Next Generation Core Network Market, Global Outlook and Forecast 2025-2032

MARKET INSIGHTS

Global Next Generation Core Network market size was valued at USD 560 million in 2024. The market is projected to grow from USD 630 million in 2025 to USD 1,199 million by 2032, exhibiting a CAGR of 11.8% during the forecast period.

The Next Generation Core Network (NGCN) represents the advanced backbone of modern telecommunications infrastructure, primarily supporting 5G and future network standards. These networks are engineered to deliver ultra-low latency (under 1ms), multi-gigabit data speeds, and support for massive IoT device connectivity (over 1 million devices per square kilometer). The technology encompasses cloud-native architectures, network slicing capabilities, and distributed edge computing nodes.

Market growth is accelerating due to increasing 5G deployment globally, with over 2 billion 5G subscriptions expected by 2025 according to industry benchmarks. Key drivers include rising demand for bandwidth-intensive applications like 4K/8K video streaming, cloud gaming, and industrial automation. Asia-Pacific leads adoption with 46% market share, driven by China's rapid 5G infrastructure rollout. Leading players like Huawei and Ericsson are investing heavily in Open RAN solutions, which accounted for 15% of new deployments in 2023.

MARKET DYNAMICS

MARKET DRIVERS

5G Deployment Acceleration to Fuel Next Generation Core Network Growth

The global rollout of 5G networks is the primary driver for Next Generation Core Network adoption. With over 1.8 billion 5G connections expected worldwide by 2024, telecommunications providers are investing heavily in cloud-native core network architectures to support enhanced mobile broadband, ultra-reliable low latency communications, and massive machine-type communications. These advanced 5G services require the software-defined, virtualized architecture of NGCN to deliver network slicing capabilities that can support diverse use cases with varying performance requirements simultaneously on the same physical infrastructure.

Cloud-Native Transformation Driving Operational Efficiency

Telecom operators are embracing cloud-native principles to transform their core networks, driving the NGCN market growth. The shift from proprietary hardware to software running on commercial off-the-shelf servers offers operators 30-40% reduction in total cost of ownership while increasing network agility. Recent deployments by major operators demonstrate the tangible benefits: one European operator reported 60% faster service deployment and 50% reduction in operational costs after transitioning to a cloud-native core network architecture. This transformation enables automated scaling, continuous delivery, and improved resilience that traditional core networks cannot match.

Industry 4.0 and IoT Expansion Creating New Demand

The rapid growth of Industrial IoT (IIoT) applications across manufacturing, energy, and transportation sectors is generating unprecedented demand for NGCN capabilities. With projections of 30 billion IoT connections by 2025, conventional core networks struggle to support the massive scale, diverse quality-of-service requirements, and edge computing needs. Next Generation Core Networks enable industrial digital transformation through network slicing, edge computing integration, and support for ultra-reliable low-latency communication (uRLLC) that are critical for smart factories, autonomous systems, and other Industry 4.0 applications.

MARKET RESTRAINTS

Legacy Network Integration Challenges Limiting Adoption Pace

While the benefits of NGCN are clear, most operators face significant technical hurdles in integrating these solutions with existing legacy network infrastructure. The transition from monolithic network functions to cloud-native, microservices-based architectures requires complex interworking between new and old systems, often resulting in interoperability issues and service continuity risks. One major Asian operator reported spending 18-24 months on average for full NGCN deployment due to these integration challenges, significantly slowing market adoption rates across the industry.

Security Concerns in Virtualized Environments

The virtualization of core network functions introduces new security vulnerabilities that restrain market growth. Traditional perimeter-based security models become ineffective in cloud-native environments where network functions are distributed across multiple cloud locations. Recent security audits reveal that over 60% of cloud-native deployments have significant security gaps in areas like container security, API protection, and microservices communication. These concerns make some operators hesitant to fully commit to NGCN deployments until robust security frameworks are established.

High Initial Investment and Uncertain ROI

The transition to NGCN requires substantial upfront capital expenditure that constrains adoption, particularly among smaller operators. Industry estimates suggest a typical greenfield NGCN deployment costs 40-60% more in the first three years compared to maintaining legacy systems, with the ROI timeline extending beyond five years in many cases. This financial burden, combined with uncertain monetization models for new 5G services, creates hesitation among risk-averse operators and slows overall market growth.

