U.S. satellite giant Viasat's $7.3 billion takeover of UK rival Inmarsat faces in-depth competition probe

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The U.K.'s competition regulator launched an in-depth probe into American satellite internet company Viasat's $7.3 billion deal to buy British rival Inmarsat.

The Competition and Markets Authority on Friday referred the takeover for a so-called «Phase 2» competition investigation, concerned it would make it harder for competitors such as Elon Musk's SpaceX, U.K. firm OneWeb and Canadian operator Telesat to do business with the aviation sector.

Specifically, the CMA is worried the deal would lead to higher prices for onboard Wi-Fi on plane flights.

The watchdog has said Viasat and Inmarsat «compete closely in the aviation sector, particularly for the supply of onboard wifi for passenger use.» While these in-flight connectivity (IFC) services are only offered by a handful of players currently, the market «is expected to grow significantly in coming years,» the CMA says.

Such a move «could face higher prices and be offered lower quality connectivity solutions, ultimately affecting the cost, quality and availability of services for airline passengers,» it added.

The regulator said its initial investigation found it can be very difficult for airlines to switch satellite providers once they have installed network equipment. The merger of Viasat and Inmarsat could therefore «lock in a large part of the customer base» before rival suppliers emerge.

Combined, Intelsat and rival Panasonic represent more than 75% of the long-haul IFC market, the regulator stated.

«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,» said Colin Raftery, senior director of