The European Parliament has voted to slash the costs of making and receiving mobile phone calls abroad.

The Parliament voted by a large majority to cap the costs of making calls from overseas to €0.49 (34p) a minute.

Additionally it ruled that receiving a call when overseas will drop to €0.24 (17p) a minute. The cuts will be spread over three years so that by 2009 it will cost €0.43 (30p) to make calls abroad and €0.19 (13p) to receive them.

"Today is a good day for consumers and business travellers in the EU," said EU Commissioner Viviane Reding.

"In a record time of only 10 months, a political agreement could be reached on the EU Roaming Regulation, thanks to the impressive support of the European Parliament and the negotiation skills of the German Presidency.

"This means that, already from this summer, mobile phone customers will start benefiting from substantially reduced roaming charges when travelling from one EU country to another.

"Europe's internal market will finally become truly borderless, even for mobile phone bills."

The EU decided to move on the issue after a study last summer showed that the cost of making roaming calls was on average four times higher than using a domestic network.

This was felt to harm tourists and businesses with cross-border activities.

After consultations with the telephone network operators failed the EU decided on regulation as the only way to drive down prices. The new charges will be implemented this summer and spread over the next three years.

The EU has set up a special website to explain charges to consumers:
Proposed roaming regulation - affordability and transparency