U.S. Mobile Networks Might Generate 5 to 8 Times More Revenue than Fixed Networks

Mobile networks generate vastly more revenue per home than do fixed networks, as much as five times to eight times more revenue per home. 

There are about 122 million U.S. homes. Assume that Comcast, Verizon, AT&T generate $32 billion in fixed network revenue between them. Assume CenturyLink generates $20 billion annually, about $10 billion from the traditional access business (consumer, small business, enterprise access). So assume fixed network access revenue from those four companies is about $42 billion. 

Assume those four companies pass about 90 percent of U.S. homes, collectively. That suggests revenue per passing for those four firms is about $344 per passing, per year. 

Annual revenue for all mobile service providers in the United States is about $283 billion. Assume 80 percent of those accounts are consumer subscriptions, and can be correlated with homes. That suggests consumer mobile revenue of about $226.4 billion, and a per passing revenue of about $1855. 

That tells you much about the relative value of fixed and mobile networks in the U.S. market. 

Here are some of the assumptions.  

In the fourth quarter of 2019, Comcast Cable generated $14.8 billion in revenue.  Total revenue that quarter was $28.4 billion. 

Verizon’s fixed network business, on the other hand, generated about $7 billion, out of total revenue of nearly $35 billion. 

AT&T had fourth quarter 2019 total revenue of nearly $47 billion. AT&T’s fixed network, plus satellite TV, generated about $18 billion in revenue.  AT&T’s “fixed network plus satellite” operations generate 38 percent of revenue. Perhaps $8 billion or so of that revenue comes from the satellite operations. So the fixed network business might generate $10 billion in revenue. 

Comcast Cable passes 58 million consumer and business locations. Comcast has 26.4 million residential high-speed internet customers, 20.3 million residential video customers and 9.9 million voice accounts, generating average cash flow (EBITDA) of $63 per unit. 

At a high level, the problem is that Verizon’s entire fixed network operation generates about 20 percent of total revenue. AT&T’s fixed network generates perhaps 21 percent of revenue. Comcast, which has a small mobile operation, generates close to $15 billion from the fixed network. 

And that, it seems to me, illustrates the problem. Comcast, AT&T and Verizon all put together generate about $32 billion in fixed network revenue, and revenue is likely to remain flat to negative. 

Verizon homes passed might number 27 million. Comcast has (can actually sell service to ) about 57 million homes passed.

AT&T’s fixed network represents perhaps 62 million U.S. homes passed. 

CenturyLink never reports its homes passed figures, but likely has 20-million or so consumer locations it can market services to. 

Looking only at Comcast, AT&T and Verizon, $32 billion in annual fixed network revenue is generated by networks passing about 146 million U.S. homes. That works out to about $212 per home passed, per year.