Vietnam's official media reported last week that Hanoi is mulling plans for a domestic telecommunications satellite, but industry executives in Hanoi dismissed the reports as wishful thinking.

The English-language Vietnam News said Vietnam's telecommunications authorities had announced that a domestic satellite project would be set up in the near future.The report said the plan, which is expected to cost some $200 million, was aimed at meeting Vietnam's growing demand for telecommunications services.

But Western telecommunications executives in Hanoi were skeptical.

"I think it's not so much a case of satellite in the sky, as pie in the sky," said a company official who asked not to be identified.

"Well we have talked to the Vietnamese about a satellite plan, but at this stage we don't even know what it is they want. And there are a whole load of questions which would need to be answered . . . For example where are they going to put it? It's pretty crowded up there," said a Western telecom executive.

Vietnam News reported that at least five international companies were in discussion with Hanoi over plans relating to the project, including Hughes Space, Matracom Space and Alcatel Space.

The newspaper said launching a domestic satellite would be cheaper than leasing transponders on existing foreign satellites.

Vietnam currently uses transponders on satellites, which include Intelsat and Indonesia's Palapa satellite.

The report said Vietnam was hoping to get the project off the ground before the year 2000.

However, industry analysts told Reuters a number of questions would have to be resolved well before that date including the launch mode for the satellite, its geo-stationary position in an increasingly crowded sky, and how the project would be funded.

Vietnam, with a population of 72 million, had just 360,000 telephones in September last year. The media reports last Friday said that number had increased to 600,000 as of the end of July.

"The whole thing is still at a very nascent stage," the telecom executive said.