Despite gloomy mobile infrastructure market the spending on mobile core gateway equipment for packet core networks are expected to increase 19% to more than $1.2bn in 2012 compared to 2011, according to a report by ABI Research.
According to the report deployment of fourth-generation (4G) LTE networks, which require Evolved Packet Core (EPC) equipment will drive the market.
Mobile gateway investment for 4G networks will account for about 60% of the total spending in 2012.
ABI Research principal analyst for wireless infrastructure Jim Eller said although the Q1 2012 spend for mobile core gateways only shows a 0.1% growth compared to Q1 2011 it is expected that the last two quarters to be stronger as spend gets pushed towards end of the year.
"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", Eller said.
Spending on the LTE EPC includes investment on P-Gateway, S-Gateway, MME, and eHRPD equipment, which account for LTE EPC deployments in both WCDMA and CDMA networks.
The spending on LTE EPC is likely to benefit leading vendors like Alcatel-Lucent, Ericsson, Huawei, Nokia Siemens Networks and ZTE as well as router vendors such as Cisco Systems and Juniper Networks.
According to the report Alcatel-Lucent, Ericsson, Huawei, Nokia Siemens Networks and ZTE are likely to dominate the market while Cisco is gaining some market share.
ABI Research practice director of mobile networks Aditya Kaul said the recent network outages at O2 in the UK, Orange in France, T-Mobile and Verizon in the US 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," Kaul said.
