The competition commission has authorised the merger of two of Switzerland's newer telecommunications companies, diAx and Sunrise. But it noted there was a lack of competition in certain sectors of the telecommunications market.
The commission said on Tuesday it had taken a detailed look at the proposed merger and concluded that it did not represent a danger to competition in Switzerland.
It said in a statement that the two companies would only have significant market share in the provision of Internet services. It added that since this is a very fast moving segment of the market, competition would not be threatened.
The commission also said that in the course of its examination of the merger it had determined that competition was lacking in some areas of the telecoms market.
It cited the "last mile" - the end link between subscribers and providers - as a particular concern. The government has agreed in principle to lift the monopoly on the last mile enjoyed by the former state-owned operator, Swisscom, but the Federal Court has delayed the move.
The competition commission also described as "problematic" the limited number of third generation mobile phone (UMTS) licences in Switzerland.
Four licences were bought by four separate operators after they went on auction on December 6. DiAx/Sunrise secured one, with the others going to Swisscom, Orange, and Telefonica of Spain.
swissinfo with agencies