European mobile phone users could make big savings under proposals from Brussels to scrap "roaming" costs incurred while travelling in another EU country.

In a move that could deal a heavy blow to mobile operators, Viviane Reding, EU telecoms commissioner, will today outline legal action that could force companies to scrap "unjustified" roaming fees - the add-on prices consumers pay to make or receive a call while abroad.

These rates vary but can account for up to 40 per cent of the cost Europeans pay to use their regular mobile phones elsewhere in the EU.

For Europe's telecoms industry, which makes 10-15 per cent of profits from these charges and is suffering from a slowdown in earnings growth, the move would be a significant setback.

Vodafone yesterday warned the European Union against rushing to bring in regulation to force down prices of mobile calls made abroad.

Vodafone, Europe's top mobile operator with around 100 million users in the region, has written to the EU arguing that competition among operators was in any case forcing charges down and warning any "ill-judged" move could have unforeseen effects on the industry.

The intervention by the world's top mobile company by sales comes when European politicians and officials are stressing the need to cut or even scrap roaming charges, long seen as a bane for travellers and tourists.

European Union information society and media commissioner Viviane Reding, who has previously said roaming charges were too high, is due to present an update on roaming charges and outline a new regulation to bring down roaming charges today. Any new regulation, which could come into force in 2007, will need the approval of member states and the European Parliament.

Taoiseach Bertie Ahern last week called roaming charges "an unnecessary evil" as Ireland moved a proposal at a two-day EU summit in Brussels to look at eliminating or reducing them.

Roaming charges are a lucrative source of revenues and earnings for mobile operators and analysts estimate a steep cut could hit them hard.

Investment bank Credit Suisse expects an outright scrapping of international roaming surcharges for intra-EU roaming to cause a loss of up to 7-9 per cent of revenues for European mobile operators and around 15 per cent of earnings overnight.

Vodafone said the EU needs to explain why it feels there is a case for regulation in a market where prices were falling.