Circular 08 with detailed stipulations about wholesale activities in the telecommunications sector has been released by the Ministry of Information and Communications (MIC) and is expected to take effect on August 23, 2024.

This is one of two circulars that guide the implementation of the 2023 Law on Telecommunications.

According to the Authority of Telecommunications (AOT), which drafted Circular 08, telecommunications resources, in some cases, are limited, and require huge investment capital to develop infrastructure, so only a few telcos are capable of establishing networks and provide services. 

Meanwhile, other firms can pay fees to use the infrastructure to provide retail services to end-users.

In practice, wholesale relationships have been established in the domestic telecom market for a long time, but the 2009 Law on Telecommunications doesn’t consist of  provisions to manage the relationships, thereby making it difficult to provide services.

The provisions on wholesale telecom service in the 2023 Law on Telecommunications will create favorable conditions for different businesses to join the market, promote competition in the wholesale market, and encourage sharing of telecom infrastructure and wholesale traffic and services among businesses.

MIC, based on the 2023 Law on Telecommunications, has issued Circular 08 on managing wholesale activities to create a healthy competitive market among telcos. With the legal document, telcos will be able to buy wholesale services with reasonable conditions and at reasonable prices.

The ministry also emphasized that the new regulation would help promote competition in the retail market by regulating the wholesale market. This will bring great benefits to consumers: they will have more opportunities to access new services, and have more choices about service packages.

Vu The Binh, deputy chair and secretary general of the Vietnam Internet Network Association (VIA), said, if considering the characteristics of the Vietnam’s telecom market, where the largest market share is held by a few powerful telcos while market demand is diverse, the association believes that it is reasonable to set a legal framework for wholesale telecom service as this will benefit the market.

“The provisions stipulated in the 2023 Law on Telecommunications and new circular will help better orient wholesale activities of telecommunications services, with an ‘open’ approach,” Binh said. 

“We think the new regulations are reasonable for the current market situation and the changes in the next few years," he commented.

More choices for users

Discussing possible impact of the new regulation on telecom service wholesale, Binh said as wholesale activities are legalized, they will become more methodical and transparent, which would benefit both wholesalers and wholesale buyers. 

This may also cause businesses to become telecom wholesalers who sell services to clients and in localities they understand well.

Binh said that the new policy is expected to prompt more businesses to join the market, and promote infrastructure sharing and healthy competition, thus offering more choices to users.

Binh recalled moments in the history of Vietnam’s telecom industry, when the market made groundbreaking growth thanks to policies on encouraging competition. Therefore, he is sure that legalization of wholesale activities of telecom services will bring high benefits.

“We believe that the ultimate beneficiaries are end-users. They will be served by the business that best understands them,” Binh said. “In the value chain from wholesale to retail, once activities are carried out smoothly, this will bring benefits to both wholesalers and wholesale buyers."

In this case, players in the ecosystem will focus on links that they are best at, rather than undertake all the works of the chain, from A to Z. 

Also according to Binh, market is determined by supply and demand, the predictability of policies and the impact of policies, or the predictability of big players. Therefore, a legal framework for wholesale telecom service will be positive which allows more reasonable service fees.

VIA commented that the circular shows a reasonable approach when amending Law on Telecommunications and related policies.

Trong Dat