Driven by the need to improve communications across government jurisdictions, especially to comply with Department of Homeland Security initiatives, telecommunications spending by state and local governments is expected to grow by 70%, from $9.6b in 2005 to $16.4b in 2010, according to analysis firm INPUT.
As DHS' Homeland Security Data Network grows in size and quality, the federal government will increase grant money available for local governemnt to spend on upgrading their ability to take part in the network. Government officials buying telecom services will find a wider range of vendors to choose from, notes INPUT analyst James Krouse. "New vendors with competing technologies are entering the same market segment, resulting in healthy pricing and service-level competition," Krouse said in a press release. He also noted that adoption of WiFi and Voice over IP are hampered by government's concerns that widespread adoption will ultimately hurt their tax bases.