VODAFONE and Virgin Media O2 have come to a new network agreement as the companies look to reassure regulators of competition concerns in the telecoms sector.

The companies announced on Wednesday that they had agreed to "extend and enhance" their existing agreement, which has been in place for more than a decade.

Subject to the completion of a proposed mega-merger between Vodafone and Three's UK units, the deal would see VMO2 purchase spectrum from the combined business - which the firms said would create "three high-quality, scaled wholesale competitors, further supporting an already thriving mobile virtual network operator segment in the UK".

The companies said the bulk of the deal is not subject to the Vodafone- Three merger going through.

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