According to the new report from Dell’Oro Group, the complexity of 5G SA is driving vendor revenues much higher relative to the same stage for 4G – however 5G mobile core network revenue growth is expected to slow over the next two years.
This, it says, it because operators are putting off transformation projects due to “elevated server costs.”
The report also adds that EMEA (Europe, Middle East and Africa) will drive most of the mobile core network revenue over the next five years, and that while it was superseded by 5G, 4G core revenue grew last year and the analyst has raised its forecast for it.
It also reckons AI will have a “variable impact” on mobile core networks – in that while there will be opportunities for efficiency and revenue generation, there will also be a risk of escalating costs.
“The way the 3GPP standards unfolded created an offset between 5G RAN spending and the implementation of 5G SA,” said Siân Morgan, Senior Director at Dell’Oro Group. “However, the complexity of the 5G SA is driving cumulative vendor revenues much higher than they were at the same stage in the LTE Evolved Packet Core (EPC) lifecycle.
“5G SA revenues have not yet peaked. The majority of mobile network operators haven’t made 5G SA services available to a broad base of their customers. Some operators are delaying core transformation projects because memory shortages are driving up server prices, but we expect double-digit 5G Mobile Core Network revenue growth to resume in 2028.”
A report from earlier in the year from Dell’Oro said that 5G Standalone “reached an inflection point” last year, with 5G Core making up 50% of total MCN revenue for the first time.
It also noted that standard-setting bodies, vendors, and operators are working together to “expand the ecosystem with new products, applications, and monetization features that are expected to deliver future benefits.”
RedCap radios, which reduce the cost of IoT devices for consumer wearables and industrial applications, network slicing for mission-critical and on-demand applications, IMS data channels, and Open APIs that enable developers to scale their applications across all operators, were offered up as examples of this.
Meanwhile the analyst has put out another report this week which says 5G deployment is expected to grow for another two years, boosting demand for microwave transmission equipment.
“We anticipate at least two more years of growth for point-to-point microwave transmission equipment,” said Jimmy Yu, Vice President of Dell’Oro Group. “This growth will be primarily driven by the ongoing expansion of 5G networks, as global coverage increases.
“After this period, demand for mobile backhaul equipment is likely set to decline until 6G mobile radio deployments enter the picture. Similar to the 5G cycle, we anticipate most of the growth will be in fiber-based backhaul systems initially, but after that, once again, demand for microwave transmission systems will be on the rise.”
The firm also projects that over the next four years wireless backhaul share will increase because of the expansion of 5G in regions that depend more on point-to-point microwave connectivity – but by 2030 this trend will reverse as initial 6G deployments will favour cell sites equipped with fibre-based systems, apparently.
Source: https://www.telecoms.com/5g-6g/operators-have-spent-208-more-on-5g-sa-than-4g-comparatively
