Watchdog clears Viasat-Inmarsat merger

The UK competition watchdog, the Competition and Markets Authority, has cleared the planned merger of satellite connectivity businesses Viasat and Inmarsat after an in-depth probe.

The CMA’s Phase 2 investigation into the combination found that, while Viasat and Inmarsat compete closely, the merged company will be challenged by emerging and established competitors in coming years.

Both Viasat and Inmarsat supply businesses globally with satellite connectivity that enables services such as the internet, email, and video calling – including for use on aircraft.

Last October, the regulator referred the deal to a Phase 2 review after its initial, Phase 1, inquiry found that there were specific competition concerns.

The panel considering the merger found that while the pair compete closely in the supply of satellite connectivity for WiFi on flights, the deal does not substantially reduce competition for services provided on flights used by UK customers.

Changes in the market played a role in seeing the deal get the green light. New entrants such as Elon Musk’s Starlink are playing in the same field. Starlink recently secured its first European airline contract with airBaltic.

Others also investing in this area. Panasonic and Intelsat recently deals with OneWeb allowing them to use the latter’s satellites to enhance hir offering for airlines.

“The satellite communications sector is evolving at rapid pace – new companies are entering the market, more satellites are being launched into space, and firms are exploring and entering into new commercial deals. All the evidence has shown that the sector will continue to grow as the demand for satellite connectivity increases,” said Richard Feasey, chair of the CMA’s Phase 2 inquiry group.

“After carefully scrutinising the deal, we are now satisfied that, following the merger, these developments will ensure that both airlines and their UK customers will continue to benefit from strong competition.”