LONDON, July 3 (Reuters) - Britain's Vodafone ( VOD )

and Virgin Media O2 have reached a new network sharing agreement

in the UK including a plan to shift spectrum which could help

Vodafone ( VOD ) win regulatory approval for its tie-up with mobile

operator Three.

A planned $19 billion merger between Vodafone's ( VOD ) UK operation

and Hutchison's Three UK unit is the subject of an

in-depth probe by the UK's Competition and Markets Authority

(CMA).

Under Vodafone ( VOD ) and Virgin Media O2's new long-term deal, the

enlarged Vodafone-Three entity would sell spectrum to Virgin

Media O2, which the companies said would improve mobile

connectivity, choice and competition for customers.

That could help address the regulator's concerns about a

merger which is set to reduce the number of mobile networks in

Britain to three from four.

"We believe that this new agreement addresses the issues we

have voiced and the CMA outlined in its initial decision,"

Virgin Media O2 CEO Lutz Schuler said in a statement.

Vodafone ( VOD ) said the network-sharing deal would allow customers

of Virgin Media O2 to benefit from the 11 billion pound

investment plan in 5G networks that it has pledged should its

merger with Three win approval.

"The proposed merger, together with this agreement, will

boost competition by establishing a strong third player in the

UK mobile market," said Ahmed Essam, Vodafone's ( VOD ) CEO of European

Markets.