Dell'Oro paints a gloomy picture for mobile core network and MEC growth

Dell’Oro Group is painting a gloomier picture for mobile core network (MCN) growth in its latest update on the MCN market. According to its latest forecast, the research firm now predicted a 1% compounded annual growth rate (CAGR) for the worldwide MCN market over the next five years, down from the 2% growth forecast last quarter.

Along with slower subscriber growth across the globe, mobile network operators (MNOs) are concerned about inflation, a possible recession and political conflicts, causing MNOs to be more cautious about capital expenditure (capex) overall, the analysts said.

Dave Bolan, research director at the firm, noted that only four MNOs have deployed pure 5G standalone (SA) networks so far this year, as opposed to the six that managed to switch on 5G SA in the first half of 2022. “5G SA deployments are growing but need more growth to offset the 4G and IMS Core market decline to impact the market,” the analyst told Silverlinings. “To return to higher growth levels, subscriber growth must return to higher levels.”

European carriers, particularly have only just started the move to 5G SA, with Vodafone in the UK and Orange in Spain leading the Euro charge in 2023.

Bolan also notes that the multi-access edge  omputing (MEC) market is lagging as commercially viable enterprise applications are taking much longer to realize than earlier hoped. “The MEC ramp-up will begin later in the forecast period: by 2027; we estimate that MEC will be 12% of the Wireless Packet Core (WPC) market as compared to 13% in the previous forecast,” the analyst tells us.

So a gloomy edge outlook for a sunny day — at least here in NYC.

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