The market for telemedicine devices and services will generate nearly $3.6 billion in annual revenue within the next five years, with mobile services companies taking a sizeable chunk, according to a new report from Pike and Fischer.

The need to control costs, along with the development and expansion of faster wireless broadband networks, smart phones and data compression solutions, will drive market growth, the Silver Spring, Md.-based market research provider projects in the report, "Telemedicine and the Economic Stimulus: Broadband Opportunities in a Swelling Market." The report also says wireless applications, devices and service solutions will account for more than 70 percent of the market within five years.

Driving that spending is the American Recovery and Reinvestment Act of 2009, which Congress passed earlier this year. The initiative includes $20 billion for health information technology, with a focus on electronic medical records and telemedicine.

P&F forecasts that at least 25 percent of the stimulus funds earmarked for health information technology will be applied toward broadband-enabled telemedicine services such as remote patient monitoring and mobile access to medical records, as well as consumer applications such as interactive fitness guides and mobile health-related videos.

"These estimates will climb if the Obama administration's proposed healthcare reform plan passes," sayid Tim Deal, senior analyst in P&F's broadband advisory services group. "The proposed healthcare reform includes an investment of $50 billion over five years to promote health information technology."

AT&T will have the largest presence in this market, he said, followed by Verizon and Sprint Nexte. Smaller software and device manufacturers will quickly find themselves targeted for acquisition, he said.

Pike & Fischer, a BNA business, offers legal and business products covering the telecommunications industry.