Virtualized Evolved Packet Core Market Expands with 5G Network Rollout

The global virtualized evolved packet core (vEPC) market is witnessing rapid expansion, driven by the accelerating adoption of 5G networks, growing demand for efficient data traffic management, and the increasing shift toward cloud-based network infrastructure. According to Kings Research, the market was valued at USD 8.47 billion in 2024 and is projected to grow from USD 10.28 billion in 2025 to USD 40.73 billion by 2032, exhibiting a CAGR of 21.64% during the forecast period.

A virtualized evolved packet core represents a significant evolution in mobile network architecture, enabling operators to separate network functions from dedicated hardware through network function virtualization (NFV). This transformation enhances flexibility, scalability, and cost efficiency while supporting the massive connectivity demands of next-generation applications such as IoT, augmented reality (AR), virtual reality (VR), and autonomous vehicles.

As 5G adoption accelerates globally, vEPC has emerged as a foundational technology to ensure high-performance data transmission, low latency, and network agility. The ongoing transition toward cloud-native and software-defined architectures is expected to further fuel market growth in the coming years.

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Market Dynamics

Key Growth Drivers

1. Rising Adoption of 5G Networks

The commercialization of 5G is one of the primary drivers of the vEPC market. Unlike 4G, which relied on hardware-centric EPC, 5G requires flexible, virtualized, and software-defined core networks to handle diverse services and ultra-low latency applications.

vEPC provides the necessary agility for network slicing, dynamic resource allocation, and scalable traffic management, enabling operators to deliver customized services for different industries.

2. Surge in Mobile Data Traffic

The explosive growth in mobile internet usage, driven by video streaming, online gaming, and connected devices, has created enormous demand for efficient data routing and handling.

According to GSMA, global mobile data traffic is expected to exceed 300 exabytes per month by 2030, creating substantial opportunities for vEPC vendors offering optimized data management and bandwidth utilization solutions.

3. Shift Toward Cloud-based Infrastructure

Telecom operators and enterprises are increasingly embracing cloud-native and virtualized network architectures to reduce operational costs and enhance scalability.

vEPC allows network functions such as MME, SGW, PGW, PCRF, and HSS to be deployed on commodity hardware and managed through virtualization, eliminating dependence on proprietary equipment.

This shift also enables rapid deployment, on-demand scaling, and centralized control, which are essential for managing complex, distributed 5G networks.

4. Growing Internet of Things (IoT) Ecosystem

The rising number of IoT-connected devices, spanning industries such as automotive, healthcare, manufacturing, and smart cities, is propelling the need for flexible core networks.

vEPC provides the infrastructure to support massive machine-type communications (mMTC) and ultra-reliable low-latency communications (URLLC)—key requirements for IoT-based ecosystems.

Market Challenges

1. High Initial Investment and Integration Complexity

Although vEPC offers long-term cost benefits, initial deployment costs remain high due to hardware upgrades, network redesigns, and training requirements.

Integration of virtualized systems with existing legacy networks can be complex, requiring significant expertise and coordination between vendors, operators, and cloud service providers.

2. Security and Data Privacy Concerns

As vEPC operates in virtualized and cloud environments, it is more susceptible to cyber threats, data breaches, and unauthorized access.

Ensuring end-to-end encryption, implementing secure APIs, and adopting advanced identity management protocols are critical to maintaining network integrity and user trust.

3. Lack of Standardization

Interoperability challenges persist among different vendors and network architectures due to the lack of universal standards for virtualization in mobile cores.

This can lead to vendor lock-in and hinder seamless integration across multi-vendor ecosystems.

Market Segmentation

By Component

1. Solution

The solution segment dominates the market, encompassing software suites that virtualize EPC functions such as SGW (Serving Gateway), PGW (Packet Data Network Gateway), MME (Mobility Management Entity), and PCRF (Policy and Charging Rules Function).

As operators move toward software-based and containerized architectures, demand for vEPC software platforms that offer scalability, automation, and interoperability continues to grow.

2. Services

The services segment includes consulting, integration, maintenance, and managed services.

Telecom operators often rely on managed service providers to handle complex deployments, software updates, and performance monitoring, enabling them to focus on customer experience and service innovation.

By Deployment

1. On-premises

On-premises deployment remains crucial for organizations requiring strict data control, security, and low-latency performance.

Industries such as defense, government, and manufacturing prefer on-premises vEPC to maintain full ownership and oversight of network operations.

2. Cloud-based

The cloud-based segment is expected to witness the fastest growth during the forecast period, driven by the flexibility and cost efficiency of cloud-native deployments.

Public and private cloud environments allow operators to dynamically scale resources, accelerate network upgrades, and reduce capital expenditure.

Cloud-native vEPC also facilitates containerized deployments using microservices, improving fault tolerance and system reliability.

By Network

1. 4G

While the telecom industry shifts toward 5G, 4G networks continue to represent a significant share of mobile data traffic, especially in developing regions.

Operators are increasingly virtualizing their 4G EPC to improve efficiency and prepare for seamless migration to 5G architecture.

2. 5G

The 5G segment is projected to grow at the highest CAGR, driven by the expansion of standalone (SA) 5G networks.

vEPC (and its successor, the 5G Core) enables support for enhanced mobile broadband (eMBB), ultra-reliable communications, and massive IoT, making it integral to the 5G ecosystem.

