Talks between SpaceX and the Vietnamese government for Starlink satellites to provide broadband satellite in the Southeast Asian country reportedly hit a snag over foreign ownership regulation.
Citing unnamed sources, Reuters reported that discussions between the two parties had been put on hold since November after the country's amended telecommunications law, which will take effect in July, did not ease the existing provision on foreign ownership.
SpaceX had been seeking an exception to the rule restricting foreign ownership to a non-controlling 50% stake in telecommunication companies with network infrastructure.
Vietnam has been looking into satellite-based broadband Internet services to improve coverage in its mountainous and underserved areas that cannot be reached by terrestrial networks. It is also planning to upgrade its Internet infrastructure in the aftermath of recent outages at its five major underwater fiber-optic cables.
Reuters said SpaceX and Vietnam's Ministry of Information and Communications (MIC) had held several meetings for months from at least the middle of last year until November 2023
The stalled talks led to the interruption starting in November of Starlink's previously unreported pilot services for Vietnam's coast guard, which used the satellites to guide drones in the South China Sea and the Gulf of Thailand.
Sources told Reuters they do not know when talks would resume.
New regulatory hurdles
Aside from the limitation on foreign ownership, foreign satellite service providers face new regulatory hurdles before entering the Vietnamese market.
According to the Vietnam New Agency, a draft decree that will implement the revised law added a requirement for foreign satellite service providers to set up a local ground gateway connected to the public telecoms network. Foreign satellite providers must ensure that all traffic generated by satellite subscriber terminals in Vietnam must pass through this local ground gateway.
The draft decree classifies satellite broadband services such as Starlink as cross-border services. The MIC, which is tasked to finalize the document after public consultation, considers cross-border satellite communications to be a risk in terms of data from Vietnamese Internet users being collected abroad and used illegally.
Furthermore, the draft decree specifies that foreign satellite service providers must meet capital and investment conditions. For example, the VNA said that contributed charter capital must be at least 30 billion Vietnamese Dong ($1.2 million), and total investment capital in the network must be at least VND100 billion ($4.2 million) in the first three years.
Foreign satellite service providers must also have a commercial agreement with a licensed domestic telecommunications enterprise and a technical plan to ensure information security, perform emergency prevention and shut off services when ordered to do so by relevant state agencies.
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SpaceX's talks with Vietnam over Starlink service stalled over ownership rule report - Light Reading
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