The reduction in the forecast is caused by severe economic headwinds and the slow adoption of 5G SA networks by mobile network operators
The global mobile core network (MCN) market is expected to decline by 10% during the 2024-2028 period, according to a newly published forecast report by Dell’Oro Group.
The reduction in the forecast is caused by severe economic headwinds, primarily the high inflation rates, and the slow adoption of 5G Standalone (5G SA) networks by mobile network operators (MNOs), according to Dell’Oro.
“It bears repeating, this is the fifth consecutive time we have reduced the growth rate of the MCN market as the build-out of 5G SA networks continue to wane compared to 5G NSA networks,” said Dave Bolan, research director at Dell’Oro Group. “This is the first 5-year forecast out of the last five where the 5-year CAGR has fallen into negative territory. The count of 5G SA networks commercially deployed by MNOs remains the same as it was at the end of 2023, about 50 5G SA networks.”
For the same reasons outlined for the MCN market, Dell’Oro reduced the 5-year cumulative revenue forecast for the Multi-Access Edge Computing (MEC) market, a sub-segment of the MCN market, by 18%.
“In the case of MEC, the adoption rate is slowed much more dramatically than the overall MCN market. The industry is addressing these concerns with several initiatives such as open gateway application programmable interfaces (APIs) to attract the application development community to develop applications for the mobile industry that can easily be leveraged across all MNOs. Release 18 is introducing capabilities for new use cases, and Reduced Capability (RedCap) RAN software to bring more 5G IoT devices to market. However, these will take time to bring solutions to market and more importantly at scale to have an impact on the overall market growth,” Bolan added.
Earlier this year, Dell’Oro had stated that the market for Radio Access Network (RAN) equipment is expected to remain a tough one during 2024.
“The Radio Access Network (RAN) market is now in a downward trajectory,” Dell’Oro concluded. There was a greater than 40% increase in the RAN market between 2017-2021, a stabilization in 2022 and by the time the numbers for 2023 are said and done, the analyst firm expects a sharp decline for 2023. “Market conditions are expected to remain challenging in 2024 as the Indian RAN market pulls back, though the pace of the global decline this year and for the remainder of the forecast period should be more moderate,” the firm said.
