Forcing the two companies to give up valuable spectrum threatens to undermine this plan.
However, the CMA said it was “concerned about the practicality of such a remedy”.
In its initial findings regarding the tie-up, the watchdog also warned the deal could lead to tens of millions of customers paying more on their mobile bills. The CMA concluded that the deal would lead to price increases or see customers get a reduced service such as smaller data packages in their contracts.
The watchdog raised concerns that this would negatively affect people who are least able to afford mobile services, as well as those who may have to pay more for services they do not value.
Stuart McIntosh, chair of the CMA, said: “We’ve taken a thorough, considered approach to investigating this merger, weighing up the investment the companies say they will make in enhancing network quality and boosting 5G connectivity against the significant costs to customers and rival virtual networks.
“We will now consider how Vodafone and Three might address our concerns about the likely impact of the merger on retail and wholesale customers while securing the potential longer-term benefits of the merger, including by guaranteeing future network investments.”
Margherita Della Valle, Vodafone’s chief executive, said: “Our merger is a catalyst for change. It’s time to take off the handbrake on the country’s connectivity and build the world-class infrastructure the country deserves.
“We are offering a self-funded plan to propel economic growth and address the UK’s digital divide.”