5G Core Market

On 20 January 2026 the European Commission proposed a revised Cybersecurity Act that would give mobile operators three years to remove high-risk suppliers from their 5G networks, putting the software brain of those networks, the 5G core, back on the procurement table across 27 member states. Douglas Insights values the 5G core market at USD 5.84 billion in 2025, USD 5.8 billion at one decimal, and forecasts USD 11.6 billion by 2035, a compound growth rate of 7.08% a year. The receipt is adoption times spend: about 2.60 billion 5G subscriptions served on average during 2025 at about USD 2.25 of core network spend per subscription per year. The adoption leg adds 9.6% a year as 5G subscriptions climb toward 6.5 billion, and the spend leg falls 2.3% a year as cloud-native software, shared infrastructure and fierce vendor pricing cut the cost of carrying each subscriber. The study sits within Douglas Insights coverage of telecom and networks and follows the published Douglas Insights research methodology.

What sits inside a 5G core, and what does this study leave out?

A 5G core is the set of software network functions that authenticates devices, sets up data sessions, routes traffic and applies policy on a 5G network, and it earned vendors USD 5.84 billion in 2025. The 5G core market in this study counts licences, subscriptions, software support, integration and managed services for six groups of functions: user plane functions and packet gateways; access and session management control plane; subscriber data management; policy and charging functions; signalling, routing and network exposure; and integration, managed and support services.

The 5G core study also splits revenue by architecture into standalone 5G core and converged 4G/5G core, by deployment into operator private cloud, public cloud and bare-metal appliances, and by network type into public mobile networks and private and enterprise networks. Radio access equipment, transport, spectrum fees, IMS voice cores sold alone and the servers that host the core software are excluded; radio and transport spend is sized in the 5G Infrastructure Market report, and the cloud platforms that operators run the core on appear in the Telecom Cloud Market report.

What did the Brussels proposal of 20 January 2026 mean for 5G core buyers?

The 20 January 2026 proposal puts roughly USD 1.14 billion of European 5G core spend, 19.6% of the 2025 total, on notice that core vendors will face an EU-level screen rather than 27 national ones. The Commission’s plan, set out in press release IP/26/105, would make products from high-risk suppliers ineligible for EU 5G cybersecurity certification and give operators three years to restructure networks, with ENISA coordinating the transition. The proposal is not yet law, and it must pass the Parliament and Council. Several member states already exclude high-risk vendors from the core under the 2020 EU 5G Toolbox, so the largest effect falls on operators that still run a Huawei or ZTE packet core, mainly in Central and Southern Europe. Douglas Insights estimates core swaps triggered by the proposal add about USD 90 million to USD 140 million a year to European 5G core spend from 2027 to 2030. The January 2026 proposal runs through this report: it lifts the European growth rate, shifts share between suppliers, and marks one edge of the scenario range.

What drives 5G core spending as operators switch to standalone?

Four forces lift 5G core revenue, and subscription growth is the largest. The Ericsson Mobility Report of June 2026 counts 3.1 billion 5G subscriptions in the first quarter of 2026, after 162 million were added in the quarter, and forecasts 6.4 billion by 2031. Every new subscription needs capacity in the user plane, session management and subscriber database, so Douglas Insights sets the adoption leg of the 5G core model at 9.6% a year, taking average subscriptions served from 2.60 billion in 2025 to about 6.5 billion in 2035.

The move to standalone architecture is the second driver. Ericsson counts more than 90 service providers with standalone 5G in service out of about 390 that have launched 5G, which leaves close to 300 operators still running 5G radios on a 4G packet core. Each standalone migration replaces the evolved packet core with cloud-native functions, and Douglas Insights estimates standalone projects account for about 58% of 2025 5G core revenue. Standalone conversion adds about 2.1 points a year to 5G core growth through 2031, then fades as the base converts.

Differentiated connectivity is the third driver. Network slicing, guaranteed uplink for live broadcast and enterprise quality of service need the policy, exposure and routing functions that only a standalone core provides, and Ericsson reports that operators offering differentiated connectivity rose from 65 in November 2025 to 84 by June 2026. Douglas Insights estimates slicing and exposure add about 1.2 points a year to 5G core growth, which is why signalling, routing and network exposure is the fastest-growing function group.

Vendor results confirm the core cycle is live. Ericsson’s full-year 2025 report shows Cloud Software and Services sales of SEK 62.7 billion, up 6% organically, which the company attributes to increased core network sales across all market areas, with the fourth quarter up 12% organically. Nokia’s full-year 2025 report shows Cloud and Network Services sales of EUR 2.61 billion with operating margin up from 8.0% to 13.0%, driven by cloud-native core. Douglas Insights reads these as core refresh spending running ahead of the wider telecom equipment market, adding about 0.8 points a year to the 5G core forecast to 2028.

What holds back 5G core upgrades at operators still running 4G cores?

