A predicted price war is being kicked off by O2, which is introducing a 25p a minute 'higher roamer' rate for customers - a 70% discount on its usual roaming rate. Users won't be charged to receive calls when they're abroad.

Small and medium-sized firms can sign up for the deal at a monthly fee of £2.50 if they agree to a 12-month contract.

The deal will initially only be available in Spain, which is the most popular foreign destination for O2 business and domestic customers.