Future of Internet in Vietnam: Insights into SpaceX’s Potential Starlink Expansion

Vietnam is on the brink of a significant digital transformation as it awaits the potential investment of US$1.5 billion from SpaceX, led by billionaire Elon Musk, for its Starlink satellite internet services. This development signals a promising future for digital connectivity and related sectors in Vietnam, paving the way for enhanced technological advancements throughout the country.

SpaceX has expressed interest in entering the Vietnamese market in recent years. In 2021, Starlink’s website announced that its service would be available in Vietnam by 2022. However, their expansion plans faced challenges due to local regulations and pandemic interruption, which postponed their rollout until 2024. Following a visit to Vietnam in September 2024, Tim Hughes, Senior Vice President for Global Business and Government Affairs at SpaceX, presented a US$1.5 billion investment plan for Starlink to Vietnamese President To Lam at a United Nations summit later that year. 

The proposal to Vietnam underscores the country’s significance as a key satellite internet market in Southeast Asia, offering SpaceX access to its increasingly tech-savvy population and expanding digital economy. The prospective expansion will assist the Vietnamese government with its goal of universal internet access and digital transformation. While details remain undisclosed, Vietnamese leaders have expressed their support for SpaceX’s initiative and hope for further investments.

Concurrently, Starlink is expected to enhance its coverage across most of Southeast Asia by 2025. Given the notable disparities in internet adoption and access to infrastructure in the region, there is significant potential for satellite internet services, especially in Vietnam.

Potentials for Starlink satellite internet service in Vietnam

Increasing tech-savvy population

In early 2024, the Vietnamese Ministry of Information and Communications (MIC) reported that the number of users of mobile broadband and fixed broadband reached 90.26 and 22.98 per 100 people, respectively.

According to Vietnam Digital research, the country has 168.5 million mobile connections, which amounts to 169.8 percent of the population. Having approximately 78.44 million internet users, Vietnam enjoys a relatively high internet penetration rate of 79.1 percent. It is projected that the number of internet users will reach 100 million by 2029, with one-third of the population aged between 13 and 34 in 2024.

Growth in the digital sector

The Internet plays a vital role in Vietnam’s socioeconomic development, driving technological progress and transforming the economy. This year, Vietnam’s digital economy reached a value of US$36 billion, a 16 percent increase from 2023.

As stated by MIC, the digital economy accounted for 16.5 percent of Vietnam’s GDP in 2023, and projections for 2024 show that it will rise to 18.6 percent. Therefore, satellite internet is expected to support and enhance Vietnam’s existing internet infrastructure to accommodate the increasing number of online activities nationwide.

Natural factors influence

Vietnam boasts a diverse topography that includes mountains, hills, plains, coasts, and a continental shelf, as well as approximately 4,000 islands, both large and small. Furthermore, the country faces significant challenges due to climate change. In a report of the Ministry of Environment and Natural Resources, 2024 witnessed an increase in both the frequency and severity of natural disasters, resulting in numerous casualties and extensive property damage.

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The complex terrain and unpredictable weather have exposed the limitations of traditional communication methods in maintaining connections in affected areas. For instance, during the Yagi storm, reports indicated that transmission towers were damaged, and some areas experienced loss of mobile communication due to power outages.

As a result, there is a growing demand for satellite internet as an alternative telecommunications solution to enhance connectivity between the mainland and remote regions of Vietnam, particularly during extreme weather events.

Vietnam’s internet infrastructure

Vietnam’s internet has seen significant growth, but its infrastructure is still limited compared to its user base and population size. Currently, there are six submarine cable lines in operation, three of which are over ten years old, and one new cable was added in December 2024. Among these cables, the SMW3, which connects Southeast Asia, the Middle East, and Western Europe, is nearing the end of its operational life after more than two decades of service.

