The Competition and Markets Authority (CMA) has approved the £12.5bn merger between telecoms giant BT and mobile phone firm EE, despite the concerns of the firms’ rivals that the transaction will affect competition.
The merger, announced in February this year, will be completed in March 2016.
The CMA said there were no legal obstacles towards the merger as the two firms operated largely in separate areas.
"The group does not provisionally believe that, in a dynamic and evolving sector, it is more likely than not that BT/EE will be able to use its position to damage competition or the interests of consumers,” said John Wotton, chairman of the CMA inquiry.
"We recognise that this is a merger which is important to many consumers and businesses. We have heard a number of concerns from competitors. After a detailed investigation, our provisional view is that these concerns will not translate into a competition problem in practice."
The two firms involved have said the deal will enable them to invest billions more into Britain's digital economy.
However, the competitors - led by Vodafone - voiced their concerns that a merger between the largest mobile provider EE and BT, which dominates in the landlines and broadband sector, could seriously harm customers and businesses.
"We strongly believe the combination of the UK's dominant supplier of digital fixed infrastructure, upon which all other providers rely, with the largest mobile operator would have a negative impact on the market and the services available to millions of UK consumers and businesses,” said Vodafone’s spokesperson.
"Overall, we are disappointed to read these initial findings by the CMA."
The CMA will publish the full findings of its provisional report later this week alongside all other published information relating to the inquiry.
Interested parties will have until 19 November to put forward their response to these provisional findings. The CMA has also set a deadline of ‘early December’ for any other submissions related to the inquiry.
The final report will be published no later than 18 January.