Circular No. 11/2010/TT-BTTTT dated May 14, 2010 of the Ministry of Information and Communications providing for sales promotion for mobile phone services

CIRCULAR

PROVIDING FOR SALES PROMOTION FOR MOBILE PHONE SERVICES

THE MINISTER OF INFORMATION AND COMMUNICATIONS

Pursuant to the June 14, 2005 Commercial Law;

Pursuant to the November 23, 2009 Telecommunications Law;

Pursuant to the Government's Decree No. 187/2007/ND-CP of December 25, 2008, defining the functions, tasks, powers and organizational structure of the Ministry of Information and Communications;

Pursuant to the Government's Decree No. 37/ 2006/ND-CP of April 4, 2006, detailing the Commercial Law regarding trade promotion activities (below referred to as Decree No. 37/ 2006/ND-CP);

Pursuant to the Prime Minister's Decision No. 39/2007VQD-TTg of March 21, 2007, on management of post and telecommunications charges;

At the proposal of the director of the Telecommunications Department,

STIPULATES:

Chapter I GENERAL PROVISIONS

Article 1. Scope of regulation

This Circular provides for sales promotion for land mobile phone services (below referred to as mobile phone services) and goods exclusively used in the mobile phone service sector (below referred to as goods exclusively used for mobile phone services).

Article 2. Subjects of application

1. Telecommunications enterprises licensed to set up networks and provide mobile phone services (below referred to as mobile phone enterprises).

2. Traders dealing in goods exclusively used for mobile phone services on the basis of contracts signed with mobile phone enterprises.

Article 3. Mobile phone services and units of mobile phone services

1. Mobile phone services which are allowed for lawful provision and sales promotion include:

a/ Postpaid nationwide land mobile phone service;

b/ Prepaid nationwide land mobile phone service;

c/ Postpaid local land mobile phone service;

d/ Prepaid local land mobile phone service;

e/ Other mobile phone services prescribed by the Ministry of Information and Communications.

2. Units of mobile phone services include:

a/ Activation, which means a subscriber's right to connect to a mobile phone network upon concluding a contract with a mobile phone enterprise. The unit of calculation is time of activation;

b/ Daily subscription, which means a subscriber's right to connect to a mobile phone network for a day. The unit of calculation is day;

c/ Monthly subscription, which means a subscriber's right to connect to a mobile phone network for a month. The unit of calculation is month;

d/ Communication duration, which means the period during which a subscriber sends and receives information (voice, data and image) using mobile phone services. The unit of calculation is minute or second;

e/ Information volume, which means the number of byte of information (data or image) sent or received via mobile phone networks using mobile phone services. The unit of calculation is byte;

f/ Information pack, which means the number of transactions carried out by a subscriber via mobile phone networks using mobile phone services, including:

- The number of calls (voice calls). The unit of calculation is call;

- The number of short messages (SMS and MMS). The unit of calculation is short message;

- The number of files (data and image). The unit of calculation is file.

g/ Other mobile phone service units prescribed by the Ministry of Information and Communications.

3. Mobile phone service charges are VAT-exclusive prices calculated in Vietnam dong and actually collected upon provision of a unit of mobile phone service which are registered and notified to the Ministry of Information and Communications and announced to customers by mobile phone enterprises right before sales promotion. Mobile phone service charges include:

a/ Activation fee (VND/time of activation);

b/ Daily subscription charge (VND/day);

c/ Monthly subscription charge (VND/ month);

d/ Communication charge (VND/minute/ second), VND/byte. VND/call, VND/short message or VND/file).

