The first few years of 5G build-out have seen rapid deployment of NonStandalone (NSA) networks, which still rely on the 4G evolved packet core (EPC). To achieve ‘true 5G’ performance and to enable many services that look beyond just mobile broadband, operators will need to migrate to the 5G core, and most are envisaging this as a stage in their adoption of fully cloud-native architectures.
The 5G core will support a service-based architecture (SBA) that can enable network slicing, and many of the 5G capabilities that are central to developing new revenue streams, rather than just bolstering or defending existing ones. The 5G core will enable capabilities such as ultra-low latency and will be implemented as microservices, which allow network resources to be scaled up and down on-demand to suit the needs of individual services or users, and enables the operator to create virtual ‘slices’ of the network, optimized for the needs of a particular sector, enterprise or use case.
So the 5G core will be essential to support the really transformative promises of 5G, such as agile service delivery, full multilayer convergence with wireline and other wireless networks, critical communications and network slicing. However, migrating to that core will be a significant and complex process, and only a few have already embarked on the journey. Notable examples include Rakuten, with its cloud-native 4G/5G network and its co-development of a 5G core with NEC; China Mobile, whose SA/5G core roll-out has expanded rapidly to reach hundreds of cities; and T-Mobile USA.
Many will wait for several years before embarking on the 5G core, perhaps waiting for cloud-native technologies and standards to stabilize. The number of large-scale 5G SA roll-outs that will take place in 2021- 2022 will remain low, and we expect significant momentum only after 2023.
But the necessity of deploying the 5G core to support new profit models will drive gradual but very steady investment in new platforms. By 2026, capex spending on the core network (products, services and cloud platforms) will reach $XXbn worldwide, and a cumulative $XXXbn will have been spent in the period from 2019 to 2026 – a rising percentage of that on cloud-native 5G and on cores to support converged networks and services.
Some operators will adopt a multi-stage approach even in the primary core that supports mobile broadband consumers and services. This typically involves virtualizing the 4G evolved packet core (EPC) and enhancing it for 5G NSA, rather than taking a single step to 5G SA. Of the operators surveyed in Rethink’s most recent study (78 mobile and converged operators globally), more than XX% are upgrading and virtualizing their EPC to support more 5G capabilities (‘5G EPC’), before embarking on the bigger migration to 5G SA.
There are, of course, many drivers to invest in the 5G core and take on the pain of the migration. The survey found that, in the short term (first two years of a commercial 5G SA deployment), the focus is on flexibility and scalability, to support improved user experiences and to make more efficient use of expensive 5G network resources. At a later stage, the priorities shift to enabling brand new experiences quickly; and to full automation and dynamic slicing with edge compute.
An important aspect of 5G core deployment will be the increased distribution of functions closer to users, especially enterprises. Many operators will deploy separate, standalone cores in the early stages of 5G migration to support new services, such as IoT applications, in a discrete way; or for enterprise customers.
Once a full cloud-native 5G core is implemented, these secondary cores will become merely instances of the main platform, with precise user plane functions (UPFs) deployed in each location depending on application requirements. Secondary cores to support enterprises or new services will often be sources of experimentation with new vendors or architectures, before these are allowed into the main core networks and subscriber bases.
New suppliers will be important as many operators look to cloud-native 5G core and RAN as the opportunity to shake up their ecosystems and work with a wider range of partners. The 5G core will be the trigger to rethink the supply chain for most operators. As the survey extract shows, while the majority will stick with their existing vendor for enhancements to the 4G EPC, or for 5G EPC upgrades, for the 5G core, XX% aim to deploy VNFs from multiple vendors on a common cloud platform while only XX% will stay with their EPC supplier – though a further XX% want to use the same vendor for the core as for the 5G RAN.
