We just finished our Mobile Core Network (MCN) five-year forecast (2019 to 2024). The MCN forecast includes 4G and 5G packet core, policy, and subscriber data management network functions, as well as the IMS Core. Here are some of the highlights from the forecast:
- 5G SA networks with 5G Cores are expected to launch during the second half of 2020. Regionally, China and South Korea will lead the way, followed by the US, Western Europe, and the Middle East.
- MCN revenues are projected to grow 8% per year over the next five years with the move to 5G Standalone (5G SA).
- The cumulative revenue investments from 2020 to 2024 in 5G MCN functions are expected to be 20% of the combined investments in 4G and 5G MCN functions.
- 4G MCN revenues are estimated to peak in 2022 and decline thereafter as the move to 5G SA accelerates.
- MCN revenues Y/Y growth rates will fluctuate as different parts of the world deploy 5G SA at various times.
- Technology is beginning to transition from virtual machine servers with virtual network functions, to bare-metal servers with container-based cloud-native network functions. The total cost of ownership savings is expected to be 30% over time, with the added benefit of reduced complexity.
- As expected, the cumulative revenues for 5G MCN in the Asia Pacific will represent the largest regional share, led by service providers in China.
Over 70 SPs are now providing 5G coverage with the 5G NSA architecture. The size of 5G SA deployments in 2020 is uncertain at this time and could impact the forecast. Also, the transition from 5G NSA to 5G SA could affect the product mix between 4G and 5G network functions, though the overall size of the market would be the same.
Other factors that could impact the forecast include further price erosion than assumed, brought on by competition, not only by the incumbents, but by startups trying to break into the market, or by Cloud SPs vying for SPs to host their MCN network functions on their servers; the aggressiveness of MEC (Multi-Access Edge Computing) and FWA (Fixed Wireless Access) deployments; and the number of 5G Cores built per SP, such as dedicated 5G Cores for the consumer market, the enterprise market, and the mission-critical markets, such as public safety. Examples already exist in the LTE world, with numerous private LTE networks for enterprises, dedicated EPCs for public safety by AT&T and Verizon in the US, and separate cores for MVNOs. China Mobile and China Unicom have already awarded vendor contracts to build separate 5G Cores to serve both consumers and enterprises.
Dell’Oro Group’s Mobile Core Network 5-Year Forecast Report offers a complete overview of the market for Wireless Packet Core, IMS Core, policy, and subscriber management with historical data, where applicable, to the present. The report provides a comprehensive overview of market trends by network function implementation (Non-NFV and NFV), covering revenue, licenses, average selling price, and regional forecasts for various network functions. To purchase this report, please contact us at dgsales@delloro.com.
