Vodafone has binned its pager service after competition regulators threatened an in-depth investigation of its proposed sale to Capita.
The telecoms firm agreed a deal to sell its pager business to Capita in February. The support services giant operates PageOne, the only other pager service remaining in the UK.
But this morning the Competition and Markets Authority (CMA) said the merger "could lead to a substantial lessening of competition".
The CMA added the tie-up meant customers could face price rises and a reduced quality of coverage. It concluded that unless "undertakings" could be made by Capita, an in-depth "phase 2" investigation would be launched.
Vodafone called the CMA conclusion a "surprising decision".
A spokesperson for the firm said: "No other country in Europe has more than one wide area paging network.
Due to the expense involved with a prolonged investigation, Vodafone will not pursue the transaction and has made the decision to close down this business, which is based on ageing, standalone technology no longer supported by network vendors.
Vodafone said it would work to minimise the impact on around 1,000 customers still using its service.
A PageOne spokesperson said: “We are disappointed that the acquisition has not been approved at phase 1 by the Competition and Markets Authority.”