More than $3 billion will be spent over the next four years to build and operate public wireless networks for U.S. municipalities, according to a new research report by Muniwireless.com.

The 2006 Municipal Wireless State of the Market Report expands on last year's inaugural research report by detailing:

- Why the market is growing faster than previously thought
- The most important goals cities and counties are looking to accomplish with public wireless networks
- The growing adoption of wireless networks by counties and large, multi-community coalitions
- When the U.S. spending for municipal networks will exceed $1 billion for the first time

Interest by U.S. cities and counties in public wireless is exceeding earlier expectations, as the success of many initial municipal network deployments in smaller communities has prompted larger cities and counties to accelerate their own plans, according to Muniwireless.com founder Esme Vos.

Spending Will Exceed Earlier Forecasts
Spending will exceed $235 million in 2006 -- significantly higher the forecast of $177 million made last year -- according to the research findings. For 2007, spending will reach $460 million, compared to last year's estimate of $406 million.

In 2008, U.S. spending will grow 105 percent to $940 million, and 2009 spending will increase another 87 percent to $1.8 billion, according to the report.

"In the past year alone, many large U.S. cities have either selected suppliers to begin designing and building municipal networks or have announced firm plans to do so in the near future," noted Vos. "San Francisco; Portland, Ore., Dayton, Ohio; and Minneapolis are just a handful of large cities that have named partners to build and/or operate their citywide networks.

"And other big cities are falling in line fast, with Chicago, Houston, Los Angeles and Atlanta among the many that have issued formal Requests For Proposals," she added.

Rapid Adoption By Large Counties
Further sparking the market's heightened growth is the movement by large counties and regional municipal coalitions to adopt public wireless for a wide range of applications, from public safety and economic development to bridging the digital divide. For instance, the three-county, 40-city Smart Valley consortium in California's Silicon Valley last month named a three-company team of vendors to build their network.

"We are now long past the stage where municipal wireless was something primarily for small communities that had been bypassed by incumbent service providers," said Vos. "Cities and counties throughout the country -- and around the world -- have begun to get it: Public wireless networks are an essential part of local quality-of-life and public-policy strategies."

Additional Findings
Among the other research findings:
- Public safety, building inspection and public works are the three most prevalent applications for public wireless networks.
- Large cities (those with a population of more than 500,000), which currently account for about one-third of all municipal wireless spending, will see their share of total spending grow to 40 percent by 2009.
- Approximately 44 percent of all 2006 expenditures will go toward hardware and packaged software products, with the remainder allocated to services such as applications development, training, systems design and integration, and consulting.

The new research is being released at this week's MuniWireless '06 conference in Minneapolis, attended by more than 350 representatives from municipalities, service providers, product vendors, analysts and investors. The research report can be purchased for $595; municipal employees and elected officials can purchase the report for a special price of $495. Purchases can be made online at www.muniwireless.com/research. KW