By Francesco Guarascio and Phuong Nguyen
HANOI, March 6 (Reuters) - Vietnam's police-owned telecom operator Mobifone is in talks with Chinese tech firms over new contracts to build parts of its 5G network, three people briefed on the plan said, despite U.S. warnings of security risks following earlier deals.
The talks precede a planned visit to China by Vietnam's top leader To Lam in coming weeks, one of the sources said, in a new sign of warming ties between the two Communist neighbours.
Any deal by
Mobifone would follow market leaders Viettel and VNPT, which signed 5G supply contracts last year with ZTE and Huawei, in a notable shift from years of caution toward Chinese 5G technology amid warming bilateral ties.
Mobifone is planning to launch a tender to roll out advanced antennas, known as base stations, for its 5G infrastructure which is expected to result in Chinese companies developing a substantial portion of its network, the three people said, declining to be named as the information was not public.
Two of them cited possible quotas for Chinese firms. The other said a decision to assign contracts to the Chinese had been already made.
The sources did not say which Chinese supplier could get new contracts, but one said Mobifone discussed the new tender with tech giant Huawei. State-owned ZTE is Huawei's largest Chinese rival.
Huawei, ZTE, Mobifone and Vietnam's foreign ministry did not respond to requests for comment.
Mobifone, which was placed under Vietnam's public security ministry last year, is the third largest telecom operator in Vietnam.
The tender would not cover big cities, two of the sources said, but would expand Mobifone's infrastructure which, while limited, is already deployed in strategic locations.
Mobifone does not disclose the location of its existing 5G towers, but a recent visit to a rooftop in central Ho Chi Minh City, Vietnam's business hub, showed a Huawei 5G base station already mounted on a tower branded with Mobifone's logo, close to the U.S. Consulate General and offices of foreign governments and companies.
VIETNAM AGREED IN 2020 TO BAN HUAWEI, ZTE FROM 5G NETWORK
In 2020 Vietnam had joined the U.S. government's "Clean Network" initiative committing not to using 5G equipment from the two Chinese companies.
Asked about the latest Vietnamese plans, a U.S. State Department spokesperson told Reuters countries should prioritize national security over lower-priced equipment for critical infrastructure.
"Chinese intelligence and security services can legally compel Chinese citizens and companies to share sensitive data or grant unauthorized access to their customers' systems," the spokesperson added, declining to comment about communications with Vietnam or other governments.
Huawei and ZTE are banned from U.S. telecom networks because Washington has designated them as "security threats".
In a meeting involving a delegation that accompanied Lam on a visit to Washington in February, U.S. officials warned that future American investment in Vietnam could be jeopardized by reliance on non‑trusted network providers, one of the sources said.
That followed concerns raised by Western officials after Vietnam awarded 5G contracts to Chinese companies last year, and Washington's warnings to Hanoi over use of Chinese tech in undersea cables.
Telecom networks are vulnerable to wiretapping and surveillance, and 5G systems are considered especially sensitive because their antennas process data, rather than simply relay information to core facilities as 4G and preceding technologies do.
A separate source said concerns over secure 5G deployment have also surfaced, although not prominently, in U.S.–Vietnam talks over trade tariffs.
Vietnamese officials have argued that Chinese telecom equipment is cheaper and reliable, while downplaying security risks.
Huawei has lost multiple 5G bids in Vietnam, while much of the country's 5G network has been so far built by European suppliers Ericsson and Nokia, with U.S. chipmaker Qualcomm also involved in the rollout.
In February, Hanoi also approved U.S. satellite internet service Starlink under preferential conditions as part of a pilot scheme.
(Reporting by Francesco Guarascio and Phuong Nguyen; Editing by Raju Gopalakrishnan)
