This week, Viasat has moved one step closer to completing its acquisition of fellow satellite communications specialist Inmarsat, with the UK’s Competition and Markets Authority (CMA) granting unconditional approval for the deal on Tuesday.
The transaction, first announced in November 2021, entails the merging of both companies’ satellite assets, which currently include around 20 geostationary devices providing services in the Ka-, L-, and S-bands. An additional ten geostationary spacecraft are planned for launch by 2024. Furthermore, Inmarsat intends to deploy 150–175 low Earth orbit satellites as part of its ORCHESTRA project.
The magnitude of the merger had raised concerns for regulators around the world, prompting investigations into the deal’s potential impact on market competition. The CMA was particularly apprehensive about the likelihood of the deal causing more expensive in-flight Wi-Fi services, leading to a thorough investigation launched in October last year.
By March 2023, the CMA had provisionally cleared the takeover, pending the results of its Phase 2 investigation. The recently-completed Phase 2 probe concluded that the merger should not have a negative impact on market competition. This is largely due to the expanding nature of the satellite communications sector and the emergence of new players.
Richard Feasey, who chaired the CMA’s investigation into the merger, explained: “The satellite communications sector is evolving at a 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. After carefully scrutinizing 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 approval marks the latest in a series of hurdles for the deal to clear, including permissions from both the Foreign Investment Review Board of Australia and the Committee on Foreign Investment in the US.
However, even larger challenges remain, most notably from the European Commission and the US Federal Communications Commission (FCC), both of which are currently conducting their own independent investigations into the merger. The European Commission is expected to announce its decision on June 29. In contrast, the FCC’s investigation could take even longer, following complaints by rival satellite operators, including Elon Musk’s SpaceX.