MARKET OPPORTUNITIES

Open RAN Ecosystem Creating New Business Models

The emergence of Open RAN architectures presents significant opportunities for NGCN vendors. As operators seek to break vendor lock-in and reduce costs through open interfaces, the core network becomes a strategic point for innovation. The open RAN market is projected to grow at over 35% CAGR through 2027, creating demand for NGCN solutions that can seamlessly integrate with multi-vendor radio networks. This shift enables new business models where core network capabilities can be offered as-a-service, opening additional revenue streams for vendors and operators alike.

Edge Computing Integration Driving Core Network Evolution

The convergence of edge computing and core networks represents a significant growth opportunity for NGCN solutions. With edge computing investments expected to exceed $20 billion annually by 2026, operators require core networks that can intelligently distribute workloads between centralized and edge locations. Next Generation Core Networks with built-in edge orchestration capabilities enable low-latency applications like augmented reality, industrial automation, and autonomous vehicles, creating new monetization opportunities that were impossible with traditional architectures.

Enterprise Private Networks Creating New Market Segments

The growing demand for private 5G networks across manufacturing, healthcare, and logistics sectors opens new growth avenues for NGCN vendors. Enterprises increasingly seek dedicated core network infrastructure to ensure security, reliability, and customization for their digital transformation initiatives. Industry analysts project the private 5G network market to reach $8 billion by 2027, with NGCN solutions playing a central role in delivering the required network slicing, QoS guarantees, and cloud integration capabilities that enterprises demand.

MARKET CHALLENGES

Skills Shortage in Cloud-Native Technologies

The telecommunications industry faces a critical shortage of cloud-native expertise that challenges NGCN adoption. Recent surveys show that over 70% of operators cite skills gaps in areas like Kubernetes, DevOps, and cloud automation as major barriers to NGCN deployment. This talent crunch is particularly acute given the competition with hyperscalers and IT companies for the same skill sets, making it difficult for operators to build and operate next-generation core networks effectively.

Regulatory and Standardization Uncertainties

The evolving regulatory landscape for network virtualization and edge computing presents ongoing challenges for NGCN deployment. Different countries have varying requirements for data sovereignty, network slicing governance, and security certification that complicate global deployments. Additionally, while 3GPP has made progress in standardizing NGCN interfaces, implementation variations among vendors still create interoperability challenges that can delay deployments and increase integration costs.

Performance Optimization in Distributed Architectures

Achieving carrier-grade performance in cloud-native environments remains a significant technical challenge. While virtualization offers flexibility, it can introduce latency and throughput issues when running network functions on general-purpose hardware. Operators report that optimizing virtualized network functions to match the performance of traditional appliances often requires significant engineering effort, with some critical functions still showing 20-30% performance degradation in virtualized deployments compared to purpose-built hardware.

Segment Analysis:

By Type

Service Segment Dominates the Market Due to Rising Demand for 5G Network Infrastructure Deployment

The Next Generation Core Network market is segmented based on type into:

• Service

  • Subtypes: Professional services, managed services

• Hardware

  • Subtypes: Routers, switches, gateways, other network equipment

By Application

Media Entertainment Segment Leads Owing to Increased Need for High-Bandwidth Content Delivery

The market is segmented based on application into:

• Smart Energy

• Industrial Manufacturing

• Smart Medical

• Media Entertainment

• Smart Transportation

• Others

By Deployment

Cloud-Based Deployments Gain Traction for Their Scalability and Cost-Effectiveness

The market is segmented based on deployment into:

• On-premises

• Cloud-based

• Hybrid

By Network Type

5G Networks Segment Shows Strong Growth Potential for Next Generation Core Implementations

The market is segmented based on network type into:

• 4G/LTE

• 5G

• Other emerging networks

COMPETITIVE LANDSCAPE

Key Industry Players

Telecom Giants and Technology Leaders Vie for Market Dominance

The next generation core network market features a fiercely competitive environment dominated by telecommunications behemoths and cutting-edge technology providers. China Mobile currently leads the market with an estimated 12.3% revenue share in 2024, leveraging its massive subscriber base and aggressive 5G deployment across China.

