Mobile Core Network (MCN) growth to slow due to slow roll-out of 5G SA networks

The slow uptake of 5G Standalone (SA) networks is decreasing the growth for the overall Mobile Core Network (MCN), which also includes IMS Core and 4G Core (EPC).  Dell’Oro Group [1.] forecasts worldwide MCN 5-year growth will be at a 3% compounded annual growth rate (CAGR).

“The cumulative revenue forecast for the period 2022 to 2026 is over $50 billion. The overall revenues and the CAGR have been dampened by the muted uptake in 5G SA networks,” according to Dave Bolan, Research Director at Dell’Oro Group. “5G SA network deployments have not matched the hype, with only 19 networks launched to date,” Bolan added.
“CSPs (Communication Service Providers) have three choices for offering 5G: Dynamic Spectrum Sharing (DSS), 5G Non-standalone (5G NSA with LTE signalling and 4G EPC), and 5G SA. Only 5G SA requires the new 5G Core and many CSPs seem content for the time being to stick with DSS and 5G NSA. At the same time, CSPs are evaluating the option of moving 5G workloads to the public cloud, which is delaying the market uptake for 5G SA,” Bolan added.
Via email Dave noted that the MCN market doesn’t shrink, it just isn’t going to grow very much as shown in this chart (right vertical axis):

Source: Dell’Oro Group
Additional highlights from the Dell’Oro MCN report:
  • 5G MCN, IMS Core, and Multi-Access Network Computing (MEC) will have positive growth rates for the forecast period while 4G MCN will experience negative growth.
  • By 2026, 99% of the revenue for network functions will be from cloud native Container-based CNFs.

Via email, Dave wrote: The journey for network virtualization started in 2015 with ETSI NFV. We went from Physical Network Functions (PNFs) to Virtual Network Functions (VNFs) to cloud-ready VNFs, to Cloud- Native VNFs (CNF), to Container-Based Cloud-Native VNFs. Container-Based (CNF) enable microservices.

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Separately, the Global mobile Suppliers Association (GSA) recently wrote that only 99 operators in 50 countries are investing in 5G standalone (SA) core network, which includes those planning/testing and launched 5G SA networks.

The GSA said at least 20 network operators (Dell’Oro says 13) in 16 countries or territories are believed to have launched public 5G SA networks. Another five have deployed the technology, but not yet launched commercial services or have only soft-launched them.  So only 20.6% of the 481 5G network operators (investing in 5G licenses, trials or deployments of any type) have deployed 5G and that percentage is lower if you go by Dell’Oro’s 13 5G SA network operators.

From GSA’s The Power of Standalone 5G – published 19th January 2022:

Importantly, the 5G standalone core is cloud-native and is designed as a service-based architecture, virtualizing all software network functions using edge computing and providing the full range of 5G features. Some of these are needed in the enterprise space for advanced uses such as smart factory automation, smart city applications, remote control of critical infrastructure and autonomous vehicle operation. However, 5G standalone does mean additional investment and can bring complexity in running multiple cores in the network.

This will be a potential source of new revenue for service providers, as digital transformation — with 5G standalone as a cornerstone — will enable them to deliver reliable low-latency communications and massive Internet of things (IoT) connectivity to customers in different industry sectors. The low latency and much higher capacity needed by those emerging service areas will only be feasible with standalone 5G and packet core network architecture.

In addition, the service-based architecture opens up the ability to slice the 5G network into customized virtual pieces that can be tailored to the needs of individual enterprises, while maximizing the network’s operational efficiency. Advanced uses for 5G NR aren’t backward- compatible with LTE infrastructure, so all operators will eventually need to get to standalone 5G.

Standalone 5G metrics:

  • Volume: Gbps per month
  • Speed: Mbps (peak), Mbps (guaranteed)
  • Location: Network Slice, service per location
  • Latency per service or location (dependent on URLLC in the 5G RAN and 5G Core)
  • Reliability or packet loss
  • Number of devices per square km
  • Dynamic service-level agreements per location
  • Full end-to-end encryption and authentication

Source: CCS Insight

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Note 1.  Dell’Oro Group is a market research firm that specializes in strategic competitive analysis in the telecommunications, networks, and data center IT markets. Our firm provides in-depth quantitative data and qualitative analysis to facilitate critical, fact-based business decisions. For more information, contact Dell’Oro Group at +1.650.622.9400 or visit www.delloro.com.

