Europeans are now paying far less for broadband internet and cell phone calls compared with previous years, boosting their use and helping the telecoms sector grow faster than the rest of the economy, the European Commission said.

The European Union now has more mobile phones than people, the EU executive said, as penetration rates hit 119 per cent, well above the US and Japan.

Average cell phone bills have fallen by more than a third in the last five years, it said, while monthly charges for broadband internet access dropped by at least a fifth from 2007 to 2008.

Higher take-up has helped the telecoms industry to grow by 1.3 per cent last year and reap revenues of €300 billion, the EU said, outpacing the EU's gross domestic product by around one per cent. Lower prices have also helped dampen inflation, it said.

EU telecoms chief Viviane Reding said regulatory efforts to increase competition were paying off and claimed that more use would help shield telecoms companies from recession.