Mid-sized Biz to Spend $20B on Telecom

In efforts to better equip and connect remote and mobile workers, research from In-Stat/MDR indicates that U.S. mid-market firms – those with 100 to 999 employees – will continue spending on telecom services and equipment, resulting in a roughly 8 percent swell to $20 billion by the end of 2003. Spending is expected to rise to approximately $25 billion by 2006.

The research firm expects broadband provision to remote locations, such as telecommuters’ homes and branch offices, will be a priority and drive significant spending, but middle market decision-makers are also planning for the long term, investing in high-end T3 [define] , Frame Relay [define], and ATM [define] services to VPN [define], and managed and wireless services.

In-Stat/MDR also found that:

• The average mid-sized firm will spend roughly $233K on telecom services and equipment in 2003, an increase of roughly 6 percent from 2002.
• Mid-sized firms will allocate the largest portion of their telecom budgets to wireline data services, more than $7.4 billion in 2003.
• Wireless voice services is the most rapidly growing area of expenditures, accounting for roughly $3.7 billion. As the usage of wireless voice becomes more pervasive, spending is expected to increase, reaching roughly $5.8 billion by 2006.
• Similar to the U.S. market as a whole, the services vertical accounts for the largest part of middle market telecom spending in 2003, nearing $6.0 billion.
• Manufacturing is the second-largest contributor to middle market telecom spending, with more than $4.0 billion in 2003.
• Middle market government organizations spent approximately $3.3 billion on telecom services and equipment in 2003.