Federal Telecom Spending to Rocket

RESTON, Va. -- U.S. Federal Government spending on telecommunications products and services will increase at a compound annual growth rate of 7% from $12.5 billion in fiscal year 2003 to $17.3 billion in FY 2008 according to a report released by INPUT, the essential market intelligence resource for companies doing business with government.

"Homeland security, E-government, DoD force transformation and telecommuting are all contributing to increases in federal telecommunications spending over the next five years," says Payton Smith, Manager of Federal Market Analysis Services at INPUT. Smith adds, "Of these four market trends, homeland security is having the greatest impact on near-term telecommunications spending while E-government will become more significant in the later years of our forecast."

According to the report, the Department of Defense is the leading spender on telecommunications products and services in the federal government. Smith states, "This situation is contrary to the general rule that civilian agencies outspend the DoD on information technology, but it reflects the extent to which the Department of Defense operates in a distributed fashion with bases and units all over the world, and is therefore more dependent on telecommunications services."

Of the civilian agencies, the Department of Homeland Security has the most substantial telecommunications requirements. The report shows telecommunications is embedded throughout the national homeland security strategy. Smith explains, "Addressing interagency communications and information sharing will require additional spending on data communications, networking and professional services for consulting and integration."

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