Should the Viasat/Inmarsat merger eventually close, the company may need to send a thank you present to the Starlink team at SpaceX. After four months of additional review, the UK’s Competition and Markets Authority (CMA) issued a provisional approval to the combination, and the upstart LEO operator is cited as a major factor in the determination.
[F]eedback from airlines overall suggest that they have confidence that Starlink is likely to succeed and to be a strong competitor.– CMA filing
Last October the CMA cited the potential for airlines to 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.” After a deeper review of the competitive landscape, however, those concerns are no longer pressing. Indeed, the CMA now believes “the aggregate constraints the Merged Entity would likely face from other rivals are significant and are likely to increase,” such that the inflight connectivity market will remain sufficiently competitive going forward.
In its analysis the CMA reviews the competitive position of Intelsat, Anuvu, and Panasonic Avionics. Both Intelsat and Panasonic are cited as “significant constraints” on the merged pair, in large part owing to the LEO/GEO hybrid solutions they are developing in partnership with OneWeb. Anuvu is seen as a “moderate constraint” owing to its focus only on narrow-body aircraft.
The CMA also considers the emerging suppliers, Starlink, Amazon, Telesat, and OneWeb. OneWeb is covered in the hybrid solutions, while neither Amazon nor Telesat are seen as viable quickly enough to affect the analysis.
Starlink, however, attracts significant attention in the report.
The CMA highlights the major milestones achieved by Starlink since the review commenced in October. They include activation of the first aircraft in service, as well as securing a contract with airBaltic, an airline that will fly with the service active to and from the UK.
LEO services still have concerns about performance in more dense areas such as airport hubs, and the CMA recognizes that challenge. But the planned expansion on the constellation is sufficient to meet the CMA’s criteria for ensuring competition, “Future satellite launches will increase its capacity and geographic coverage and will likely improve the quality of IFC service that Starlink can provide at airport hubs and other areas where there is concentrated demand.”
The CMA also notes that both Starlink and OneWeb (with Gogo and Satcom Direct as distribution partners) are competing in the business aviation segment, providing another competitive balance to the merger pair.
Hitting these major milestones in the past few months has been huge for Starlink on its own, of course. In reading the report, however, it is clear that Starlink’s recent advances give the CMA confidence the market is not losing too much in the way of competition with this merger.
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