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Vietnam to approve pilot scheme for satellite internet

providers

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Foreign providers would retain full control of operations

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Sudden shift in stance seen reflecting nervousness about

potential US tariffs

By Francesco Guarascio and Phuong Nguyen

HANOI, Feb 18 (Reuters) - Vietnam plans to adopt rules

that would allow Elon Musk's Starlink to provide satellite

internet services in the country while maintaining full

ownership of any local subsidiary, a draft of the regulations

shows.

The change paves the way for Starlink to launch in Vietnam

and follows protracted talks with its parent company SpaceX, a

government official said.

It represents a sudden shift in stance and can be seen as

"an olive branch" to SpaceX amid nervousness in Vietnam about

tariff threats from U.S. President Donald Trump, according to a

person familiar with the matter.

It's a "demonstration from the Vietnamese side that they can

play the transactional diplomacy game if the Trump

administration wants that," said the person.

All sources declined to be identified so they could speak

more freely.

Attempts by SpaceX to enter Vietnam - a market of nearly 100

million people - were put on hold in late 2023 after the

Communist-run country declined to lift a ban on foreign control

of satellite internet providers - a precondition for Musk, who

is now a key adviser to Trump.

The draft rules, set to be adopted by parliament in an

extraordinary sitting on Wednesday, allow for full foreign

control of operations for internet providers who have a network

of low-orbit satellites, under a pilot scheme that would run

until the end of 2030.

The provision is included in a 12-page resolution that seeks

"to remove obstacles in scientific, technological and innovation

activities". Projects submitted under the pilot scheme would

require the approval of Vietnam's prime minister.

SpaceX and Vietnam's information ministry did not reply to

requests for comment.

SpaceX has been expanding its network of suppliers in

Vietnam. The Vietnamese government has said the company wants to

invest $1.5 billion in the country.

If many Vietnamese firms and individuals were to subscribe

to Starlink that could help trim the large surplus in goods and

services that the country has with the United States, according

to a person with knowledge of the discussions.

Its surplus last year hit a record high of $123.5 billion,

the fourth biggest among U.S. partners, according to U.S. data.

Trump last Thursday directed his team to devise reciprocal

tariffs on every country that taxes U.S. imports by April 1 and

his aides have said countries with large imbalances will be

closely scrutinised.

U.S. duties have the potential to seriously disrupt

Vietnam's export-reliant economy, which counts the U.S. as its

main market. Vietnam hosts many China-based manufacturers which

have invested heavily in the Southeast Asian country after

Trump's first administration imposed tariffs on China in 2018.

To narrow its surplus with the U.S., Vietnam has also

separately offered to import more U.S. agricultural products,

and is discussing other possible imports.