There are several key decisions that operators need to make before going cloud-native. The most business-critical ones, according to our survey are:
- Whether to build a telco cloud to support the core, or rely on public or third party cloud
- Whether the cloud platform that supports the core should also be configured and optimized for other networks functions and for enterprise applications
- How many locations will be required to support the right balance between the efficiencies of a centralized core, and the flexibility of a distributed one
The survey and report provide a detailed view of how operators are thinking in terms of these big decisions. Key trends in the period to the end of 2026 are a rising willingness to work with public cloud providers for centralized core deployments, but to deploy distributed and specialized instances of the core close to users and enterprises, often leveraging the same cloud infrastructure that will be used to support vRAN distributed units and soft routing.
All these functions will become increasingly disaggregated and distributed as the demand for excellent quality of experience and near-real time response drive operators to deploy infrastructure close to the edge. So while core functions do not have the stringent latency requirements of the vRAN, they can take advantage of infrastructure that is built for that vRAN to achieve enhanced performance and location flexibility. That trend will accelerate with the increased adoption of vRAN after 2025, and will help to reshape the relationships of operators with cloud partners such as hyperscalers, large vendors and fellow telcos.
All this will result in steady growth in investment in the 5G core, and by 2026 it will account for over XX% of total core network capex, up from XX% in 2021.
This document contains explanatory notes and commentary to accompany the Excel spreadsheet ‘5G core migration forecast 2019-2026’. That contains further data breakdowns including regional patterns.
The surveys and forecasts on which the outputs are based were conducted in February to April 2021. The core input to the forecast was a survey of 78 operators about their core network adoption plans, technologies, ownership models and economics.
The survey base consisted of 78 Tier 1 and 2 mobile operators from a global panel. There were also extensive stakeholder interviews with operators, vendors, infrastructure service providers and cloud companies.
Who should buy this report?
This report outlines the migration patterns of operators to a 5G core and is relevant to operators – senior executives in charge of network planning, network roll-out, infrastructure planning. Vendors – strategy and planning units, senior sales and client engagement executives, small cell and enterprise network providers, Cloud Service Providers, and those involved in the deployment, delivery and support of services delivering MEC, Cloud RAN, Network slicing, Private Networks.
The Rethink RAN Research process summarized
- These forecasts were based on a combination of data from:
- Detailed surveys, interviews and operator-by-operator modelling of the IMG-40 groups.
- Studies and modelling of the deployments and strategies of the top 100 4G/5G operators, as tracked by Rethink Technology Research’s quarterly surveys, interviews and desk research.
- A survey of 78 tier one operators about their detailed plans for RAN deployments to 2026, and of 28 smaller and alternative operators.
- Input from ecosystem vendors on shipments, technology strategies and competitive landscape, also updated quarterly.
- interviews with other stakeholders such as IoT services providers and enterprises
- a calculation of the resources required in each type of location to achieve the MNOs’ stated objectives.
Most of the forecasts refer specifically to nodes deployed within MNO networks, either by themselves or by partners. MNOs may also make use of third party nodes deployed outside their network and connected by wireline or WiFi; and many edge cloud services will run on infrastructure that is not used by MNOs at all.
RAN Research: Forecasting disruption in wireless
Rethink Technology Research is a specialized research and consulting firm with 12 years’ experience in surveying wireless, broadband, over-the-top and quad play operators. This has resulted in a broad research base of over 140 service providers (MNOs, telcos, cable and satellite operators, over-the-top providers) worldwide. These organizations are surveyed on a regular basis about their network infrastructure and business plans, and have a relationship of trust with Rethink.
Rethink also has deep relationships with the telecoms ecosystem (tier one device OEMs, vendors, technology developers, integrators, regulators etc), and is perceived as a thought leader in many areas of the telecoms and media sectors. Key areas of expertise and research experience include HetNet migration, small cells and carrier WiFi; transformation strategies for the RAN and the BSS/OSS; convergence of IT and network skills and platforms; device and chipset roadmaps; spectrum strategy.
Rethink Technology Research, UK