28 Continuing reforms for better trade negotiations ......................................28 State dominance and the creation of an independent regulator ................29 Lessons learnt for other developing countries ...........................................30 1 Abbreviations ASEAN Association of South East Asia Nations BCC Business Cooperation Contract BTA Bilateral Trade Agreement (between Vietnam and the US) CDMA Code-Division Multiple Access EVN Electricity Telecommunication Information Company (‘EVN Telecom’) FBO Facilities-based operator FPT Financing and Promoting Technology Company GATS General Agreement on Trade in Services GDP Gross Domestic Product GSM Global System for Mobile Communications HTVC Ho Chi Minh City Cable Television Company ISP Internet Service Provider ITU International Telecommunications Union IXP Internet eXchange Point LOT Law on Telecommunications MIC Ministry of Information and Communications (formerly the ‘MPT’) MMS Multimedia Messaging Service MOIT Ministry of Industry and Trade MPT Ministry of Post and Telecommunications (now called the ‘MIC’) Netnam Information Technology Institute OTT Over-the-top RAM Recently Acceded Member (of the ‘WTO’) SCTV Saigontourist Cable Television SME Small and Medium-sized Enterprise SMS Short Message Service SOE State-owned enterprise SPT Saigon Post and Telecommunications Company (also called ‘SaigonPostel’) TPR Trade Policy Review TSMA Telecommunications Specialized Management Agency VCA Vietnam Competition Authority VCC Vietnam Competition Council VCL Vietnam Competition Law Vietshiptel Vietnam Maritime Telecommunications Company Viettel Military Electronics and Telecommunications Company VoIP Voice over Internet Protocol VNPT Vietnam Post and Telecommunications Corporation VTV Vietnam Television VCTV Vietnam Cable Television VND Vietnamese dong WTO World Trade Organisation 2 Foreword Foreword Services and services trade can play a central role in With funding support from the UK Trade Advocacy promoting sustainable development, supporting Fund, a set of studies, toolkits and trainings are inclusive economic growth, and reducing poverty in developed to assist these countries in increasing their modern economies. However, LDCs, LICs, and LMICs participation in services trade. Target beneficiaries continue to face challenges in catalysing or sustaining range from negotiators, policymakers, regulators, progress across this diverse range of economic statistical officers and various non-state actors. activities. With respect to trade policy and related negotiations, services have become an increasingly This case study analyses how the telecom sector been visible feature of discussions – domestically, liberalized and reformed in Vietnam. From having a regionally, as well as at the bilateral and multilateral wholly government-owned monopoly to opening up levels. the market, the reform road has been and remains paved with challenges. Results today are nevertheless A number of challenges impacting services trade encouraging, with prices having significantly dropped, negotiations and policy-making have been identified wider choices for consumers, and private and foreign however. Many lack access to reliable services trade service providers finding it easier to enter and thrive in data on which to base analysis and decision-making, the industry. and skills for processing and analysing existing services trade data to underpin conclusions. Ineffective interactions between stakeholders to support decision- making – within government, and between the government and the private sector, civil society, and other non-state actors - is also a major challenge. Against this backdrop, ILEAP, CUTS International Geneva and the University of Sussex’s CARIS have partnered to undertake a series of interventions that seek to contribute to the increased and more effective participation of LDCs, LICs, LMICs and RECs in multilateral, regional and bilateral services trade negotiations. 3 Introduction Recent times have witnessed the liberalization up the market and allowing private and of the telecommunications sector in many foreign participation, and developing economies around the world, the initiation and implementation of which ultimately resulted in significant regulatory reforms, in the direction of expansion of their telecommunications imbibing competition principles into networks and improvements in performance. regulations. The supply of telecommunications services has changed from monopoly- or government- While there is a growing consensus that all of based, to market- or competition-based these elements are desirable and ideally they approaches. The driving forces behind this should form inherent parts of a complete process have been: reform package, not all governments have the emergence and rapid development immediately and fully executed all of them. of new technologies and services, such They did so at different paces and different as internet and wireless services, which sequences, more often than not adopting a enables the entrance into the sector of gradual approach. There remained significant competitive service providers, resistance and lobbying against reforms undertaken. Privatized incumbents and the increasing recognition that a former monopolists may, through use of liberalized telecom market can produce anticompetitive practices, erect a whole lot of higher growth, faster innovation, and ‘invisible’ barriers, to entrench their control better services, over others or to stop new market entries. The the need to attract private capital for regulatory framework over the telecom sector, expansion of networks and introduction thus, in addition to regulations over price, of new services, and quality, licensing, and other technical issues, strong developments of international etc, needs to also contain competition policy trade in telecom services. and law elements to ensure that major suppliers do not abuse their position. In this During the transition period from monopolistic respect, important elements of competition to competitive telecom markets, governments