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The Virtualized Evolved Packet Core Market is expected to reach $19.87 billion by 2031 at a CAGR of 19.3% from 2024 to 2031.
In the rapidly evolving landscape of telecommunications, the virtualized evolved packet core (vEPC) market is poised for substantial growth, driven by the ever-increasing mobile data traffic and the rising demand for high-speed data services. According to recent research conducted by Meticulous Research®, the vEPC market is projected to reach an impressive $19.87 billion by 2031, with a robust compound annual growth rate (CAGR) of 19.3% from 2024 to 2031. This growth trajectory indicates a significant transformation in how telecommunications infrastructure is designed, implemented, and managed.
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Driving Forces Behind Market Growth
Surge in Mobile Data Traffic
One of the primary catalysts for the vEPC market’s expansion is the exponential increase in mobile data traffic. As more users adopt smartphones, tablets, and other mobile devices, the demand for bandwidth-intensive applications—such as streaming video, online gaming, and cloud-based services—has surged. This trend necessitates the deployment of efficient and scalable core network solutions that can manage large volumes of data seamlessly.
Demand for High-Speed Data Services
Consumers and enterprises alike are increasingly prioritizing high-speed data services. The proliferation of 5G technology has heightened expectations for faster, more reliable connections. The vEPC infrastructure is integral to delivering these services, providing the necessary agility and flexibility to support diverse applications and user demands.
Investment in 5G Technology
The transition to 5G networks represents a pivotal opportunity for the vEPC market. Telecom operators are investing heavily in upgrading their infrastructure to support 5G capabilities, leading to a greater adoption of virtualized solutions that facilitate faster network deployment and improved service delivery. These investments not only enhance network performance but also position operators to better compete in an increasingly crowded market.
Cloud-Native Solutions and IoT Integration
As organizations embrace digital transformation, cloud-native solutions are gaining traction in the telecom sector. The integration of vEPC with cloud technologies offers enhanced scalability, cost-effectiveness, and operational efficiency. Additionally, the growing adoption of Internet of Things (IoT) technologies is driving demand for vEPC solutions that can manage a vast array of connected devices and ensure seamless data transmission.
Challenges Impeding Market Growth
Despite the promising outlook, several challenges could impede the growth of the vEPC market. Chief among these are data security risks associated with virtualized infrastructure, which can expose telecom operators to vulnerabilities if not adequately addressed. Moreover, misconceptions and a lack of understanding regarding vEPC solutions can hinder their adoption among potential users, particularly among enterprises not fully versed in the technology.
Reliability and Knowledge Gaps
The reliability of vEPC solutions remains a concern for many telecom operators, particularly those transitioning from legacy systems. Ensuring the robustness and stability of these virtualized solutions is crucial for maintaining service quality and user satisfaction. Furthermore, educational initiatives aimed at demystifying vEPC technology and its benefits are essential to foster broader acceptance and utilization.
Market Segmentation Analysis
The vEPC market can be segmented based on various criteria, including component, application, deployment mode, end-user, and geography. Understanding these segments can help stakeholders identify growth opportunities and tailor their strategies accordingly.
Component Segmentation: Solutions vs. Services
The vEPC market is primarily segmented into solutions and services. In 2024, the solutions segment is anticipated to dominate, driven by the increasing need to optimize operational expenditures (OPEX) and capital expenditures (CAPEX). The agility, flexibility, scalability, and low-latency delivery offered by vEPC solutions are key factors contributing to this trend.
Notably, telecom operators are increasingly collaborating to develop and deploy solutions that can efficiently handle 5G and IoT applications. For instance, in December 2022, T-Mobile USA, Inc. partnered with Cisco Systems, Inc. to launch the world’s largest scalable cloud-native converged core gateway, boosting performance and enhancing user experience.
On the other hand, the services segment is expected to register the highest CAGR during the forecast period. The growing demand for consulting, integration, and support services reflects the need for telecom operators to ensure effective implementation and maintenance of vEPC solutions.
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Application Segmentation: Diverse Use Cases
The vEPC market can also be categorized by application, including Mobile Private Network & Mobile Virtual Network Operators (MPN & MVNO), Long-term Evolution & Voice over Long-term Evolution (LTE & VoLTE), and Internet of Things & Machine to Machine (IoT & M2M).
In 2024, the MPN & MVNO segment is projected to hold the largest market share, driven by the increasing penetration of mobile devices and the demand for affordable mobile services. The adoption of vEPC among MPNs and MVNOs is facilitating rapid deployment and integration into existing networks. A notable partnership was formed in April 2022 between Summa Networks and Cirrus Core Networks to deliver comprehensive solutions for fully managed packet core and IMS services.
Conversely, the IoT & M2M segment is expected to experience the highest CAGR, spurred by the rising need for remote device monitoring and autonomous decision-making capabilities. The demand for effective monitoring and control of industrial equipment, sensors, and actuators continues to grow, highlighting the significance of vEPC solutions in this domain.
