Mobile core gateway spending up despite gloomy infrastructure market
August 10, 2012 // Nick Flaherty
Despite cut-backs in network equipment spending by mobile network operators this year due to the economic climate, purchases of mobile core gateway equipment for packet core networks are set to increase 19% from 2011 to more than US$1.2 billion in 2012.
“Although the 1Q 2012 spend for mobile core gateways only shows a 0.1% growth compared to 1Q 2011 we expect the last two quarters to be stronger as spend gets pushed towards end of the year”, says Jim Eller, principal analyst for wireless infrastructure.
The main driver for the increase in mobile gateway spend is the deployment of fourth-generation (4G) LTE networks, which require Evolved Packet Core (EPC) equipment. Mobile gateway spend for 4G networks will account for approximately 60% of the total in 2012.
“The recent network outages seen at O2 in the UK, Orange in France, T-Mobile and Verizon in the US are all related to issues in the mobile core," said Aditya Kaul, practice director of mobile networks at ABI. "The insatiable demand for mobile broadband data and smartphones is putting pressure on the scalability and reliability of mobile core elements, which will ultimately drive operators to upgrade their mobile core.”
The LTE EPC spend consists of P-Gateway, S-Gateway, MME, and eHRPD equipment, which account for LTE EPC deployments in both WCDMA and CDMA networks. The vendors benefitting from the increase in EPC spend include the five major wireless network equipment vendors (Alcatel-Lucent, Ericsson, Huawei, Nokia Siemens Networks, and ZTE), as well as router vendors such as Cisco Systems and Juniper Networks. The Big Five will continue to dominate, although Cisco is gaining some market share.
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