A seven-year probe into alleged overcharging on overseas calls by mobile operators was today dropped by the European Commission.

Vodafone, O2 and T-Mobile had faced the threat of multi-million euro fines after the Commission accused them of charging “unfair and excessive” prices.

But today the Commission said that new rules it has recently introduced, to slash the cost of calling home from abroad, had made the case redundant.

The decision to drop the anti-trust case marks a significant victory for the mobile operators in their battle with Brussels.

The Commission rarely terminates investigations of possible abuse of dominant positions without fines or a settlement.

Many mobile companies had fiercely contested the new 'roaming' regulation leading to a souring of relations between them and Viviane Reding, the EU Telecoms Commissioner.

In a further victory for the operators the EU Ombudsman is to investigate the Commission's handling of the case. The Ombudsman's probe follows a complaint from O2 that it was not given a fair chance to defend itself. The Commission had tried to dismiss the complaint.

A spokesman for O2 said: “The company has maintained from the outset that the case against it was completely without foundation and is pleased the Commission has come to the same conclusion.”

The investigation had focused on ‘wholesale’ roaming charges - the rates charged by one operator to another to enable its customers to make calls while visiting another country.

However higher wholesale rates can be passed onto consumers as increased retail prices.

Vodafone and O2 were under investigation for their charges in Britain while Vodafone and T-Mobile were being investigatd over their practices in Germany between 1997-2003.

The Commisson - which kicked-off its probe with dawn-raids on the offices of Vodafone and eight competitors - said at the time that it feared the mobile giants could be abusing their dominant market positions.

Initially the operators had faced accusations of collusion. These were later dropped after the Commission found no evidence of price-fixing.

In a statement the Commission said: “This (new) regulation addresses the same issues as those raised in these antitrust cases, and clearly resolves them for the future ...

“The Commission has decided to close the case."

The new roaming laws will see the cost of a making a call while abroad capped at 49 eurocents per minute and an incoming call at 24 eurocents.

Operators start to inform their customers about the changes today with many expected to introduce the charges in time for the Summer holidays.

At present, calls made from abroad can be up to 50 times more expensive than a standard UK national call.

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