The UK competition regulator has provisionally cleared the merger between American and British satellite giants Viasat and Inmarsat.
The Competition and Markets Authority said the $7.3 billion deal does not substantially reduce competition for services provided on flights used by UK customers.
The watchdog said a surge in demand for satellite connectivity, driven in large part by the ever-growing use of the internet by businesses and consumers, coupled with a number of new entrants to the industry, meant that the threat posed to competition by the merger was minimal.
Richard Feasey, chair of the independent inquiry group carrying out the Phase 2 investigation, said: “This is an evolving and rapidly expanding sector, in which there have been significant developments even during the course of our 4-month investigation. We see this continuing as demand for satellite connectivity increases.
“While Viasat and Inmarsat compete closely, the evidence suggests that the merged company will face significant competition in the coming years – from both emerging players like Starlink and from established firms like Intelsat and Panasonic.
“This competition has led us to provisionally conclude that airlines and their UK customers will not be adversely affected by the deal.”
The two businesses agreed to merge in a deal announced in November 2021. The agreement has since cleared government regulatory hurdles including approval under the under the National Security and Investment Act in the UK and by the and Committee on Foreign Investment in the United States. The firms said the deal would increase the availability of more affordable, faster, and more reliable in-flight connectivity globally to operators, airlines, and passengers.
Rajeev Suri, Inmarsat CEO, said: “Inmarsat faces intense competition every day in providing in-flight connectivity.
“There is good reason to expect that intensity to increase given the power of well-funded new companies entering the sector. In the face of these changing market dynamics, the UK has much to gain by the presence of a strong satellite communications company, positioned to strengthen the country’s position in the critical space sector.”
