Dell’Oro Group revises 5G mobile core and MEC forecasts

Analyst Dell’Oro Group raised its five-year forecasts for the mobile core network to 12% Compound Annual Growth rate (CAGR) and for Multi-Access Edge Computing (MEC) to 22% CAGR, citing 5G standalone adoption and growing demand for low-latency Artificial Intelligence (AI) applications; this affects network planning and edge deployments.

Market Overview

Dell’Oro Group revised its five-year mobile core network forecast to 12% CAGR and its MEC forecast to 22% CAGR, linking the changes to an inflection in 5G standalone adoption and demand for low-latency AI applications.

The report points to expanding 5G SA coverage and the introduction of 5G-Advanced features by multiple Mobile Network Operators (MNOs) as contributors to the revised outlook.

Key Findings

“The key inflection point is the acceleration in 5G SA network subscriber growth as these networks mature and expand coverage to more cities, including rural and indoor areas, encouraging more 4G subscribers to upgrade,” said Dave Bolan.

“Other factors include the launch of 5G-Advanced by a dozen MNOs, introducing new capabilities, including dynamic network slicing, which will drive new consumer and enterprise low-latency applications, also driving demand for more MEC nodes throughout MNOs’ networks and on-premises for enterprises. The increasing adoption of Agnetic AI will increase the demand for more MCN capacity and MEC nodes, fueling growth,” said Dave Bolan.

Segment or Supplier Performance

The report lists the regional rank order for five-year cumulative 5G MCN revenue as Europe, Middle East and Africa, Asia Pacific excluding China, China, North America, and Caribbean and Latin America.

It projects the 4G MCN market will continue to decline; in Model Extraction Attack (MEA), parts of Southeast Asia, and CALA, 4G will account for the vast majority of the market.

Technology or Trend Analysis

The report cites Reduced Capability (RedCap) 5G SA chips for smartwatches and lower-cost 5G SA Internet of Things (IoT) devices as making 5G SA more appealing to consumers and enterprises, particularly for private networks compared with Long Term Evolution (LTE).

It also notes the modernization of Integrated Maritime Surveillance (IMS) core to cloud-native architectures and the retirement of 3G networks as additional factors linked to market change.

Forecast or Analyst Outlook

Dell’Oro projects a 12% five-year CAGR for the mobile core network and a 22% CAGR for MEC, driven by expanded 5G SA coverage, 5G-Advanced capabilities, and increased edge computing demand.

The report expects mobile network operator deployments and enterprise on-premises (on-prem) MEC nodes to grow to support low-latency AI applications.

The report raises five-year MCN and MEC forecasts and links the revisions to 5G SA adoption, 5G-Advanced capabilities, and edge demand, informing network investment and edge deployment planning for enterprises and service providers. This Analyst Signals brief reflects a neutral, fact-based summary of the original research note.