Article 4. Goods exclusively used for mobile phone services and units of goods exclusively used for mobile phone services

1. Goods exclusively used for mobile phone services which are permitted for lawful trading and sales promotion include:

a/ Subscriber identification module (SIM) used for prepaid nationwide mobile phone services, which is a card containing a mobile phone subscription number. The unit of calculation is SIM card.

b/ SIM used for postpaid nationwide mobile phone services, which is a card containing a mobile phone subscription number. The unit of calculation is SIM card.

c/ SIM used for prepaid local mobile phone services, which is a card containing a mobile phone subscription number. The unit of calculation is SIM card.

d/SIM used for postpaid local mobile phone services, which is a card containing a mobile phone subscription number. The unit of calculation is SIM card.

el Paper recharge cards, electronic recharge cards and other recharge cards used for nationwide mobile phone services. The unit of calculation is card.

f/ Paper recharge cards, electronic recharge cards and other recharge cards used for local mobile phone services. The unit of calculation is card.

g/ Cell phones with a mobile phone subscription number. The unit of calculation is cell phone.

h/ Other goods exclusively used for mobile phone services prescribed by the Ministry of Information and Communications.

2. The prices of goods exclusively used for mobile phone services are VAT-exclusive prices calculated in Vietnam dong (VND) and actually collected upon the sale of a unit of goods which are posted and announced to customers by enterprises right before sales promotion.

Article 5. Principles of sales promotion in the mobile phone service sector

In addition to the provisions in Article 4 of Decree No. 37/2006/ND-CP, sales promotion in the mobile phone service sector must be conducted on the following principles:

1. Only mobile phone enterprises are allowed to provide, and conduct sales promotion for, mobile phone services.

2. Only mobile phone enterprises are allowed to supply, and conduct sales promotion for, goods exclusively used for mobile phone services. Sales promotion for blank SIM cards containing no mobile phone subscription number, cell phones without SIM and data cards without SIM shall be conducted in the same way as for other goods in accordance with the Commercial Law and Decree No. 37/2006/ND-CP.

3. Mobile phone enterprises may conduct sales promotion for mobile phone services and goods exclusively used for mobile phone services by themselves or outsource this business to traders providing sales promotion services. In case of outsourcing, mobile phone enterprises shall ensure that sales promotion be conducted in strict accordance with sales promotion programs already notified or registered with state management agencies in charge of sales promotion.

4. Mobile phone enterprises may conduct sales promotion only for mobile phone services specified in Clause 1. Article 3 and goods exclusively used for mobile phone services specified in Clause 1, Article 4 of this Circular, provided that they are permitted to provide mobile phone services and trade in goods exclusively used for mobile phone services according to their telecommunications licenses granted by the Ministry of Information and Communications.

5. Agents of mobile phone enterprises and other traders of goods exclusively used for mobile phone services shall:

a/ Enter into contracts with mobile phone enterprises;

b/ Refrain from organizing sales promotion for goods exclusively used for mobile phone services but comply with sales promotion programs conducted by mobile phone enterprises.

6. They are prohibited from conducting sales promotion for unfair competition in the telecommunications market or dumping mobile phone services and goods exclusively used for mobile phone services.

7. Mobile phone enterprises shall ensure the quality of promoted mobile phone services and goods exclusively used for mobile phone services according to regulations on management of standards and technical regulations applicable to, and the quality of. goods and services in the telecommunications sector.

8. It is prohibited to discount mobile phone services and goods exclusively used for mobile phone services of which specific charge rates or sale prices are set by the State. It is also prohibited to discount mobile phone services and goods exclusively used for mobile phone services for which price brackets or minimum prices are set by the State below the minimum prices.

9. The material value used for sales promotion for a unit of promoted mobile phone service or goods exclusively used for mobile phone services must not exceed 50% of the price of such unit of promoted service or goods before sales promotion, except sales promotion in the forms specified in Articles 7.8.11.12 and 13 of Decree No. 37/2006/ND-CP.

10. The total value of mobile phone services and goods exclusively used for mobile phone services used in a sales promotion program must not exceed 50% of the total value of promoted mobile phone services and goods exclusively used for mobile phone services, except sales promotion in the form specified in Article 7 of Decree No. 37/2006/ND-CP.

Chapter II FORMS OF SALES PROMOTION

Article 6. Giving sample goods or providing sample services to customers for trial use free of charge

The form of giving sample goods or providing sample services to customers for trial use free of charge specified in Article 7 of Decree No. 37/ 2006/ND-CP is carried out as follows:

1. It is prohibited to present SIM cards containing mobile phone subscription numbers or cell phones with mobile phone subscription numbers to customers who do not make registration for trial use of mobile phone services provided by enterprises.

