The boss of Vodafone has insisted the telecom company’s merger with rival Three – which has finally been approved by the regulator – will not result in higher prices.

The £16.5bn tie-up will create the UK’s biggest mobile network, with 27 million customers.

It has been given the go-ahead conditional on the merged companies agreeing to invest billions in the country’s 5G network and to cap certain mobile tariffs.

Vodafone’s chief executive Margherita Della Valle told the Today programme, on BBC Radio Four, the deal would be “self-funded”, which meant “no extra costs from public funding and no extra cost for our customers”.

The regulator, the Competition and Markets Authority (CMA) had previously raised concerns that the deal could drive up people’s bills.

But Stuart McIntosh, who led the watchdog’s probe into the merger, said it had now concluded, external it was “likely to boost competition” in the mobile sector and should be allowed to proceed.

“For retail customers, we would require the Parties to cap the prices for selected plans, protecting current and future customers, including customers on their sub-brands, from short-term price rises during the early implementation of the network plans,” he said.

The CMA has not specified which price plans would be protected or for how long.

The rising cost of mobile phone contracts and other digital services has been an issue of concern for regulators as has the slow pace of the UK’s 5G roll out.