U.S. Telecom Operator Outlook: Public Sector Revenue Growth for 2024 [Infographic]

U.S. Telecom Operator Market Overview

TBR estimates public sector revenue from U.S.-based service providers grew 6.1% year-to-year in 4Q23 to $5.4 billion (highlighted in the TBR infographic below). Total public sector revenue growth was driven by wireless revenue, which increased 9% year-to-year to an estimated $2.8 billion. First responder initiatives such as AT&T FirstNet and Verizon Frontline are the main drivers of public sector wireless revenue growth as these units are attracting public safety agencies seeking enhanced reliability to support mission-critical workloads and use cases.

TBR estimates network modernization programs such as the General Services Administration’s (GSA) 15-year Enterprise Infrastructure Solutions (EIS) program, which has generated $26.6 billion in business volume since it began in 2017, are driving public sector wireline revenue growth. However, agency migration off legacy contracts such as the GSA’s Networx program is partially offsetting revenue growth from modernization programs such as EIS.

Key 4Q23 Findings on U.S. Operator Market Disruptors and the Competitive Landscape

Market Dominance and Emerging Competition

AT&T, Verizon and Lumen Technologies are still significantly outpacing rivals in total public sector revenue, largely due to the companies’ established footing in the U.S. federal market. AT&T and Verizon also benefit by offering robust portfolios of both wireless and wireline solutions, whereas some competitors, such as Lumen, predominately provide wireline services and others, such as T-Mobile, only offer wireless solutions.

Conversely, Charter and Comcast continue to generate the bulk of public sector revenue from U.S. state and local agencies but are gradually gaining traction in the federal market, including by participating in the EIS program via Charter’s partnership with AOC Connect (Core Technologies) and Comcast’s acquisition of Defined Technologies. T-Mobile is also steadily increasing public sector revenue as it is attracting agencies with its 5G capabilities and Connecting Heroes initiative for first responders.

First Responder Initiatives and EIS Migration in the Public Sector

Though TBR expects first responder initiatives will remain a key driver of public sector revenue growth over the next several years, the market is gradually maturing, as evidenced by FirstNet annual customer growth decelerating from 1.4 million new connections in 2022 to 1.1 million new connections in 2023. Conversely, the EIS program provides significant long-term revenue opportunity for contractors but short-term revenue generation has been hampered by many agencies delaying EIS migrations due to factors including uncertainty around long-term budget and technology requirements.

Next Steps: Navigating the U.S. Telecom Public Sector

Dive deeper into TBR’s U.S. telecom operator public sector research at our upcoming TBR Insights Live session. TBR Senior Analyst Steve Vachon will explore overarching market trends and examine the revenue performance and go-to-market strategies of leading U.S. operators competing in the segment. Additionally, he’ll look at key trends and developments at the federal, state and local government levels that are impacting the business performance of these operators.