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Wednesday, August 26, 2015

Tremendous Packet Core Momentum Fuels 2Q Worldwide Mobile Infrastructure Market, Surpasses $1 Billion

LTE-Advanced deployment, Packet Core deployments, VoWiFi trials and the high interest in end-to-end VoLTE solutions are driving the mobility market

The Worldwide Mobile Infrastructure market grew revenue in Q2 quarter over quarter. The Q2 Total Worldwide Mobile Infrastructure market surpassed $1 billion in revenues. The APAC region, mainly China, led this growth during this quarter, followed by EMEA. Mobile broadband net sales were primarily driven by overall radio technologies, specifically LTE. In the North American region the market managed to stabilize, helping most vendors to maintain flat revenues. Although most operators have completed their LTE deployments, it is anticipated that the fast-rising data traffic will definitely require further upgrades of U.S. wireless networks to add more capacity and avoid congestion experiences such as those recently witnessed in New York and Chicago, and generate opportunities for vendors.

Global mobile infrastructure spending posted single digit growth with most carriers adopting a “wait and see” status for new deployments and services. However, Packet Core, specifically EPC, grew in double digits and it is expected this growth will continue in the next quarters as operators modernize the network with new services. We anticipate more spending into EPC but also into virtual solutions, vEPC, in the coming quarters as the trials will start scaling up into commercial accounts. Services virtualization continues to gain traction because of the savings and the short time to market service delivery. More VoLTE and VoWiFi deployments are expected in the next quarters as most operators understand that these services are complementary and offer different benefits for indoor and outdoor support.

“There are three interesting points to note this quarter. The focus of Mobile IP Infrastructure spending has shifted to the Asia-Pacific region, coming mainly from China; the Evolved Packet Core market is the fastest growing segment. This trend will maintain momentum in the next quarters, and it will gain traction even more in North America with significant LTE network expansions,” states Elias Aravantinos, principal analyst, ACG Wireless and Mobility.

“The second point relates to another interesting trend related to the previous trend, the large scale of virtual service trials that are becoming commercial because operators have realized the savings and the advantages when virtualizing certain parts of the network. The first commercial Virtual EPC projects are expected to massively scale by the end of 2015. Finally, there is special focus on Voice over WiFi service adaptation and spending on the Evolved Packet Data Gateway or ePDG, which is a native part of this new infrastructure and ensures the call connectivity between the WiFi and the cellular network. Operators have already understood that there is no competition between VoWiFi and VoLTE and that these services complement, helping them to face coverage, traffic offload and churn issues,” says Aravantinos.

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