Close competitors Deutsche Telekom and AT&T follow with respective market shares of 9.8% and 8.5%, capitalizing on their established infrastructure in Europe and North America. These operators are racing to modernize legacy systems while integrating cloud-native architectures, creating substantial growth opportunities.

Equipment manufacturers play an equally critical role, with Huawei and Ericsson commanding significant influence. Despite geopolitical challenges, Huawei maintains strong market positioning through its comprehensive 5G core solutions, while Ericsson continues gaining traction with its cloud-native 5G Core platform deployments globally.

Emerging trends show vendors increasingly adopting AI-driven network automation and edge computing solutions to differentiate their offerings. For instance, Nokia's recent introduction of machine learning-based network slicing optimization tools demonstrates this strategic shift toward intelligent network management.

List of Prominent Next Generation Core Network Companies

• China Mobile (China)

• Deutsche Telekom (Germany)

• AT&T (U.S.)

• Verizon (U.S.)

• China Unicom (China)

• Huawei (China)

• Telefónica (Spain)

• Ericsson (Sweden)

• Nokia (Finland)

• Vodafone Group (U.K.)

• NTT DoCoMo (Japan)

• Orange (France)

• Samsung (South Korea)

• ZTE (China)

• SK Telecom (South Korea)

• Qualcomm (U.S.)

• Cisco (U.S.)

• Intel (U.S.)

• LG (South Korea)

NEXT GENERATION CORE NETWORK MARKET TRENDS

5G Network Expansion Accelerating NGCN Adoption

The rapid global rollout of 5G networks is significantly driving demand for Next Generation Core Network (NGCN) infrastructure, with deployment growth exceeding 35% year-over-year in key markets. Telecommunications providers are investing heavily in cloud-native network architectures to support enhanced mobile broadband, ultra-reliable low latency communications, and massive machine-type communications. The transition from traditional EPC (Evolved Packet Core) to 5G Core (5GC) is enabling network slicing capabilities, which allow operators to create multiple virtual networks on shared physical infrastructure. This technological shift is particularly crucial for supporting emerging applications like autonomous vehicles and industrial IoT, where network performance requirements vary dramatically.

Other Trends

Edge Computing Integration

The convergence of edge computing with NGCN is transforming network architectures, reducing latency by processing data closer to end-users. Mobile edge computing deployments are projected to grow at nearly 28% CAGR through 2030, as enterprises demand real-time processing for applications like augmented reality and smart factories. This trend is forcing NGCN solutions to incorporate distributed cloud architectures with intelligent traffic routing capabilities, fundamentally changing how core networks are designed and managed.

AI-Driven Network Automation Growth

Artificial intelligence and machine learning are becoming integral to NGCN operations, with over 60% of telecom operators now implementing AI for network optimization. These technologies enable predictive maintenance, dynamic resource allocation, and automated traffic management - reducing operational costs by up to 30% while improving service quality. The adoption of AIOps (AI for IT Operations) in core networks is particularly notable, allowing for real-time anomaly detection and self-healing network capabilities that minimize downtime and optimize performance across complex 5G environments.

Open RAN Disruption

The open radio access network movement is reshaping NGCN deployment strategies, promoting vendor-neutral hardware and software solutions that increase flexibility while reducing costs. Major operators are transitioning toward cloud-based virtualized network functions (VNFs) that can run on commercial off-the-shelf hardware, breaking traditional vendor lock-in scenarios. This shift is driving innovation in network orchestration and management systems, with the open RAN market expected to account for nearly 15% of total NGCN investments by 2026.

Regional Analysis: Next Generation Core Network Market

North America
As the second-largest market with a 28% global share, North America leads in 5G core network deployments, driven by aggressive infrastructure modernization from telecom giants like AT&T and Verizon. The U.S. accounts for over 80% of regional demand, supported by substantial private investments in cloud-native architectures. However, stringent data sovereignty regulations and concerns over network security slightly temper adoption rates in Canada and Mexico. The region prioritizes low-latency solutions for applications like autonomous vehicles and industrial IoT, with service providers increasingly adopting AI-driven network slicing technologies.

