HANOI: 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, according to sources.

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, US officials and companies have held at least a half-dozen meetings with Vietnamese and foreign officials and business executives to discuss the South-East Asian nation’s cable strategy, according to sources.

“It is a very hard lobbying,” said one official who attended the meetings.

The meetings aimed to convince Communist-ruled Vietnam that in the cable-laying industry, which relies on only four players globally, relative newcomer HMN Technologies Co Ltd (HMN Tech) would be a poor choice, according to four people.

US officials have also separately shared intelligence about possible sabotage of the country’s subsea cables, said sources.

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 United States and China are vying for influence in Vietnam, with both US 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 US-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.

China’s Foreign Ministry said the US campaign “blatantly violated international rules and business operation models”.

Vietnamese authorities and state companies have so far shown openness towards working with China on cables, the sources said.

US officials and APTelecom have made it clear that choosing cable contractors with less experience and with less access to critical components would discourage US companies from investing in Vietnam, sources who attended the meetings said.

“They clearly singled HMN Tech 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 US 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 US 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 and Australian telecommunications firm Telstra on a new subsea cable system connecting Pacific islands.

HMN Tech has only been active since 2008 compared with decades for America’s SubCom, Japan’s NEC and France’s Alcatel Submarine Networks.

The Chinese company has mostly laid shorter cables, according to data from research firm TeleGeography.

According to research group BMI, Vietnam’s main undersea cables all had costly outages and faults - sometimes simultaneously - between end 2022 and early 2023.

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.

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, said last year it would invest in a branch cable linking Vietnam to an international cable to be built by HMN Tech.

But sources briefed on the matter said there had been no progress on the plan.“Time will tell” who is winning the race to secure Vietnam’s undersea cable contracts, a Hanoi-based diplomat said.

 - Reuters