The CMA’s provisional approval of Inmarsat and Viasat’s merger comes as both companies face increased competition from cellular networks, drones, and other satellite services. The two companies’ combined market share is expected to decrease by almost a third once the merger is complete.
Both companies have faced a number of regulatory hurdles in Europe, stemming from concerns about the size and nature of the merger. Some had argued that the deal would give Amazon too much power, while others argued that it would limit competition in a key market. The deal has still been approved by regulators, but it is likely to face further scrutiny in the coming months.
It’s been a long five months for the competition authorities – and consumers – as they’ve waited to see what action would be taken against Viasat-SvaroAurinko’s proposed $11 billion merger. Today, the market was finally given some closure as the CMA confirmed plans to probe the deal on competition grounds. This follows confirmation by the EC earlier this month that it is investigating whether Viasat-SvaroAurinko’s proposed merger may allow it to reduce competition in the market for broadband in-flight connectivity. Whatever happens next, we can expect more delays, secrecy and speculation surrounding one of Europe’s largest mergers – something that isn’t likely to benefit either party involved.
Airlines have long been concerned that the merger of Inmarsat and Viasat would lead to inflated prices for in-flight Wi-Fi services. However, it seems that this fear is unfounded – as numerous new entrants into the space as well as longstanding incumbents will be competing fiercely for market share. This should mean that consumers will continue to benefit from affordable in-flight Wi-Fi services regardless of the merger’s outcome.
The CMA’s inquiry group is concerned that the merger of Viasat and Inmarsat will lead to significant competition in the satellite connectivity market. The inquiry group recognizes that both competitors, Starlink and Inmarsat, have announced plans to enter the market, but believes that Viasat will face significant competition from both companies.
Today’s news of the CMA’s provisional decision to accept further input from stakeholders followed months of debate and public outcry surrounding the proposal. Although there are still several kinks in the process which need to be ironed out, businesses, consumers and government officials have all indicated that they would like more time to weigh in. Given this feedback, it is likely that the final decision will be delayed until at least March of 2023.
