Circular No. 02/2007/TT-BTTTT dated December 13, 2007 of the Ministry of Information and Communication guiding the implementation of regulations on management of post and telecommunications service charges

CIRCULAR

GUIDING THE IMPLEMENTATION OF REGULATIONS ON MANAGEMENT OF POST AND TELECOMMUNICATIONS SERVICE CHARGES

Pursuant to the December 3, 2004 Competition Law;

Pursuant to the April 26, 2002 Pricing Ordinance;

Pursuant to the May 25, 2002 Ordinance on Post and Telecommunications;

Pursuant to the Governments Decree No. 178/2007/ND-CP of December 3, 2007, defining the functions, tasks, powers and organizational structure of ministries and ministerial-level agencies;

Pursuant to the Governments Decree No. 157/2004/ND-CP of August 18, 2004, detailing the implementation of a number of articles of the Ordinance on Post and Telecommunications regarding post;

Pursuant to the Governments Decree No. 160/2004/ND-CP of September 3, 2004, detailing the implementation of a number of articles of the Ordinance on Post and Telecommunications regarding telecommunications;

Pursuant to the Prime Ministers Decision No. 39/2007/QD-TTg of March 21, 2007, on the management of post and telecommunications service charges;

The Ministry of Information and Communication guides the implementation of regulations on the management of post and telecommunications service charges as follows:

I. GENERAL PROVISIONS

1. Scope and subjects of regulation

1.1. This Circular guides the principles on service charge management; grounds for setting charge rates; modes of service charge management; competence and order of, and procedures for, determination of charge rates for post services, delivery services, telecommunications services and Internet services (referred collectively to as post and telecommunications services).

1.2. This Circular applies to organizations and individuals engaged in the management, provision and use of post and telecommunications services.

2. Interpretation of terms

2.1. Charges applicable to users of post and telecommunications services are charges which service users pay to post and telecommunications enterprises when using services provided by these enterprises.

2.2. Charges applied among post and telecommunications enterprises are charges to be paid among post and telecommunications service-providing enterprises when one enterprise uses another enterprises network for service connection or transition.

2.3. Enterprises holding dominant market shares are enterprises which have their turnover or output accounting for 30% or more of the service market in their permitted localities and might have a direct impact on other enterprises participation in the relevant service market.

2.4. Groups of enterprises holding dominant market shares are enterprises jointly committing anti-competitive practices and causing direct impacts on other enterprises participation in the relevant service market which fall into one of the following cases:

- Two enterprises having a total share (turnover or output) of 50% or more on the relevant service market in localities where they are licensed to provide services;

- Three enterprises having a total share (turnover or output) of 65% or more on the relevant service market in localities where they are licensed to provide services;

- Four enterprises having a total share (turnover or output) of 75% or more on the relevant service market in localities where they are licensed to provide services.

II. PRINCIPLES ON THE MANAGEMENT, GROUNDS FOR DETERMINATION AND MODES OF MANAGEMENT OF POST AND TELECOMMUNICATIONS SERVICE CHARGES

1. Principles on charge management

1.1. The State respects post and telecommunications service-providing enterprises rights to self-determination of charges and charge-based competition as prescribed by law.

1.2. The management and determination of charges must ensure the harmony between lawful rights and interests of services users, post and telecommunications enterprises and the States interests.

1.3. To boost fair competition while ensuing public post and telecommunications activities.

1.4. Equality and non-discrimination in the management and determination of charges applicable to service users.

1.5. In case of necessity, the State may apply different charge management modes to post and telecommunications service-providing enterprises in order to encourage new enterprises to participate in the market.

2. Grounds for charge determination

2.1. Grounds for determination of charges applicable to users

a/ The States socio-economic development policies and post and telecommunications development objectives in each period; the observance of state regulations on charge management and conformity with international agreements which Vietnam has signed or acceded to.

b/ Production costs, supply-demand relations on the market and charge rates of similar services in countries in the region and world.

c/ To gradually reduce then eliminate charge rate cross-subsidy among different services. To gradually adjust charge rates of services which are currently lower than production costs so as to ensure business efficiency of post and telecommunications enterprises in the context of competition and international economic integration.

