*

Starlink set to have first ground station by June, sources say

*

Company plans 10-15 stations in Vietnam, sources say

*

Plan proceeding amid US tariff risks, fate unclear

By Francesco Guarascio and Phuong Nguyen

HANOI, April 1 (Reuters) - SpaceX is readying a ground station in Vietnam for Starlink satellites and plans many more, two people with knowledge of the talks told Reuters, in a move that would herald its launch in the country and would help authorities police internet traffic.

The possible investment follows Vietnam's decision, amid U.S. tariff risks, to allow Starlink to operate under a five-year pilot programme by which owner Elon Musk can retain full control of SpaceX's local subsidiary, circumventing strict limits on foreign ownership.

Hanoi has asked SpaceX to set up at least one ground station in Vietnam, according to a decision by the prime minister, dated March 23 and reviewed by Reuters.

That station could be up and running as early as May or June in the central Vietnamese city of Danang, and may be part of a network of up to 15 in the country, said the two people, who were briefed about the deliberations.

It is unclear whether the plans would move forward if Vietnam is slapped with high tariffs, which U.S. President Donald Trump has said will be announced on April 2 for countries the administration reckons are unfairly benefiting from their trade with the United States.

SpaceX and Vietnam's technology ministry did not reply to requests for comment.

The plan would make Vietnam the host of one of the largest such Starlink networks. Starlink operates in more than 100 countries and territories, but does not disclose how many ground stations it has. Not all of the countries have a ground station, which communicate with satellites and forward data to users.

Starlink Installation Pros, a company that says it specialises in installing Starlink services but is not related to Starlink, says on its website Starlink has about 150 ground stations globally, with nearly half in the United States.

'OLIVE BRANCH'

Starlink is still completing its application to operate in Vietnam, and is also in talks for the possible provision of secure intranet communication services, said one of the people, a Vietnamese official, who noted the intranet plan had not yet been approved by the government.

The Vietnamese government has authorised Starlink to serve a maximum of 600,000 customers - a limit that, in a country with internet prices lower than Starlink's and where only remote, poor areas are not covered by high-speed connections, may encourage Starlink to offer additional services.

The second source, who was briefed about a meeting in March between representatives for Starlink and local authorities, said Starlink's investment would be about $3 million for the ground station in central Vietnam.

Both sources said that the plan entailed the establishment of 10-15 stations across Vietnam, but that regulatory steps had so far only been taken for the first.

They declined to be named because the information was not public.

Negotiations to obtain favourable ownership conditions for Starlink, which Vietnam initially opposed, resumed in recent months amid increasing risks that Vietnam might face damaging tariffs from the Trump administration over its large trade surplus with Washington, which topped $123 billion last year.

A third person familiar with the discussions described Vietnam's change of tack on Starlink as an "olive branch" to Musk, a close ally to Trump.

Starlink had run a free trial service in Vietnam, one of the sources and another Vietnamese official said. The official had noted that the service allowed the coast guard to guide drones in the South China Sea, and was interrupted when talks over ownership rights were put on hold at the end of 2023.

Ground stations optimise Starlink's services in a country. At the same time they allow regulators to monitor more closely data transfers, which is a crucial issue in tightly controlled Vietnam, one of the sources said.

All traffic generated in Vietnam "must pass through this gateway", the prime minister's March decision says, setting requirements on data storage, identification of users and suspension of service on security grounds.

SpaceX has pledged to invest $1.5 billion in Vietnam, according to a report published in September on the Vietnamese government portal, and has told suppliers to move some production operations to the Southeast Asian nation. (Reporting by Francesco Guarascio and Phuong Nguyen; additional reporting by Khanh Vu)