Vodafone, Virgin Media, EE and Three have agreed to introduce a cap on bills on phones that have been reported lost or stolen.
The aim is for the cap to work in a similar way to debit and credit cards, where there is a £50 liability cap.
"Government, Ofcom and the mobile operators will undertake detailed work to determine the level of the cap and the conditions that will apply to it with the ambition of introducing the cap in spring 2014," the government said.
As part of a formal agreement that the mobile operators have signed with government to help customers get the best out of their telecoms services, they will also make contract terms more transparent from the start and eliminate roaming charges by 2016.
"Customers will not only have a better understanding of their contract from the outset but they will also have a choice, when faced with mid-contract price rises. They can accept it or end the contract without penalty," the government said.
It added: "The government has made it clear that it sees no place for mobile roaming charges in a true European Single Market."
Digital Agenda commissioner Neelie Kroes proposed a law to remove expensive roaming charges in the EU in September.
Recently, Vodafone was found to be the only mobile operator failing to meet government targets on 3G mobile coverage. EE, Three and O2 met their coverage obligations by the 30 June 2013 deadline.
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