Over-the-top (OTT) apps pose a growing challenge for telecom operators worldwide. These services—many of which offer voice, messaging, and video features for free or at lower cost—have eroded traditional telco revenue streams. As a result, operators are increasingly relegated to the role of “dumb pipes,” responsible for carrying massive volumes of data without capturing the value created by the applications that run over their networks.
In Vietnam, the Ministry of Information and Communications is drafting proposed regulations aimed at bringing foreign messaging apps under closer government oversight. Under these proposals, international OTT services such as Viber, Line, Skype, and WhatsApp would be required either to install local servers within Vietnam or to form commercial arrangements with domestic telcos if they wish to operate and monetize services using the country’s networks.
Telcos in Vietnam argue the measures are necessary to protect both revenue and national interests. A representative from Viettel, one of the country’s largest network operators, warned last year: “We will lose 40 to 50% of our revenue if all of our 40 million customers use Viber instead of traditional calls and texts.” At the same time, homegrown apps have surged in popularity—Zalo, a local messaging platform, has risen to market leadership with over 20 million users, illustrating how quickly usage patterns can shift toward OTT services.
(Chart Credit: Jana)
Market data underscores why regulators and operators are alarmed. Industry analysts estimated there were about 21–22 million smartphone users in Vietnam, a figure that suggests a very high uptake of local OTT services: if those estimates are accurate, Zalo could be reaching as much as 95% of the country’s smartphone user base for calls and messages.
Domestic operators also point to regulatory imbalances. As one senior executive at a major mobile network put it, Vietnamese telecom companies “have to strictly follow Vietnamese laws, pay taxes and fulfill many other duties,” while foreign OTT firms can provide services over the country’s broadband infrastructure without similar obligations. That discrepancy, he argues, creates an uneven playing field, threatens the growth of domestic businesses, and raises national security concerns.
However, the government’s proposals echo controversial industry proposals seen in other markets, where internet service providers have lobbied for the right to charge OTT providers for access or preferential treatment on their networks. Critics warn that such measures could undermine net neutrality by enabling paid “fast lanes” for services that can afford to pay for better performance, while relegating smaller startups and independent services to “slow lanes.” This could hamper competition and limit consumer choice.
The debate centers on balancing competing priorities: preserving the financial viability of network operators and protecting national policy goals versus maintaining an open, competitive internet where innovation and startups can thrive without mandatory commercial arrangements or discriminatory access. Regulators will need to weigh economic impact, consumer welfare, and technical feasibility when deciding how to proceed.
Public opinion remains divided. Supporters of stricter rules argue they level the regulatory field, secure tax revenue, and protect national interests. Opponents warn of unintended consequences for innovation, competition, and internet freedom. As Vietnam’s draft bill takes shape, stakeholders from operators, OTT platforms, consumer groups, and policymakers will likely continue to clash over the best path forward.
Do you think legislation to regulate OTT services should be enacted? Share your view in the comments.