(Alliance News) - The UK's competition watchdog on Thursday said the proposed merger of Vodafone's UK offering with CK Hutchison-owned Three UK will be the subject of a more in-depth probe.

The Competition & Markets Authority said any measures to soothe antitrust concerns were not offered to the regulator.

"The CMA has therefore decided to refer this merger for a phase 2 investigation," it said.

In March, it said the planned merger could raise consumer prices and harm investment into UK mobile networks.

"The CMA is concerned that combining these two businesses will reduce rivalry between mobile operators to win new customers," the regulator explained. "Competitive pressure can help to keep prices low, as well as provide an important incentive for network operators to improve their services, including by investing in network quality," it said in March.

Vodafone UK is owned by Berkshire, England-based telecommunications provider Vodafone Group PLC, and Three UK is owned by Hong Kong-based telecommunications, ports, infrastructure and retail conglomerate CK Hutchison Holdings Ltd.

Both are major providers of mobile telecommunication services in the UK.

Vodafone and CK Hutchison announced plans in June to combine the UK businesses into a joint venture, with Vodafone to own 51% and CK Hutchison 49% of the combined operation.

This would bring their roughly 27 million customers under a new, single network provider.

Shares in Vodafone opened slightly lower on Thursday morning in London, down 0.3% at 71.02 pence.

By Jeremy Cutler, Alliance News reporter

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