Deployment Mode Segmentation: On-Premise vs. Cloud-Based
Deployment mode further segments the vEPC market into on-premise and cloud-based solutions. In 2024, on-premise deployments are expected to lead in market share due to large enterprises seeking greater control over their network infrastructure. However, the cloud-based segment is predicted to grow at a higher CAGR, driven by the advantages of cloud solutions, such as ease of data maintenance, cost-effectiveness, and scalability.
End-User Segmentation: Telecom Operators and Enterprises
The end-user segmentation reveals that telecom operators will account for the largest share of the vEPC market in 2024. This dominance can be attributed to the increasing adoption of vEPC solutions among operators aiming to enhance latency, improve bandwidth connectivity, and optimize OPEX and CAPEX. The growing demand for reliable application services further underscores the significance of vEPC solutions in improving network performance.
Prominent players in the telecom sector are formulating strategies to maximize their market share in the vEPC landscape. For instance, in February 2024, NEC Corporation partnered with NTT DOCOMO to provide virtualized radio access network (vRAN) solutions, enhancing the scalability and flexibility of DOCOMO’s 5G networks.
Geographical Segmentation: North America vs. Asia-Pacific
Geographically, the vEPC market is segmented into North America, Europe, Asia-Pacific, Latin America, and the Middle East & Africa. North America is projected to capture the largest market share in 2024, driven by the rising adoption of vEPC solutions, advanced networking technologies, and government initiatives to develop 5G infrastructure.
The demand for vEPC solutions in North America is further bolstered by partnerships aimed at launching 5G capabilities. For instance, in December 2021, Ericsson partnered with Nex-Tech Wireless to enhance 5G capabilities in rural Kansas, leveraging Ericsson’s 5G Evolved Packet Core and Radio Access Network products.
Conversely, Asia-Pacific is expected to register the highest CAGR during the forecast period. Factors contributing to this growth include the increasing number of mobile subscribers, heightened mobile data traffic, and a growing deployment of 5G-ready cloud core and Network Functions Virtualization Infrastructure (NFVI) solutions.
Leading players are actively pursuing strategic initiatives in the region. For instance, in August 2021, Asia-Pacific Telecom selected Ericsson to modernize its LTE network in Taiwan, underscoring the region’s importance in the global vEPC market.
Key Players Shaping the vEPC Market
The vEPC market features several prominent players, each contributing to the landscape with innovative solutions and strategic partnerships. Key players include:
- Cisco Systems, Inc. (U.S.)
- Telefonaktiebolaget Lm Ericsson SE (Sweden)
- Huawei Technologies Co., Ltd. (China)
- Samsung Electronics Co., Ltd. (South Korea)
- Nokia Corporation (Finland)
- Affirmed Networks (a subsidiary of Microsoft Corporation) (U.S.)
- Mavenir Systems, Inc. (U.S.)
- ZTE Corporation (China)
- F5 Inc. (U.S.)
- NEC Corporation (Japan)
- IPLOOK Networks (Hong Kong) Co., Limited (Hong Kong)
- Parallel Wireless, Inc. (U.S.)
- Polaris Networks (a subsidiary of Motorola Solutions, Inc.) (U.S.)
- Athonet S.r.l. (a subsidiary of Hewlett Packard Enterprise) (Italy)
- Intel Corporation (U.S.)
- Tecore Networks (U.S.)
- Lemko Corporation (U.S.)
- Metaswitch Networks Ltd (a subsidiary of Microsoft Corporation) (U.K.)
These companies are at the forefront of the vEPC market, continually innovating to meet the demands of an evolving telecommunications landscape.
Conclusion
The virtualized evolved packet core market is on a remarkable growth trajectory, fueled by the increasing mobile data traffic, the demand for high-speed data services, and the ongoing investments in 5G technology. While challenges such as data security risks and knowledge gaps exist, the opportunities presented by cloud-native solutions and IoT integration pave the way for sustained growth.
As the telecom sector continues to evolve, the strategic collaboration among industry players and the adoption of innovative solutions will be crucial for capturing market share and delivering enhanced user experiences. Stakeholders must remain vigilant in addressing the challenges while leveraging the opportunities that arise within this dynamic and rapidly changing market.
The journey towards a robust and efficient virtualized evolved packet core infrastructure has just begun, and its implications will resonate throughout the telecommunications industry for years to come.
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Segment Covered –
By Component
- Solutions
- Mobility Management Entity
- Home Subscriber Server
- Serving Gateway
- Packet Data Network Gateway
- Policy & Charging Rules Function
- Services
- Professional Services
- Integration Services
- Consulting Services
- Training & Maintenance Services
- Managed Services
- Professional Services
By Application
- Mobile Private Network & Mobile Virtual Network Operators (MPN & MVNO)
- Long-term Evolution & Voice over Long-term Evolution (LTE & VoLTE)
- Internet of Things & Machine to Machine (IoT & M2M)
By Deployment Mode
- On-premise Deployments
- Cloud-based Deployments
By End User
- Telecom Operators
- Enterprises
- BFSI
- Information Technology
- Travel & Consumer
- Media & Entertainment
- Healthcare
- Other Enterprises
- Other End Users
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