In a surprise move. which pre-empted the introduction of tough new European Commission rules, the Spanish-owned group said its 16.8 million UK customers would no longer be charged for receiving calls while abroad.

Analysts feared the introduction of the new tariff, for which O2’s customers must pay £5 a month, will force rivals, including Vodafone, which is already facing fierce pricing pressures in its key European markets, into making similar cuts.

The cost for making calls abroad or “roaming” has long-provided a lucrative revenue stream for the main mobile players, accounting, analysts believe, for between 10 per cent and 15 per cent of their profits.

Though the Commission is now seeking to cut roaming charges with the introduction of price caps analysts had expected the operators to hold back on any radical moves until the proposals were made law. The plans are currently going through Parliament with the outcome of the European Union Council of Ministers’ discussions on the proposals due in mid-December.

One analyst, who declined to be named, said: “This is a bold move from Telefonica, Telefonica [the owner of O2] is eroding some of the synergy that Vodafone derives from its own footprint.”

However, a spokesman for Vodafone said its customers were “very happy” with its existing Passport scheme, a special tariff to provide low-cost calls while abroad.

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