Viasat Inc., a global communications company, and Inmarsat, a leading provider of global mobile satellite communications services, remain committed to working with the UK’s Competition and Markets Authority (CMA) to demonstrate how their planned transaction will benefit airline, passenger, and enterprise users of In-Flight Connectivity (IFC) in aviation businesses. viasat inmarsat
“There is great interest in ubiquitous, high-performance, affordable IFC, so the CMA’s decision to proceed to a Phase 2 review is not unexpected, even though IFC represents less than 10% of the revenues of the combined company,” said Mark Dankberg, CEO and executive chairman, Viasat. “This is still a nascent, dynamic, and rapidly evolving business, with existing providers and extremely well-financed new entrants bringing new technologies and new business models to increase adoption among airlines, passengers, and aircraft types. We intend to work closely with the CMA to show that our transaction will benefit customers by improving efficiencies, lowering costs, and increasing IFC availability around the world—and to reach a satisfactory conclusion in Phase 2.”
“There is no lack of competition in satellite connectivity for the aviation sector,” said Rajeev Suri, Inmarsat CEO. “Strong players are already offering in-flight connectivity and the new low-earth orbit (LEO) players—which already operate over half the satellite broadband capacity available globally—are aggressively and successfully targeting aviation. We expect competition to be robust in the years ahead and, together, Viasat and Inmarsat will be well-placed to invest in the technologies needed to meet the growing needs of aviation customers and compete with the LEOs and others.
“In addition, the highly complementary combination of Viasat and Inmarsat will support the UK Government’s objective to drive growth by providing more jobs and investment in the UK space industry than we expect could be provided by Inmarsat as a standalone satellite communications provider,” Suri added.
As their engagement with the CMA progresses, the companies will determine and communicate any updated expectations for closing.
The proposed transaction has already secured several key regulatory approvals, most recently with the UK Government’s clearance of the proposed transaction under the National Security and Investment Act, and over the summer from the Committee on Foreign Investment in the United States.
Viasat is a global communications company that believes everyone and everything in the world can be connected. For over 35 years, Viasat has helped shape how consumers, businesses, governments and militaries around the world communicate. Today, the Company is developing the ultimate global communications network to power high-quality, secure, affordable, fast connections to impact people’s lives anywhere they are—on the ground, in the air or at sea.
Inmarsat delivers world leading, innovative, advanced and exceptionally reliable global, mobile communications across the world – in the air, at sea and on land – that are enabling a new generation of commercial, government and mission-critical services. Inmarsat is powering the digitalisation of the maritime industry, making operations more efficient and safer than ever before. It is driving a new era of inflight passenger services for aviation, while ensuring that aircraft can fly with maximum efficiency and safety.
CMA’s investigators concluded that it is too difficult for airlines to switch providers once they have installed their connection, so the merged entity could effectively lock-out other potential competitors. The resulting loss of competition could ultimately affect cost quality and availability of services for airline passengers, according to Colin Raftery, the CMA’s Senior Director. “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,” said Raftery.