2.2. Grounds for determination of charges among enterprises

a/ The charge rates for interconnection among telecommunications enterprises are set on the basis of:

- Expanses for interconnection.

- Nondiscrimination among services and telecommunications enterprises (including member enterprises).

- The rational separation based on network components or service stages.

- Compatibility with interconnection charge rates of other countries in the region and world.

- Policies on development of the telecommunications market in each period. The States policies on enterprises contributions to public telecommunications services and incentives for enterprises to participate in the market though interconnection charge rates.

- In case the interconnection charge rates include contributions for public telecommunications services, these contribution levels must be prescribed in a transparent manner so as to ensure equality among enterprises.

b/ The charge rates for international payment are set on the basis of direct agreements between enterprises providing international post and telecommunications services and foreign post and telecommunications enterprises or according to regulations of international organizations which Vietnam has joined on the basis of assurance of sovereignty, national interests and interests of service users and enterprises.

c/ Charges rates for the services of channel leasing, portal leasing, common use of infrastructure and re-sale of services among telecommunications enterprises are set on the basis of boosting fair competition and encouraging new enterprises to participate in the market.

3. Modes of charge management

3.1. Decision on charge rates: The State shall promulgate decisions on the charge rates of services on the list of those with their charge rates decided by the State.

3.2. Registration of charge rates: Enterprises shall decide on charge rates of services on the list of those subject to charge registration, however, before promulgating decisions on charge rates, they must register charge rates with state management agencies under Item a, Clause 1.2, Point 1, Section IV, of this Circular.

3.3. Quotation of charge rates: Enterprises shall determine charge rates for services on the list of those subject to charge quotation and send charge quotations to state management agencies under Item b, Clause 1.2, Point I, Section IV, of this Circular.

3.4. Self-determination of charge rates: Enterprises may set by themselves charge rates for services outside the lists defined in Clauses 3.1, 3.2 and 3.3, Point 3, Section II of this Circular.

III. COMPETENCE FOR THE MANAGEMENT OF SERVICE CHARGES

The competence for the management of post and telecommunications service charges is provided for in Articles 5 and 6 of the Prime Ministers Decision No. 39/2007/QD-TTg of March 21, 2007, on the management of post and telecommunications service charges, specifically as follows:

1. The Prime Minister

To give in-principle approval of plans on charge rates for domestic non-registered mails weighing up to 20 grams and local phone calls.

2. The Ministry of Information and Communication

2.1. To elaborate and submit to the Prime Minister charge rate plans defined at Point 1, Section III, of
this Circular.

2.2. After obtaining the Prime Ministers in-principle approval of charge rate plans, to decide on charge brackets or charge rates of services defined at Point 1, Section III, of this Circular.

2.3. After obtaining the Finance Ministrys opinions, to decide on charge brackets or charge rates of public post services, exclusive post services and public telecommunications services.

2.4. In the first quarter of each year or irregularly, to publicize a list of charges for post and telecommunications services provided by enterprises or groups of enterprises holding dominant market shares, announce the managerial modes applicable to these charges and perform the management of these charges as prescribed.

2.5. In the first quarter of each year or irregularly, to publicize a list of charges for interconnection services among telecommunications enterprises, announce the managerial modes applicable to these charges and perform the management of these charges as prescribed.

2.6. To provide for mechanisms and modes of management of charges for international payment between domestic post and telecommunications service-providing enterprises and foreign telecommunications enterprises.

3. Post, telecommunications and Internet enterprises

3.1. To specify charge rates for services specified at Points 1 and 2, Section III, of this Circular, within
charge brackets or on the basis of standard charge rates specified by the State.

3.2. To conduct charge registration and quotation for services on the lists of those subject registration or quotation.

3.3. To set by themselves charge rates for services not on the lists specified in Clauses 3.1 and 3.2., Point 3, Section III, of this Circular, on the basic of observance of regulation on principles on management and grounds for determination of post and telecommunications service charges.