2. Sample mobile phone services may be provided to customers for trial use free of charge if the following conditions are fully met:

a/ Sample mobile phone services are services in a test period under service testing licenses granted by the Ministry of Information and Communications or services which have been newly marketed for no more than 12 months:

b/ Customers voluntarily register for trial use of services;

c/The period of trial use of mobile phone services must not exceed 1 month and the total money which should have been paid by subscribers at the charge rate applied before sales promotion for the normal use of services must not exceed VND 100.000;

d/ After the period of trial use, mobile phone enterprises shall withdraw mobile phone subscription numbers already issued to customers for trial use.

Article 7. Presenting goods as gifts or providing services free-of-charge to customers not accompanied by goods sale or purchase or service provision

The form of presenting goods as gifts or providing services free-of-charge to customers not accompanied by goods sale and purchase or service provision specified in Article 8 of Decree No. 37/2006/ND-CP applies in cases in which goods presented as gifts or services provided free-of-charge are not goods exclusively used for mobile phone services or mobile phone services

Article 8. Selling goods or providing services at sale prices or service charge rates lower than previous ones

1. The form of selling goods or providing services at sale prices or service charge rates lower than previous ones (below referred to as discount) specified in Article 9 of Decree No. 37/2006/ND-CP means the sale of goods exclusively used for mobile phone services at prices lower than the sale prices applied before sales promotion programs or the provision of mobile phone services at charge rates below the rates announced by enterprises while no sales promotion program is conducted.

2. Discount of goods exclusively used for mobile phone services will be carried out in the following forms:

a/ Discounting SIM cards containing mobile phone subscription numbers;

b/ Discounting cell phones with mobile phone subscription numbers;

c/ Discounting recharge cards;

d/ Presenting recharge cards upon purchase of recharge cards;

e/ Other forms prescribed by the Ministry of Information and Communications.

3. The maximum discount rate for SIM cards containing mobile phone subscription numbers, cell phones with mobile phone subscription numbers and recharge cards must not exceed 50% of the sale prices applied before sales promotion. (Example: the price of an SIM card containing a mobile phone subscription number before sales promotion is VND 50,000, during sales promotion, the maximum discount level will be VND 25,000/SIM card). The maximum value of the recharge card to be presented free upon sale of a recharge card must not exceed 100% of the par value of the sold card. (Example: the sale price of a VND 100,000-recharge card before sales promotion is VND 100,000, during sales promotion, if a customer buys a VND 100,000 recharge card at the price of VND 100,000/card, the mobile phone enterprise may present him/her a recharge card valued at VND 100.000 at most).

4. Mobile phone enterprises may conduct sales promotion in the above forms for one or several units of goods exclusively used for mobile phone services specified in Clause 1. Article 4 of this Circular but shall ensure that the actual sale prices of SIM cards containing mobile phone subscription numbers, cell phones with mobile phone subscription numbers and recharge cards upon sales promotion of different forms must not exceed 50% of the sale prices applied before sales promotion. (Example 1: the sale price of a VND 100,000-recharge card before sales promotion is VND 100.000/card. if the enterprise discounts VND 50.000 for each card and, concurrently, present a VND 50,000-recharge card to customers, it will be considered having violated the above-stated principle as in this case, customers have to pay only VND 50,000 for recharge cards of VND 150,000, therefore, the sale price of a recharge card has been discounted by more than 50% of the sale price before sales promotion. Example 2: the sale price of a VND 100,000-recharge card before sales promotion is VND 100.000/card, if the enterprise discounts VND 25,000 for each card and, concurrently, present a VND 50,000-recharge card to customers, it will be considered not having violated the above-stated principle as in this case, customers have actually paid VND 75,000 for recharge cards of VND 150,000, therefore, the sale price of a recharge card has been discounted by less than 50% of the sale price before sales promotion).

