Dell’ Oro estimates that about 75% of 5G subscribers will be on 5G SA networks in 2028

The global mobile core network (MCN) market growth rate has been reduced to less than a 1% CAGR during the 2023-2028 period, according to a newly published forecast report by Dell’Oro Group.

The report noted that the growth in this market will be led by the Multi-access Edge Computing (MEC) market segment and the 5G MCN market segment.

“This is the fourth consecutive time we reduced the growth rate of the MCN market as the build-out of 5G Standalone (5G SA) networks continues to wane compared to 5G Non-standalone (5G NSA) networks,” said Dave Bolan, research director at Dell’Oro Group. “The buildout of 5G SA networks is going slower than anticipated which is restraining growth in the marketplace. To date, we count fifty 5G SA eMBB networks that have been commercially deployed worldwide by mobile network operators (MNOs). We counted 18 new 5G SA networks in 2022, but only 12 were launched in 2023. On a positive note, we believe a lot of work has been done in the background, preparing for 5G SA launches by mobile operators and we expect 2024 to have more launches than 2022.”

The report highlighted that the MEC market segment will lead the charge for growth rates in the MCN market with an expected 26% CAGR in the 2023-2028 period, followed by the 5G MCN market segment at a 7% CAGR.

“In 2028, we project about 75% of 5G subscribers will be on 5G SA networks. Additionally, about 60% of 4G subscribers are expected to be on converged 5G cores in 5G SA networks. The market anticipates that the growth of the MEC market will be energized by the introduction of reduced capability new radio (RedCap NR) equipped IoT devices, bringing more 5G IoT devices to the market at lower price points. 5G Advanced was recently approved and we expect minimal impact on the 5G MCN market segment, except in China during the forecast period,” Bolan added.

In a conference call to announce fourth quarter and full year 2023 financials, Ericsson CEO Börje Ekholm described a “difficult mobile networks market marked by persistent headwinds”. He called the slowdown in North American spending “unprecedented.” Ekholm also acknowledged a spike in salesIndia as carriers there rapidly deploy 5G but, he said, that business would call off as “the investment pace normalizes.”

Historically, the Ericsson executive said large declines in the mobile market are followed by a rebound. “That is something we see will happen this time as well,” although the timing is difficult to predict.

Ekholm also said operators are having to deal with stagnant return on capital. “I think to change this there are two things we can do: We can passively wait for the market ot just improve or regulation to change, or we try to address the issue head-on by changing the way networks are consumed and monetized…We’ve chosen the latter route.”