Report: EPC Market Rebounds in Q2

Service providers are ramping up their virtualization efforts in preparation for 5G deployments, which helped spur an upward quarter-over-quarter tick for the Evolved Packet Core (EPC) market.

According to a recent report by Dell'Oro Group , the EPC market rebounded nearly 30% from the first quarter of this year to the second quarter. Overall, the EPC market was flat year-over-year in the second quarter of this year, in contrast to the drop in the first quarter of 2017.

"The upward rebound for the EPC market in 2Q17 was significant as service providers embrace the advantages of virtualization that has been promoted by the industry," said Dave Bolan, senior analyst at Dell’Oro Group, in a prepared statement. "Virtual EPC (vEPC) is the beginning of a replacement cycle for Evolved Packet Core as the industry begins the migration to 5G. We forecast positive year-over-year growth going forward."

In the report, Dell’Oro Group said more service providers were upgrading their networks to LTE Advanced Pro, Gigabit LTE and LTE Internet of Things. With the upgraded networks paired with vEPC, service providers can provide network slicing and lower latency that can lead to new revenue-producing services related to 5G. Virtualization gives carriers the ability to cost-effectively reconfigure their networks as well as add new services at a faster rate by using software.

Cisco Systems Inc. (Nasdaq: CSCO), Ericsson AB (Nasdaq: ERIC), Huawei Technologies Co. Ltd. , Nokia Corp. (NYSE: NOK) and ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763) -- the top five vendors, in alphabetical order -- benefited from the upturn in the EPC market in Q2 by accounting for nearly 90% of the market.

— Mike Robuck, Editor, Telco Transformation