Virtual Mobile Packet Core Spending Surges as Operators Migrate to Virtualized Networks

ABI Research Forecasts NFV Spending for the Mobile Packet Core Will Top $8 Billion by 2021
29 Nov 2016

As mobile data traffic escalates, the continuous development of network function virtualization (NFV) technologies comes as a relief to many operators looking for economical and flexible network expanding approaches while they plan for next-generation network applications and deployments. ABI Research forecasts that NFV spending for the virtual mobile packet core, which includes the Virtual Evolved Packet Core (vEPC) and virtual IP Multimedia Subsystem (vIMS), will exceed that of physical network functions by 2019, topping $8 billion by 2021.

“Tier One operators like AT&T, NTT DOCOMO, and Telefonica are boldly leading the market toward fully virtualized networks,” says Ahmed Ali, Senior Analyst at ABI Research. “The extended network footprint supports a much larger number of users and businesses than ever before. This necessitates a giant leap into the virtualized core market to accommodate current and future network operations cost effectively.”

The vEPC will support business strategies for emerging IoT applications and help handle the significant amount of mobile traffic from operators’ vertical market partners. “Given how essential vEPC functions will be to the connected world, the demand for them will continue to increase, creating the largest segment of the core market, which grows at a CAGR of 54%,” continues Ali.

ABI Research finds that operators in developing markets will also take full advantage of matured virtualized core elements to accelerate their 4G rollouts and compensate for slower network expansions.

The rising adoption of VoLTE and Wi-Fi calling solutions also fuels the need for a virtual IMS and core network functions that deliver real-time communications services for consumer and business users over any access network and for any device type. “The need for a virtual IMS will help to establish a growing market that overtakes the physical mobile core function options in several regions over the next few years,” concludes Ali.

These findings are from ABI Research’s Mobile Packet Core VNFs and PNFs Market Data report.

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