Europe
Holding 19% of the global market, Europe’s growth is shaped by the EU’s strict GDPR compliance requirements and cross-border 5G standardization initiatives. Germany and France dominate deployments, particularly for smart manufacturing applications, while the U.K. focuses on virtualized radio access networks (vRAN). Nokia and Ericsson’s strong regional presence accelerates Open RAN adoption, though legacy infrastructure in Eastern Europe slows modernization. The region also sees emerging demand for edge computing integration to support latency-sensitive services across healthcare and transportation sectors.

Asia-Pacific
The largest market (46% global share) is propelled by China’s nationwide 5G rollout, which accounted for 60% of global 5G base stations by 2024. India and Japan follow with rapid telecom infrastructure upgrades, though vendor diversification policies in India favor local players like Reliance Jio. Southeast Asia shows uneven growth due to fragmented regulations, while South Korea leads in network automation and AI-based traffic management. Media entertainment applications dominate, leveraging high-speed connectivity for AR/VR content, but industrial and smart city use cases are gaining traction. Intense competition among Huawei, ZTE, and international vendors drives pricing pressures but spurs innovation in energy-efficient hardware.

South America
Brazil anchors regional growth with 5G spectrum auctions completed in 2023, though economic instability delays full-scale deployments. Argentina and Chile prioritize urban connectivity, with operators like Telefónica deploying cloud-native cores to reduce capital expenditure. Limited fiber backhaul infrastructure and reliance on imported hardware constrain progress, but partnerships with global vendors are gradually improving network resilience. The region shows strong potential for private 5G networks in mining and agriculture, albeit adoption remains in early stages compared to other markets.

Middle East & Africa
Gulf nations (UAE, Saudi Arabia) lead with ambitious smart city projects and high 5G penetration, while sub-Saharan Africa relies on 4G-LTE hybrids due to cost barriers. South Africa and Nigeria are piloting Open RAN solutions to bridge connectivity gaps in underserved areas. Political volatility and currency fluctuations deter large-scale investments in some markets, but submarine cable expansions (e.g., 2Africa) are improving backbone capacity. The region’s unique growth driver is mobile money infrastructure, demanding ultra-reliable core networks for financial inclusion initiatives.

Report Scope

This market research report offers a holistic overview of global and regional markets for the forecast period 2025–2032. It presents accurate and actionable insights based on a blend of primary and secondary research.

Key Coverage Areas:

• ✅ Market Overview

  • Global and regional market size (historical & forecast)

  • Growth trends and value/volume projections

• ✅ Segmentation Analysis

  • By product type or category

  • By application or usage area

  • By end-user industry

  • By distribution channel (if applicable)

• ✅ Regional Insights

  • North America, Europe, Asia-Pacific, Latin America, Middle East & Africa

  • Country-level data for key markets

• ✅ Competitive Landscape

  • Company profiles and market share analysis

  • Key strategies: M&A, partnerships, expansions

  • Product portfolio and pricing strategies

• ✅ Technology & Innovation

  • Emerging technologies and R&D trends

  • Automation, digitalization, sustainability initiatives

  • Impact of AI, IoT, or other disruptors (where applicable)

• ✅ Market Dynamics

  • Key drivers supporting market growth

  • Restraints and potential risk factors

  • Supply chain trends and challenges

• ✅ Opportunities & Recommendations

  • High-growth segments

  • Investment hotspots

  • Strategic suggestions for stakeholders

• ✅ Stakeholder Insights

  • Target audience includes manufacturers, suppliers, distributors, investors, regulators, and policymakers

FREQUENTLY ASKED QUESTIONS:

What is the current market size of Global Next Generation Core Network Market?

-> The Global Next Generation Core Network market was valued at USD 560 million in 2024 and is projected to reach USD 1199 million by 2032.

Which key companies operate in Global Next Generation Core Network Market?

-> Key players include China Mobile, Deutsche Telekom, AT&T, Verizon, China Unicom, Huawei, Ericsson, Nokia, and Vodafone Group, among others.

What are the key growth drivers?

-> Key growth drivers include 5G deployment, increasing demand for low-latency connectivity, and rising adoption of IoT applications.

Which region dominates the market?

-> Asia-Pacific is the largest market with 46% share, followed by North America (28%) and Europe (19%).

What are the emerging trends?

-> Emerging trends include network virtualization, cloud-native architectures, and AI-driven network optimization.