MEC market has failed to materialize as expected: Dell'Oro

Dell'Oro Group today announced that it’s lowering its forecast on the Multi-access Edge Computing (MEC) market by more than 20% because the market has failed to materialize as expected.

In addition, the China Mobile Core Network (MCN) market hit a steep decline in 1Q 2023, weighing down the total market, according to the market research firm.

"Except for China, the big promise for MEC was addressing the needs of enterprises. Several factors are contributing to the slower uptake," said Dell'Oro Group Research Director Dave Bolan in a statement.

One of those factors is standalone private networks have garnered more attention and emphasis than MEC, which Dell’Oro defines as extensions to mobile network operators (MNOs) networks. Other factors: lack of applications with well-defined return-on-investment (ROI); competition from Hyperscale Cloud Provider (HCP) and upcoming Wi-Fi 7, according to Bolan.

“We believe enterprises are evaluating all of these choices before moving forward with more aggressive MEC deployments. As a result, we are lowering the MEC forecast for 2023 by more than 20 percent from our previous forecast,” he added.

The China market's growth rate had a steep decline in the first quarter of 2023 as its buildout of 5G Standalone (SA) networks reached maturity and is projected to end 2023 with a negative growth rate, a first since the firm started tracking China market revenues in 2018.

However, the worldwide market, excluding China, in 1Q 2023 got the year off to a good start with the highest growth rate since 4Q 2019. “We expect positive growth rates throughout the year with continuing buildouts of 5G Standalone networks," Bolan said.

The research firm said the top MCN vendors worldwide for the first quarter of 2023 were Huawei, Ericsson, Nokia and ZTE. Excluding China, the top MCN vendors for Q1 were Huawei, Ericsson and Nokia.

According to Dell’Oro, 43 mobile network operators have launched commercial 5G SA eMBB networks as of Q1 2023.