The majority of 5G SA network deployments will stick to telco cloud, a new report asserts.
The revenue for 5G workloads hosted on public cloud services will increase at a compound annual growth rate of 88% between now and 2026, totaling $4.6 billion over that time. What’s more, the majority of 5G Standalone (SA) networks will be in telco clouds rather than public cloud, according to a new report published by Dell’Oro Group.
Dave Bolan, research director at Dell’Oro Group, acknowledged that at first glance the numbers look very conservative, at least if the press releases from hyperscale cloud service providers is any indication. Hyperscalers have limited opportunity to penetrate the telco cloud market, said Bolan, because mobile network operators are already committing to telco cloud deployments.
Bolan framed the potential opportunity for 5G component manufacturers, equipment vendors, and service providers.
“The new 5G SA network architecture with Containerized Network Functions (CNFs) has this prerequisite design feature that enables 5G network functions to run in a Public Cloud These changes allow the MNOs to have a ‘web-scale’ Telco Cloud that can expand and contract with user demand for differentiated services. At the same time, the 5G Core enables multi-access edge computing (MEC) opening the door for MNOs to deliver low-latency services for real-time and near-real-time enterprise applications,” wrote Bolan.
The report focuses on the burgeoning market of software and infrastructure services that can shift telco cloud workloads to public cloud deployments. These include 5G Mobile Core Network (MCN) functions: 5G core control plane and user plane, policy and subscriber data management; IP Multimedia Subsystem (IMS) core software functions like Session Border Controller (SBC), Voice Application Server (VAS), and Call Session Control Function (CSCF) and virtual Radio Access Network (vRAN) solutions. Infrastructure powering that change includes servers and storage.
“Most of the [Hyperscale Cloud Provider, or HCP] press releases are about HCPs adding network solutions for enterprises that desire 5G device connectivity via a hybrid cloud at the edge location,” Bolan explained. “Our projections are for public cloud revenues, not hybrid clouds at the edge of the networks.”
Dell’Oro counted 27 5G SA networks in commercial deployment at the time of the report, with only one mobile operator running 5G workloads in a public cloud environment. The other 26 are running their own telco clouds, the report noted.
“Further findings show that another 130 MNOs have already cut contracts with 5G core vendors to deploy their own telco clouds, and two MNOs have committed to run their networks in the public cloud,” said Bolan.
Bolan believes hyperscalers are focusing their attention on enterprise opportunities around network edge deployments, either on their own or partnered with a Communication Service Provider (CSP) to integrate services inside the telco cloud.
“Longer term there is much more opportunity for the HCPs to host 5G workloads in their public clouds with 75 5G Non-Standalone (5G NSA) MNOs and another 600 LTE MNOs still to announce their 5G SA plans,” writes Bolan.