A deal bringing together the UK's two terrestrial transmission companies has been approved by regulators subject to conditions designed to protect broadcasters.

The Competition Commission said the £2.5bn purchase of National Grid Wireless by Macquarie UK, which owns the other transmission firm, Arqiva, could bring "higher prices and lower service quality".

It has therefore ordered Arqiva to implement a set of measures, already provisionally agreed, to stop it charging unfair prices. The company's customers include all UK terrestrial television and radio broadcasters.

Industry group RadioCentre this week said stations could be forced to close if suitable conditions were not imposed. It wanted a 25% reduction in prices for radio broadcasters.

Arqiva has agreed a package of measures with the regulator that it says will pass back about £165m to broadcasters until 2020. They include an immediate 17% discount to radio broadcasters and conditions on renewals and new contracts.

An industry adjudicator will also be appointed to resolve disputes between Arqiva and its customers.

Inquiry chairman Diana Guy said if the conditions were not met it would order a "substantial divestment" of National Grid Wireless.

She said the benefits of the deal included "reducing the risks associated with the digital switchover process and passing back cost savings to customers".

"We are very conscious that this is a unique situation given the critical importance of digital switchover and the possibility that a substantial divestment could jeopardize this process, and result in extra costs for customers," she added.

The commission's report also recognised that Ofcom was planning a review the transmission market in the future and would help oversee the measures.