RealTime IT News

Decree Number 55 Important To Internet Development In Vietnam

The Internet cafe business has been flourishing in Vietnam, with more than 3,000 establishments in Ho Chi Minh city and 500 outlets in Hanoi sprouting up in recent years. However, these booming businesses now have to deal with Decree number 55, the Vietnamese Government's latest move to regulate the country's Internet access market.

Decree number 55, which goes into effect today after being issued about two weeks ago, requires that all Internet cafes sign business contracts with recognized ISPs in order to continue providing their Net surfing services. Cafes that fail to do so with any of the five existing ISPs in Vietnam will be fined up to VND5 million (US$333).

However, the Vietnam General Department for Post and Telecommunication (VGDPT), which oversees the development of the Internet in the country, has yet to address certain issues faced by Internet cafe owners.

A cafe owner was quoted on Vietnam Television as saying that his cafe leases lines from two of the five ISPs, and that despite calls to both ISPs to clarify what he should do, he still did not receive satisfactory answers. The ISPs had apparently not received detailed guidelines from the VGDPT.

In response to such queries, VGDPT director Mai Liem Truc said, "The public Internet has developed in a spontaneous way over the past years. We acknowledge the importance of developing the public Internet to further serve people's demands from now on. We will issue circulars to clarify the operation for Internet cafes soon."

Still, the new decree has been regarded as an instrument that will lessen the amount of red tape hindering the development of the Internet in Vietnam.

It has opened the country's Internet access market to private and foreign-owned companies wanting to enter as ISPs and online service providers (OSPs), which typically provide e-learning and online lottery services, as well as medical and news portals.

The playing field for Internet exchange providers (IXPs), however, is still restricted to state-owned enterprises.

Experts say up to 10 new ISPs will start up within this year as a result of Decree number 55, increasing the pool of competitors for existing ISPs Vietnam Datacommunication Company (VDC), the Corporation for Financing and Promoting Technology (FPT), NetNam, SaigonNet, and Vietnam Electronics and Telecoms Company (Vietel).

Currently, only VDC and FPT are fully functioning ISPs and have - between them - captured 90 percent of the market. NetNam, an Institute of Information Technology spin-off company, is still financially weak and latecomer SaigonNet is slowly gaining more market share. Vietel has yet to offer any services after obtaining its license to operate as an ISP, choosing instead to focus on providing VoIP services to the local telco market.

But even if the number of ISPs in Vietnam does grow, there will not be full-blown competition among the service providers as they will only be able to compete on service offerings to Internet surfers - pricing is still fixed by the Post and Telecommunication Department.

VGDPT has yet to issue evaluation criteria with which the new entrants will be measured against. According to Truong Dinh Anh, director of FPT Internet, the governing body should carefully screen applicants to ensure that they are financially strong, technically able and adequately staffed to fulfill their long term commitment to their customers.

There is more to be done for the development of the Internet in Vietnam. Decree number 55 is one step forward - it shows, at least, the Government's firm commitment to foster a better environment for the Internet to develop in Vietnam.