The European Commission says some mobile phone users are turning off their handsets when abroad because of "excessively high" roaming charges.
The industry insists the legislation is not needed
Its call came after a survey conducted for the Commission found 70% of Europeans want it to act to reduce the cost of cross-border mobile calls.
The commission first said in July that it intended to cap roaming charges.
Europe's mobile phone networks insist legislation is not needed as they are already reducing their roaming prices.
Reaffirming its intention to bring in caps, the Commission said its latest survey also found that calls to a mobile in another country within the EU could be as much as four times higher than a call within one nation.
Commissioner Viviane Reding is leading the attack on roaming charges
European Union Information Society Commissioner Viviane Reding, who is leading the caps plan, said the current high prices were putting off people from using their phones while on holiday.
"Excessively high prices restrict mobile usage while abroad," she said.
"This hurts consumers, it hurts European industry and it hurts Europe."
The legislation to cap roaming charges is currently being debated by the European Parliament, and the Commission says it wants the new law adopted before the 2007 summer season.
However, mobile phone operators insist the legislation is not needed, and firms such as Vodafone and Deutsche Telekom have already announced plans to reduce their roaming charges.
According to the Commission, the European roaming market is worth 8.5bn euros ($11bn; £5.7bn) a year, or 5.7% of the sector's revenues.
The Commission estimates that its legislation will save European phone users 5bn euros a year.