According to the Speedtest Global Index, as of November 2024, Vietnam ranked 44th out of more than 100 countries for mobile speeds and 36th for fixed broadband speeds. There is a gap in internet speed in rural and urban provinces due to the limited infrastructure in remote areas. The country’s internet operations heavily depend on these submarine cables, resulting in frequent interruptions and incidents that lead to slow speed and inconveniences for domestic users.

Meanwhile, data storage and processing in Vietnam are also limited by its modest number and scale of data, with only 28 centers compared to countries in the region, such as Singapore (103), Malaysia (45), and Indonesia (69). Vietnam’s businesses that provide cloud computing services mainly resell services from foreign platforms.

These setbacks have disadvantaged Vietnam’s Internet connection ecosystem compared to other advanced countries in ASEAN.

Benefits of Starlink satellite technology to Vietnam’s internet system

Satellite internet in Vietnam began with the launch of the Vinasat-1 satellite in 2008, followed by the Vinasat-2 satellite in 2012, both by VNPT. These geostationary telecommunication satellites have a lifespan of 15 years, meaning Vinasat-1 will officially expire in 2023, followed by Vinasat-2 in 2026. This situation raises the need for a new solution to ensure the continuity of the telecommunications system for both the mainland and coastal areas.

With the expansion of space technology across various new fields, satellite communication technology offers the advantage of providing internet access to remote and underserved areas, thereby improving access to education through online courses and enhancing healthcare through telemedicine. Furthermore, satellite systems can bolster connectivity during disasters, improving response and management capabilities.

Another benefit is that satellites connect remote areas to the global economy, fostering the growth of e-commerce and the Internet economy, which creates new business opportunities and attracts investments in these locations. Starlink, for example, has a satellite system, which could help Vietnam save costs in building its own system while gaining immediate access to internet services.

Starlink upstages Vietnam’s internet connectivity

The current advantages of internet systems in Vietnam are the affordability and a wide range of services due to the variety of internet service providers such as FPT, Viettel, and VNPT. For a household, Viettel charges an internet installation fee of around VND 300,000 (US$11.90), with monthly fees ranging from VND 165,000 to VND 300,000 (US$6.55-11.90) depending on connection speed. To compare, as the first announcement to Vietnamese customers in 2021, the Starlink kit costs US$599, and the monthly package is US$99. 

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However, Starlink has distinct competitive advantages in the internet market. Currently, internet access in Vietnam is primarily provided by internet service providers. These providers rely on submarine fiber optic cables that connect Vietnam to international networks and distribute internet bandwidth through their infrastructure to households. This process involves a complex installation of various physical components, such as cables, routers, and base transceiver stations. In contrast, Starlink’s setup is much simpler, requiring only a compact kit. This kit includes a dish, a stand, and cables, making it easy for users to install themselves. It is particularly convenient for remote work, as it features an automatic function for searching and connecting to satellites.

Moreover, Starlink has garnered attention for its high-speed internet, easy installation, and satellite systems that offer global internet service to over 100 countries and territories, making it one of the most reliable providers of satellite internet services. Its system of over 6,000 small satellites in low Earth orbit (LEO) can improve the signal concentration, transmission, and internet coverage compared to traditional systems. For both fixed and mobile broadband, the internet speed for download–upload can go up to 220 Mbps – 25 Mbps in turn, as stated by Starlink. User reviews indicate that Starlink maintains a stable speed of over 100 Mbps, presenting a promising solution for Vietnam, where internet speed is generally unstable and averages below 100 Mbps. In some rural and mountainous provinces, such as Bac Kan, the speed can be even lower, with reports of only around 50 Mbps.

Conclusion

Vietnam’s journey towards development highlights the importance of internet accessibility, reflecting the nation’s commitment to digital transformation and innovation in a rapidly changing world. The introduction of satellite internet represents a significant step in Vietnam’s digital infrastructure planning, aiming to improve internet coverage across the entire country. This development could enhance the Internet economy and strengthen responses to natural disasters.

(US$1 = VND 25,193)

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