Communication systems makers bullish amid slump

MUMBAI RERROR AFTERSHOCKS

Unified communications providers (video and audio conferencing, IP-based telephony and web-based communications systems) see a silver lining in the dark clouds of the economic slowdown. With companies reducing travel expenditure, thanks to the slump, telecom companies offering such modes of communication are bullish over their business prospects.

The audio and video conferencing market in the country, which has undergone a paradigm shift with the emergence of telepresence as a business solution for real-time communication, is expected to grow at a CAGR (compounded annual growth rate) of 53 per cent to $40 million by 2010. The audio-video conferencing market (excluding telepresence) currently is about $23 million. According to a survey by consulting firm Zinnov Management Consulting, the market for telepresence in India is currently pegged at $7.2 million.

Telepresence is essentially a superior form of video conferencing. Aloke Shende, principal analyst, Ascendia, said, “Telepresence is a true substitute for personal meeting. It provides a high-definition experience, which improves the quality of interaction. While the main problem in video conferencing is the connection, telepresence tides over most of these problems as it has high-speed data transfer.”

Some of the video and audio conferencing solution providers, who provide the backbone to offer these services, like Cisco and Polycom, are bullish on the growth in business.

Cisco, which has launched its telepresence solutions in India, has tied up with leading internet service providers (ISPs), like Bharti and Tata communications, and channel partners, like Datacraft, to set up private and public rooms for telepresence across the country.

Cisco, which introduced its telepresence services last year, is betting on robust growth in coming quarters from this business.

Minhaj Zia, national sales manager, unified communications, India and Saarc, Cisco, said, “At a time when companies are in the cost-cutting mode, they are also trying to improve their productivity as much. Telepresence not only saves travel costs, which they can invest in their business, but also helps them in keeping regular face-to-face interactions with partners and clients.”

The company has already sold 50 telepresence units last year (one unit comprises setting up the entire solution, including the room, the equipment and the network). He expects this number to double by the end of this year.

Each unit comes at an approximate cost of $1,50,000 (around Rs 75 lakh). Matt Bross, group chief technology officer, British Telecom, is optimistic of growth in this segment. He said, “We are getting a significant order book from India because of our collaboration tools like telepresence.”