LONDON — Viasat’s bid to acquire British satellite mobile communications company Inmarsat has been set back following a British competition authority ruling Oct. 6 that the merger could impact competition in the market for Wi-Fi services for airlines.

The Competition and Markets Authority (CMA) said the two companies had until Oct. 13 to address its competition concerns, after which it would decide whether to accept any proposed changes or refer the bid to further investigation.

California-based Viasat agreed a $7.3 billion takeover with Britain’s Inmarsat last November and has since been seeking approvals from authorities in Europe and the United States.

CMA approval is one of the last hurdles in what has been a nearly one-year effort to secure the deal.

Last month the merger cleared a key review by the British government with a decision that the deal met national security requirements.

Both companies have significant activities in the defense and security sectors here. Inmarsat is a provider of satellite-based communications services to aviation, shipping, and government departments, including the U.K. Ministry of Defence.

Now it’s the civil-aviation sector which is tripping up Viasat: in particular, the fast-emerging market for the provision of Internet service aboard airliners.

The companies supply satellite connectivity to a range of industries but compete most closely in the supply of in-flight connectivity (IFC) for aircraft.

Colin Raftery, a senior director at the CMA, said onboard Wi-Fi 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 [like Starlink and OneWeb] will be able to compete against them effectively.”

Viasat chief executive and executive chairman, Mark Dankberg said the decision to refer the bid to the next stage of the competitions approval process did not come as a surprise.

“There is great interest in ubiquitous, high-performance, affordable in-flight connectivity, 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 Dankberg.

“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,” he said.

Inmarsat isn’t the only deal Viasat has been involved in recently. On Oct. 3 the company announced it was selling its Link16 tactical data business to L3Harris for nearly $2 billion.

That deal is also subject to various approvals.

Andrew Chuter is the United Kingdom correspondent for Defense News.

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