CMA – Behind The Black – Robert Zimmerman

UK regulators give okay on Viasat’s purchase of Inmarsat

May 10, 2023 9:46 am Robert Zimmerman

After months of delay, the United Kingdom’s Competition and Markets Authority (CMA) regulators has finally admitted that Viasat’s purchase of Inmarsat would not reduce competition in the communication satellite industry, and has approved the purchase unconditionally.

The evidence analysed by the panel shows that, while Viasat and Inmarsat compete closely– specifically in the supply of satellite connectivity for wifi on flights – the deal does not substantially reduce competition for services provided on flights used by UK customers.

The evidence also shows that the satellite sector is expanding rapidly – a trend that is set to continue for the foreseeable future. This is due to increased demand for satellite connectivity, driven largely by the ever-growing use of the internet by business and consumers.

The CMA press release is a classic of bureaucracy blather. Essentially, it tries to make it sound like this agency did lots of difficult hard work to discover what is patently obvious, that without this merger these two companies will almost certainly not be able to compete with the emerging new satellite communications companies coming on line.

The best thing that the UK could do to encourage competition and new industries in the UK would be to defund this agency, now. Its existence accomplishes nothing other than to stand in the way.

UK bureaucracy provisionally clears Viasat-Inmarsat merger

March 1, 2023 9:40 am Robert Zimmerman

We’re here to help you! The United Kingdom’s Competition and Markets Authority (CMA) has now provisionally approved the merger deal between the two communications satellite companies Viasat and Inmarsat by admitting the obvious, that the deal will do nothing to reduce competition in the presently thriving communications satellite industry.

Over the past 4 months, an independent CMA panel has gathered and scrutinised a wide range of evidence in order to better understand the sector, as well as the potential impact of the deal. This included internal documents from Viasat and Inmarsat, as well as the companies’ competitors (including their plans for future expansion); evidence from airlines; the CMA’s own analysis of sector conditions – and how these could change.

…The CMA’s investigation into the Viasat/Inmarsat deal has provisionally found that, while the companies compete closely in the aviation sector – specifically in the supply of satellite connections for onboard wifi – the deal does not substantially reduce competition for services provided on flights used by UK customers.

Duh. In other words, these bureaucrats spent four months determining what is self-evident to every person who pays any attention to the business of space. Furthermore, both companies are badly threatened by the new players in this industry, like OneWeb and Starlink. This dithering by bureaucrats threatens their survival, as these older companies want to merge to give them the resources to better compete. Being forced to sit and wait only increases the chances that both will go bankrupt, thus reducing competition, the very thing this government agency is supposed to encourage and protect.

Not that the CMA has come to any real decision yet. As its press release notes so nobly, “Today’s findings are provisional, and the CMA will now consult on its findings and listen to any further views before reaching a final decision.”

UK regulators to investigate Viasat-Inmarsat merger

August 10, 2022 9:03 am Robert Zimmerman

The United Kingdom’s Competition and Markets Authority (CMA) yesterday opened an investigation into the purchase of InMarsat by Viasat, announced in November ’21, to see it that merger would “result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services.”

This investigation will clearly delay the merger. It also appears somewhat counter-productive, considering that Inmarsat has been having trouble making money in recent years due to the market’s shift from its big geosynchronous satellites to constellations of smallsats in low Earth orbit, such as SpaceX’s Starlink. Viasat meanwhile has been desperately trying to block Starlink because of that very competitive threat.

By merging, these two satellite companies might survive and compete with the new orbital constellations. Otherwise, they might both go out of business, thus reducing competition. It seems the CMA will be shooting itself in the foot if it blocks this merger.