The evolution toward 5G mobile networks will be characterized by an increasing number of wireless devices, increasing device and service complexity, and the requirement to access mobile services ubiquitously. Two key enablers will allow the realization of the vision of 5G:
very dense deployments and centralized processing. This article discusses the challenges and requirements in the design of 5G mobile networks based on these two key enablers. It discusses how cloud technologies and flexible functionality assignment in radio access networks enable network densification and centralized operation of the radio access network over heterogeneous backhaul networks. The article describes the fundamental concepts, shows how to evolve the 3GPP LTE architecture, and outlines the expected benefits.