The Competition and Markets Authority has paved the way for Liberty Global and Telefonica to merge their UK operations.
It has provisionally cleared the merger of Virgin Media and O2 after initially raising concerns that either party could raise prices or reduce the quality of their wholesale services, or withdraw them altogether.
Having examined the evidence, the CMA inquiry group has now provisionally concluded that the deal is unlikely to lead to any substantial lessening of competition in relation to the supply of wholesale services.
Martin Coleman, CMA panel inquiry chair, said: “Given the impact this deal could have in the UK, we needed to scrutinise this merger closely.
“A thorough analysis of the evidence gathered during our phase 2 investigation has shown that the deal is unlikely to lead to higher prices or a reduced quality of mobile services – meaning customers should continue to benefit from strong competition.”
Both Liberty Global and Telefonica still expect the deal to close around the middle of the year.