TAMPA, Fla. — Viasat’s plan to buy London-based Inmarsat has just regulators left to clear in the United States and Europe after getting unconditional approval from the United Kingdom.
The U.K.’s competition watchdog said May 9 that although the two satellite operators compete closely, particularly to provide Wi-Fi on planes, their merged company would face sufficient competition from established and emerging players.
The satellite communications market is also rapidly evolving, said Richard Feasey, who chaired the Competition and Markets Authority’s (CMA) investigation into the deal.
Attracted by increasing demand for connectivity in the air and other areas terrestrial networks cannot reach, lower latency broadband constellations from SpaceX and OneWeb are adding new competitive pressures on Viasat, Inmarsat, and other legacy geostationary satellite networks.
Panasonic and Intelsat, two established inflight connectivity providers, also recently partnered with OneWeb to complement the services they offer from geostationary orbit.
OneWeb deployed the remaining satellites in March needed to provide global coverage later this year, and SpaceX said May 5 it has more than 1.5 million customers for Starlink as it continues to expand its constellation rapidly.
“All the evidence has shown that the sector will continue to grow as the demand for satellite connectivity increases,” Feasey said in a statement.
“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.”
The CMA launched its in-depth investigation into the deal in October, known as Phase 2 in the U.K., after a Phase 1 review identified concerns that it could lead to more expensive and poorer quality Wi-Fi for plane passengers.
Under Phase 2, the CMA considers whether it is more likely than not that a deal will substantially lessen competition.
The regulator provisionally cleared Viasat’s Inmarsat takeover March 1, subject to a public consultation, following a four-month investigation that included analyzing internal documents from the merging companies and their competitors.
The CMA’s final ruling bodes well for a separate merger review the European Commission kicked off Feb. 13, also prompted by concerns over the deal’s impact on the inflight Wi-Fi market.
The European Commission has said it expects to make its decision by June 29.
The Committee on Foreign Investment in the United States (CFIUS) approved the deal last year; however, the merger still requires a green light from the U.S. Federal Communications Commission.
The satellite operators had hoped to complete the deal by March 8 before it became the subject of in-depth regulatory investigations.
They did not give an updated timeline for closing the transaction, worth $7.3 billion when it was announced in November 2021 through a mix of cash and shares.