Dell’Oro Group has revised its growth forecasts for the Mobile Core Network (MCN) market. Instead of the 3% CAGR (compound annual growth rate), the revised expectations are 2% CAGR for the MCN market over the next five years. Just six months ago, the forecast was more positive than it is today. This has a lot to do with what is going on in the global market right now. There is high inflation, geopolitical tensions, supply chain problems and more. All this will contribute to increasing the challenges for the MNOs (Mobile Network Operators).
“The July 2022 forecast is more conservative than the January 2022 forecast due to industry headwinds, including supply chain challenges, higher inflation, a looming recession, Mobile Network Operators (MNO) challenges to increase revenues and regional political conflict,” says Dave. Bolan, director of research at Dell’Oro Group.
“As a result, we reduced the cumulative revenue forecast for 2022 to 2026 by 6%, reducing revenue by $3.2 billion. The cumulative revenue forecast for July 2022 (2022-2026) is now $50.3 billion, which is results in a CAGR of 2%.”
However, it is worth noting that things can change quite quickly in favor of the MCN market. It would depend on the number 5G SA networks that are deployed, the revenue that the telcos can generate and other things like reduced tension between different countries, fixation of the supply chain and more.
“We are tracking the number of 5G Standalone (5G SA) MBB networks that have been commercially launched by MNOs. In the first half of 2022, only three new 5G SA networks were launched, KDDI in Japan, DISH Wireless in the US and China Broadnet in China, bringing the total deployed globally to 27 MNO 5G SA MBB networks,” Bolan added.
The growth of 5G SA will be relatively slow for the next two to three years before it finally picks up speed.
