The fall comes despite Europe seeing some action on carriers like Telefónica replacing their Huawei 5G cores
Declines in China have tipped the mobile core market Ito negative growth in Q4 2024, according to the latest numbers from analysts Dell’Oro. The market ended 2024 with -4 percent YoY growth rate, driven by a 15 percent decline in the China market during the quarter. However, the analysts are forecasting that it isn’t all doom and gloom as not only were elements of the market on the up, Dell’Oro can see some green shoots and is hoping these are not weeds.
“The market has struggled to gain traction in the last three years, with three of the four quarters having flat or negative YoY growth rates,” said Dell’Oro Group research director Dave Bolan. “In 2024, we saw the lowest at -4 percent YoY.”
“However, the results for 2024 were not balanced across the technologies we track – while signalling and wireless packet core revenues were down, policy, subscriber data management, and IMS Core revenues were up YoY,” he said. “On a regional basis, China’s growth rate was negative, and to a lesser extent, the worldwide market (excluding China) was also negative. However, both market areas are projected to return to positive growth in 2025.”
“We remain cautiously optimistic about 2025, as more 5G Standalone (5G SA) networks are projected to launch than in 2024, and more subscribers continue to migrate to the existing 5G SA networks,” he said. “Additionally, voice networks look to be returning to growth, with more IMS Core networks being implemented as circuit switched core networks are phased out, plus new voice over New Radio (VoNR) networks are introduced.”
Dell’Oro reckons the 5G MCN market is expected to fuel the uptick in growth with an accelerating growth rate in 2025. Meanwhile, the multi-access edge computing market is expected to continue growing in 2025, though at a decelerating growth rate.
Vendors unchanged
According to the report, the top vendor rankings remain unchanged in 2024: Huawei, Ericson, Nokia, and ZTE. It is pretty remarkable how resilient Huawei is proving to be in the market given the more to strip its equipment out of European networks.
Telefónica just awarded the second phase of the replacement of the core of its 5G network to Nokia. The move follows a 2021 award to Ericsson and signifies that the operator will have removed Huawei technology from its 5G core. The operator first awarded Huawei the 5G Core in 2019 but the world has moved in since then with most of the larger European telcos removing Huawei in various forms from their core networks.
In Telefónica’s latest deal with Nokia, the operator will use the vendor’s Packet Core solutions to roll out low-latency services like drone control, robotics and industrial applications, smart metering that enables real-time monitoring and billing for utility consumers, and other use cases to the operator’s enterprise customers. Telefónica will deploy the Nokia cloud-native software solutions on top of its telco cloud and as packet core appliances on enterprise premises.
The two already collaborate on several other network technologies, including 5G RAN, XGSPON, IP and optical transport, network analytics and network APIs. Telefónica said it will deploy Nokia Cloud Mobile Gateway and Nokia Mediation on its telco cloud, providing flexibility and operational efficiencies with its multi-vendor and multi-cloud capabilities.
Nokia reckons it had the most 5G Standalone Core communication service provider customers, with 123 in total, at the end of 2024, with around one third of these being live deployments. “We are pleased to support Telefónica in strengthening the enterprise customer experience in Spain. Beyond better data capacity, latency, and reliability, our packet core will also provide a local breakout of user traffic with our latest generation appliances, providing reduced latency and improved security,” said Nokia VP cloud and network services market leader for Europe Erez Sverdlov.
