Vietnam Confirms SpaceX's $15B Investment in Starlink Project

Photo : AFP

Elon Musk's SpaceX is planning to invest $1.5 billion in Vietnam, according to a statement from the government of the Communist-run nation on Thursday. This investment is anticipated to help break a deadlock surrounding the launch of Starlink satellite services in the country.

Discussions regarding the provision of Starlink's satellite internet and other communication services had stalled at the end of 2023, as reported by sources familiar with the negotiations earlier this year. However, these talks resumed subsequently.

President To Lam was quoted in a government report expressing that the Vietnamese government is actively considering SpaceX's investment proposal. He urged the company to work closely with Vietnamese officials to finalize preparations for the investment.

This announcement follows a meeting between President To Lam and Tim Hughes, a SpaceX government affairs executive, in New York. Hughes indicated that SpaceX aims to invest $15 billion in Vietnam, which presents a promising market for its satellite internet offerings.

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While the government did not specify the exact areas where SpaceX plans to invest or when the details of the agreement might be finalized, the potential for significant collaboration between the two parties is evident.

SpaceX, based in the United States, did not respond immediately to a request for comment from Reuters regarding the investment plans.

Vietnam’s foreign ministry also did not provide a comment when approached for clarification.

With a population of approximately 100 million, Vietnam represents a substantial user base for American internet companies, including Meta’s Facebook and Alphabet. However, the country faces challenges due to aging infrastructure, which can disrupt the operations of crucial undersea optical fiber cables. Additionally, Vietnam’s mountainous terrain can lead to unreliable internet services, creating an opportunity for satellite internet solutions. This technology could enhance various sectors, including increased surveillance and patrolling efforts in the contested South China Sea, where Vietnam often finds itself at odds with China.

The recent developments follow earlier reports indicating that Hughes had reaffirmed SpaceX's commitment to providing Starlink services to Vietnam, especially after negotiations resumed. Hughes emphasized that the deployment of internet services in Vietnam would primarily benefit educational initiatives and disaster prevention efforts, according to state media.

Past negotiations had faltered over concerns related to the ownership structure of the local entity SpaceX would need to establish in Vietnam. The country has regulations limiting foreign ownership in local firms to 50%, while SpaceX sought at least a controlling interest. It remains uncertain whether this issue continues to pose a challenge.

Vietnam also mandates that data be stored domestically and imposes strict regulations on online content. 

Industry sources have mentioned that SpaceX has suppliers operating in Vietnam, which is a key industrial hub for numerous American firms and their contractors. For instance, Apple has indicated a desire to increase its investment in Vietnam, already home to many of its suppliers.