Viasat and Inmarsat merger may lead to inferior plane wifi, says watchdog

theguardian.com:

The $7.3bn (£5.4bn) takeover of the British satellite company Inmarsat by its US rival Viasat could result in higher-priced and lower-quality wifi for plane passengers, according to the UK competition watchdog.

The Competition and Markets Authority said its investigation has identified concerns with the merger possibly leading to airlines being offered lower-quality products for onboard wifi and facing higher prices to deliver it.

The CMA’s findings come weeks after the UK government cleared the deal, saying the takeover of Inmarsat did not pose a threat to national security.

The watchdog said that while there are new players in the satellite communications market seeking to target the aviation sector – such as Elon Musk’s Starlink, OneWeb and Telesat – it is not certain any of them will be able to effectively compete against Inmarsat and Viasat.

“This is an evolving market, but the merging companies are currently two 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 Rafferty, senior director at the CMA.

“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.”

Inmarsat provides mobile satellite services that underpin email, internet and video conferencing, as well as in-flight wifi and communications services for ships. The takeover of Inmarsat is the California-based Viasat’s largest-ever acquisition.

The two companies disagreed with the CMA’s assessment, with Viasat pointing out that there are “extremely well-financed new entrants” to the sector – a nod to Musk, the world’s richest man with a net