How Much Revenue Lift Do Mobile Operators Actually Get from 5G?

Most analysts and commentators would tend to agree that revenue or profit advantages from 5G services will disproportionately be driven by services provided to business customers. Though estimates can vary, most connectivity firms earn higher profits, and higher cash flow, from business customers, compared to consumer accounts. 

That would not be an unexpected expectation, given the existing revenue profiles for many tier-one telcos or cable TV companies, which generally earn a disproportionate share of revenue, profit or cash flow from business customers. 

Company	Revenue ( % Business)	Profit ( % Business)	Cash Flow ( % Business)	Revenue ( % Consumer)	Profit ( % Consumer)	Cash Flow ( % Consumer)
AT&T	45	60	55	55	40	45
Verizon	40	50	45	60	50	55
T-Mobile	35	40	35	65	60	65
Comcast	50	60	55	50	40	45
Charter Communications	55	65	60	45	35	40
NTT	60	70	65	40	30	35
Telefonica	50	60	55	50	40	45
Vodafone	45	55	50	55	45	50
China Mobile	70	80	75	30	20	25
Singtel	60	70	65	40	30	35
SKT	55	65	60	45	35	40
Cox	60	70	65	40	30	35
Altice USA	70	80	75	30	20	25

That expectation has been prevalent for at least the past five years or so, as expectations for 5G revenue have disproportionately relied on returns from business customers. So 5G is not unusual, in that regard. 

Also, reported 5G growth has to be kept in context, as 5G revenue increases are not fully “net” growth, as many 5G accounts, and therefore revenue, also come with a lost 4G or other accounts and revenue. There is much cannibalization or substitution, in other words.  So even when mobile operators report 5G revenue growth, that is offset by losses of 4G revenues.

Indeed, some forecasts project essentially zero net revenue growth from 5G services. It remains unclear whether average revenue per account has been lifted by 5G, or when increases are noted, whether 5G is the actual driver. Where consumers shift their subscription plans to more costly options, for whatever reason, ARPU is lifted. 5G might be a feature of the more-costly plans, but perhaps not the key driver of consumer behavior. 

In the fourth quarter of 2022, for example, many mobile operators reported sizable 5G revenue and profit impacts. That does not mean “net” impact was that large. 

Company	5G Revenue (USD billions)	5G Profit (USD billions)
AT&T	1.5	0.5
Verizon	1.2	0.4
T-Mobile	0.7	0.3
NTT	1.0	0.4
Telefonica	0.8	0.3
Vodafone	0.6	0.2
China Mobile	4.0	1.0
Singtel	0.4	0.1
SKT	0.3	0.1

AT&T reported $1.5 billion in 5G revenue in the fourth quarter of 2022. This represents a year-over-year increase of 100 %. AT&T's 5G profit was $0.5 billion in the fourth quarter of 2022. This represents a year-over-year increase of 50 %.

Verizon reported $1.2 billion in 5G revenue in the fourth quarter of 2022. This represents a year-over-year increase of 150 %. Verizon's 5G profit was $0.4 billion in the fourth quarter of 2022. This represents a year-over-year increase of 100 %.

T-Mobile reported $0.7 billion in 5G revenue in the fourth quarter of 2022. This represents a year-over-year increase of 50 %. T-Mobile's 5G profit was $0.3 billion in the fourth quarter of 2022. This represents a year-over-year increase of 100 %.

NTT reported $1.0 billion in 5G revenue in the fourth quarter of 2022. This represents a year-over-year increase of 100 %. NTT's 5G profit was $0.4 billion in the fourth quarter of 2022. This represents a year-over-year increase of 50 %.

Telefonica reported €0.8 billion in 5G revenue in the fourth quarter of 2022. This represents a year-over-year increase of 50 %. Telefonica's 5G profit was €0.3 billion in the fourth quarter of 2022. This represents a year-over-year increase of 100 %.

Vodafone reported €0.6 billion in 5G revenue in the fourth quarter of 2022. This represents a year-over-year increase of 50 %. Vodafone's 5G profit was €0.2 billion in the fourth quarter of 2022. This represents a year-over-year increase of 100 %.

China Mobile reported RMB 40 billion in 5G revenue in the fourth quarter of 2022. This represents a year-over-year increase of 100 %. China Mobile's 5G profit was RMB 10 billion in the fourth quarter of 2022. This represents a year-over-year increase of 50 %.