An investigation into the proposed merger between network operators Vodafone and Three is being planned by the Competition and Markets Authority (CMA) over concerns that it could lead to higher prices for consumers.

Last year, both businesses announced a joint agreement, which would bring their 27 million customers under a single network provider. There are only four major operators in the UK, and this would unify half the market under one banner.

The regulator already carried out a Phase 1 investigation in January to identify whether the deal may lead to a “substantial lessening of competition”. The Phase 2 investigation will now allow an independent panel of experts to probe in more depth the initial concerns identified at Phase 1.

The proposed deal has already sparked security concerns over Three owner CK Hutchison, which has Chinese ownership.

But outside of that, the CMA said the merger has the potential to reduce rivalry between mobile operators to win new customers, which helps to...