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Federal Funds Compensate for State Governments' Education Budget Deficit
PALO ALTO, Calif. --(Business Wire)-- March 21, 2005 -- The education vertical continues to remain a primary adopter of new technologies, and hence is one of the most blossoming vertical markets for telecom solution providers. The push to leverage technology to improve education, teaching, and research has enabled schools and universities to hold telephony spending a high priority, even during economic distress and recession. However, the decrease in funding by the state government is affecting revenues in the education information technology (IT) and telecommunications market.
New analysis from Frost & Sullivan (www.telecom.frost.com), U.S. Education IT and Telecommunications Market, reveals that the education vertical spent $19.58 billion on telecom services in 2004. The spending is estimated to reach $34.21 billion in 2008.
If you are interested in a virtual brochure, which provides telecom and IT solution providers, end-users and other industry participants an overview of the latest analysis of the U.S. Education IT & Telecommunications Markets, send an e-mail to Mireya Castilla - Corporate Communications at mireya.castilla@frost.com with the following information: your full name, company name, title, telephone number, fax number and e-mail. Upon receipt of the above information, an overview will be sent to you via e-mail.
The decline in taxes and higher health insurance premiums are significantly affecting the state budget and its falling revenue. Greater focus on healthcare programs is also limiting the amount that can be allotted for education even if the state budgets improve.
However, this shortage is likely to be covered by the federal government, which has increased K-12 funding for elementary, middle, and high school facilities and institutions.
"The federal government is taking increased interest in the K-12 funding through its No Child Left Behind (NCLB) and e-rate programs," says Frost & Sullivan Research Analyst Roopa Shree. "The federal share of total K-12 spending was just 5.7 percent in 1990-1991 and has risen by more than one-third to 8.2 percent in 2004."
In addition, 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. Educational institutions, for their part, are trying to save costs and improve efficiencies with the help of telephony carriers that can help them consolidate networks.
State educational departments, university systems, and school districts are focusing on standards for educational improvements so that they can justify technology purchases. Apart from the need to save costs, this move was also implemented to keep tabs on educational enhancements such as test scoring, student knowledge in specific courses, and statistics proving that technology greatly assists in learning.
"Marketing and communications with educational end users will need to focus on the same requirements and standards that school districts and universities have set in place," notes Shree. "Service and technology providers, carriers, and vendors will have to educate sales, marketing, and product development teams on these specific requirements and standards."
With higher reliance on technology to improve standards of education as well as a spurt in applications such as distance education and e-learning, there is 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 is also a growth 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 an influx of high bandwidth usage resulting in the implementation their own fiber networks," says Shree. "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.'"
U.S. Education IT and Telecommunications Market, a part of the Telecommunications Services subscription, provides detailed analysis of market trends, industry challenges, and revenue forecasts for the U.S. education IT and telecommunications market. It 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. Interviews of the analyst and executive summaries are available to the press.
Frost & Sullivan, a global growth consulting company, has been partnering with clients to support the development of innovative strategies for more than 40 years. The company's industry expertise integrates growth consulting, growth partnership services and corporate management training to identify and develop opportunities. Frost & Sullivan serves an extensive clientele that includes Global 1000 companies, emerging companies, and the investment community, by providing comprehensive industry coverage that reflects a unique global perspective and combines ongoing analysis of markets, technologies, econometrics, and demographics. For more information, visit http://www.frost.com.
U.S. Education IT and Telecommunications Market
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List of Keywords in this Press Release: education IT, telecommunications, U.S., K-12, No Child Left Behind, NCLB, e-rate programs, fiber-optic cabling, fiber 'condominiums,' MP3s, research, information, market, trends, technology, service, forecast
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