Fed telecom spending to top $17 billion, report says

Homeland security, e-government and the Defense Department's transformation effort are driving federal telecommunications spending, which is expected to reach $12.5 billion this fiscal year and increase to $17.3 billion in fiscal 2008, according to a study released today by Input of Reston, Va.

"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," said Payton Smith, manager of Input's federal market analysis services.

Leased circuits for both voice and data account for the bulk of telecom spending, projected to rise from $8.6 billion this year to $11.8 billion in 2008, Input researchers wrote the report, 'Federal Network/Telecom Services Market View.'

Telecommunications is one of three technology segments in which the government is investing for homeland security. The other two are information security and knowledge management, the report said.

Civilian and defense agencies are expected ratchet up their telecom spending, although budget cuts will keep telecom spending flat through next year. Civilian agencies' outlays are projected to increase from $5.8 billion this year to $8 billion in 2008. The report predicts that Defense spending will swell from $6.7 billion this year to $9.3 billion in 2008.

DOD is the biggest spender on telecom products and services. "This situation is contrary to the general rule that civilian agencies outspend the DOD on IT,' Smith said. But DOD operates bases and units all over the world, making it more dependent on telecom services, he said.

Command and control, and battlefield intelligence technologies continue to transform warfare. DOD will need ruggedized equipment for frontline forces, professional services to integrate capabilities, network services to boost intelligence activities, and transmission services to carry the entire system, the report said.

Of the civilian agencies, the Homeland Security Department has the most substantial telecom requirements. The bulk of DHS telecom funding will support state and local first responders'police, fire and rescue departments'the report said. Interoperability remains an obstacle among federal agencies and with state and local governments.

The Transportation, Treasury, Energy and Agriculture departments follow closely behind DHS in spending, in that order.

E-government initiatives depend on networks and increasing bandwidth to meet demand. Some initiatives may include more traditional call centers and interactive voice response systems. Although e-government initiatives are limited now, they will become a significant factor in the next five years, the report said.

About the Author

Mary Mosquera is a reporter for Federal Computer Week.


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