The process of transferring 5G workloads to the public cloud is taking more time than expected due to the sluggish speed at which the industry is implementing 5G standalone (SA) solutions. As a result of this, financial advisory firm Dell’Oro decided to scale back its growth predictions for revenues produced by 5G SA workloads based in the public cloud.
The firm now forecasts accumulated revenue to hit $5.4 billion by 2027. This signifies a compound annual growth rate (CAGR) of 65% over five years, which is still noteworthy, but falls short of the previous forecast. In August 2021, Dell’Oro projected that accumulated revenues would exhibit a CAGR of 88% in the five years leading up to 2026, reaching $4.6 billion.
“This revision comes in the wake of a slow migration to 5G SA by mobile network operators (MNOs) for their eMMB networks, and by enterprises for their private 5G SA wireless networks,” Dave Bolan, research director at Dell’Oro, stated.
By the end of the second quarter, only 36 operators had launched 5G SA. The number of operators investing in 5G SA remained stagnant in the second quarter at 115. Telco public cloud hasn’t exactly caught fire, with most companies not jumping on the bandwagon just yet. The same is true for private 5G SA networks where the uptake in enterprises has been equally slow.
“While some networks have been commercially deployed, most remain as long-term proofs-of-concept or field trials, which could last a few years,” noted Bolan.
It is projected that hyperscale cloud providers such as Amazon Web Services (AWS), Google Cloud, and Microsoft Azure will collectively command 6% of total market revenue in the next half-decade by handling 5G workloads on their respective public clouds.
The multi-access edge compute (MEC) market, will also have to wait for the business from hyperscalers. In five years, Dell’Oro predicts HCPs will amass $1.3 billion in revenue from this market. The anticipated CAGR is a notable 86 %, making it the area of highest growth for HCPs.
However, $1.3 billion is relatively small when compared to the wider MEC and mobile core network (MCN) market, projected by Dell’Oro to reach $50 billion by 2027.
While there remains substantial untapped potential in the 5G SA and MEC markets for hyperscalers, their current share remains marginal in their overall corporate revenues.
