Huawei and ZTE Expand 5G Contracts in Vietnam Amidst U.S. Concerns

HANOI, Vietnam, Nov 28 (Reuters) – China’s leading telecommunication firms, Huawei and ZTE, have secured multiple contracts this year to provide 5G equipment in Vietnam, signaling a shift in Hanoi‘s relations with Beijing. This development comes as U.S. tariffs on Vietnamese goods continue to sour ties with Washington, according to seven sources familiar with the matter.

Historically, Vietnam has been hesitant to adopt Chinese technology for sensitive infrastructure. However, recent months have seen a warming of its stance towards Chinese tech firms. Sweden’s Ericsson and Finland’s Nokia have been awarded contracts for Vietnam’s core 5G infrastructure, while U.S. chipmaker Qualcomm has supplied network equipment.

The dynamic changed as Chinese companies began winning smaller tenders from state-owned operators. In April, a consortium led by Huawei was awarded a $23 million contract for 5G equipment just weeks after U.S. tariffs were announced. ZTE also secured contracts totaling at least $20 million for antennas last week.

Although the timing of these contracts in relation to U.S. tariffs is unclear, they have raised international concerns. Washington has previously highlighted the exclusion of Chinese contractors from Vietnam’s digital infrastructure as a crucial aspect for its support in advancing technology.

Both Huawei and ZTE face bans from U.S. telecom networks due to perceived national security risks. While Ericsson declined to comment specifically on Chinese companies, it emphasized its commitment to supporting customers in Vietnam. Sweden’s foreign ministry stated that secure and trusted networks are vital as society becomes more digital.

No comments were received from Huawei, ZTE, Nokia, Qualcomm, or the U.S. embassies in either Vietnam or China regarding this issue. Vietnam has become a critical battleground for global influence, with major multinational companies like Apple and Samsung heavily reliant on Chinese components.

Experts note that Vietnam’s earlier cautious stance towards Chinese technology has shifted due to its own priorities. Nguyen Hung, a supply chain specialist at RMIT University Vietnam, mentioned that the new deals might encourage deeper economic integration with China.

Recently, Vietnam has made progress in other sensitive projects with Beijing, even undertaking initiatives previously dismissed over security concerns. Despite Huawei losing several bids for 5G equipment, the company continues to cooperate on technical services and has made agreements with Viettel, Vietnam’s military-owned telecom provider, for 5G technology transfers.

A Viettel representative indicated that Chinese technology is more affordable. Discussions about Chinese contracts have taken place in recent high-level meetings among Western officials in Hanoi. There is concern this could undermine trust in Vietnam’s networks and jeopardize access to advanced U.S. technology.

A U.S. official has proposed sealing off areas using Chinese technology from the rest of the network to help prevent data leaks, though some experts warn this may not fully address the risks, as suppliers could still access network data. Innocenzo Genna, a telecommunications lawyer, highlighted that Western contractors may face challenges collaborating with firms they do not trust.