By Application

1. LTE, VoLTE, and VoWiFi

vEPC enables advanced voice and data services such as Voice over LTE (VoLTE) and Voice over WiFi (VoWiFi), ensuring high-quality connectivity and seamless user experience.

2. IoT and M2M Communication

Virtualized cores enable massive IoT deployment by handling millions of device connections efficiently while maintaining low latency and energy consumption.

3. High-bandwidth Applications

Applications such as video streaming, cloud gaming, and AR/VR demand flexible, high-speed, and low-latency networks that vEPC supports through dynamic bandwidth management and traffic prioritization.

By End User

1. Telecom Operators

Telecom operators constitute the largest end-user segment, leveraging vEPC to modernize networks, reduce OPEX, and launch innovative 5G services.

Operators such as AT&T, Verizon, Vodafone, and Deutsche Telekom are adopting vEPC to achieve service agility and enhance network performance.

2. Enterprises

Large enterprises in sectors like manufacturing, energy, logistics, and smart cities are deploying private networks powered by vEPC for secure, low-latency communication.

These networks enable use cases such as predictive maintenance, autonomous robotics, and remote operations.

3. Cloud Service Providers

Cloud providers such as AWS, Google Cloud, and Microsoft Azure are entering the telecom domain by offering vEPC-as-a-service platforms, enabling telecom and enterprise customers to deploy scalable, virtualized cores efficiently.

Regional Analysis

North America

North America leads the global vEPC market, driven by strong 5G rollout initiatives, high mobile data consumption, and technological innovation.

The U.S. is at the forefront, with telecom giants like AT&T, T-Mobile, and Verizon rapidly deploying virtualized core networks to support nationwide 5G coverage.

The region also benefits from the presence of major technology providers and cloud infrastructure companies facilitating vEPC deployments.

Europe

Europe is a significant market, supported by stringent digital transformation initiatives and EU-funded 5G programs.

Countries such as Germany, the U.K., France, and Spain are investing heavily in network virtualization to enhance connectivity and promote Industry 4.0 applications.

The region’s focus on open standards and interoperability is driving collaboration among telecom operators and software vendors.

Asia-Pacific

Asia-Pacific is the fastest-growing regional market, led by China, Japan, South Korea, and India.

The region’s strong focus on 5G commercialization, massive IoT adoption, and smart city projects is fueling vEPC demand.

China’s large-scale network infrastructure investments and South Korea’s advanced telecom ecosystem make them global leaders in vEPC deployment.

Middle East & Africa (MEA)

MEA is witnessing steady growth, supported by smart city initiatives and next-generation telecom projects in countries like Saudi Arabia, UAE, and South Africa.

Investments in 5G networks under Vision 2030 and Dubai’s Smart City Program are driving demand for virtualized core solutions.

Latin America

Latin America is emerging as a promising region, particularly in Brazil, Mexico, and Chile, where operators are expanding 4G networks and preparing for 5G migration.

Cloud-based vEPC solutions are gaining popularity due to cost-efficiency and scalability in developing markets.

Competitive Landscape

The vEPC market is highly competitive, with global telecom and technology leaders focusing on partnerships, product innovation, and geographic expansion to strengthen their market position.

Key Players

• Cisco Systems, Inc.
• Huawei Technologies Co., Ltd.
• Nokia Corporation
• Ericsson AB
• ZTE Corporation
• Samsung Electronics Co., Ltd.
• Mavenir Systems, Inc.
• NEC Corporation
• Affirmed Networks (Microsoft)
• Athonet S.r.l. (HPE)

Recent Developments

• 2024: Ericsson launched its next-generation cloud-native core platform to support large-scale 5G network slicing.
• 2023: Nokia announced collaboration with AWS to deploy vEPC on public cloud infrastructure for enterprise 5G use cases.
• 2022: Mavenir expanded its vEPC portfolio to support containerized 5G core deployments for private networks.

Future Trends

1. Transition Toward 5G Standalone (SA) Architecture
2. Telecom operators are gradually migrating from non-standalone (NSA) to standalone (SA) 5G networks, where vEPC evolves into a fully virtualized, service-based 5G core.
3. Integration of AI and Machine Learning
4. AI-driven analytics will enhance network optimization, predictive maintenance, and traffic management in vEPC environments.
5. Increased Adoption of Private 5G Networks
6. Enterprises will continue investing in dedicated private networks to enhance connectivity and data security, driving vEPC demand.
7. Automation and Orchestration Platforms
8. Automated network orchestration using NFV MANO (Management and Orchestration) frameworks will streamline deployment and scaling.
9. Expansion of Open-source Ecosystems
10. Open-source platforms like ONAP (Open Network Automation Platform) and OpenEPC will encourage innovation and reduce vendor dependency.

Conclusion

The global virtualized evolved packet core (vEPC) market is at the heart of the telecom industry’s digital transformation, enabling seamless scalability, efficient data management, and future-ready 5G capabilities.

As the demand for high-speed connectivity, low-latency communication, and cloud-based infrastructure continues to grow, vEPC will remain a cornerstone technology shaping the next generation of mobile networks.

Organizations investing in cloud-native, AI-integrated, and open-standard architectures are well-positioned to capitalize on the vast opportunities that the evolving telecom landscape presents.

About Kings Research

Kings Research is a leading market research and consulting firm that provides comprehensive market intelligence and strategic insights to businesses across various industries.