Fed telecom spending will hit $17B by fiscal 2008, Input says

Federal government spending on telecommunications products and services will increase at a compound annual growth rate of 7 percent, from $12.5 billion in fiscal 2003 to $17.3 billion in fiscal 2008, according to a report published today by market research firm Input Inc. of Reston, Va.

"Homeland security, e-government, DoD force transformation and telecommuting are all contributing to increases in federal telecommunications spending over the next five years," said Payton Smith, manager of federal market analysis services at Input.

Homeland security spending on telecommunications will be a priority in the near term, while spending on telecommunications for e-gov will be more important in the later years of the Input forecast, Smith said.

The Department of Defense spends the most on telecommunications products and services in the federal government, according to the report.

"This situation is contrary to the general rule that civilian agencies outspend the DoD on information technology," Smith said, "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, according to Input. Twenty-two federal agencies were combined in the department earlier this year.

Enabling interagency communications and information sharing at the department will require additional spending on data communications, networking and professional services for consulting and integration, Smith said.

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