Virtualized Evolved Packet Core Market by Component Type (Solution (MME, HSS, S-GW, PDN-GW), Service (Professional Services, Managed Service, Consulting, Integration & Development, and Training & Support)), By Deployment Mode (Cloud, On-Premises), By End User (Telecom Operator, Enterprises), By Region, Competition, 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 9.28 Billion
CAGR (2026-2031)	26.95%
Fastest Growing Segment	Cloud
Largest Market	North America
Market Size (2031)	USD 38.85 Billion

Market Overview

The Global Virtualized Evolved Packet Core Market will grow from USD 9.28 Billion in 2025 to USD 38.85 Billion by 2031 at a 26.95% CAGR. The Global Virtualized Evolved Packet Core (vEPC) market comprises the sector of telecommunications infrastructure dedicated to migrating core network functions from proprietary physical hardware to software-based solutions running on commercial off-the-shelf servers. The primary drivers supporting this market include the critical need for mobile operators to lower capital and operational expenditures through hardware decoupling and the requirement for greater network agility to manage fluctuating data traffic. Additionally, the necessity to support diverse and high-bandwidth applications, such as the Internet of Things, necessitates the scalable architecture that virtualization provides.

Despite these advantages, the market encounters a significant challenge in the complex integration of virtualized frameworks with legacy non-virtualized infrastructure, which often creates interoperability issues and delays network modernization. This operational difficulty contributes to a measured pace of adoption for fully cloud-native architectures. According to the Global mobile Suppliers Association, in 2024, while 151 operators were investing in 5G standalone access which relies on virtualized core networks, only 64 had successfully deployed or launched these systems commercially.

Key Market Drivers

The rapid adoption of 5G Standalone (SA) network architectures is a primary catalyst for the Global Virtualized Evolved Packet Core Market, as this architecture fundamentally relies on cloud-native, virtualized core functions to deliver advanced capabilities. Unlike Non-Standalone (NSA) deployments that utilize legacy 4G cores, 5G SA requires a completely new, service-based architecture that enables features such as network slicing and ultra-reliable low-latency communications (URLLC). This shift necessitates the deployment of virtualized packet cores that can dynamically allocate resources and manage complex signaling loads independent of underlying hardware. According to the Global mobile Suppliers Association, August 2025, in the '5G Standalone August 2025' report, 173 operators in 70 countries were investing in public 5G Standalone networks, highlighting the aggressive industry push toward these virtualized environments.

Escalating global mobile data traffic and bandwidth demand further compel operators to transition to virtualized evolved packet cores, which offer the elasticity needed to handle unpredictable surges in throughput. As consumer consumption of high-definition video and real-time applications grows, legacy physical appliances lack the scalability to manage this volume efficiently without prohibitive costs. Virtualization allows operators to automatically scale control and user plane functions, ensuring service continuity and optimal user experience during peak usage periods. According to Ericsson, November 2025, in the 'Ericsson Mobility Report', mobile network data traffic grew 20 percent year-on-year between the third quarter of 2024 and the third quarter of 2025. This volume creates immense pressure on core networks, reinforcing the need for agile software-defined infrastructure. Additionally, according to 5G Americas, in 2025, global 5G connections reached 2.25 billion, further underscoring the critical scale that virtualized cores must support.

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Key Market Challenges

The complex integration of virtualized frameworks with legacy non-virtualized infrastructure acts as a substantial impediment to the growth of the Global Virtualized Evolved Packet Core Market. Operators transitioning to virtualized environments encounter critical interoperability hurdles when attempting to interface new software-based functions with aging proprietary hardware that supports older network standards. This technical misalignment often results in fragmented management systems and operational silos, compelling telecommunications providers to maintain costly parallel infrastructures rather than achieving the intended network consolidation. Consequently, the operational and financial burden of synchronizing these hybrid environments discourages the rapid decommissioning of legacy systems, thereby retarding the pace of migration to fully cloud-native vEPC architectures.

The impact of this integration bottleneck is highlighted by the disparity between broad industry investment and the actual deployment of modernized standalone systems which utilize these virtualized cores. According to the Global mobile Suppliers Association (GSA), in 2024, 619 operators were investing in 5G networks in the form of trials, licenses, and deployments. Despite this extensive engagement with next-generation technology, the prevalence of legacy integration barriers means that the majority of these deployments remain tethered to non-standalone configurations, limiting the scalable expansion of the virtualized core market.

Key Market Trends

The expansion of Private vEPC deployments for enterprise networks represents a distinct shift toward localized, secure, and highly reliable connectivity solutions tailored for industrial use cases. Unlike public consumer networks, these deployments allow organizations in sectors such as manufacturing and mining to utilize dedicated virtualized cores that ensure data sovereignty and guaranteed low latency for mission-critical applications. This trend is accelerating as enterprises seek to implement Industry 4.0 standards, decoupling their operational technology from congested public infrastructure. According to the Global mobile Suppliers Association (GSA), September 2025, in the 'Private Mobile Networks Market Update September 2025', the association has identified 1,846 organisations worldwide that have deployed at least one private mobile network, reflecting the growing reliance on these bespoke virtualized environments.

