U.S. markets closed
  • S&P Futures

    3,965.25
    +3.25 (+0.08%)
     
  • Dow Futures

    33,889.00
    +32.00 (+0.09%)
     
  • Nasdaq Futures

    11,532.25
    +7.50 (+0.07%)
     
  • Russell 2000 Futures

    1,840.00
    +2.20 (+0.12%)
     
  • Crude Oil

    78.96
    +0.76 (+0.97%)
     
  • Gold

    1,766.70
    +3.00 (+0.17%)
     
  • Silver

    21.43
    -0.01 (-0.03%)
     
  • EUR/USD

    1.0350
    +0.0015 (+0.14%)
     
  • 10-Yr Bond

    3.7480
    +0.0450 (+1.22%)
     
  • Vix

    21.89
    -0.32 (-1.44%)
     
  • GBP/USD

    1.1974
    +0.0024 (+0.20%)
     
  • USD/JPY

    138.8000
    +0.1660 (+0.12%)
     
  • BTC-USD

    16,945.04
    +672.71 (+4.13%)
     
  • CMC Crypto 200

    402.46
    +13.74 (+3.53%)
     
  • FTSE 100

    7,512.00
    +37.98 (+0.51%)
     
  • Nikkei 225

    27,858.16
    -169.68 (-0.61%)
     

Musk's in-flight Wi-Fi launch ‘faces risk from tech merger’

Space X Starlink Satellite Elon Musk - SpaceX/Rex
Space X Starlink Satellite Elon Musk - SpaceX/Rex

The $7.3bn merger between Inmarsat and US rival Viasat poses a threat to Elon Musk’s efforts to break into the market for in-flight Wi-Fi, the competition watchdog has claimed.

Both Britain’s Inmarsat and Viasat offer in-flight connectivity services beamed down from satellites, providing airline passengers with data connections when flying.

Mr Musk’s company, Starlink, has been trying to win customers among carriers, securing a deal with Hawaiian Airlines in April in its first major contract win.

The Competition and Markets Authority (CMA) said it was considering referring the merger for an in-depth investigation over concerns the combined company could lock out rivals by securing key contracts with major airlines before rivals are ready to compete. The companies now have five days to provide potential remedies to the regulator.

A “phase 2” investigation could end with the regulator demanding changes to the deal or even seeking to block it.

Mr Musk’s Starlink, Britain’s OneWeb and Canada’s Telesat have all been exploring in-flight Wi-Fi offerings, although none are as developed as Inmarsat and Viasat.

Starlink has launched thousands of satellites into “low earth orbit”, roughly 500 miles above earth, to provide broadband signals.

Starlink - SpaceX
Starlink - SpaceX

The CMA added the lack of competition would have an adverse impact on airlines, who could face higher prices for Wi-Fi connectivity, and this would put up costs for passengers.

However, Rajeev Suri, Inmarsat’s chief executive, said: “There is no lack of competition in satellite connectivity for the aviation sector.”

He added: “Strong players are already offering in-flight connectivity and the new low-earth orbit players - which already operate over half the satellite broadband capacity available globally – are aggressively and successfully targeting aviation.”

Industry sources said Starlink’s rapid growth was threatening satellite incumbents, forcing them into mergers in order to achieve scale and refresh growth to take on the new arrival.

Starlink’s parent company, SpaceX, secured $1.5bn (£1.3bn) in funding earlier this year, valuing it at $125bn.

Viasat, the US satellite company valued at $3bn, has been vocal about its opposition to Starlink. In a filing with telecoms regulator Ofcom, it accused Mr Musk of trying to build a space “monopoly” to snuff out competition.

Meanwhile, Mr Musk’s company has urged US regulators to block Viasat’s merger with Inmarsat, accusing it of “blatant” violations of telecoms rules and of seeking to “impede competition at all costs”.

Mark Dankberg, Viasat’s chief executive, said in-flight connectivity would make up just 10pc of the combined businesses.

He said: “We intend to work closely with the CMA to show that our transaction will benefit customers.”