Why 5G Is an Easier Business Case in North America, Compared to Europe

There are at least a couple of reasons why 5G is an easier business case for at least some U.S. mobile service providers, compared to most others in Europe. All other things being equal, U.S. service providers simply are more profitable than European service providers.

“Of our studied markets, there are three where operators derive ARPUs (average revenue per user) much higher than elsewhere: Canada, Switzerland and the USA,” say researchers at Tefficient.

That, in turn, means there is more revenue to spend on infrastructure, higher revenue per customer and higher profits, on average.

source: Tefficient

U.S. mobile operators also arguably earn higher profits on revenue, based in part on scale, relatively lighter regulatory burdens, and application demand.

Another issue is wide use of unlimited usage plans in the U.S. market, which means data consumption is higher, and growing faster. That, in turn, means U.S. service providers have greater needs to shift the cost-per-bit metrics, in addition to supplying lots more bandwidth.  

source: PwC

Also, partial geographic coverage gives several service providers incentive to consider use of fixed wireless to compete with fixed service providers out of region. Of the more than 135 million U.S. home locations, no service provider has a fixed network thatt passes much more than 53 percent of those locations. That is true for Verizon and CenturyLink, which have relatively-small household coverage footprints, as well as for Sprint and T-Mobile US which have virtually zero footprint.


source: IP Carrier estimate