British competition regulator the CMA, begins phase one investigation of $7.3 billion merger between Inmarsat and Viasat
The UK’s Competition and Markets Authority (CMA) has launched a probe into the merger between US satellite operator Viasat and Inmarsat.
It was last November when US-based Viasat first revealed its intent to acquire British satellite telecommunications company Inmarsat for $7.3 billion, in order to “create a leading global communications innovator with enhanced scale and scope to affordably, securely and reliably connect the world.”
The deal however is attracting regulatory scrutiny. In late July the European Commission signalled the deal would need its approval before it could be completed.
The Commission said it had received requests from 13 countries, namely Belgium, Bulgaria, Cyprus, Denmark, Finland, France, Ireland, Italy, the Netherlands, Norway, Romania, Spain, and Sweden to assess the proposed acquisition.
Both Viasat (based in the US) and Inmarsat (based in the UK) operate their own satellite networks and provide two-way satellite communication globally to commercial customers and governments.
The Commission said it was investigating because the transaction might affect competition in a market for the supply of satellite in-flight connectivity services for commercial aviation in the European Economic Area.
The combined entity is expected to operate a fleet of 19 satellites that are currently in service. An additional 10 satellites are under construction and planned for launch within the next three years.
Its investigation began on 10 August and the CMA said it would announce its decision whether to to refer the merger for a Phase 2 investigation on 5 October 2022.
Effectively both the CMA and European Commission will investigate whether the deal will decrease competition in the sector.
But the two firms are relatively small players competing against much larger rivals – some of which have access to significantly more resources.
SpaceX’s Starlink for example already has approximately 2,900 Starlink satellites in operation.
There is also Amazon.com’s Project Kuiper, which plans to spend $10 billion to construct a network of more than 3,200 satellites in low Earth orbit.