Vodafone Group PLC's (LSE:VOD) agreed UK mobile merger with Three is being examined by the UK competition watchdog to see if a full investigation is needed.
The Competition and Markets Authority (CMA) said it has started a 'phase one' probe, where it will take up to 40 days before deciding whether the merger may result in a substantial lessening of competition that would require a deeper 'phase two' inquiry.
Last year, Vodafone agreed to merge its UK operations with Three UK, which is owned by Hong Kong's CK Hutchison, to create a £15bn entity, with the FTSE 100 group a 51% majority owner.
The CMA said it started the initial formal investigation after receiving evidence and information from both companies, as well as early views from other industry organisations.
It will focus only on competition, with the watchdog noting that its remit does not cover other potential effects of the merger might have, such as access to personal data or issues around national security.
CMA chief Sarah Cardell said: "This deal would bring together two of the major players in the UK telecommunications market, which is critical to millions of everyday customers, businesses and the wider economy. The CMA will assess how this tie-up between rival networks could impact competition before deciding next steps."
As well as merging its UK operation, last year Vodafone agreed to sell its Spanish business, to Zegona Communications (LSE:ZEG), and said it was exploring options for its Italian unit.