Tampa, Florida. — regulators have only cleared Viasat’s plan to buy London-based Inmarsat in the U.S.The company received unconditional approval from the U.K. and is now expanding to the U.S. and Europe.
On May 9, the competition watchdog of the U.K. stated that even though the two satellite operators offer similar services, including in-flight Wi-Fi, their merger will still have to compete with other established and emerging companies.
The market for satellite communications is also evolving rapidly, said Richard Facey, The person who led the investigation into the deal was the chair of the Competition and Markets Authority (CMA).
Driven by growing demand for connectivity in air and other areas terrestrial networks cannot reach, low-latency, the emergence of broadband constellations from companies like SpaceX and OneWeb is creating new competition for older geostationary satellite networks such as Viasat and Inmarsat.
Panasonic and Intelsat, experienced inflight connectivity providers, have collaborated with OneWeb to enhance their services from geostationary orbit.
OneWeb deployed the remaining satellites in March to provide global coverage later this year. SpaceX said on May 5 that it has more than 1.5 million subscribers to Starlink as it rapidly expands its constellation.
In a statement, Facey affirmed that the satellite connectivity sector would keep expanding due to the increasing demand, as supported by the available evidence.
“Having scrutinized the deal, we are now satisfied that, post-merger, these developments will ensure that both airlines and their U.K. customers benefit from stronger competition.”
In October, the CMA initiated an extensive investigation into the deal, known as Phase 2 in the U.K., due to concerns identified during the Phase 1 review. The research was focused on the possibility of higher costs and lower-quality Wi-Fi for air travelers.
Under Stage 2, the CMA considers whether it is more likely than not that an agreement would significantly lessen competition.
The regulator provisionally cleared Viasat’s Inmarsat takeover on March 1, subject to public consultation, after a four-month investigation that analyzed The internal documents from both merging companies and their competitors will be examined.
The final decision made by the CMA is good news for the independent merger review initiated by the European Commission on February 13. This review was launched due to concerns about how the deal would affect the in-flight Wi-Fi market.
The European Commission is expected to decide by June 29th.
Last year, the Committee on Foreign Investment in the United States (CFIUS) approved the agreement. However, the U.S. Federal Communications Commission still needs to approve the merger.
The satellite operators had intended to finalize the agreement before March 8 to avoid undergoing a more comprehensive regulatory inquiry.
An updated timeline for the $7.3 billion transaction, announced in November 2021 and involving cash and stock, has yet to be provided.