UTC: Utility telecom spending could top $5B in 2010
JULY 16, 2009 -- Fueled by billions in government stimulus funding, total utility telecom-related spending could top $5 billion in 2010, according to the Utilities Telecom Council's (UTC's) just-released study.
JULY 16, 2009 -- Fueled by billions in government stimulus funding, total utility telecom-related spending could top $5 billion in 2010, according to the Utilities Telecom Council's (UTC's; search Lightwave for the UTC) just-released study, Utilities Telecom Spending Market Forecast. Based on a survey of its North American utility members, the study found that industry-wide spending on telecom-related equipment and services totaled $2.33 billion in 2008. This spending is increasing by 13% to $2.64 billion in 2009, a trend that stands in contrast to the current downturn in the overall telecommunications equipment and services market.
Moreover, a major influx of telecom-related funding will flow into the utility industry due to two major government spending initiatives: $7.2 billion in broadband deployment grants administered by the National Telecommunications and Information Administration (NTIA) and the Rural Utility Service (RUS) and, more importantly, the $4.5 billion in smart grid grants administered by the Department of Energy (DOE). Both initiatives were mandated by the American Recovery and Reinvestment Act of 2009.
UTC estimates that these two efforts could push utility telecom spending past the $5 billion mark during 2010, with much of the increased spending flowing to "smart grid" technologies. Based on the survey data, smart grid-related spending -- expenditures that had been budgeted prior to the passage of the stimulus bill -- likely will total $568 million in 2009. When the government stimulus spending begins to reach the industry, then, smart grid spending in 2010 could easily surpass $2 billion, with 2011 spending conceivably reaching even higher levels.
This survey asked UTC core utility members about the types of equipment and services utilities use, the purchasing process for that equipment, the frequency of upgrades for telecom equipment, and the cost of various equipment and services. The study sought data regarding traditional telecommunications as well as spending on new forms of telecommunications such as smart-grid and the next-generation technologies that will be deployed to enable it.
A wide range of critical data on utility spending trends is presented in the report, including:
- industry spending on transport networks
- industry spending on land mobile radio
- industry spending on advanced metering and the state of advanced metering deployment
- dynamics of the procurement process and what factors are most important to utilities in making buying decisions
- spending trends by type of utility such as investor-owned utilities, municipally owned utilities, cooperatives and more
Customized analyses of the data can be performed for interested parties.
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