Mobile core gateway spending to reach $1.2B this year

According to the latest report from ABI Research, purchases of mobile core gateway equipment for packet core networks will grow 19 percent from 2011 to more than $1.2 billion this year. This is in spite of cut-backs in network equipment spending by mobile network operators this year due to the poor economy.

"Although the 1Q12 spend for mobile core gateways only shows a 0.1 percent growth compared to 1Q 2011 we expect the last two quarters to be stronger as spend gets pushed toward end of the year," said Jim Eller, principal analyst for wireless infrastructure at ABI Research.

The main driver for the increase in mobile gateway spending is the deployment of 4G LTE networks, which require Evolved Packet Core (EPC) equipment. Mobile gateway spending for 4G networks will account for about 60 percent of the total in 2012.

Aditya Kaul, practice director of mobile networks stated, "The recent network outages seen at O2 in the U.K., Orange in France, T-Mobile and Verizon in the U.S. are all related to issues in the mobile core. 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.锟絋he 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.锟絋he Big Five will continue to dominate, although Cisco is gaining some market share, added ABI Research.