A group of European mobile phone operators has agreed to slash roaming charges which are paid by customers when they use their handsets to make and receive calls abroad.
The move by the companies, including UK firm Orange and Germany's T- Mobile, comes as the European Commission considers regulatory action to enforce price cuts after concluding that the industry is guilty of imposing "excessive" roaming charges on mobile users.
Other mobile firms involved in the agreement, co-ordinated by the industry's international trade body the GSM Association, include Wind and Telecom Italia in Italy, Norway's Telenor SA and Sweden's TeliaSonera.
Under the terms of the deal the mobile companies have agreed to cap the average wholesale rate they charge when a customer from another provider uses their network at €0.45 (31 pence) a minute from October.
They plan to reduce the cap to €0.36 (25p) a minute from October 2007 - representing a cut of almost half from current wholesale prices.
Announcing the agreement in a joint statement yesterday, the mobile phone companies said that they aimed to ensure that their customers benefited from the reductions as quickly as possible.
"The operators commit to pass the benefits of these wholesale reductions on to customers through market-driven reductions in retail prices as fully and quickly as possible," the companies said.
T-Mobile chief executive Rene Obermann said the agreement on cost reductions made it "apparent that market forces in the mobile industry function and do not need regulatory intervention".
But O2, which is understood to have refused to endorse the agreement, warned that the deal between the mobile operators might be regarded by EU officials as "price collusion". The company insists that its own mobile roaming charges are already at or below the levels the group of operators is planning to meet.
The EU's IT commissioner Viviane Reding is expected to try and introduce legislation next month calling for mobile roaming charges to be scrapped completely.