From fleets in the government sector, the total revenue from telematics, including hardware shipments and service subscriptions, could increase to $1.26 billion globally by the end of 2018 from $618 million, as of the end of 2012, according to “Commercial Telematics in Government Fleets,” from ABI Research.

“The main market drivers behind the adoption of telematics in government fleets are government mandates designed, for example, to lower fuel consumption and gas emissions or to promote the use of alternative fuel vehicles,” said Gareth Owen, principal analyst at ABI Research.

The research notes that due to the global economic slowdown, government and public-sector agencies are under pressure to reduce costs while maintaining service levels and are looking for opportunities to improving vehicle fleet utilization and ensure compliance new regulatory and environmental legislation.

The U.S. government is promoting the adoption of telematics in federal vehicles by simplifying the purchasing process, ABI Research said. Federal agencies can add telematics solutions to vehicles leased from GSA fleet, the vehicle-leasing arm of the federal government, and add the cost to their monthly lease plan.

“Although there are no plans to mandate telematics adoption at the federal level yet, there are a number of initiatives underway to mandate the use of telematics at state government levels,” Owen said. Because they operate specialized vehicles, such as snowplows and garbage trucks, state departments typically have more sophisticated requirements, ABI Research found, and as a result, telematics is increasingly effective in improving services levels, productivity and disputing insurance claims.

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