The UK’s Competition and Markets Authority (CMA) has cleared the merger between satellite communications companies Viasat and Inmarsat after an extensive Phase 2 review.
The deal had been referred for further investigation following a Phase 1 inquiry that identified concerns over its potential impact on competition.
The CMA panel examined a range of evidence, including internal documents from the merging companies and competitors, as well as feedback from airlines and its own analysis of the satellite sector.
While Viasat and Inmarsat compete closely in the supply of satellite connectivity for in-flight Wi-Fi, the panel determined that the merger would not substantially reduce competition in services for UK customers. It also found that the satellite sector is expanding rapidly and attracting new entrants such as SpaceX’s Starlink, which has already secured a contract with a European airline.
The decision to clear the merger is significant for the industry, as it allows the two companies to combine their resources and capabilities to offer enhanced satellite connectivity services.
Viasat and Inmarsat both provide satellite-based internet, email, and video calling services to businesses globally, including for use on aircraft.
The merger will enable the companies to offer a broader range of services and compete more effectively with other players in the sector.
The decision also underscores the CMA’s view that the satellite communications industry is highly dynamic and continues to evolve rapidly, with new companies and satellites being launched into space, and firms exploring new commercial deals.
The CMA’s decision to clear the merger comes as the satellite sector is experiencing rapid growth, driven largely by the increasing use of the internet by businesses and consumers.
In addition to Starlink, other companies such as OneWeb are also investing in the sector and completing global satellite constellations to offer connectivity services to airlines.
Established players such as Panasonic and Intelsat are also partnering with new entrants to enhance their offerings to airlines. The continued expansion of the sector is expected to benefit airlines and their customers by providing a wider range of satellite connectivity services at lower costs.
(Photo by Katya Ross on Unsplash)
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