The Commission described the reforms as “the most ambitious plan in 26 years of telecoms market reform”.
It said the measures will reduce consumer charges and simplify red tape for mobile companies.
The proposals must be approved by the 28 EU members and European lawmakers before they can be put into effect.
Analysts say Europe is falling behind in broadband infrastructure, while telecoms companies struggle with declining revenues.
Under the plans, companies would be banned from charging for incoming calls from July 2014. All other roaming charges would be scrapped by 2016.
Mobile providers will then either have to charge customers the same prices for phone calls across the EU, or allow them to switch providers for the period they are abroad, without changing their Sim card.
‘Full and fair access’
European Commission President Jose Manuel Barroso said the proposed reforms were good for both customers and operators.
“Further substantial progress towards a European single market for telecoms is essential for Europe’s strategic interests and economic progress,” he said.
“For the telecoms sector itself and for citizens who are frustrated that they do not have full and fair access to internet and mobile services.”
The plan also includes measures to harmonise regulation across all 28 EU member states.
The Commission said that currently the industry still operates on the basis of 28 national markets, rather than one unified market, meaning customers and companies face differing prices and rules.
But under the new proposals, companies will need one authorisation to operate in all countries, rather than 28 separate ones.
Harmonisations across countries will also increase certainty for stakeholders, encouraging more investment in mobile networks, the Commission said.
There are also plans for improved consumer rights, including the right to a 12-month contract, rather than longer terms, and to more consumer friendly, jargon-free contracts.
Customers should also have the right to walk away from contracts if they are not given the internet speeds promised in their contracts.