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U.S. to buy $1.7 billion of software defined radio equipment by 2007

NATICK, Mass., Sept. 28, 2004. The United States military is the largest proponent and purchaser of Software Defined Radio (SDR) equipment. In fact, shipments of SDR equipment to the United States military are forecast to reach over $1.7 billion by 2007, according to a new study from Venture Development Corp.

This represents a compound annual growth rate of 48.4% between 2003 and 2007.

Most U.S. SDR procurement takes place through the DoD's JRTS program. JTRS was started seven years ago in an effort to coordinate the replacement of approximately 750,000 U.S. military radios with 250,000 to 320,000 Software Defined radios.

Unlike previous radio systems, these new SDR radios can interoperate with each other and be upgraded via software to incorporate the latest communications technologies. Since its conception, the program has been expanded to enable interoperability with the British military, NATO, and other Allied Forces.

Estimated JTRS spending through 2007 includes (in millions of dollars):
2003: 212.5
2004: 558.4
2005: 533.5
2006: 880
2007: 1,386.10

The JTRS program is divided into 4 sub-programs, know as clusters. Contracts for Cluster 5 and the AMF cluster were recently awarded. Initial contract awards, primary contractors, and subcontractors are listed below:

Cluster 1 -- initial award $857 million
Prime contractor: Boeing
Subcontractors:
Agile Communications Nova Engineering
BAE Systems
BBN Technologies
Harris RF
Northrop Grumman
Rockwell Collins
Vanu
ViaSat
Xetron

Cluster 2 - Update of existing contract
Prime contractor: Thales
Subcontractors:
Innovative Concepts

AMF Cluster (previously Clusters 3 and 4)

Team 1 ¿ Prime contractor: Boeing (initial award $54.6 million)
Subcontractors:
BBN Technologies
Harris Corp.
L-3 Communications
Northrup Grumman Space Technology
MILCOM Systems Corp.
Rockwell Collins

Team 2 ¿ Prime contractor: Lockheed Martin (initial award $51 million)
Subcontractors:
BAE Systems
Cisco Systems
General Dynamics C4 Systems
NOVA Engineering
Raytheon Integrated Communications Systems
Scientific Research Corp
Thales

Cluster 5 - initial award $295 million
Prime contractor: General Dynamics
Subcontractors:
Agile Communications
Altera
BAE Systems
Motorola
PrismTech
RedZone Technologies
Rockwell Collins
Thales
Vanu

"The JTRS program continues to invigorate the SDR market with new products and technologies," said Senior VDC Telecom/Datacom Analyst Chad Hart.

"These recent contracts will help to further entrench traditional military players like General Dynamics, Lockheed Martin, and Northrop Grumman. However, these recent awards will also help catapult several smaller SDR vendors' revenues such as PrismTech and Vanu as well as create many new opportunities for many other emerging players outside of the contract teams."

Founded in 1971, VDC is a technology market research and consulting firm that specializes in industrial and commercial electronics, computing, communications, software and power systems markets. For more information, see www.vdc-corp.com.




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