The United States is urging Vietnam to avoid Chinese companies like HMN Tech and other Chinese operators in its plan to build 10 new submarine cables by 2030. Insiders say that international submarine cable construction has become the latest battleground in the US-China tech war.
Vietnam’s five main submarine cables connecting to the global internet have aged and frequently experienced failures, making the construction of new cables a top priority for the Vietnamese government.
According to seven sources speaking to Reuters, US officials and businesses have held at least six meetings since January with officials and executives from Vietnam and other countries to discuss the cable strategy for this Southeast Asian nation.
One official who attended the meetings described it as “a very challenging persuasion.”
Additionally, five sources told Reuters that US officials shared intelligence such as satellite images indicating disruptions in Vietnam’s submarine cables, possibly due to sabotage.
Both the US and China are vying for influence in Vietnam, with President Biden and Chinese Communist Party leader Xi Jinping visiting the country last year, and both nations’ companies making significant investments in Vietnam.
At the same time, submarine cables carrying a majority of global data have become the core of the US-China tech war.
Due to concerns over Chinese espionage activities, the US had successfully persuaded to exclude HMN Tech in another important project earlier.
In 2023, US submarine cable supplier SubCom outbid the cheaper HMN Tech to win the international tender for the Southeast Asia–Middle East–Western Europe 6 cable stretching 19,200 kilometers from Singapore to France, connecting Malaysia, Bangladesh, India, Sri Lanka, Maldives, Pakistan, Djibouti, Saudi Arabia, Egypt, Greece, and Italy along the way.
Five sources mentioned that the lesser-known US telecom consulting company APTelecom participated in persuading Vietnam’s negotiations.
Two individuals present at the meetings said US officials and APTelecom made it clear that choosing less experienced Chinese cable contractors, who have difficulty obtaining key components, would hinder US companies investing in Vietnam.
Formerly known as Huawei Marine Networks, HMN Tech was established as a Huawei subsidiary in 2008 and rebranded as HMN Tech in 2020.
With massive subsidies from the Chinese government, Huawei Marine Networks had gained over 20% global market share within a decade, becoming the fourth-largest submarine cable contractor worldwide behind US SubCom, Japan’s NEC, and France’s Alcatel Submarine Networks.
However, as countries raise their guard against Chinese cyber-attacks and espionage, Chinese-led submarine projects have faced repeated setbacks. In 2020, Chile abandoned a Chinese cable construction plan in favor of a Japanese proposal. In 2021, China’s attempt to underbid for a submarine cable project in Pacific island nations ended in failure.
Out of national security concerns, the US has already sanctioned Huawei and HMN Tech.
A source familiar with the cable industry stated that APTelecom, founded in 2009, has a multi-year contract with the US government to promote Washington’s Clean Network initiative abroad. The initiative aims to ensure that critical telecom networks, cloud services, data analysis, mobile applications, the Internet of Things, and 5G technologies do not use equipment from “untrusted” suppliers to avoid malicious attacks or unfair control by authoritarian governments like the Chinese Communist Party.
The source mentioned that APTelecom is also collaborating with Google and Australian telecommunications company Telstra to build a new submarine cable system connecting Pacific islands.
Currently, the tender for Vietnam’s cable plan has not begun, and it’s uncertain whether Vietnam will accept the US’s recommendations.
A diplomat in Hanoi told Reuters that “time will tell” who will emerge victorious in the competition for the Vietnam submarine cable contract.