According to Vietnam, Musk's SpaceX plans to invest $1.5 billion in Starlink. By Reuters

By Khanh Vu and Francesco Guarascio

HANOI (Reuters) – Elon Musk's SpaceX plans to invest $1.5 billion in Vietnam in the near future, the communist-run country's government said on Thursday, in a move that could help resolve a stalemate over the launch of Starlink satellite services there.

Months of talks about offering Starlink's satellite internet connection and other communications services were put on hold at the end of 2023, sources familiar with the matter told Reuters earlier this year, but they were later resumed.

“The Vietnamese government is reviewing SpaceX's (investment) proposal,” President To Lam was quoted as saying in a report on the government portal on Thursday, urging the company to work closely together to complete preparations for the investment.

The remark followed a meeting in New York between the head of state and SpaceX's government representative Tim Hughes. Hughes said the company plans to invest $15 billion in Vietnam, a promising market for its satellite internet service, the report added.

The government did not disclose where SpaceX's investment would be made or when details might be agreed upon.

U.S.-based SpaceX did not immediately respond to Reuters' request for comment.

The Vietnamese Foreign Ministry did not respond to a request for comment.

With a population of 100 million, Vietnam is a large user base for U.S. internet companies such as Meta's Facebook (NASDAQ:) and Alphabet (NASDAQ:), but its outdated equipment can disrupt the operation of key undersea fiber optic cables.

Large mountain ranges also make internet services less reliable in Vietnam. The country could also use satellite internet for tasks such as increased surveillance of the disputed South China Sea, where it is often at odds with China.

However, such a move may not go down well in Beijing.

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Thursday's news follows a report on the government portal this month in which Hughes was quoted as saying SpaceX wants to provide Starlink services to the Southeast Asian country after the two sides resume talks.

At the time, Hughes, the company's senior vice president of global business and government affairs, said SpaceX's provision of internet services in Vietnam would primarily benefit education and disaster preparedness, state media reported.

Talks last year were stalled by questions about the ownership of the company that SpaceX would have to set up in Vietnam, where foreign ownership of such companies is limited to half, while SpaceX is seeking at least a majority stake, sources told Reuters.

It is unclear whether this issue still represents an obstacle.

Vietnam also requires data to be stored domestically and there are strict controls on what is visible online.

Industry sources told Reuters that SpaceX has suppliers in Vietnam, a major industrial center that is home to major manufacturing facilities for American companies and their contractors.

Apple (NASDAQ:), which operates dozens of suppliers in the country, announced in April that the company plans to increase its investments by increasing spending on them.

(The headline and first paragraph of this story have been officially corrected to say that SpaceX plans to invest $1.5 billion, not $15 billion. The error was also included in an earlier version of the story.)