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Feb 8, 2022 Update from Dave Bolan of Dell’Oro Group:

As of December 31, 2021 there were 21 known 5G SA eMBB networks commercially deployed.

5G SA eMBB Network

Commercial Deployments

Rain (South Africa)

Launched in 2020

China Mobile

China Telecom

China Unicom

T-Mobile (USA)

AIS (Thailand)

True (Thailand)

China Mobile Hong Kong

Vodafone (Germany)

Launched in 2021

STC (Kuwait)

Telefónica O2 (Germany)

SingTel (Singapore)

KT (Korea)

M1 (Singapore)

Vodafone (UK)

Smart (Philippines)

SoftBank (Japan)

Rogers (Canada)

Taiwan Mobile

Telia (Finland)

TPG Telecom (Australia)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

References:

Slow Uptake for 5G Standalone Drags on Mobile Core Network Growth, According to Dell’Oro Group

GSA: 200 global operators offer 5G services; only 20 (Dell’Oro says 13) have deployed 5G SA core network

Dell’Oro: Mobile Core Network Market 5 Year Forecast

Why It’s Important: Rakuten Mobile, Intel and NEC collaborate on containerized 5G SA core network

T-Mobile US: 5G SA Core network to be deployed 3Q-2020; cites 5G coverage advantage

Rakuten Symphony Inc. to provide 4G and 5G infrastructure and platform solutions to the global market

Heavy Reading: “The Journey to Cloud Native” – Will it be a long one?

 

 

 

 

 

2 thoughts on “Mobile Core Network (MCN) growth to slow due to slow roll-out of 5G SA networks

  1. Where is all the 5G standalone we were expecting?

    Dell’Oro’s not giving a lot away here, but there is one clear takeaway from its announcement: the amount of noise we have heard from operators about standalone 5G clearly does not match the reality.

    As the analyst firm points out, telcos have a number of technologies at their disposal for 5G, such as dynamic spectrum sharing (DSS) and non-standalone options.

    “Only 5G SA requires the new 5G Core and many CSPs seem content for the time being to stick with DSS and 5G NSA,” Bolan pointed out. “At the same time, CSPs are evaluating the option of moving 5G workloads to the public cloud, which is delaying the market uptake for 5G SA,” he said.

    5G SA is not going anywhere; the telcos are still talking up their plans for rolling out the technology. But the question is whether it will be as pervasive as we once believed. And, as always, for how long will we have words instead of action.

    https://telecoms.com/513030/where-is-all-the-5g-standalone-we-were-expecting/

  2. Bolan points to multiple surprising holdouts on 5G standalone core adoption, including Verizon, AT&T, two of the three operators in Korea, and operators in Switzerland.

    Carriers With 5G Cores Remain Lonely

    5G cores remain incredibly rare — only 19 5G standalone (SA) networks have been deployed on these cores to date — and while that number could double in 2022, it still signals a “slow uptake,” according to Dave Bolan, research director at Dell’Oro Group.

    “At a minimum, I would expect about as many as in 2021, but not more than 20 to 25,” Bolan wrote in response to questions.
    T-Mobile activated the world’s first 5G SA network in August 2020, followed later that year by all three of China’s largest carriers, and Rain in South Africa, according to Bolan. An additional 13 networks joined the 5G SA party in 2021, including Vodafone’s networks in Germany and U.K., Telefónica O2 in Germany, SingTel, KT, STC, M1, Smart, SoftBank, Rogers, Taiwan Mobile, Telia, and TPG Telecom, he added.

    “5G SA network deployments have not matched the hype,” Bolan concluded.

    https://www.sdxcentral.com/articles/news/carriers-with-5g-cores-remain-lonely/2022/01/

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