The popularity of flat rate data tariffs is growing in Europe, Ovum analysts say. In a region lagging behind Asia in terms of mobile internet uptake, European operators are exploring new business models that prevent bill shock.

The report entitled, Innovative Consumer Data Tariffs in Europe: Enabling the Mobile Internet, looks at the pros and cons of different flat-rate plans in place today and offers suggestions for operators that want to increase non-voice ARPU. The authors of the report are senior analyst, Elsa Lion, and analyst, Jonathan Arber.

Telecom Italia, the largest mobile operator in Italy, has introduced a flat-rate tariff of EUR 20 a month for mobile phone access to the internet. The offering targets customers with pre-paid, fixed-charge subscriptions - the preferred method of payment in Italy - and encourages these price-sensitive subscribers to take advantage of additional services such as mobile internet access.

T-Mobile's flat-rate mobile internet service, Web 'n' Walk, was launched in 2005. By the end of 2006, 1.2 million customers were using Web 'n' Walk. The service is available in the UK for EUR 11 (GBP 7.50), with a generous download limit.

The operator 3 launched the X-Series globally in November 2006 and has lowered its fees in the UK as of April 2007. The standalone rates for the X-Series vary from EUR 7 (GBP 5) to EUR 21 (GBP 15) depending on the additional services.

Ovum lists the most common packaging options as bolt-on, capped fee, inclusive allowance and per-minute tariffs.

Simplifying the mobile internet experience for customers is critical for success, not just in the content available, but in the way it is marketed. Customers get confused by operators pushing mobile data as a product rather than a service. At the same time, many operators do not want to be perceived only as an access pipe. The balance between offering services and access will be challenging to navigate.

The report also points out that as devices improve and more support a full HTML browser, operators will have to offer and promote large data limits in order to avoid bill shock for customers venturing out on the mobile internet.