U.S. Education IT and Telecommunication Markets

While the education vertical continues to remain a primary adopter of new telecom solutions, the diminishing state funds for education due to the decline in tax revenue is affecting the vertical’s spending on telecommunications. State budget deficits, falling revenue, and higher health insurance premiums are eating into allotted money for education. However, the federal government has been showing increased interest in K-12 funding (for elementary, middle, and high school facilities and institutions) through its No Child Left Behind (NCLB) and e-rate programs. Simultaneously, lawmakers are also pushing for reforms that will make higher education more cost effective, so that citizens will have to rely less on government subsidies.

This Frost & Sullivan research service provides detailed analysis of market trends, industry challenges, and revenue forecasts for the U.S. education information technology (IT) and telecommunications market. It also recognizes areas of opportunity and provides recommendations to succeed in this market. It enables companies to align their positioning strategies to benefit from the changing markets and obtain maximum return on investments.

Greater Bandwidth Requirements Create Market Opportunities

With a spurt in applications such as distance education and e-learning as well as higher reliance on technology to improve standards of education, there has been a corresponding hike in demand for greater bandwidth. Some reasons for this increase in bandwidth include Internet connectivity expansion, networking of offices, administration buildings, and computer labs as well as greater use of networks for teaching, research, and multiple educational purposes.

There has also been an escalation in recreational traffic due to MP3s, music downloading, and file sharing. Educational portals are being increasingly used to communicate assignments, grades, and student personal information. "Many universities and colleges are experiencing such high bandwidth usage growth that they are now implementing their own fiber networks," says the analyst of this research. "The availability of low-cost, fiber-optic cabling is creating a shift away from carrier-owned infrastructure toward customer-owned fiber and innovative sharing arrangements such as fiber ‘condominiums’."

Rising Demand for Wireless Voice and Data Services to Drive Market Revenue

Due to the exponential growth of bandwidth requirements, the educational end-user market is likely to invest heavily in wireline data services. However, wireless voice and data offerings are likely to outstrip wireline with high double-digit growth rates. Wireless technology will be more useful on college campuses, where there will be easy access to class information, research, training, and distance learning. Service providers are primarily expected to tap the opportunities in broadband access and Internet, LAN/WAN connectivity, data transport and wireless offerings, and streaming video in niche education areas.

"Top applications driving telephony growth in K-12 include broadband in the classroom, collaborative learning, and teacher-to-student communications," notes the analyst. "Primary applications promising growth in the higher education segment include distance learning, networking of multiple locations and schools, streaming video, interactive Web-based education resources, and increased use of Internet services."