The Viasat and Inmarsat deal seems interesting for the regulators. The British competition regulator said that in case the deal goes through, airlines will face higher prices and lower quality on-board Wi-Fi, since a key competitor will be eliminated from the market.
Viasat signed a $7.3 billion deal in November 2021 to purchase Inmarsat. In that context, the UK Competition and Markets Authority (CMA) insisted that the takeover of the British mobile satellite communications services provider Inmarsat by Viasat would raise competition worries in the United Kingdom.
The British competition regulator said that in case the deal goes through, then airlines will face higher prices and lower quality on-board Wi-Fi. The CMA has discovered in its initial phase 1 probe that there is growing uncertainty about when the other suppliers in the aviation industry would be in a position to majorly compete with Viasat and Inmarsat.
Based on the British competition regulatory authority, switching providers after installing a connectivity solution can be extensively challenging for the airlines. Hence, the CMA stated that it is worried that the combined business may effectively lock in a huge chunk of the customer base before any emerging suppliers are in a good position to compete.
The phase 1 investigation into this merger was launched by the CMA in July 2022. Colin Raftery, CMA Senior Director, stated:
Buy Bitcoin Now“This is an evolving market, but the merging companies are currently 2 of the key players – and it remains uncertain whether the next generation of satellite operators will be able to compete against them effectively.”
“Ultimately, airlines could be faced with a worse deal because of this merger, which could have knock-on effects for UK consumers as in-flight connectivity becomes more widespread.”
Viasat and Inmarsat have been given up to five working days to come up with a viable proposal to address the concerns raised by the CMA. After that, the watchdog will have an additional five days to decide whether to accept any offer or refer this case for an extensive phase 2 probe.
In September, Viasat secured the UK government approval under the National Security & Investment Act for the Inmarsat deal.
