Exact Ventures recently reported During the quarter, the combined 5G Core (5GC) and Evolved Packet Core (EPC) market grew 16 percent sequentially to $760 million, due to seasonal strength and the continued momentum of 5GC sales. The market was up 11 percent versus 2Q21, due to 47 percent growth in 5GC revenues. In 2Q22, the EPC market grew 9 percent sequentially due to season spending patterns but was down 2 percent versus 2Q21 and accounted for approximately two-thirds of the market, with 5GC accounting for the remaining third. While other vendors have begun to recognize 5GC revenues, the market continues to be heavily dominated by Chinese operators and Chinese vendors as that country has been the most aggressive at investing in 5GC capacity to help support its approximately 1.7 billion total subscriptions.
For the full year 2021 the total (5GC + EPC) market grew 19 percent to reach $2.7 billion as the 5GC contributed $728 million and the EPC market fell by 6 percent to $1.7 billion. Much of the EPC market in 2021 and in ensuing year will be to support 5G NSA deployments which continue to leverage the EPC. The growth in 5GC revenues was due to China transitioning their spending faster than expected and is the reason for the increase in the market forecast. Since production SA core networks at scale are still limited to a very small number of network operators, shipments (and revenues) of 5G core network functions will be very volatile. 5G Core revenues are also likely to be highly variable due to complex and stringent revenue accounting and product acceptance criteria. There has also been some delay in some 5G deployments due to the pandemic slowing the standards process as well as slowing the testing and trial process. Inflation and economic uncertainty are also prompting companies at all levels of the mobile ecosystem to be more circumspect with spending. Nevertheless, we continue to forecast that the total market will increase by 8 percent for the full-year 2022 as 37 percent growth in the 5GC market helps to offset a slight expected decline in EPC sales. Operators will continue to invest in the EPC networks for many years to support 5G via NSA network architectures and to provide some level of feature parity with 5G-SA based core networks and services.
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