SAN FRANCISCO-Municipalities in the United States are expected to spend more than $400 million in 2007 on wireless networks and nearly $700 million during the next three years.
So says the “2005 Municipal State of the Market Report” published by Muniwireless.com, a wireless industry analyst firm that held a conference in San Francisco last week to announce the findings of its research.
According to the inaugural report, the U.S. market will enjoy a compound annual growth rate of 134 percent between 2004 and 2007.
“Since I began following this industry more than two years ago, everyone has struggled to get a handle on just how big this market really is and what the market opportunity represents for companies building and deploying wireless networks for municipalities,” said Esme Vos, founder of Muniwireless.com. “Our study is the first to quantify the market’s size and growth potential and leaves little doubt: This is a market that has quickly gained critical mass and is destined to grow at rapid rates for the foreseeable future-even with the obvious questions surrounding the technical and political challenges.”
The report found that growth is taking place with equal vigor in large and small municipalities alike and will more than double annually for the next three years, both in cities with populations of more than 500,000 people and those with less than 100,000 residents.
In addition, the report said that more than 60 percent of total 2005 municipal wireless network spending is being done by large cities, a figure expected to hold fairly constant in the next two years, as more large cities issue Requests for Proposals for their wide-area wireless initiatives.
Other findings from the report include:
- The top application for current municipal wireless networks is public safety (police, fire, emergency services). Just more than half of U.S. municipalities that have deployed municipal wireless have done so for public safety.
- Many municipalities are starting their “unwiring” efforts in an attempt to reduce skyrocketing telecommunications costs. But small municipalities often are driven to offer inexpensive broadband access to residents and businesses typically underserved by the large incumbent communications carriers.
- Since the majority of municipal wireless spending will focus on infrastructure buildout for the next several years, product vendors will be well positioned to capitalize on demand for their products. However, as that infrastructure is deployed, applications developers will be the most sought-after technology partners.
- Adoption of important industry standards, such as the next generation of Wi-Fi and WiMAX, could spur even higher growth rates for the market, should those standards be widely adopted by technology vendors early next year.
- Still unclear is how dramatic the impact will be of major technology players such as Microsoft Corp., Cisco Systems Inc., Google Inc. and Intel Corp.
Muniwireless.com said the study is based on in-depth, personal interviews with municipal information technology executives, elected officials and municipal department heads. Also, Muniwireless.com said it received detailed statistical information about past, current and anticipated future spending for all-sized U.S. municipalities, and interviews were combined with U.S. census data to create a comprehensive “market map” representing the total available market for 2004 through 2007.
