The proposed merger between Vodafone and Three could lead to higher prices or a reduced service for millions of mobile users, the UK's competition watchdog has said.The Competition and Markets Authority (CMA) said it had particular concerns those customers least able to afford mobile services would be most affected.

Vodafone’s agreement to merge its U.K. business with rival operator Three raises competition concerns, the U.K.’s antitrust authority said, creating uncertainty on a deal poised to shake up the country’s telecommunications market.

Vodafone's merger with Three UK could win regulatory approval if they can guarantee the $19 billion deal will be good for consumers, network quality and competitors like Sky Mobile, Britain's competition watchdog signalled on Friday.

The CMA is concerned that the Vodafone-Three merger can lead to an increase in telecom prices for the customers and reduce competition.

The U.K.'s Competition and Markets Authority said the proposed merger between Vodafone and Three would lead to a "substantial lessening of competition in the U.K." phone market

Millions of mobile customers risk being hit with higher prices from a £15billion mega-merger between Vodafone and Three, watchdogs have concluded. The Competition and Markets Authority said the huge tie-up - creating Britain’s biggest mobile operator - risked users “having to pay more”.

The UK mobile networks Vodafone and Three have promised to work with the country's competition regulator to allay fears over pricing and competition regarding their proposed merger. Both companies first proposed a corporate marriage last summer and have faced regulatory scrutiny.

Vodafone’s US$19.7 billion deal for the network owned by Li Ka-shing’s CK Hutchison Holdings would create the UK’s largest carrier.

The U.K.'s Competition and Markets Authority provisionally concluded that the merger of U.K. telecommunication businesses of Vodafone (NASDAQ:VOD) and CK Hutchison's (OTCPK:CKHUY) (OTCPK:CKHUF) Three UK is likely to lead to a substantial lessening of competition in the U.