The significance of Amazon’s move into Vietnam’s satellite internet services market is that the government appears increasingly willing to accept reduced control over parts of its telecommunications sector where the economic and geopolitical benefits are judged to outweigh the political risks.
Amazon has said it is studying plans to deploy low-earth orbit satellite internet services in Vietnam through its Project Kuiper initiative, Tech Node has reported.
If the global conglomerate were to move ahead, it would be the second foreign satellite internet services provider (ISP) to enter the market, after Starlink, which was approved to begin a pilot of its services earlier this year.
This is interesting in that telecommunications in Vietnam has traditionally been dominated by the government, with the country’s major internet providers all controlled by state-linked entities: VNPT by the state through the Commission for the Management of State Capital at Enterprises, Viettel by the Ministry of National Defence, and MobiFone by the Ministry of Public Security.
This is consistent with the priorities of a single-party state, where control over information flows is often viewed as important to maintaining political stability.
This may, however, be much more difficult when dealing with foreign ISPs.
Vietnam’s internet blocking, for example, is often implemented at the domain name level, whereby ISPs block access to banned websites. This differs from, say, China’s Great Firewall, which filters the internet at the deeper network level. Put another way, it is the difference between a storefront refusing to sell a product and the wholesaler refusing to distribute it altogether.
Moreover, whereas reaching key figures in domestic telecommunications is relatively easy because of their connections to the government, staff managing the technical aspects of an international internet provider could be located anywhere in the world. This could delay ban or blocking requests.
So, in light of these risks, why is this happening now?
Ostensibly, it’s to provide internet connectivity to rural and isolated communities, with then Prime Minister Pham Minh Chinh back in February, telling the Ministry of Science and Technology to accelerate low Earth orbit satellite internet services to ensure no one is left behind.
However, it’s difficult to see past the US trade negotiations that are underway with market access for US services firms, a key point of contention for the Trump administration.
For Amazon more specifically, the timing makes it look a lot like the firm is riding on Starlink’s success.
That said, there is an important point of note here in that this is a pilot program that runs for five years — that is, it will come to an end after the Trump administration has left office.
The pilot is also capped at 600,000 subscribers, though it may actually be the price that limits uptake.
A basic Starlink setup is estimated to cost around VND 34 million for the first year, around a third of the average Vietnamese worker’s annual wage. It’s not a stretch to assume Amazon services would come in around the same price point, though the increased competition could drive prices down.
All of that is to say, the significance of Amazon’s move into Vietnam’s satellite internet services market is that the government appears increasingly willing to accept reduced control over parts of its telecommunications sector where the economic and geopolitical benefits are judged to outweigh the political risks.