The European Commission has given a conditional go-ahead for the merger of Orange UK and T-Mobile UK, owned by France Telecom and Deutsche Telekom respectively.
The Commission, Europe's top competition authority, agreed to the deal on condition that the two companies change their existing network sharing agreements with a third smaller player, Hutchison Whampoa's 3UK, to "ensure that there remain sufficient competitors in the market," the Commission said in a statement.
The merger investigation showed that the deal as initially notified could put at risk the future of T-Mobile's Radio Access Network sharing agreement with 3UK, the UK's smallest mobile network operator. The Commission said the termination of this agreement could threaten 3UK's viability on the market and possibly force it out of the market.
It also insisted that the joint entity sells a quarter of their combined spectrum in the 1800MHz band, which is one of three frequency bands currently used for mobile communications in the UK.
Competition Commissioner Joaquin Almunia said in the statement he was "happy" a quick solution to the potential competition problem was found.
Orange UK is a wholly owned subsidiary of the French incumbent telecommunications operator France Telecom. It provides mobile telephony services in the UK and, to a lesser extent, broadband internet access services on a fixed network.
T-Mobile UK is a wholly owned subsidiary of the German incumbent telecommunications operator Deutsche Telekom. It provides mobile telephony services in the UK.