Two of Australia's largest telecommunications firms appear set to merge, after a court ruled on Thursday that the multi-billion-dollar deal between Vodafone and TPG would not pose a major threat to competition.

The Australian Competition and Consumer Commission (ACCC) had blocked an attempted Aus$15 billion (US$10 billion) merger between the country's third- and fourth-largest telecommunications companies, Vodafone and TPG.

The ACCC said it believed the smaller firm could have become an "innovative and disruptive" mobile phone provider in the country's concentrated market, which is dominated by Telstra, Optus and Vodafone Australia.

But in a case brought against the ACCC by Vodafone—which would have the majority stake in the merger—Federal Court judge John Middleton ruled in the company's favour.

"The court has come to the view that the proposed merger would not have the effect, or be likely to have the effect of substantially reducing competition... the merger can proceed," public broadcaster ABC reported him as saying.

Vodafone Hutchison Australia CEO Inaki Berroeta said a merger with TPG would increase the company's network capacity and speed up the planned rollout of a high-speed 5G network.

"The more quickly the merger can proceed, the faster we can deliver better competitive outcomes for Australian consumers and businesses," he said in a statement.

The merger is expected to be completed by mid-2020 unless shareholder opposition or an appeal by the ACCC hold up that process.

The ACCC said it was "carefully considering" the judgement.

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© 2020 AFP