TAMPA, Fla. — The U.K. provisionally cleared Viasat’s plan to buy London-based Inmarsat March 1 after finding the deal would not substantially reduce competition for providing Wi-Fi on planes.

The approval by the U.K.’s Competition and Markets Authority (CMA) is subject to a public consultation, and the deal also still needs to clear a separate in-depth investigation that Europe launched Feb. 13 into its impact on inflight connectivity (IFC) competition.

While the geostationary satellite operators compete closely in the IFC market, the U.K.’s competition watchdog said they face “significant competition” in coming years from Starlink, OneWeb, and other emerging players in low Earth orbit.

Established IFC providers Intelsat and Panasonic are also investing in IFC, the CMA found, and have partnered with OneWeb to boost their capabilities.

Meanwhile, Starlink recently won its first contract with a European airline, airBaltic, as SpaceX continues to rapidly expand the constellation with additional satellites.

“This is an evolving and rapidly expanding sector, in which there have been significant developments even during the course of our 4-month investigation,” said Richard Feasey, who chaired the CMA’s investigation.

“We see this continuing as demand for satellite connectivity increases.”

The consultation deadline for responding to CMA’s provisional ruling is March 21. The watchdog’s final report is due March 30.

The European Commission expects to make its decision on the transaction by June 29.

In a joint statement, Viasat and Inmarsat hailed the U.K.’s provisional ruling as “an important milestone in the regulatory process” for a deal they announced back in November 2021.

They said the decision “acknowledges the strong evidence of the highly competitive nature of the global market for satellite communications which includes numerous providers, including well-established companies and well-funded new entrants.”

However, the in-depth competition investigations have likely dashed Viasat’s initial hopes of completing the deal by March 8.

U.S.-based Viasat also still needs regulatory approval in the United States to complete the deal.

Jason Rainbow writes about satellite telecom, space finance and commercial markets for SpaceNews. He has spent more than a decade covering the global space industry as a business journalist. Previously, he was Group Editor-in-Chief for Finance Information...