5. Discount of charge rates for mobile phone services will be earned out in the following forms:

a/ Discounting activation fee, daily subscription charge, monthly subscription charge and communication charges;

b/ Increasing communication duration, information volume and information pack for subscribers who have used services;

c/ Other forms prescribed by the Ministry of Information and Communications.

6. The maximum discount rate for activation fee, daily subscription charge, monthly subscription charge and communication charges must not exceed 50% of the charge rates applied before sales promotion. (Example: the communi­cation charge rate before sales promotion is VND 1,000/minute, during sales promotion, the maximum discount level will be VND 500/ minute). The maximum increase of communica­tion duration, information volume and information pack of which charge rates are kept unchanged must not exceed 100% of those applied before sales promotion. (For example, the charge rate for each sent message before sales promotion is VND 300, during sales promotion, if a subscriber has sent a short message charged at VND 300, he/she may send another free-of-charge).

7. Mobile phone enterprises may conduct sales promotion in the above form for one or several service units specified in Clause 2, Article 3 of this Circular but must ensure that the actual charge rates (for activation, daily subscription, monthly subscription and communication) during sales promotion for several service units must not exceed 50% of the charge rates applied before sales promotion, (Example 1: the charge rate for a sent short message before sales promotion is VND 300. if the enterprise discounts the charge rate to VND 150/short message and present a free-of-charge short message for each short message sent by subscribers, it will be considered having violated the above principle as in this case, a subscriber who sent 2 short messages has to pay only VND 150 or the charge rate actually applied upon sales promotion for both communication charge and information pack is VND 75/short message, therefore, it has been discounted by more than 50% of the charge rate applied before sales promotion. Example 2: the charge rate for a sent short message before sales promotion is VND 300. if the enterprise discounts the charge rate to VND 100/ short message and present a free-of-charge short message for every 4 short messages sent by subscribers. it will be considered not having violated the above principle as in this case, a subscriber who sent 5 short messages has to pay VND 800 or the charge rate actually applied during sales promotion for both communication charge and information pack is VND 160/short message, therefore, it has been discounted by less than 50% of the charge rate applied before sales promotion.

8.The total duration of sales promotion programs conducted in the form of discounting for each mobile phone service specified in Clause 1, Article 3 or each commodity exclusively used for mobile phone services specified in Clause 1. Article 4 of this Circular must not exceed 90 days in a year. The duration of a sales promotion program conducted in the form of discounting must not exceed 45 days.

9. During sales promotion, the discounted charge rates of mobile phone services provided by mobile phone enterprises holding dominant market shares must not be lower than their cost prices registered with the Ministry of Information and Communications.

Article 9. Selling goods or providing services together with goods purchase or service use coupons

The application of the form of sales promotion through selling goods or providing services together with goods purchase or service use coupons specified in Article 10 of Decree No. 37/2006/ND-CP in the mobile phone service sector must comply with the following principles:

1. When a customer buys an SIM card containing a mobile phone subscription number or a cell phone with a mobile phone subscription number for activation, enterprises may present the customer a coupon for use of mobile phone services provided by enterprises themselves or a goods purchase or service use coupon issued by other traders. This form of sales promotion does not apply to goods exclusively used for mobile phone services (it is not allowed to issue coupons for the purchase of SIM cards containing mobile phone subscription numbers, cell phones with mobile phone subscription numbers or recharge cards).

2. Coupons for use of mobile phone services will be used for the purchase of communication duration, information volume or information pack. These coupons will be issued by mobile phone enterprises and become valid only after customers activate their subscription and use services with a communication duration, information volume and information pack of at least equal to those stated in the coupons. (For example: the communication duration offered on a service use coupon given to customers is 100 minutes; the charge rate applied before sales promotion is VND 1,000/minute. In order to comply with the above principle, subscribers should be allowed to make calls of a total duration of at least 100 minutes at the charge rate of VND 1,000/minute before they are entitled to 100 minutes of charge-fee call offered on the service use coupon). Coupons for use of mobile phone services must have all details prescribed in Article 97 of the Commercial Law.

