In Satellites, Antitrust Could Lead to Less Competition

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For stock investors, a new risk is orbiting the satellite market: By trying to preserve competition, antitrust regulators could end up placing even more power in the hands of a privately-owned behemoth—Elon Musk‘s Starlink. California’s Viasat announced a $7.3 billion takeover of British satellite telecommunications company Inmarsat in late 2021, making it a centerpiece in the long-awaited consolidation of the satellite market. Yet, despite the deal being cleared by the U.K. government for national-security purposes, Britain’s Competition and Markets Authority recently placed it under intense “Phase 2” scrutiny, on the grounds that it would reduce the number of players in the high-growth in-flight Wi-Fi market. Shooting down the deal could achieve the exact opposite of what the regulators hope. The Starlink network built by Elon Musk’s SpaceX is on a path to dominance, with more than 3,000 satellites already in orbit and aspirations to take that number above 40,000. Amazon's subsidiary Kuiper Systems wants to build a further 3,000, and there are smaller LEO players such as Britain’s OneWeb, as well as sovereign competition from China and Russia. The LEO threat is forcing incumbents to burn money in pursuit of economies of scale before it is too late.


In Satellites, Antitrust Could Lead to Less Competition