A major merger planned between networks Vodafone and Three UK could lead to higher bills for tens of million of customers or give mobile users a reduced service, the UK’s competition watchdog has found.

The Competition and Markets Authority (CMA) kicked off an investigation into the merger in October last year, and in its latest progress update said that “tens of millions” of mobile customers could see the cost of their mobile packages go up or services such as data allowances reduced.

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 $19 billion merger with Three UK is under scrutiny by Britain's Competition and Markets Authority (CMA) due to concerns it could raise mobile bills and reduce competition. Nevertheless, the deal might enhance network quality and expedite 5G rollout.

CMA warns that merger of Vodafone and Three in the UK "will lead to higher prices" - The merger would create the largest retail mobile operator by revenue in the UK and the second largest in terms of customers.

Despite the UK competition authority voicing new apprehensions about the proposed £15bn amalgamation of Vodafone and Three's UK operations, market experts have indicated that the outcomes of the recent inquiry appear more favourable than anticipated.

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