3.4. Post and telecommunications enterprises shall elaborate charge rate plans for post and telecommunications services on the list of those with their charge rates decided by the State; make separate cost-accounting of expenses for the provision of services; calculate and determine service costs in accordance with regulations and take responsibility for the reliability and legality of data used for calculation of service costs.

IV. ORDER OF AND PROCEDURES FOR THE ELABORATION, SUBMISSION, APPRAISAL AND PUBLICIZATION OF POST AND TELECOMMUNICATIONS SERVICE CHARGES

1. Charges applicable to service users

1.1. For services on the list of those with their charge rates decided by the State

a/ When wishing or requested by the State to adjust charge rates for services on the list of those with their charge rates decided by the State, enterprises shall compile and submit dossiers of charge rate plans to the Ministry of Information and Communication.

b/ A dossier of charge rate plans comprises:

- The enterprises written request for adjustment of charge rates.

- The plan on the adjustment of service charge rates, including, but not limited to, the following contents:

+ Assessment of the provision of services during the period from the latest adjustment of charge rates to the intended time of adjustment;

+ Forecasts on market changes, the necessity of and grounds for the adjustment of charge rates;

+ Grounds and methods for, and explanations on, calculation of service costs; the specific plan on the adjustment of service charge rates;

+ Comparison between the current charge rates and the estimated charge rates and the charge rates of similar services in other countries in the region, especially ASEAN countries, and the world;

+ Analysis of the impacts of the adjustment of service charge rates on enterprises and service users;

+ Recommendations on measures for organizing the implementation.

c/ For services for which the Prime Ministers in-principle approval of charge rate plans is required, within 45 working days after the date of receiving a complete dossier as prescribed, the Ministry of Information and Communication shall consider and appraise the dossier, consult concerned ministries and branches and submit the dossier to the Prime Minister. After obtaining the Prime Ministers approval of charge rate plans, the Ministry of Information and Communication shall promulgate a decision on service charge rates within 20 working days.

d/ For services with their charge rates decided by the Ministry of Information and Communication:

- For services for which opinions of concerned ministries and branches are required, within 20 working days after receiving a complete dossier as prescribed, the Ministry of Information and Communication shall examine the dossier and consult concerned ministries and branches before promulgating a decision on service charge rates.

- For services for which opinions of concerned ministries and branches are not required, within 10 working days after receiving a complete dossier as prescribed, the Ministry of Information and Communication shall examine the dossier and promulgate a decision on service charge rates.

1.2. For services subject to the managerial mode of charge registration or quotation

The list of services subject to the managerial mode of charge registration or quotation shall be publicized by the Ministry of Information and Communication in the first quarter of each year or irregularly in accordance with Clause 2.4, Point 2, Section III, of this Circular.

a/ For services on the list of those subject to the managerial mode of charge registration

- When formulating or adjusting charge rates for services on the list of those subject to charge registration, enterprises shall make and send a dossier of charge registration to the Ministry of Information and Communication.

- A dossier of charge registration comprises:

+ An official letter signed and stamped by the head of the enterprise, clearly describing contents of services, names of the services and the expected time of application of new charge rates;

+ Grounds and methods of, and explanations on, the calculation of service costs; and a specific plan on the adjustment of charge rates;

+ Assessment of the impacts of the adjustment of service charge rates on the relevant service market or other related services;

+ The enterprises draft decision on service charge rates.

- The dossier of charge registration must be sent to the Ministry of Information and Communication at least 10 working days before the expected date of promulgation. Within five working days after receiving the enterprises complete dossier, the Ministry of Information and Communication shall issue a notice of approval or disapproval of the enterprises dossier of charge registration (clearly stating the reason for disapproval):

+ In case the enterprises charge registration dossier is approved by the Ministry, the enterprise shall promulgate a decision on charge rates within the levels already registered with the Ministry of Information and Communication;

+ In case the enterprises charge registration dossier is disapproved by the Ministry, the enterprise shall continue applying the current charge rates and, when necessary, carry out the re-registration of charges as prescribed.

b/ For services on the list of those subject to the managerial mode of charge quotation

- When adjusting charge rates for services on the list of those subject to charge quotation, enterprises shall elaborate charge rate plans, issue decisions on charge rates and send the charge quotations to the Ministry of Information and Communication as prescribed.

