Cablegate: Vietnam: Ambassador Calls On Telecom Minister

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 03 HANOI 001046

SIPDIS

STATE FOR EAP/BCLTV AND EB/TPP/BTA/ANA JBELLER
STATE PASS USTR FOR EBRYAN AND JMCHALE
USDOC FOR 4431/MAC/AP/OPB/VLC/HPPHO
GENEVA PASS USTR

SENSITIVE

E.O. 12958: N/A
TAGS: ECPS ETRD VM WTRO WTO BTA IPROP
SUBJECT: VIETNAM: AMBASSADOR CALLS ON TELECOM MINISTER

This cable contain sensitive information. Do not post
on internet.

1. (SBU) Summary: During an April 28 introductory call
on Minister of Posts and Telematics Do Trung Ta, the
Ambassador urged the Minister to take a flexible
approach on telecommunications in the World Trade
Organization (WTO) accession negotiations, to meet
Bilateral Trade Agreement (BTA) commitments including
setting up an independent regulator, to clarify
confusion by issuing legal guidance on what constitutes
value added and internet services, and to seek U.S.
technical assistance in evaluating interconnection
terms. He also called for greater IPR protection of
software, urged the Minister to attend the June APEC
Telecom Ministerial, and advocated for Lockheed
Martin's bid in the Vinasat communications satellite
project and Connection by Boeing's license to provide
in-flight internet services over Vietnam. The Minister
encouraged the United States to accept the "roadmap for
liberalization" in Vietnam's revised telecom offer,
committed to ensure a good business climate for U.S.
firms in Vietnam and to working to improve IPR
protection. Ta promised to review Lockheed's proposal
carefully and agreed in principle with the in-flight
internet service license, but noted that the airlines
needed to apply directly. End Summary.

2. (SBU) The Ambassador, accompanied by ECON/C, paid an
introductory call on Minister of Posts and Telematics
Do Trung Ta on April 28. The Ambassador began by
noting that the United States supports Vietnam's
efforts to join WTO and the Embassy is working hard to
assist Vietnam in preparing for the negotiations
involved. Vietnam's record in meeting its BTA
commitments would be a key indicator for progress of
WTO accession, he commented. Noting that
telecommunications was a key area of U.S.-Vietnam
bilateral market access negotiations, the Ambassador
encouraged Vietnam to take a flexible and creative
approach on this issue. After accession, Vietnam would
need a world-class telecommunications system and
assistance from leading multinational firms to create
it. To do so, Vietnam would need to attract foreign
investment. Given the risks inherent in investing in
such rapidly changing technology, few U.S. or other
firms would want to commit capital if they could not
control the investment, he continued. Control would
thus be a key element in bilateral negotiations. The
Ambassador acknowledged that Vietnam's recent new offer
contained changes in the telecom services sector. Once
U.S. experts have completed their analysis and have
industry input, the United States would respond,
perhaps with questions for clarification.

3. (U) Turning to Bilateral Trade Agreement (BTA)
implementation, the Ambassador noted that Vietnam plans
to implement some of its commitments by passing the
enterprise law later this year and urged that this be
done on schedule. He stressed that Vietnam needed to
create conditions for new entrants to the market to
develop lower cost telecom services. Noting that the
Prime Minister and Deputy Prime Minister had both
expressed disappointment with the level of U.S.
investment in Vietnam, the Ambassador agreed that there
was room for additional U.S. investment, but it would
come only if the conditions were right. For example,
issuing adequate legal guidance on what constitutes
value added and internet services would clear up
confusion about joint ventures in value added telecom
services. Saying that he was encouraged that the
Ministry of Posts and Telematics (MPT) intends to set
up an independent regulator, the Ambassador urged
Vietnam to do so quickly. Interconnection is an
important issue both for Vietnamese and international
providers. The United States could help evaluate the
interconnection offer of Vietnam National Posts and
Telecommunications Corporation (VNPT) through one of
USAID's two technical assistance projects, Support for
Trade AcceleRation Project or the Vietnam
Competitiveness Initiative, the Ambassador suggested.

4. (U) The Ambassador noted that he had hosted a
roundtable with U.S. firms and associations interested
in IPR protection earlier that day (septel). IPR is a
core issue both within the BTA and the WTO and MPT has
the lead on software for the government. It is vital
for MPT to set an example by using only licensed
software, he stressed. In addition, Vietnam should
criminalize the use of pirated software.

