The UK Competition and Markets Authority (CMA) is reviewing the $3.1 bn merger between SES and Intelsat. While the deal may raise initial questions about overlapping services, especially in maritime communications and in-flight connectivity (IFC), it is likely to be unconditionally cleared. The wave of consolidations in the satellite industry will impact sectors like telecommunication, cloud computing, airlines, cruises and even payments.
More Concentration But No Concerns
SES and Intelsat are both global providers of satellite capacity, primarily through GEO (geostationary) and MEO (medium Earth orbit) services. They should not be confused with satellite manufacturers—such as Airbus or Thales—or satellite launch providers like Arianespace or SpaceX. Rather, SES and Intelsat are clients of those companies. They operate across several key segments, including in-flight connectivity (IFC), maritime communications, government and defence, and media and broadcast. In essence, they are the providers of connectivity services for TV broadcasters, cruise lines, and airlines.
Despite some overlaps, the CMA is unlikely to conclude that the merger would result in a substantial lessening of competition (SLC). As seen in the 2023 Viasat/Inmarsat decision, even when the merging parties were direct competitors, factors such as rising demand, technological shifts—particularly toward low Earth orbit (LEO) satellites—and the emergence of new rivals helped ensure that the market remained competitive.
Panasonic and Intelsat (prior to the SES deal) were identified as strong and active competitors, frequently bidding for IFC contracts and maintaining significant market positions.
The CMA also placed considerable emphasis on the growing role of Starlink, which had evolved from a new entrant into a credible and increasingly successful bidder, even securing tenders with European airlines. In addition, strategic partnerships—such as those between Panasonic and OneWeb, and between Intelsat and OneWeb—highlighted how established players could strengthen their offerings by leveraging LEO satellite capacity. Applying this analytical framework to the SES/Intelsat merger, it is reasonable to expect that the CMA will once again conclude that the merged entity will remain subject to effective competitive constraints from both established rivals and emerging players.
However, unlike the Viasat/Inmarsat merger, this transaction centers more on GEO and MEO capabilities than on LEO expansion. As a result, the competitive relevance of potential challengers like Starlink or even Amazon may play a different, and perhaps less direct, role in the CMA’s assessment.
Timeline For the Merger Review
The CMA opened a phase I merger review on April 11. Based on standard procedure, the CMA will have 40 working days, until June 12, to decide whether to clear the transaction or refer it for a more in-depth Phase II investigation. Given the complexity of the satellite connectivity sector and the presence of horizontal overlaps, a Phase II referral cannot be ruled out. However, the recent Viasat/Inmarsat precedent has already provided the CMA with enough data and knowledge to assess and clear this deal in Phase I.
The Wave of Satellite Consolidation
In 2023, Viasat and Inmarsat merged in a deal valued at $6.2 billion. In September of the same year, Eutelsat and OneWeb completed a merger worth $3.4 billion. Now, SES has acquired Intelsat in a $3.1 billion transaction. Following this wave of consolidation, it is unlikely we will see another deal of this magnitude among satellite operators, as further mergers could trigger antitrust concerns. This leaves these three players—along with Starlink—as the dominant forces in the sector. However, this does not preclude the possibility of smaller deals involving other operators such as Telesat (Canada) or Hispasat (now owned by Indra, Spain).
These mergers are significant as they reflect a broader strategic transformation within the satellite communications industry. Traditionally dominated by geostationary (GEO) and medium Earth orbit (MEO) satellites, the sector is undergoing a shift toward low Earth orbit (LEO) constellations. This transition is driven by the demand for enhanced connectivity, reduced latency, and the ability to serve previously unreachable markets.
According to a recent report by Goldman Sachs, the global satellite market is poised for exponential growth, with projections indicating an increase from $15 billion in 2024 to $108 billion by 2035. In a more optimistic scenario, the market could reach as much as $457 billion within the same timeframe. This surge is fueled by the anticipated launch of approximately 70,000 LEO satellites over the next five years—a tenfold increase compared to the current number in orbit. Notably, a significant portion of these launches is expected to originate from China, highlighting the global race to establish LEO infrastructure.
Without delving into technical details, LEO satellites offer faster data transmission and broader coverage, especially in remote or underserved regions. This capability is crucial for applications such as broadband internet, cloud computing, autonomous vehicles, telemedicine, and augmented reality. For example, integrating LEO technology into mobile networks could enable seamless connectivity for services like real-time data streaming and remote diagnostics. Goldman Sachs has even tested blockchain-based satellite-to-satellite payments, which may pave the way for seamless services and transactions in space.
Below is a list of companies from SES’s investor presentation that highlights which sectors are most likely to grow and require satellite connectivity in the near future.
