Vodafone and the proprietor of Three UK have reached an agreement to form the largest mobile phone provider in the UK.
As a result of the companies' intention to combine their UK-based operations, the UK's largest mobile network will have about 27 million customers.
Regulators still need to approve the deal and determine whether it will raise customer prices.
With the merger of Vodafone and Three, their combined market share will surpass that of Virgin Media O2.
While EE, which is owned by BT Group, has 20 million mobile users, Virgin Media O2 has about 24 million customers.
The merger of Vodafone and Three UK, the third and fourth-largest mobile companies in the nation, will be closely examined by the Competition and Markets Authority (CMA).
The new company will be 51 percent owned by Vodafone and the remaining 45 percent by CK Hutchison, owner of Three UK.
Customers "will immediately experience a better network experience with greater coverage and reliability at no additional cost," according to Vodafone and Three.
They added that they would spend £11 billion over ten years in the UK on the fifth generation of telecoms technology.
Enders Analysis' head of mobile, Karen Egan, stated that the businesses were "certainly making a strong case for merger approval.".
It could take up to 18 months to get there, she warned, and it will be "a long and tortuous road.".
After the competition watchdog rejected UK approval for Microsoft's proposed $69 billion acquisition of Activision Blizzard, the company that owns Call of Duty, Ms. Egan continued, "The CMA's hawkish approach to mergers of late is not encouraging."
