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The deal would create one of the world’s largest satellite broadband providers and could harm market competition
Back in November 2021, US satellite operator ViaSat struck a deal to acquire the UK’s Inmarsat for $7.3 billion.
The companies said that the tie-up would “create a leading global communications innovator with enhanced scale and scope to affordably, securely and reliably connect the world”, suggesting their complementary assets that would be used to create a “high-capacity hybrid space and terrestrial network”.
In total, the combined company would operate a fleet of 19 satellites in various orbits and using various spectrum bands, with ten more under construction.
At the time, the two operators said that they hoped the deal would close in mid-2022, but it seems that this target was overly ambitious, with various regulatory bodies being asked to weigh in on the matter due to competition concerns.
Last month, the European Commission announced that they had been asked to investigate the deal at the behest of 13 countries, meaning ViaSat will have to wait for clearance before implementing the transaction.
Meanwhile, Elon Musk’s SpaceX has also complained about the deal to the U.S. Federal Communications Commission (FCC), saying that ViaSat should not be allowed to control Inmarsat’s ground terminals due to ViaSat’s alleged spectrum licence violations. ViaSat has previously refuted SpaceX’s claims, calling them “baseless”.
Now, the UK’s Competition and Markets Authority (CMA) has announced that it is beginning its own review into the acquisition, seeking to ascertain if the deal represents “a substantial lessening of competition within any market or markets in the [UK]”.
Third parties will have until August 15th submit their comments, having been invited to do so in late July, with the CMA expected to make a decision regarding the need for an in-depth investigation by October 5.
“The CMA review, with which we will co-operate fully, is taking place against a backdrop of satellite industry consolidation as Inmarsat and ViaSat seek to create a global innovator that will safeguard UK space industry jobs and technology, while making significant investments to meet customer needs,” said Inmarsat in a comment. “The regulatory process on the ViaSat-Inmarsat transaction remains on track and has secured approval in several key markets, including from the important Committee on Foreign Investment in the US.”
Indeed, the satellite industry is currently scrambling for consolidation. SES is reportedly in merger discussions with Intelsat, while Eutelsat and OneWeb announced their intention to merge late last month.
All of these proposed satellite tie-ups revolve around rapidly gaining scale and offering a more diverse service portfolio, largely as a result of traditional geostationary revenues beginning to dry up, as well as threat presented by the meteoric rise of SpaceX’s Starlink.