3. Sales promotion conducted in the form of giving coupons for use of mobile phone services must comply with Point b, Clause 5. Clauses 6, 7, 8 and 9, Article 8 of this Circular.

Article 10. Frequent customers

Frequent customers defined in Article 13 of Decree No. 37/2006/ND-CP include:

1. Prepaid mobile phone subscribers that have used mobile phone services provided by an enterprise for at least 12 consecutive months with a total charge amount of at least VND 1.000,000;

2. Postpaid mobile phone subscribers.

Article 11. Other forms of sales promotion

In addition to the forms of sales promotion specified in Articles 6 thru 10 of this Circular, other forms of sales promotion comply with the Commercial Law and Decree No. 37/2006/ND-CP.

Chapter III

REPORTING EXAMINATION, INSPECTION, AND HANDLING OF VIOLATIONS

Article 12. Notification and registration of sales promotion

1. Mobile phone enterprises shall comply with contents on notification and registration of sales promotion programs in Section 3, Chapter 2 of Decree No. 37/2006/ND-CP.

2. When conducting a sales promotion program in the form of discounting or selling goods or providing services together with goods purchase or service use coupons in a province or centrally run city, the mobile phone enterprise shall, apart from notifying its sales promotion program to the provincial-level Industry and Trade Department, send a notice to the provincial-level Information and Communications Department. When conducting a sales promotion programs in the form of discounting or selling goods or providing services together with goods purchase or service use coupons in two or more provinces or centrally run cities, a mobile phone enterprise shall, in addition to notifying its sales promotion program to provincial-level Trade Departments, send a notice to the Ministry of Information and Communications for duplication and sending to relevant provincial-level Information and Communications Departments.

Article 13. Public announcement and reporting

When conducting sales promotion in the mobile phone service sector, mobile phone enterprises shall publicize information under Article 97 of the Commercial Law.

Annually, mobile phone enterprises shall send to the Ministry of Information and Communi­cations lists of sales promotion programs, enclosed with reports on their forms and contents. When conducting sales promotion, they shall identify and report to the Ministry of Information and Communications the following information if so requested in writing by the Ministry:

a/ Goods prices and service charge rates which are publicized immediately before sales promotion;

b/ The value of a unit of services or goods used for sales promotion;

c/ The total value of promoted services or goods under a sales promotion program;

d/ The total value of services or goods used for sales promotion under a sales promotion program;

e/ The sale prices of goods sold and charge rates of services provided free-of-charge to customers during sales promotion in the form prescribed in Article 7 of this Circular;

f/ The specific value or the proportion below goods sale prices or service charge rates applied before sales promotion, for sales promotion conducted in the form specified in Article 8 of this Circular;

g/ The cash value or specific benefits to be enjoyed by customers from goods purchase or service use coupons: places of goods sale and service provision and types of goods and services which customers can purchase or use with coupons, for sales promotion conducted in the form specified in Article 9 of this Circular.

h/ Expenses to be paid by customers, for sales promotion conducted in the form specified in Article 10 of this Circular.

Article 14. Examination and inspection

Organizations and individuals are subject to examination and inspection by state management agencies in charge of sales promotion in the telecommunications sector.

The Information and Communications Ministry's Inspectorate and inspectorates of provincial-level Information and Communica­tions Departments shall coordinate with state management agencies in charge of sales promotion in the telecommunications sector in inspecting sales promotion activities of mobile phone enterprises.

Article 15. Handling of violations

Any illegal acts detected in the course of examination and inspection shall be handled in accordance with the law on sales promotion and telecommunications, depending on their nature and severity.

Chapter IV IMPLEMENTATION PROVISIONS

Article 16. Implementation provisions

1. This Circular takes effect on July 1, 2010.

2. The Chief of the Office, the director of the Telecommunications Department and heads of agencies and units under the Ministry, directors of provincial-level Information and Communi­cations Departments, directors general and directors of mobile phone enterprises and concerned organizations and individuals shall implement this Circular.-

FOR THE MINISTER OF INFORMATION AND COMMUNICATIONS

DEPUTY MINISTER

LE NAM THANG