- A charge quotation dossier comprises: A written charge quotation and a decision on charge rates of services provided by the enterprise.

- The price quotation dossier must be send to the Ministry of Information and Communication no later than three days after the charge rate decision is issued by the enterprise.

- If detecting that the enterprises charge quotation dossier is incompliant with current regulations on management of service charges, the Ministry of Information and Communication shall document request in writing the enterprise to suspend the application of new charge rates for consideration and adjustment.

1.3. Reporting on charge rates

Before the 10lh of the first month every quarter, enterprises shall send reports on charge rates of post and telecommunications services they provide to the Ministry of Information and Communication.

2. Charges applicable to enterprises

2.1. Interconnection charges

The list of charges for interconnection among enterprises and the managerial modes applicable to these service charges are publicized by the Ministry of Information and Communication in the first quarter of each year or irregularly as prescribed in Clause e, Point 2, Section III, of this Circular.

a/ For interconnection charges on the list of those subject to the managerial mode of decision on charge rates

Based on the actual market development and the interconnection demand, telecommunications enterprises shall elaborate plans on interconnection charge rates or the Ministry of Information and Communication shall request telecommunications enterprises involved in the interconnection to elaborate plans on interconnection charge rates for submission to the Ministry of Information and Communication. Within 15 working days after receiving complete dossiers of interconnection charge rate plans, the Ministry of Information and Communication shall consider and appraise the dossiers and organize a meeting with all telecommunications enterprises to collect their opinions on interconnection charge rates proposed by enterprises involved in interconnection. Within 30 working days after the date of organizing the meeting, the Ministry of Information and Communication shall issue a decision publicizing the charge rates for interconnection among telecommunications enterprises.

b/ Interconnection charges on the list of those subject to the managerial mode of registration

Telecommunications enterprises involved, in interconnection shall negotiate and agree with one another on interconnection charge rates, make and send a dossier of charge registration to the Ministry of Information and Communication as prescribed in Item a, Clause 1.2, Point 1, Section IV, of this Circular.

2.2. Charges for international payment between Vietnamese enterprises and foreign enterprises

a/ Charges for international payment between Vietnamese enterprises providing international post and telecommunications services and foreign enterprises are subject to the managerial mode of charge quotation. Enterprises providing international post and telecommunications services shall directly negotiate and agree with one another on the rates of charges for international payment and sign contracts on international payment with foreign post and telecommunications enterprises on the basis of assurance of national sovereignty and interests and interests of service users and enterprises. The quotation of international payment charge rates by enterprises to the Ministry of Information and Communication complies with Item b, Clause 1.2, Point 1, Section IV, of this Circular.

b/ When making international payment, enterprises providing international post and telecommunications services shall apply necessary economic, technical and professional measures so as to ensure the performance of contracts in accordance with law and international practice to avoid bad debts among parties.

2.3. Charges for channel leasing, portal leasing, common use of infrastructure and re-sale of services

Based on the development conditions in each period, the Ministry of Information and Communication shall provide for specific managerial modes applicable to charges for the services of channel leasing, portal leasing, common use of infrastructure and re-sale of services.

2.4. Charges among post and delivery enterprises

Charges among post and delivery enterprises shall be negotiated and agreed upon by these enterprises on the basis of contracts and charge rates shall be quoted to the Ministry of Information and Communication in accordance with Item b, Clause 1.2, Point 1, Section IV, of this Circular.

V. ORGANIZATION OF IMPLEMENTATION

1. This Circular takes effect 15 days after its publication in CONG BAO. Other matters not guided in this Circular comply with the Prime Ministers Decision No. 39/2007/QD-TTg of March 21, 2007, on the management of post and telecommunications service charges and relevant legal provisions.

2. Any problems arising in the course of implementation should be reported to the Ministry of Information and Communication for consideration and settlement.