The UK competition regulator has softened its stance on a major mobile merger between networks Vodafone and Three UK, saying the deal could prove to be "pro-competitive", writes Chris Newlands.

The change of tack paves the way for the £15bn tie-up to go ahead after the Competition and Markets Authority (CMA) initially expressed fears that the deal "could lead to mobile customers facing higher prices and reduced quality".

The CMA now says the merger could get the green light as long as both companies freeze certain tariffs and data plans for at least three years and invest more in 5G.

"We believe this deal has the potential to be pro-competitive for the UK mobile sector if our concerns are addressed," said Stuart McIntosh, who is leading the CMA panel investigating the merger.

Vodafone and Three announced their plans to merge their UK-based operations in June last year, which would bring 27 million customers together under a single provider.

The watchdog previously warned that tens of millions of mobile phone users could end up paying more if the merger went ahead.

It was "concerned" that combining two firms which "provide important alternatives" for customers would reduce rivalry to win new mobile customers.

Previously, Tommaso Valletti, an economics professor at Imperial College and former chief competition economist at the European Commission, said the merger would "certainly" lead to higher prices, and that he found it "difficult to see how the merger could be approved".

Giving evidence to the Business and Trade Committee last year, Professor Valletti added that his analysis over a 25-year period of similar "four-to-three" merger deals, reducing the number of major telecoms providers, showed an "unambiguous" average rise in consumer bills post-merger by 16 per cent.

With the average monthly data bill for UK consumers in 2023 at £17.60, according to Ofcom's pricing trends report published in December, a 16 per cent increase would lump an additional £33.79 on to the average

Brit's annual bill, or an extra £135.17 for a family of four.

The two groups have set out plans to protect consumer pricing and boost network investment.

Mr McIntosh said: "Our provisional view is that binding commitments combined with short-term protections for consumers and wholesale providers would address our concerns while preserving the benefits of this merger."

The watchdog is seeking responses to its proposed remedies by next Tuesday, with a deadline of 7 December for a final decision on the merger.