Enterprises providing telecommunications services and network infrastructure have complained about unreasonable financial obligations, saying they have to contribute to the public-utility telecom service fund plus an annual charge for the right to telecom operation.

At a meeting of digital enterprises on September 22 and many other meetings of the Vietnam Private Sector Forum (VPSF), many companies proposed that they be exempt from contributions made to the public-utility telecom service fund, or make contributions under other forms. They also proposed that the annual charge for the right to telecom operation be removed.

Enterprises said these financial obligations discouraged them from developing network infrastructure and digital services and cause their expenditures to surge.

The two charges are regulated in the 2009 Telecommunications Law, which specifies that telecom businesses must perform public-utility telecom tasks assigned by the State and make financial contributions to the Vietnam Fund for Public-Utility Telecom Services managed by the Ministry of Information and Communications. The non-profit fund supports the implementation of State policies for provision of public-utility telecom services.

A decree guiding the implementation of the Telecom Law states that the Prime Minister shall specify the list of telecom services subject to the fund contributions depending on each period, and the contribution rates will not be higher than 5% of service revenue. Enterprises holding telecom service licenses must contribute 1.5% of their service revenues, and contributions are counted as legitimate business expenses of enterprises.

In addition, enterprises have to pay a charge for the telecom operation right. The charge is set at 1% of telecom service turnover but the State currently collects only 0.5% of service revenue.

Nguyen Trung Chinh, general director of CMC Corporation, said a total charge of 2% is unreasonable as the State should support enterprises to develop public-utility telecom services. He proposed the Government review the collection, and clarify the fund allocation.

VPSF said funds for public-utility activities should be optional and contribution rates calculated based on revenues of enterprises are unreasonable as it may extend the time of capital recovery. Telecom companies already have to satisfy numerous business, technology and investment requirements of the Telecommunications Law to be allowed to operate.

Last year, 26 telecom companies contributed VND1.85 trillion (US$81.1 million) to the Public-Utility Telecommunication Service Fund, excluding the contributions made by FPT Telecom and New Generation Telecom Corporation (NGT).

The forum suggested publishing the fund information as stated in the Tax Law.

However, the Ministry of Information and Communications has published only data about the fund from 2008 to 2014 updated to August 2014 on its website. The fund’s expenditures are summarized briefly, saying it was allocated to help businesses maintain and develop public-utility telecom services, increase mobile phone subscription and expand Internet coverage.

Moreover, the fund revenue is always higher than its expenditures with VND1.6 trillion compared to VND1.2 trillion in 2009.

Hoang Duc Trung, senior director of DFJ VinaCapital, said it is essential to make the fund transparent and establish a fund management council with the participation of telecom companies contributing to the fund. He also proposed the Government allow enterprises to provide public-utility telecom services by themselves under the direction of the Government.

SGT