Two of the UK's biggest mobile phone operators agreed Wednesday to merge their businesses to capitalise on the rollout of next-generation 5G wireless technology in the country.

The tie-up of Vodafone UK and Three, which is owned by Hong Kong's CK Hutchison, will create Britain's biggest mobile phone player, with a market value of around 15 billion pounds ($18.75 billion). Vodafone will account for 51 per cent of the merged firm, with CK Hutchison owning the rest.

The groups said the merger will help them compete with their rivals on 5G technology. Vodafone CEO Margherita Della Valle described the deal as a “game-changer” for the company's home market.

“It's transformative as it will create a best-in-class — indeed best-in-Europe — 5G network, offering customers a superior experience," she said.

The companies said they are aiming to complete the deal by the end of 2024.