Vodafone is claiming that the changes it has made to its mobile phone packages will see a saving of 40 per cent for roaming charges by the summer of 2007.

The Vodafone Passport scheme allows customers to sign up to pay a one off connection fee of 75p for a call made abroad and then the normal call rate. The further reductions in costs announced today will bring the average cost per minute for calls down from €0.90 to €0.55.

Vodafone is also making agreements with other mobile operators across Europe to reduce the cost of calls not made on a Vodafone network.

Arun Sarin, chief executive of Vodafone, hailed Passport as a success and said that prices were coming down across Europe. The addition of Passport to a mobile phone account is free of charge and more than six million people have signed up.

The mobile phone operators have been under considerable pressure from the European Commissioner Viviane Reding to reduce these costs.

Mr Sarin disputed the need for the EU to make pricing decisions for the mobile phone operators, saying "we believe the market is the best way to meet customer needs, not regulation".