The EU's highest court has upheld the European Commission's decision to impose price limits for cross-border mobile phone calls.
The EU Commission won agreement in 2007 to set price caps for such 'roaming' call charges for Europeans using their mobile phones outside of their home country.
The European Court of Justice in Luxembourg decided that the EU rules were justified in order to protect the proper functioning of the internal market. The decision was agreed with a time limit, and is due to expire in 2012.
Four major phone operators - Vodafone, Telefonica O2, T-Mobile and Orange - have been contesting the rule changes, hoping at least to prevent its extension.
According to the phone companies, the commission's decision violates the principle of subsidiarity, whereby some decisions are taken purely at national level.
The operators argue that market forces should be left to determine a fair price for using a mobile phone abroad. Vodafone has also mentioned the possibility that the receivers of such mobile roaming calls might have to pick up the tab.
The European Court rejected the companies' complaints, deciding that 'the ceilings for retail charges must be considered to be appropriate for the purpose of protecting consumers against high levels of charges'.
This afternoon the Commission welcomed the European Court verdict supporting its efforts - and promptly declared that it was cutting the permitted maximum roaming charges even further.
The new maximum tariffs will apply from July 1, just in time for holidaymakers to benefit from the lower rates.
The maximum permitted charge for making a mobile call while abroad will fall to 32p a minute and the rate for receiving calls to 12.5p a minute.
A Commission statement said that from July 1 operators will also be obliged to apply an automatic €50 cut-off limit on accounts if the customer has not stipulated their own limit.
This is to protect against 'bill shocks' for surfing the Internet with mobiles and laptops while travelling in other EU countries.
The statement said: 'Consumers can now move around Europe without being afraid to turn on their mobile phones.
'The differences in national mobile charges and roaming charges illustrate the lack of a single market in telecoms services.
'Since the costs of providing roaming services should not be substantially different from those incurred when providing domestic mobile services, there is no justification, in a competitive market, charging customers considerably higher prices for roaming services".
The commission will be looking at its roaming rules again in a review next June, when there may be even more price cuts.
And the ultimate goal, said the statement, is to reduce the difference in domestic and roaming tariffs to virtually zero by 2015.
