The Competition and Markets Authority (CMA) has raised concerns over the £15 billion merger between Vodafone and Three UK.

According to the British competition watchdog, which has launched an in-depth phase two investigation into the tie-up, the move could lead to higher prices for customers and affect investment in UK mobile networks.

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As a result, the CMA has given the two telecoms giants five five working days to respond with “meaningful solutions” to their concerns.

The CMA also raised its concerns that the deal may make it difficult for smaller mobile ‘virtual’ network operators such as Sky Mobile, Lebara and Lyca Mobile to negotiate good deals for their own customers, by reducing the number of mobile network operators capable of hosting these “virtual networks”.

In January, the CMA launched its Phase 1 investigation into the merger, which found it could “could lead to mobile customers facing higher prices and reduced quality.”

CMA Phase 1 decisionmaker for this case, Julie Bon, said: “Millions of people in the UK depend on effective competition in the mobile market in order to access the best deals for them.

“Whilst Vodafone and Three have made a number of claims about how their deal is good for competition and investment, the CMA has not seen sufficient evidence to date to back these claims.”

Bon added: “Our initial assessment of this deal has identified concerns which could lead to higher prices for customers and lower investment in UK mobile networks. These warrant an in-depth investigation unless Vodafone and Three can come forward with solutions.”