US embassy cable - 05HANOI1046

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