Three restraints pull the spend leg of the 5G core model down by 2.3% a year, and weak operator returns come first. Most operators have not raised average revenue per user since launching 5G, so finance teams delay standalone projects that do not cut costs in the first two years. Douglas Insights estimates about 40% of operators with 5G radios will still run non-standalone service in 2028, which removes about 1.1 points a year from 5G core growth.

Price pressure is the second restraint. Chinese vendors bid core software at deep discounts in Asia, Africa and Latin America, and Western vendors match on price in contested tenders. Douglas Insights estimates the realised price of a 5G core licence per subscriber falls about 4% a year, partly offset by new functions, which gives the net 2.3% annual fall in core spend per subscription.

Integration risk is the third restraint. A 5G core migration touches billing, lawful intercept, roaming and emergency calls, and a single outage can cut service for millions of subscribers. Operators therefore migrate subscribers in waves over 18 to 36 months, and Douglas Insights removes about 0.4 points a year from 5G core growth for projects that slip.

Which network function carries the value in the 5G core market?

User plane functions and packet gateways carry the most 5G core value at 24.6% of 2025 revenue, USD 1.44 billion, while signalling, routing and network exposure grow fastest at 11.3% a year.

User plane functions and packet gateways are worth USD 1.44 billion in 2025. The user plane function carries every packet, so its licences scale with traffic, and edge deployments add user plane instances close to factories and stadiums.

Access and session management control plane is worth USD 1.24 billion in 2025. The AMF and SMF register devices and set up sessions, and operators license them by active subscriber, so value tracks subscription growth.

Integration, managed and support services are worth USD 1.02 billion in 2025. Standalone migrations need 12 to 36 months of testing and cut-over work, but this group grows slowest at 6.2% a year as automation cuts the labour in each project.

Subscriber data management is worth USD 864 million in 2025. The UDM, AUSF and UDR hold keys and profiles for every subscriber, and operators replace these databases less often because they are the hardest function to migrate.

Policy and charging functions are worth USD 712 million in 2025. The PCF and CHF enforce quality of service and bill usage, and slicing gives them new rules to apply per enterprise customer.

Signalling, routing and network exposure is worth USD 566 million in 2025 and grows fastest at 11.3% a year to USD 1.65 billion. The NRF, SCP, SEPP and NEF route messages between functions, secure roaming and expose network APIs to developers, and each slice and roaming partner adds signalling load.

How do architecture, deployment and network type split 5G core revenue?

By architecture, Douglas Insights estimates standalone 5G core takes about 58% of 2025 revenue and converged 4G/5G core about 42%, the latter bought by operators that want one platform for both generations. By deployment, operator private cloud takes about 71%, public cloud about 9% and bare-metal appliances about 20%, the last mostly in China and older deployments. By network type, public mobile networks account for about 91% of 5G core revenue and private and enterprise networks about 9%, served by compact cores from HPE Athonet, Nokia, Ericsson and Mavenir for ports, mines and factories.

Which region buys the most 5G core software?

Asia Pacific is the largest 5G core region at USD 2.62 billion in 2025, 44.8% of the total, growing 6.3% a year to USD 4.82 billion by 2035. China Mobile, China Telecom and China Unicom run the largest standalone cores in the world, and Jio in India built its own standalone 5G core, which keeps the Asian price per subscription low.

North America buys USD 1.41 billion of 5G core software in 2025 and grows 7.2% a year to USD 2.82 billion. T-Mobile US runs a nationwide standalone core, while AT&T and Verizon are moving core workloads to cloud platforms. Europe buys USD 1.14 billion and grows 7.6% a year to USD 2.38 billion, faster than Asia because the January 2026 proposal and delayed standalone launches concentrate spend in 2026 to 2030.

Latin America is the fastest-growing 5G core region at 9.4% a year, from USD 298 million in 2025 to USD 731 million by 2035, as operators in Brazil, Mexico and Chile move from non-standalone launches to standalone cores. The Middle East and Africa is the wildcard at USD 374 million in 2025 and 8.18% a year to USD 821 million: Gulf operators run advanced standalone cores, while most African markets are only starting 5G.

Which companies supply 5G core platforms, and how concentrated is the field?

Douglas Insights estimates Huawei holds about 27.5% of 2025 5G core revenue, and the top three suppliers, Huawei, Ericsson and Nokia, hold about 63.9%.

Advantage in the 5G core market rests on three things: an installed 4G core to convert, carrier-grade reference sites and the security clearance to sell into government-sensitive networks. Huawei wins on price and scale, while Ericsson and Nokia win where security screening applies. HPE, which closed its purchase of Juniper Networks on 2 July 2025, adds routing depth to its Athonet private 5G core. The January 2026 proposal would move an estimated 3 to 5 points of European 5G core share from Huawei and ZTE to Ericsson, Nokia and Samsung by 2030.