Simultaneously, the incorporation of AI and Machine Learning for network automation is becoming essential to manage the operational complexity of disaggregated virtualized cores. As operators decompose monolithic architectures into microservices, manual management becomes obsolete, necessitating intelligent systems that can predict traffic patterns and automate fault isolation in real-time. This integration focuses primarily on operational efficiency, allowing virtualized cores to self-heal and optimize resource allocation without human intervention. According to GSMA Intelligence, October 2025, in the 'Telco AI: State of the Market, Q3 2025' report, approximately 75 to 80 percent of telecom AI deployments currently aim to cut costs through such automation rather than generating new revenue, underscoring the critical role of intelligence in maintaining viable infrastructure.

Segmental Insights

The Cloud segment is currently experiencing the fastest growth within the Global Virtualized Evolved Packet Core Market, primarily driven by the global acceleration of 5G network deployments. Telecommunications operators are increasingly adopting cloud-native architectures to leverage superior scalability, enabling them to dynamically adjust resources in response to fluctuating data traffic. This deployment model facilitates a strategic transition from rigid, hardware-centric infrastructure to flexible software environments, significantly reducing capital expenditures. Furthermore, cloud integration allows service providers to expedite the launch of new services, effectively meeting the expanding connectivity requirements of modern enterprise and Internet of Things ecosystems.

Regional Insights

North America maintains a dominant position in the global virtualized evolved packet core market, driven primarily by the rapid commercialization of 5G networks and the high concentration of Tier 1 telecom operators. The region experiences substantial mobile data traffic, which compels service providers to transition from legacy hardware to flexible, software-defined network architectures. Additionally, the Federal Communications Commission supports this ecosystem through strategic spectrum allocation and policies that encourage infrastructure modernization. These factors collectively enable operators to enhance network efficiency and scalability while effectively managing operational expenses.

Recent Developments

• In May 2025, Mavenir was selected by Tampnet, a leading offshore network provider, to deploy its Converged Packet Core solution across a global 4G and 5G network. This collaboration involved replacing existing legacy core infrastructure with a fully containerized, cloud-native platform capable of running on any cloud environment. The project highlighted the evolution of the Global Virtualized Evolved Packet Core Market towards flexible, multi-generational core systems that support advanced use cases like low-latency communications. The deployment enabled the operator to modernize its service delivery, ensuring robust, high-capacity connectivity for energy and maritime industries in the North Sea and Gulf of Mexico.
• In December 2024, Ericsson introduced its new Compact Packet Core solution, a pre-integrated offering designed to simplify the transition to cloud-native technologies for service providers. This product launch addressed the complexities of modernizing existing networks within the Global Virtualized Evolved Packet Core Market by supporting 4G, 5G Non-Standalone, and 5G Standalone architectures in a reduced hardware footprint. The solution enabled operators to streamline lifecycle management and accelerate deployment times through automation and optimized configurations. By reducing the barriers to entry for cloud-native adoption, the company aimed to facilitate faster upgrades and enhanced operational efficiency for mobile network operators globally.
• In October 2024, NEC Corporation partnered with Cisco to launch a comprehensive private 5G network solution aimed at enterprise customers in the Global Virtualized Evolved Packet Core Market. The collaboration integrated Cisco's 5G Standalone Core and Cloud Control Center with NEC's radio network expertise and system integration services. This joint offering was designed to support digital transformation in sectors such as logistics and warehousing by providing a scalable, virtualized core architecture. The partnership underscored the increasing demand for dedicated, secure core network environments to manage mission-critical industrial applications and massive IoT connectivity across global markets.
• In February 2024, Nokia announced a strategic collaboration with Intel to enhance the energy efficiency of its cloud-native 5G Core solutions, specifically targeting the Cloud Packet Core. By integrating new processor technologies and advanced power management software, the companies achieved significant runtime power savings in test environments. This development directly addressed the growing need for sustainable network operations in the Global Virtualized Evolved Packet Core Market, allowing communication service providers to reduce operational costs and environmental impact while maintaining high performance. The initiative highlighted the industry's shift towards optimized software-hardware integration for virtualized core infrastructure to support variable network traffic loads effectively.

Key Market Players

• Telefonaktiebolaget LM Ericsson
• Huawei Technologies Co. Ltd.
• Cisco Systems Inc.
• NEC Corporation
• Nokia Corporation
• Affirmed Solutions Inc.
• Mavenir Inc.
• ZTE Corporation
• Athonet Srl
• Samsung Electronics Co. Ltd.

By Deployment Mode	By End User	By Region
Cloud On-Premises	Telecom Operator Enterprises	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

In this report, the Global Virtualized Evolved Packet Core Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Virtualized Evolved Packet Core Market, By Deployment Mode:

• Cloud
• On-Premises

• Virtualized Evolved Packet Core Market, By End User:

• Telecom Operator
• Enterprises

• Virtualized Evolved Packet Core Market, By Region:

• North America
• United States
• Canada
• Mexico
• Europe
• France
• United Kingdom
• Italy
• Germany
• Spain
• Asia Pacific
• China
• India
• Japan
• Australia
• South Korea
• South America
• Brazil
• Argentina
• Colombia
• Middle East & Africa
• South Africa
• Saudi Arabia
• UAE