Vodafone and Three agree major merger to become UK's biggest mobile network worth £15bn

Vodafone has 51 per cent of the equity of the merged company.

The deal awaits approval by regulators but could create a group with a total of 27 million mobile customers.

BT-owned EE would miss out on the number one spot, according to customer numbers.

The new company would also leapfrog O2.

However, the Competition and Markets Authority is likely to be concerned that the proposed tie-up will lead to weaker competition.

Margherita Della Valle, chief executive of Vodafone Group, said: “The merger is great for customers, great for the country and great for competition.

“It’s transformative as it will create a best-in-class – indeed best-in-Europe – 5G network, offering customers a superior experience.

“As a country, the UK will benefit from the creation of a sustainable, strongly competitive third scaled operator – with a clear £11 billion network investment plan – driving growth, employment and innovation.

“For Vodafone, this transaction is a gamechanger in our home market. This is a vote of confidence in the UK and its ambitions to be a centre for future technology.”

Canning Fok, group co-managing director of Three’s owner CK Hutchison, added: “Today’s announcement is a major milestone for CK Hutchison and for the UK.

“Three UK and Vodafone UK currently lack the necessary scale on their own to earn their cost of capital.

“This has long been a challenge for Three UK’s ability to invest and compete.

“Together, we will have the scale needed to deliver a best-in-class 5G network for the UK, transforming mobile services for our customers and opening up new opportunities for businesses across the length and breadth of the UK.”

The announcement comes after Vodafone’s boss revealed the company would cut 11,000 jobs across its markets in a bid to boost the firm’s competitiveness.