Unraveling the Rollercoaster Ride of Mobile Core Network Growth

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The worldwide mobile core network market has just recorded the lowest quarterly growth rate in nearly six years, owing to a challenging political and economic environment alongside slow rollouts of standalone 5G networks. This analysis comes from Dell’Oro, which, while not revealing specific market numbers, has shared observations on growth trends in recent years. The market experienced its weakest growth in the third quarter of this year, dipping to levels not seen since late 2017.

Interestingly, this slowdown comes hot on the heels of a strong second quarter, which posted the highest growth rates since early 2021. Given such fluctuating numbers, Dell’Oro characterizes the mobile core network market as unstable, even describing it as being on a rollercoaster ride.

Looking at the industry’s major players, Huawei maintained the lead as the top mobile core network provider in Q3, trailed by Ericsson, Nokia and ZTE. These rankings, however, come without detailed figures that might illuminate the distribution of market shares. “The market’s volatility is often attributed to macroeconomic conditions such as fear of higher inflation rates, unfavorable currency foreign exchange rates, and the geopolitical climate,” said Dave Bolan, Research Director at Dell’Oro Group.

Another factor contributing to this inconsistent growth trajectory is the slower-than-expected rollout of standalone 5G networks by telecom operators. This aspect, often used to measure the market’s growth, is a significant driver of growth for the mobile core network market. Despite this, operators continue to launch more non-standalone 5G networks than standalone ones. The pace at which standalone 5G networks are being deployed has significantly reduced – dropping to only seven so far in 2023 from seventeen launches in the previous year.

Dell’Oro isn’t alone in its observations – the Global mobile Suppliers Association (GSA) has also highlighted a disappointingly slow growth of standalone 5G. GSA’s Q2 figures reported that only 36 operators worldwide had launched public 5G SA networks by the end of June – a mere increase of one from the previous quarter.

It should be noted that the two new entrants into the 5G SA network space in Q3 were Telefonica O2 in Germany and Etisalat in the United Arab Emirates. However, in this same period, the weakest performing regions in the overall mobile network core market were EMEA and China – surprising, given that they were among the strongest in the prior quarter. Despite this, the future still looks promising for 5G SA.

“We anticipate a larger number of 5G SA networks will be deployed in 2024 than in 2023, and we predict 2024’s market performance will outshine 2023’s,” said Bolan. Such an upward trend could potentially have a positive domino effect on the overall mobile core network space.

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