What price per subscription do operators pay for a 5G core?

Operators paid about USD 2.25 per 5G subscription per year for their 5G core in 2025, and Douglas Insights expects about USD 1.78 by 2035. A Tier 1 operator with 40 million subscribers typically signs a standalone 5G core contract worth USD 250 million to USD 450 million over five years, covering licences, integration and support. Per-subscriber licence prices run from about USD 0.40 to USD 1.20 a year in China and India to USD 2.50 to USD 4.00 in North America and Western Europe, where security screening narrows the field. A compact private 5G core for a port, mine or factory costs USD 25,000 to USD 150,000 a year as a subscription. The 5G core spend per subscription falls because software now runs on shared cloud infrastructure and because vendors price aggressively to win the standalone migration that locks in the next decade of upgrades.

How are 5G core functions moving onto public cloud platforms?

Public cloud hosts about 9% of 2025 5G core revenue, and Douglas Insights expects that share to reach about 21% by 2035. AT&T agreed in 2021 to run its mobile core on Microsoft cloud technology, and in May 2024 O2 Telefónica in Germany began moving mobile customers onto a Nokia 5G core running on Amazon Web Services. Cloud hosting shifts 5G core spend from appliances to software subscriptions and lets smaller operators buy a core as a service. Sovereignty concerns mean most European operators keep the 5G core in operator private cloud and put only testing, analytics and edge user planes on public cloud.

How wide is the 2035 range for 5G core revenue?

The base scenario takes the 5G core market to USD 11.6 billion by 2035, inside a range of USD 7.98 billion to USD 16.1 billion. The slower scenario assumes subscription growth flattens after 2030, standalone migration stalls at operators with weak returns, and price competition deepens, setting the adoption leg at 6.8% and the spend leg at -3.4% for USD 7.98 billion. The faster scenario assumes the EU proposal becomes law in 2027, slicing and API exposure earn real enterprise revenue, and most operators convert by 2030, setting the legs at 11.9% and -1.1% for USD 16.1 billion. Each 1-point change in the adoption leg moves the 2035 5G core figure by about USD 1.10 billion. Published growth estimates for the 5G core range from about 6.2% to 22.7% a year, and the Douglas Insights figure sits at the lower end because it counts only core network function revenue and nets out the falling spend per subscription.

Which security laws and 3GPP rules shape 5G core purchases?

Three sets of rules shape 5G core purchases, and security screening of suppliers is the one that moves money. The EU 5G Toolbox of 2020 asked member states to restrict high-risk suppliers in the core, and the January 2026 Cybersecurity Act proposal would make that an EU-wide certification rule with a three-year transition. In the United States, the Secure and Trusted Communications Networks Act funds the removal of Huawei and ZTE equipment, and the Federal Communications Commission’s covered list bars new authorisations for their gear. The technical standard is set by 3GPP Release 19, whose functional freeze came at the September 2025 plenary, adding 5G core features for positioning, energy saving and AI-assisted network data analytics that operators will buy through 2027 and 2028.

Douglas Exclusive: the 5G core standalone migration tracker

The standalone migration tracker follows 214 of the operators that have launched 5G, logging core vendor, architecture, deployment model, launch date of standalone service and share of subscribers moved for each operator. The tracker shows that operators with standalone service in 2025 carry about 61% of world 5G subscriptions but make up fewer than half of tracked 5G operators, because the large Chinese, Indian and US networks converted first. Related coverage sits in the 5G Infrastructure Market, Telecom Cloud Market and Next Generation Wireless Communication Market reports.

Methodology and receipts: how do 2.60 billion 5G subscriptions add up to USD 5.84 billion?

The 5G core model multiplies about 2.60 billion average 5G subscriptions in 2025 by USD 2.25 of core spend per subscription per year, giving USD 5.84 billion. Subscriptions come from operator disclosures and the Ericsson Mobility Report, averaged across the year for 96 countries. Spend per subscription comes from contract values, per-subscriber licence prices and vendor segment revenue from Ericsson and Nokia, split by function group and region and reconciled with 214 operator deployments. The forecast compounds 9.6% adoption growth and a 2.3% annual fall in spend per subscription from the 2025 base to about 6.5 billion subscriptions and USD 11.6 billion in 2035.

Sources

1. European Commission, Shaping Europe's digital future Commission proposes 3-year phase-out of high-risk suppliers from 5G networks (2026)
2. European Commission press corner Commission strengthens EU cybersecurity resilience and capabilities (IP/26/105) (2026)
3. Ericsson (company release) Ericsson Mobility Report: 5G subscriptions top three billion (2026)
4. Ericsson (investor report) Ericsson fourth quarter and full-year report 2025 (2026)
5. Nokia (investor release) Nokia Corporation financial report for Q4 and full year 2025 (2026)
6. 3GPP Release 19 (2025)