5. (SBU) Minister Ta responded by noting that Vietnam
had sent a revised WTO services offer to the United
States. He asked that the United States recognize that
this offer needs to meet Vietnam's circumstances and
that it would create a roadmap for liberalization. He
expressed hope that the United States would show good
will by supporting Vietnam on this issue which he said
would reflect the fruitful cooperation by Vietnam with
U.S. partners such as AT&T, MCI and Sprint as well as
other vendors and suppliers such as Microsoft, Champion
Communications Services Inc., Hewlett Packard and
International Business Machines. Several U.S.
operators were cooperating with Vietnam to provide
Voice Over Internet Protocol (VOIP) services. Ta
expressed the hope that the two sides would be able to
reach agreement in a final round after the Prime
Minister's visit to the United States in June.
Originally, VNPT had regulated the market as well as
been the monopoly telecom firm, he explained. Now MPT
regulates the sector while VNPT licenses other firms to
operate. The rumored separation of the regulator from
the Ministry as in Singapore and Malaysia might come in
the future, but the conditions are not right to do so
at present, he said.

6. (U) On the issue of IPR, the Minister noted that MPT
is cooperating with Motorola to develop software and
with Microsoft on Windows Office. IPR protection is
improving as the Government takes into account the
Berne Convention, which it joined in 2004. At the same
time, government experts were drafting a new IPR law on
which the May session of the National Assembly would
comment. The MPT would cooperate with the Ministry of
Science and Technology in this area in the future, he
noted.

7. (U) Ta pointed out that telecom had been a difficult
issue and indeed the final issue to be settled in the
BTA negotiations. Commenting that Vietnam has been
seriously implementing the BTA, he agreed that Vietnam
needed to protect investor interests in accord with its
BTA commitments. In the past, a Business Cooperation
Contract had been the only way for foreign telecom
firms to operate in Vietnam. Under this arrangement,
the foreign firm had contributed capital and technology
while sharing profits with its Vietnamese partner,
which had the right to operate. The BTA allowed joint
venture and joint stock firms to operate. The Prime
Minister had said that the MPT needed to assure mutual
benefits for U.S. firms in this sector.

8. (U) Before the BTA, several U.S. firms such as UPS
and FedEx had cooperated with Vietnam, he noted. The
MPT had also cooperated with the Federal Communications
Commission in setting the international accounting rate
for calls between Vietnam and the United States.
Vietnam needs investment capital, technology and human
resources to develop. Minister Ta expressed
appreciation to U.S. firms for their assistance in
modernizing Vietnam's networks thus far. He noted that
tele-density in Vietnam had been 14 to 16 percent at
the end of 2005 while it was expected to be about 33
percent by 2010. The number of internet users was also
expected to double by 2010. As the use of mobile
telephones, internet and broadband expanded, there
would be potential for further bilateral cooperation.
Expressing hope that the United States would support
Vietnam at the WTO and expand bilateral cooperation in
telecom, the Minister pointed out that the revised
telecom market access offer exceeded the BTA.

9. (SBU) Commenting that he was not an expert in
telecom, the Ambassador said he had first come to
Vietnam in 1988 and was amazed at how far and fast
Vietnam had come since then. Vietnam now has to
compete with its neighbors needs a world-class
telecommunication system to do that. Acknowledging
that telecom had been tough in the BTA, the Ambassador
expressed hope that it would not be again in the
bilateral WTO negotiations. U.S. firms were ready to
help Vietnam build its needed infrastructure. The
Ambassador also encouraged the Minister to attend the
APEC Telecom Ministers Meeting in Peru in early June.

10. (SBU) The Ambassador then raised two commercial
issues. First, he noted that Lockheed Martin had come
to Vietnam to discuss a tremendous opportunity for
Vietnam and the United States to work together on a
high tech communications satellite project. Lockheed
Martin was prepared to offer a very favorable
arrangement that would expose Vietnam to little risk.
He urged the Minister to give the offer serious
consideration. The Ambassador then mentioned the
request by Connection by Boeing (CBB) for a license to
operate an in-flight internet service on planes flying
over Vietnam. CBB was willing to accept an interim
license. At this point, Vietnam is the only country in
southeast Asia without such a license so that planes
have to shut down the service over Vietnam, he noted.

11. (SBU) In response, the Minister said that Vice
Minister Le Nam Thang would attend the APEC Telecom
Ministerial while he would be attending the National
Assembly session. Noting that he had met with Lockheed
Martin earlier that week, he said that the MPT would
review Lockheed's proposal carefully this week. On
CBB, he said that Vietnam Airlines had a license for
this service and it was up to them to cooperate with
their partners. The Ambassador pointed out that CBB
would like to work directly with the governments of
countries involved. The Minister said that the airline
had applied and in principle he agreed with this
application since this was global communications. The
Ambassador suggested that they continue to work on this
issue.

12. (U) Bio note: Minister Ta has served in his current
position since 2002. From 1995-2002 he was Chairman of
Vietnam National Posts and Telecommunications. He has
held various positions at either MPT or VNPT since 1985
and holds a Doctorate of Science in Communications from
Ilmenau Technical Institute in Germany. He was born in
Ha Tay Province, Vietnam on December 12, 1945.

MARINE

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