Carriers worldwide are expected to invest a total of $50 billion in mobile core networks (MCNs) between 2021 and 2025. It represents a CAGR of 3%.

The more exciting bit is 5G core (5GC) spend, which, on the back of 5G standalone (SA) network rollouts, is estimated to expand at much a more rapid clip of 33% CAGR. Strong growth here offsets corresponding declines in 4G and IMS core investment.

These were some of the headline findings from Dell'Oro Group's latest five-year forecast for the MCN market, although the investment picture is far from uniform.

Dell'Oro expects the bulk of MCN spend (40–45%) will come from the Asia-Pacific region, powered in the main by China and South Korea as they migrate comparatively early to 5G SA networks and 5GC.

The market research firm expects Europe, the Middle East and Africa to grab a 30–35% slice of the $50 billion MCN pie, followed by North America (18–23%) and the Caribbean and Latin America (5–10%).

China 5GC auction

"China was all the action in 2020," Dave Bolan, research director at Dell'Oro Group for MCN MEC, told Light Reading via email.

He expects that trend to continue, especially in the first half of the forecast period. Bolan points out that phase one of the 5G SA rollout in China amounted to over $1 billion in 5GC contracts, and the pace of rollout is accelerating with phase two. Phase three is now being readied.

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"5GC builds by the three incumbent service providers for 5G SA networks in China are continuing to exceed our expectations," he said in prepared remarks. "In addition, in 2021, the new Chinese communications service provider, China Broadcasting Network, will begin construction of its 5G SA network."

Dell'Oro does not yet provide vendor market share for MCN, but Bolan said Huawei and ZTE, given the size of China, are currently in the lead.

Deployments of more 5G SA networks are expected in the latter half of 2021 in Australia, Germany, Japan, South Korea, Switzerland and the UK. AT&T and Verizon, adds Dell'Oro, "should begin in earnest in 2022 and 2023" with their 5G SA networks.

Network slicing not a priority (yet)

"The basic network to get the 5G core up and running is the focus today," Bolan told Light Reading. "NSSF [network slicing service function] and NEF [network exposure function] will come in the second half of the forecast."

By the year 2025, Dell'Oro expects MCN functions associated with 5G to represent over 70% of the revenue mix between 4G and 5G MCN functions.

— Ken Wieland, contributing editor, special to Light Reading