Inside the US push to steer Vietnam's subsea cable plans away from China

NEC

18/09/2024 24:00

* 
      US officials held meetings over Vietnam cables, sources
say
    

        * 
      US shared intel with Hanoi over possible cable sabotage,
sources
say
    

        * 
      Vietnam open to working with China's HMN, sources say
    

        * 
      APTelecom helping to persuade Hanoi to not use HMN,
sources say 
    

  
    By Francesco Guarascio, Phuong Nguyen and Joe Brock
       HANOI, Sept 18 (Reuters) - The United States is urging
Vietnam to avoid Chinese cable-laying firm HMN Technologies and
other Chinese companies in its plans to build 10 new undersea
cables by 2030, sources with knowledge of the talks said.
    Vietnam's five major ageing subsea connections that link it
to the global internet have suffered repeated failures, making
new cables a top government priority.
    Since January, U.S. officials and companies have held at
least a half-dozen meetings with Vietnamese and foreign
officials and business executives to discuss the Southeast Asian
nation's cable strategy, according to seven people involved in
or briefed about the talks.
    "It is a very hard lobbying," said one official who attended
the meetings.
    U.S. officials have also separately shared intelligence
about possible sabotage of the country's subsea cables, said
five people. Reuters spoke to 12 sources for this article,
including Vietnamese officials, foreign diplomats and industry
executives. All declined to be identified because of the
sensitivity of the matter.
    The U.S. and China are vying for influence in Vietnam, with
both U.S. President Joe Biden and his counterpart Xi Jinping
visiting last year and corporations from both countries
investing heavily in Vietnam. Vietnam and China have openly
discussed boosting digital "interconnections". 
    At the same time, subsea cables, which carry much of the
world's data, have become central to the U.S.-Sino tech war and
Washington, fearful of espionage by Beijing, has previously
successfully lobbied to have HMN Tech excluded from another
project, a Reuters investigation showed.
    APTelecom, a little-known consultancy, has been part of the
talks to persuade Hanoi, five of the people said. The meetings
and APTelecom's role in them have not been previously reported.
    HMN Tech and APTelecom did not respond to multiple requests
for comment.
    The White House declined to comment. Vietnam's ministries of
information and technology did not respond to requests for
comment. China's foreign ministry said the U.S. campaign
"blatantly violated international rules and business operation
models".  
    
    OPEN TO CHINA 
    Vietnamese authorities and state companies have so far shown
openness towards working with China on cables, five of the
sources said.
    The meetings aim to convince Communist-ruled Vietnam that in
the cable-laying industry, which relies on only four players
globally, relative newcomer HMN Tech would be a poor choice,
according to four people.
    U.S. officials and APTelecom have made it clear that
choosing cable contractors with less experience and with less
access to critical components would discourage U.S. companies
from investing in Vietnam, two people who attended the meetings
said.
    "They clearly singled HMN out" in the meetings, said one of
the people who attended.
    Washington considers HMN Tech an affiliate of Chinese tech
giant Huawei and both are under U.S. sanctions over concerns
that they are a threat to national security - a charge that
Huawei has denied. HMN Tech has said it is an independent
company.
    APTelecom, founded in 2009, has a multiyear contract with
the U.S. government to promote Washington's "Clean Network"
initiative with foreign countries, including deterring
investment with China, a cable industry source familiar with the
situation said. 
    The company's website makes no mention of the government
contract. Reuters was unable to learn when it was signed.
    APTelecom also acts as a dealmaker for Western companies
seeking sensitive foreign cable contracts, the source said. The
company is partnering with Google  GOOGL.O  and Australian
telecommunications firm Telstra  TLS.AX  on a new subsea cable
system connecting Pacific islands.
    HMN Tech has only been active since 2008 compared to decades
for America's SubCom, Japan's NEC  6701.T  and France's Alcatel
Submarine Networks.
    The Chinese company has mostly laid shorter cables,
according to data from research firm TeleGeography.     
    SABOTAGE?
    Vietnam's main undersea cables all had costly outages and
faults - sometimes simultaneously - between end 2022 and early
2023, according to research group BMI. That prompted Hanoi to
set more ambitious undersea cable targets this year.
    Projected costs have not been announced but the effort would
be one of the most significant expansions of undersea internet
infrastructure by any emerging economy, said BMI analyst Niccolo
Lombatti.
    In at least two meetings with Vietnamese counterparts this
year, U.S. officials shared satellite images and other
intelligence that suggest the outages may have been caused by
sabotage, five sources said.
    Vietnam's ministries of information and technology concluded
there was no definitive evidence and if it was sabotage, no
clarity about who committed it, three sources said. 
    Reuters was unable to learn more about the intelligence
suggesting sabotage.
    U.S. telecoms firm AT&T  T.N , a member of the consortium
that owns a cable connecting Vietnam to the United States, had
at least two meetings this year with Vietnamese officials and
companies over the cables, said three people briefed about them.
    It is unclear whether AT&T coordinated with U.S.
authorities. AT&T did not respond to requests for comment. 
    One Vietnamese official, who was briefed on talks Vietnamese
authorities held with HMN Tech about the planned cables, said
Beijing's offers were cheaper.
    Vietnam's top private tech company, FPT  FPT.HM , said last
year it would invest in a branch cable linking Vietnam to an
international cable to be built by HMN Tech. But two people
briefed on the matter said there had been no progress on the
plan.
    FPT did not respond to multiple requests for comment.
    In April, Vietnam's state-owned telecommunications firm,
Viettel, and Singapore's Singtel  STEL.SI  announced a plan for
a new cable from Southern Vietnam to Singapore that would avoid
the large portion of the South China Sea claimed by Beijing.
        That cable's tender has yet to be launched.
    "Time will tell" who is winning the race to secure Vietnam's
undersea cable contracts, a Hanoi-based diplomat said.

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Burying cables beneath the sea floor    https://reut.rs/4d7LO0x
HMN Tech’s global cable network    https://reut.rs/3Tw3NqB
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Reporting by Francesco Guarascio and Phuong Nguyen in Hanoi,
Joe Brock in Los Angeles; additional reporting by Khanh Vu in
Hanoi, Ethan Wang in Beijing and Trevor Hunnicutt in Washington.
Editing by Gerry Doyle and Edwina Gibbs)
 ((Francesco.Guarascio@thomsonreuters.com;))