The mobile edge computing market lacks vigor, with sluggish adoption of 5G standalone network cores by operators prompting analysts at Dell'Oro Group to slash the cumulative projected investment in multi-access edge computing (MEC) by nearly 39% through 2025.

“The cumulative five-year investment in MEC is expected to be $11 billion,” said David Bolan, research director at Dell’Oro Group. The firm’s previous forecast issued six months ago pegged that total at $18 billion.

“The single biggest factor contributing to lowering the forecast was due to the slow start of 5G standalone network launches, aside from China,” Bolan explained.

Less than 10% of the world’s active 5G networks are currently running on a 5G standalone core. Most 5G services remain anchored to 4G LTE.

Some of this delay could be attributed to “5G service providers investigating the role that public cloud service providers could play in their networks,” Bolan added. 

Indeed, AT&T recently sold its Network Cloud technology to Microsoft and shifted gears to move its 5G network core, workloads, and services to Microsoft’s Azure for Operators platform. Dish Network also plans to be the first network operator with a 5G core running in a public cloud.

An unmet specifications need for federated MEC networks, an effort that is ongoing at ETSI and other global telecommunications standards bodies, could also be impacting 5G standalone core deployment delays, according to Bolan. 

That transition to a 5G standalone core is critical for mobile edge computing. 

“While MEC can be done for both 4G and 5G, 4G networks need to be upgraded with control and user plane separation. This is inherent in 5G,” Bolan wrote in response to questions. “Another inherent characteristic of 5G is lower latency. While the forecast has some 4G MEC, the vast majority is based on 5G standalone for MEC to reach its full potential.”

The bulk of Dell’Oro Group’s forecast for MEC investment remains loaded at the backend of the five-year period, with 60% of all projected revenue expected to hit in 2025. That’s when MEC standards, know-how, and business cases are expected to mature, according to Bolan.

The forecast includes servers and the user plane function, but it does not account for servers to support APIs, compute, storage, transport, network infrastructure for a MEC site, and management and network orchestration (MANO).